10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

OR

o 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

TRM CORPORATION

(Exact name of registrant as specified in its charter)

Oregon
(State or other jurisdiction
of incorporation or organization) 93-0809419
(I.R.S. Employer Identification No.)

5208 N.E. 122nd Avenue
Portland, Oregon 97230-1074
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (503) 257-8766

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of each class)

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No þ

          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 þ No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o  Accelerated filer o  Non-accelerated filer   o
(Do not check if a smaller reporting company) Smaller Reporting Company þ 

          Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

          As of June 29, 2007 the aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant was $19,810,000.

          As of March 14, 2008 the number of shares of the registrant’s Common Stock outstanding was 17,213,226.

Documents incorporated by reference:

Parts of registrant’s proxy statement for the annual meeting of shareholders on June 4, 2008 are incorporated by reference into Part III of this report.

TRM CORPORATION
TABLE OF CONTENTS

ITEM		PAGE
NO.		NO.
ITEM 1.	BUSINESS		1
ITEM 1A.	RISK FACTORS		5
ITEM 1B.	UNRESOLVED STAFF COMMENTS		12
ITEM 2.	PROPERTIES		13
ITEM 3.	LEGAL PROCEEDINGS		13
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		13
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		14
ITEM 6.	SELECTED FINANCIAL DATA		16
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		17
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		33
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		33
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		60
ITEM 9A.	CONTROLS AND PROCEDURES		60
ITEM 9B.	OTHER INFORMATION		61
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		62
ITEM 11.	EXECUTIVE COMPENSATION		62
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		62
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		62
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES		62
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES		63

PART I

ITEM 1. BUSINESS

General

          Where you can find more information. We file annual, quarterly and other reports, proxy statements and other information with the Securities and Exchange Commission, or SEC. We also make available free of charge through our website at www.trm.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after they are filed electronically with the SEC.

          Overview. We are an independent sales organization, or ISO, servicing businesses in the operation of automated teller machines, or ATMs. We expanded into the ATM business in 1999, leveraging the experience and infrastructure we had established in developing our photocopier operations, which began in 1981. From 1999 to 2004, we expanded our ATM operations through both internal growth and through acquisitions including, in November 2004, the acquisition of a network of over 15,000 ATMs from eFunds Corporation. As a result of financial difficulties that we encountered beginning in 2005, in 2006 we determined to sell assets in order to reduce debt and to focus our business on our U.S. ATM operations. As a result, we sold our United Kingdom photocopy business in June 2006, our United Kingdom, Canadian and German ATM businesses in January 2007, our United States photocopy business in January 2007 and our Canadian photocopy business in June 2007. Currently, we operate ATMs in the United States. During December 2007 our United States ATM networks had 9,307 transacting ATMs.

          We locate our ATMs in high traffic retail environments through national merchants such as The Pantry and Cumberland Farms, and through regional and locally-owned supermarkets, convenience and other stores. In addition to providing our merchant customers with supplemental revenues from transaction fees, we believe that the presence of ATMs in a merchant’s store helps to promote higher foot traffic, increased impulse purchases and longer shopping times since they often make the retail site a destination for cash. We attempt to maximize the usefulness of our ATMs to our customers by participating in as many electronic funds transfer networks, or EFTNs, as practical, including NYCE, Visa, Mastercard, Cirrus, Plus, American Express, Discover/Novus, and STAR.

Industry Segments and Geographical Information

          Since the sale of our photocopier businesses and our foreign ATM businesses, we have only one operating segment – ATM operations in the United States.

Products and Services

          We deploy ATMs under two programs:

• Company-owned program. Under this program there are three basic formats under which an ATM is operated:

• We own the ATM and are responsible for all of the operating expenses including maintenance, cash management and loading, supplies, signage and telecommunication services.

• We own the ATM and are responsible for all operational aspects of the unit except for cash management and loading.

• The merchant owns the ATM and we are responsible for all operational aspects of the unit.

          We typically use this program for national and regional merchants.

• Merchant-owned program. Under a merchant-owned arrangement, the merchant typically buys the ATM through us and is responsible for most of the operating expenses, such as maintenance, cash management, supplies, and telecommunication services. We typically provide access to transaction processing services, and the merchants use our maintenance services from time to time. Our rental program is similar to our merchant-owned program, except that the merchant rents the

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ATM from us rather than purchasing it, and we provide the maintenance and supplies for the machine.

          In December 2007 we had 2,143 ATMs operating under the programs for which we were responsible for cash management and 7,164 ATMs for which merchants were responsible for cash management.

          We attempt to place the ATMs in our company-owned program in high visibility, high traffic merchant locations. Our experience has demonstrated that the following locations, among others, often meet these criteria:

• convenience stores;

• combination convenience stores and gas stations;

• supermarkets;

• drug stores;

• entertainment facilities such as bowling alleys, movie theaters, amusement parks and casinos;

• restaurants and bars, particularly chain restaurants; and

• shopping malls.

          We have found that the primary factors affecting transaction volume at a given ATM are its location within the site and merchandising, such as indoor and outdoor signage, directing consumers to the location. As a result, we seek to maximize the visibility and accessibility of our ATMs, because we believe that once a customer establishes a pattern of using a particular ATM, the customer will generally continue to use that ATM.

          All of our new ATMs feature advanced functionality, diagnostics and ease of use including color displays, personal computer-based operating systems, thermal printing, dial-up and remote monitoring capabilities, and upgrade and capacity-expansion capability. All machines can perform basic cash dispensing and balance inquiry transactions, transmit on-screen marketing, and dispense coupons. Most of our equipment is modular in design, which allows us to be flexible and accommodating to the needs of our clients as technology advances.

Sales and Marketing

          We maintain sales and marketing capability in the United States. Our sales and marketing staff consists of four employees, including a vice president.

          Our sales force maintains contact with larger accounts: retail, supermarket and convenience chains, mall developers, casinos and others. This contact familiarizes the prospect with our name and our products and services, and also heightens sales staff awareness of contract expirations and requests for proposal issued by the prospects. Additionally, we have telephone salespeople and distributors who call existing customers, independent merchants and small chain accounts to discuss contract expiration and renewal, satisfaction with current levels of service, and future equipment and service needs. We maintain a sales database to log their contacts and enable follow up calls.

Primary Supply Relationships

          ATM relationships. We purchase our ATMs from Triton Systems, Hyosung America, Inc., and Tranax Technologies, Inc. We have previously purchased ATMs from NCR Corporation. We believe that the large quantity of ATMs we purchase from these manufacturers enables us to receive favorable pricing and payment terms. In addition, we maintain close working relationships with these manufacturers in the course of our business, allowing us to stay informed regarding product updates and to minimize technical problems with purchased equipment. Although we currently purchase a majority of our ATMs from Triton Systems, we believe that our relationships with Hyosung American, Inc., NCR Corporation, and Tranax Technologies, Inc. are good and that we would be able to purchase the ATMs we required from them if we were no longer able to purchase ATMs from Triton Systems.

          Master Services Agreement. In connection with the acquisition of the eFunds ATM business in November 2004, we entered into a Master Services Agreement with eFunds, which we call the MSA. Through this agreement, we consolidated many of the services we had previously obtained from multiple third party service providers with one

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provider and transferred to eFunds some of the services we had previously provided in-house. In December 2007, we entered into an agreement in principle with eFunds to terminate the MSA. In connection with the termination of that agreement, we agreed to pay eFunds $2.5 million to settle disputed charges under the agreement. The payment is due upon execution of a mutually acceptable settlement and release agreement. eFunds has agreed to work with us to provide an orderly transition whereby we will assume, either directly or through other outsource providers, the services being performed under the MSA, other than ATM processing which eFunds will continue to provide through November 2011.

Servicing

          Through 2006 we had an extensive field servicing operation that maintained our network of ATMs and photocopiers. Through this operation, we provided installation, maintenance, diagnostic and repair services to most of our ATMs and photocopiers. Following the sale of our United States photocopy business in January 2007, we terminated our staff of field service technicians, and entered into contracts with third parties to service our ATMs.

Seasonality

          In our ATM operations, we experience higher transaction volumes per machine in the second and third quarters than in the first and fourth quarters. The increased volumes in the summer months coincide with increased vacation travel.

Merchant Customers

          We have contracts with national and regional merchants and with numerous independent store operators. ATMs at The Pantry locations accounted for approximately 20% and 25% of our United States ATM net sales in 2006 and 2007, respectively. ATMs at Cumberland Farms locations accounted for approximately 9% and 11% of our United States ATM net sales in 2006 and 2007, respectively.

          The terms of our contracts vary as a result of negotiations at the time of execution. The contract terms typically include:

• an initial term of at least three years;

• ATM exclusivity at locations where we install an ATM and, in many cases, a right of first refusal for all other locations;

• a requirement that the merchant provide a highly visible space for the ATM and signage;

• protection for us against underperforming locations by permitting us to increase the withdrawal fee or remove ATMs;

• provisions making the merchant’s fee variable depending on the number of ATM transactions and milestones;

• provisions imposing an obligation on the merchant to operate the ATM at any time its store is open to the public; and

• provisions that require a merchant to use its best efforts to have any purchaser of the merchant’s store assume our contract.

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Competition

          Individuals seeking ATM-related services have a variety of choices at banking locations and within retail establishments. The convenience cash delivery and balance inquiry market is, and we expect it to remain, highly competitive due to the fact that there are few barriers to entry into the business. Our principal competition arises from other independent sales organizations, or ISOs, similar to us including Innovus, Inc., Global Axcess Corp., International Merchant Services, Inc., Cardtronics, Inc., Access to Money, ATM Express, Inc., and PAI ATM Services in the United States. We also compete with numerous national and regional banks that operate ATMs at their branches and at other non-branch locations. In addition, we believe that there will be continued consolidation in the ATM industry in the United States. Accordingly, new competitors may emerge and quickly acquire significant market share.

Government and Industry Regulation

          Our ATM business is subject to government and industry regulations which are subject to change. Our failure to comply with existing or future laws and regulations pertaining to our ATM business could result in restrictions on our ability to provide our products and services, as well as the imposition of civil fines.

          Electronic Funds Transfer Act. The United States Electronic Funds Transfer Act, while directed principally at banks and other financial institutions, also has provisions that apply to us. In particular, the act requires ATM operators who impose withdrawal fees to notify a customer of the withdrawal fee before the customer completes a withdrawal and incurs the fee. Notification must be made through signs placed at or on the ATM and by notification either on the ATM screen or through a print-out from the ATM. All of our ATMs in the United States provide both types of notification.

          Americans with Disabilities Act. The ADA currently includes provisions regulating the amount of clear floor space required in front of each ATM, prescribing the maximum height and reach depth of each ATM and mandating that instructions and all information for use of the ATM be made accessible to and independently usable by persons with vision impairments. The Department of Justice may adopt new accessibility guidelines under the ADA that will include provisions addressing ATMs and how to make them more accessible to the disabled. Under the proposed guidelines that have been published for comment but not yet adopted, ATM height and reach requirements would be shortened, keypads would be required to be laid out in the manner of telephone keypads, and ATMs would be required to possess speech capabilities, among other modifications. If adopted, these new guidelines would affect the manufacture of ATM equipment going forward and could require us to retrofit ATMs in our network as those ATMs are refurbished or updated for other purposes.

          Regulation of transaction fees. The imposition of fees on ATM transactions in the United States is not currently subject to federal regulation. There have been, however, various state and local efforts in the United States to ban or limit transaction fees, generally as a result of activities of consumer advocacy groups that believe that transaction fees are unfair to users. We are not aware of any existing bans or limits on transaction fees applicable to us in any of the jurisdictions in which we currently do business with the exception of Mississippi and Wyoming. Nevertheless, there can be no assurance that transaction fees will not be banned or limited in other cities and states where we operate. Such a ban or limit could have a material adverse effect on us and other ATM operators.

          EFTN regulations. EFTNs have adopted extensive regulations that are applicable to various aspects of our operations and the operations of other ATM operators. The Electronic Fund Transfer Act, commonly known as Regulation E, is the major source of EFT network regulations. The regulations promulgated under Regulation E establish the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. The services covered include, among other services, ATM transactions. Generally, Regulation E requires us to provide notice of the fee to be charged the consumer, establish limits on the consumer’s liability for unauthorized use of his card, provide receipts to the consumer, and establish protest procedures for the consumer. We believe that we are in material compliance with these regulations and, if any deficiencies were discovered, that we would be able to correct them before they had a material adverse impact on our business.

          Encrypting Pin Pad (“EPP”) and Triple Data Encryption Standard (“Triple DES”). Data encryption makes ATMs more tamper-resistant. Two of the more recently developed advanced data encryption methods are commonly referred to as EPP and Triple DES. In 2005, we adopted a policy that any new ATMs that we acquire from a manufacturer must be both EPP and Triple DES compliant. As of December 31, 2007, fewer than 50 of our owned ATMs in the United States were not compliant with EPP and Triple DES. We plan to upgrade these remaining machines when upgrade parts are received from the manufacturers. These ATMs continue to operate on a limited basis under extension agreements with a few networks. We estimate that these remaining machines will be upgraded by

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April 30, 2008; however, our ability to complete these upgrades depends on parts and labor vendors’ availability. We estimate that costs associated with upgrading these remaining machines will not exceed $50,000.

          Rehabilitation Act. On December 1, 2006, a United States District Court ruled that the United States’ currencies (as currently designed) violate the Rehabilitation Act, a law that prohibits discrimination in government programs on the basis of disability, as the paper currencies issued by the United States are identical in size and color, regardless of denomination. Under the current ruling, the United States Treasury Department has been ordered to develop ways in which to differentiate paper currencies such that an individual who is visually impaired would be able to distinguish between the different denominations. In response to the December 1, 2006 ruling, the Justice Department has filed an appeal with the United States Court of Appeals for the District of Columbia Circuit, requesting that the decision be overturned on the grounds that varying the size of denominations could cause significant burdens on the vending machine industry and cost the Bureau of Engraving and Printing an initial investment of $178.0 million and up to $50.0 million in new printing plates. While it is still uncertain at this time what the outcome of the appeals process will be, in the event the current ruling is not overturned, our company along with other participants in the ATM industry may be forced to incur significant costs to upgrade current machines’ hardware and software components.

Trademarks

          Most of our ATM locations are identified by distinctive yellow, green and black trapezoidal signs bearing “TRM ATM(TM),” “Got Cash?” and “TRM Cash Machine(TM).” We have registered the name “TRM Corporation(TM)” and “TRM ATM(TM)” trademarks for signage used in the United States. Those trademarks currently expire between 2009 and 2011 but can be renewed. We consider our business name and brands to be important to our business.

Employees

          As of December 31, 2007, we had 39 employees working in marketing, customer service and administration. None of our employees is represented by a union or covered by a collective bargaining agreement. We believe that our relations with our employees are good.

ITEM 1A. RISK FACTORS

Risks Related to Our Business Generally

We are uncertain whether our operations can generate sufficient cash to comply with the covenants of our loan agreements and to pay our obligations on an ongoing basis.

          We incurred a net loss of $120.1 million in 2006 and $8.4 million in 2007. As a result of our financial performance for the three months ended September 30, 2006, we failed to meet certain financial covenants of our financing agreements with GSO Origination Funding Partners LP and other lenders. On November 20, 2006 we entered into amendments that restructured our loans and waived the failure to meet the loan covenants. Under the restructured loan agreements principal payments of $69.9 million were due in the first quarter of 2007. During the first six months of 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States and Canadian photocopy businesses and used $98.6 million from the proceeds of those sales to make principal and interest payments under these loans. Following these payments, as of June 30, 2007, the only remaining balance under our term loans and line of credit was $1.9 million on our Term Loan B. As of December 31, 2007, we also owed $5.3 million pursuant to a settlement agreement with the purchaser of our United Kingdom and German ATM businesses and $2.5 million pursuant to the settlement agreement with eFunds Corporation to terminate the MSA. We borrowed $1.0 million pursuant to an agreement with LC Capital Master Fund, Ltd. and Lampe Conway & Co., LLC in February 2008 which provided cash to make a £380,000 payment due on the United Kingdom settlement agreement and have begun efforts to finance the debt payable under the eFunds settlement agreement. We cannot provide assurance that we will be able to obtain further financing on satisfactory terms, or at all. We are uncertain whether our operations can generate sufficient cash to pay our obligations on an ongoing basis. There are cross-default provisions in TRM Inventory Funding Trust’s Loan and Servicing Agreement and our Securities Purchase Agreement with LC Capital Master Fund, Ltd. and Lampe Conway & Co., LLC, which we refer to as the Lampe Facility, whereby if we fail to comply with the covenants of our restructured loan agreements and are declared to be in default by GSO Origination Funding Partners LP and other lenders, we may be declared in default of the provisions of the Loan and Servicing Agreement and the Securities Purchase Agreement as well, and the lenders may demand payment. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern.

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Our continuation as a going concern is contingent upon our ability to generate sufficient cash to pay our obligations on an ongoing basis.

We currently do not comply with several of the covenants in our loan agreement with GSO which may result in a default under our vault cash facility and allow our lenders to accelerate our loans. A failure to obtain waivers of these defaults or obtain new financing can cause significant impairment of our ability to conduct our operations.

          We are currently in default of several financial and other covenants under our financing agreements with GSO Origination Funding Partners LP and other lenders. As a result, GSO has the right to declare us in default and accelerate the maturity of the facility. Moreover, because of cross-default provisions under our vault cash facility, a declaration of default by GSO would entitle the vault cash lender to terminate our vault cash facility. The Lampe Facility also contains cross default provisions whereby upon a default, LC Capital Master Fund, Ltd. can accelerate the maturity of our debt under the Lampe Facility, subject to a 180-day standstill with respect to any default or acceleration under the facility with GSO Origination Funding Partners LP and the other lenders. See “Risks Related to our Business Generally – The terms of our credit agreement may restrict our current and future operating and financial flexibility.” It is unlikely that we will be able to cure the defaults within the foreseeable future. If we are unable to obtain further waivers from GSO, or to replace the GSO facility with new financing, our ability to conduct our operations could be significantly impaired and we may not be able to continue as a going concern.

We could be liable for sales price adjustments and warranty/indemnification claims relating to businesses we sold in 2006 and 2007.

          In 2006 and 2007 we sold our ATM businesses in the United Kingdom, Germany and Canada, and our photocopy businesses in the United Kingdom, United States and Canada in five separate transactions. In connection with each of these sales, we have made various representations and warranties and/or provided indemnities. The sales prices are subject to adjustment based on working capital amounts, the value of accounts receivable as of the closing of the sale or other factors. The purchasers may make claims against us relating to the representations or warranties or provisions for adjustment of the sales prices, and those claims could be substantial. In November 2007, we entered into a settlement agreement pursuant to which we agreed to repay £3,250,000 (approximately $6.4 million using exchange rates as of December 31, 2007) as a final settlement of all claims under the agreement for the sale of our United Kingdom and German ATM businesses. Currently, none of the other purchasers are pursuing claims against us. Because we used substantially all of the net proceeds from the business sales to reduce our debt, we might not have sufficient cash to pay such claims without additional financing.

The terms of our credit agreement may restrict our current and future operating and financial flexibility.

          As a result of our sales of our U.K., German and Canadian ATM businesses and our United Kingdom, United States and Canadian photocopy businesses, we have substantially repaid our outstanding credit facility debt. Approximately $2.1 million of that debt remains outstanding under our facility with GSO Origination Funding Partners LP and $1.0 million of debt remains outstanding under our Lampe Facility. The credit agreements that are in effect with respect to the remaining debt include a number of covenants that, among other things, restrict our ability to:

• engage in mergers, consolidations and asset dispositions;

• pay dividends on or redeem or repurchase stock;

• merge into or consolidate with any third party;

• create, incur, assume or guarantee additional indebtedness;

• incur liens;

• make loans and investments;

• engage in transactions with affiliates;

• prepay, redeem or repurchase subordinated indebtedness;

• enter into sale and leaseback transactions;

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• make asset or property dispositions; and

• change the nature of our business.

          Our credit agreements also contain covenants that prohibit our consolidated capital expenditures for each month from exceeding certain amounts, require that our operations result in minimum monthly EBITDA (as defined in the agreements) amounts, and that we maintain our common stock’s listing on the NASDAQ Global Market. As further discussed under “Risks Relating to Our Common Stock – We have been notified that our shares will be delisted from the NASDAQ Global Market as a result of our failure to satisfy the minimum stock price requirement of the NASDAQ Global Market,” we have received a NASDAQ Staff Determination Letter stating that our shares will be delisted from the NASDAQ Global Market as a result of our failure to satisfy the minimum stock price requirement of the NASDAQ Global Market. We have requested a hearing to appeal the Staff’s determination.

          A failure to comply with the covenants under our credit agreements could result in an event of default. In the event of a default under either of our credit agreements, the lenders of both such facilities could elect to declare all borrowings outstanding, together with accrued and unpaid interest and other fees, to be due and payable, and to require us to apply all of our available cash to repay these borrowings. An acceleration of maturity under our credit agreement with GSO Origination Funding Partners LP and under our Lampe Facility would result in an event of default under the TRM Inventory Funding Trust’s Loan and Servicing Agreement which is the source of cash we use in our ATMs. See “Risks Relating to Our ATM Business – We obtain our ATM vault cash under an arrangement that could cause us to lose our access to the vault cash and to fees that we have earned due to circumstances beyond our control.” If any or all of our debt were to be accelerated, we may not have sufficient liquid assets available to us to repay such indebtedness in full and the lenders may proceed against the collateral securing such indebtedness, which includes the capital stock of our subsidiaries.

We have received a “going concern” opinion from our independent registered public accounting firm, which may negatively impact our business.

          We have received a report from McGladrey & Pullen, LLP, our independent registered public accounting firm, regarding our consolidated financial statements for the year ended December 31, 2007, which included an explanatory paragraph stating that the consolidated financial statements were prepared assuming we will continue as a going concern. The report also stated that our uncertainty regarding our ability to meet our future obligations has raised substantial doubt about our ability to continue as a going concern. Any failure to dispel any continuing doubts about our ability to continue as a going concern could adversely affect our ability to enter into collaborative relationships and to raise additional capital, and could have a material adverse effect on our business, financial condition and results of operations.

Our sales depend on transaction fees from our network of ATMs. A decline in either transaction volume or the level of transaction fees could reduce our sales and harm our operating results.

          Our operating results depend on both transaction volume and the amount of the transaction fees we receive from our ATM network. Our transaction volume and fees depend principally upon:

• our ability to replace sites lost through non-renewal or termination of our contracts by the merchants in whose stores we currently have placed our ATMs;

• competition, which can result in over-served markets, pressure both to reduce existing fee structures and increase sales discounts to merchants and reduced opportunities to secure merchant or other placements of our machines;

• our ability to service, maintain and repair ATMs in our network promptly and efficiently;

• continued market acceptance of our services; and

• government regulation and network adjustment of our fees.

          If our transaction volume or the level of transaction fees we receive decrease, our sales could decline, which would impact our operating results.

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We have experienced significant attrition in the number of ATMs in our network.

          We have experienced significant attrition in the number of merchant-owned ATMs in our network that were acquired in our acquisition of the ATM business of eFunds Corporation. In 2007 the average number of transacting ATMs in our ATM network decreased by 2,125 ATMs, or 17.2%, from the average number of transacting ATMs in our ATM network during 2006 due to merchants not renewing or terminating their contracts with us. We have sought to halt this attrition through improved merchant service provided by expanded internal operations and strategic partnerships with third party service vendors including Solvport, LLC, NCR Corporation, and Diebold. This attrition has reduced and, if it continues in the future, will further reduce our sales and our ability to become profitable.

If merchant-owned ATM customers terminate their relationships with us prior to the termination of their contract or do not renew their contracts upon their expiration, it could reduce our ATM sales.

          Although our merchant-owned ATM customers have multi-year contracts with us for transaction processing services, due to competition, some of these customers may leave us for our competitors prior to the expiration of their contracts, or may not renew their contracts upon their expiration. When this occurs, we pursue these customers to remain processing with us or alternatively, in the event they terminate their relationship with us prior to expiration of their contracts, we seek payment of damages under a breach of contract clause in our contracts. If a substantial number of merchant-owned ATM customers end their relationships with us, it could cause a material reduction in our ATM sales.

Changes in technology could reduce use of ATMs as a result, reduce our sales.

          New technology in the ATM industry may result in the existing machines in our networks becoming obsolete, requiring us, or the merchants in our networks who own their machines, to either replace or upgrade our existing machines. Any replacement or upgrade program to machines that we own or that we must upgrade or replace under contracts with merchant owners would involve substantial expense, as was the case with respect to the upgrade of our ATMs to meet triple DES requirements. A failure to either replace or upgrade obsolete machines could result in customers using other ATM networks that could employ newer technology, thereby reducing our sales and reducing or eliminating our operating margins. As a result of our financial situation, we may not have sufficient capital to provide upgrades or replacements to a significant degree, which could impact our operating results.

The ATM market is highly competitive, which could limit our growth or reduce our sales.

          Persons seeking ATM services have numerous choices. These choices include ATMs offered by banks or other financial institutions and ATMs offered by ISOs such as ours. Some of our competitors offer services directly comparable to ours while others are only indirect competitors as we describe in “Business — Competition.” In addition, we believe that there will be continued consolidation in the ATM industry in the United States. Accordingly, new competitors may emerge and quickly acquire significant market share. This competition could prevent us from obtaining or maintaining desirable locations for our machines, reduce the use of our machines, and limit or reduce the transaction fees we can charge or require us to increase our merchants’ share of those fees. The occurrence of any of these factors could limit our growth or reduce our sales.

We have agreed to terminate our master services agreement with eFunds and, if we are unable to provide timely and satisfactory replacement services, our relationships with merchants and cardholders could deteriorate and our transaction volume could be reduced.

          Our ATM business requires close coordination of merchant relationships, cardholder relationships, cash management activities and telecommunication services. In connection with our acquisition of the eFunds ATM business in 2004, we entered into a master services agreement with eFunds pursuant to which eFunds has provided most of these services to us for merchant contracts we acquired from them. As a result, we have depended on eFunds to provide many services that are necessary to the operations of our ATM business. In December 2007 we entered into a settlement agreement that terminates the master services agreement. eFunds has agreed to work with us to provide an orderly transition whereby we will assume, either directly or through other outsource providers, the services being performed under the master services agreement, other than ATM processing. If we are unable to provide replacement services in a timely and satisfactory manner, our relationships with merchants or cardholders could deteriorate and our transaction volume could be reduced.

We rely on third parties to service our ATMs and their failure to do so may harm our operations, damage our reputation and decrease our transaction volume.

8

          Our success depends upon the proper functioning of our ATMs. We rely on third party service providers to service our ATMs. If our third-party service providers fail to service our ATMs properly, or fail to respond quickly to problems, we may lose customers which will decrease our transaction volume and adversely affect our ability to become profitable. Additionally if our third-party service providers fail to service our ATMs, our reputation and ability to grow may be impaired.

Increases in interest rates will increase our expenses.

          We have credit and vault cash facilities that carry variable interest rates. Consequently, increases in interest rates increase our operating costs and expenses. See Item 7A, “Quantitative and Qualitative Disclosures about Market Risk – Interest Rate Risk” for a discussion regarding the impact of changes in interest rates on our expenses.

Our ATM business operates in a changing and unpredictable regulatory environment.

          ATM withdrawal transactions involve the electronic transfer of funds through EFTNs. The United States Electronic Funds Transfer Act provides the basic framework establishing the rights, liabilities and responsibilities of participants in EFTNs. In addition, there have been various state and local efforts to ban, limit or otherwise regulate ATM transaction fees, which make up a large portion of our sales. For example, in Tennessee, Nebraska and Iowa only bank-sponsored ATMs can impose withdrawal fees. As a result, in these states we must make arrangements with a local bank to act as a sponsor of ATMs in our networks, which typically involves additional documentation costs and payment of a fee to the bank. Any limitation on our ability to charge withdrawal fees in areas where we have a concentration of ATMs could reduce our ATM sales and reduce the incentive that merchants would have to keep ATMs in our network on their premises. In addition, if existing regulations are made more restrictive or new regulations are enacted, we may incur significant expense to comply with them.

          Because of reported instances of fraudulent use of ATMs, including the use of electronic devices to scan ATM card information, or skimming, legislation is pending that would require state or federal licensing and background checks of ATM operators and would regulate the deployment and operation of ATMs. There are proposals pending in some jurisdictions that would require merchants that are not financial institutions to be licensed in order to maintain an ATM on their premises; some jurisdictions currently require such licensing. New licensing, deployment or operating requirements could increase our cost of doing business in those markets.

We may incur substantial expense in upgrading our ATMs to meet new standards, and, if we cannot meet compliance deadlines, we could be required to remove non-compliant ATMs from service.

          Data encryption makes ATMs more tamper-resistant. Two of the more recently developed advanced data encryption methods are commonly referred to as EPP and Triple DES. In 2005, we adopted a policy that any new ATMs that we acquire from a manufacturer must be both EPP and Triple DES compliant. As of December 31, 2007, fewer than 50 of our owned ATMs in the United States were not compliant with EPP and Triple DES. We plan to upgrade these remaining machines when upgrade parts are received from the manufacturers. These ATMs continue to operate on a limited basis under extension agreements with a few networks. We estimate that these remaining machines will be upgraded by April 30, 2008; however, our ability to complete these upgrades depends on parts and labor vendors with which our influence may be limited. We estimate that costs associated with upgrading these remaining machines will not exceed $50,000.

          The Americans with Disabilities Act, or ADA, currently includes provisions regulating the amount of clear floor space required in front of each ATM, prescribing the maximum height and reach depth of each ATM, and mandating that instructions and all information for use of the ATM be made accessible to and independently usable by persons with vision impairments. The Department of Justice is currently drafting new accessibility guidelines under the ADA that will cover virtually all aspects of commercial activity relating to disabled persons. We expect that these new guidelines will include provisions addressing ATMs and how to make them more accessible to the disabled. Under the current proposals, height and reach requirements would be shortened, keypads would be required to be laid out in the manner of telephone keypads with selected Braille symbols and ATMs would be required to possess speech capabilities. These new guidelines would affect the manufacture of ATM equipment going forward and could require us to retire or upgrade many of the ATMs we own, as well as merchant-owned ATMs where we are responsible for upgrade costs, potentially at significant expense to us. While we anticipate having the resources available to complete any required upgrades to our ATMs, if our projections are not achieved or our circumstances worsen, we may not have sufficient resources without obtaining additional financing, which may not be available to us. The comment period on the proposed guidelines ended May 31, 2005. No guidelines have yet been promulgated. Should the guidelines proposed become final, we anticipate an 18-month phase-in before new equipment in new locations must comply with new accessibility requirements. If ATMs in our network are not compliant with any applicable ADA guidelines by any

9

established deadlines and we cannot obtain compliance waivers, we could have to remove the non-compliant ATMs from service and, as a result, our ATM net sales could be materially reduced during the period of time necessary to become compliant.

The passing of anti-money laundering legislation could cause us to lose some merchant accounts, thus reducing our revenues.

          Recent concerns expressed by the United States federal government regarding the use of ATMs to launder money could lead to the imposition of additional regulations on our sponsoring financial institutions and our merchant customers regarding the source of cash loaded into their ATMs. In particular, such regulations could result in the incurrence of additional costs by individual merchants who load their own cash, thereby making their ATMs less profitable. Accordingly, some individual merchants may decide to discontinue their ATM operations, thus reducing the number of merchant-owned accounts that we currently manage. If such a reduction were to occur, we would see a corresponding decrease in our revenues.

If we, our transaction processors, our EFTNs or our other service providers experience system failures, the ATM products and services we provide could be delayed or interrupted, which would harm our business.

          Our ability to provide reliable service largely depends on the efficient and uninterrupted operations of our transaction processors, EFTNs and other service providers. Any significant interruptions could severely harm our business and reputation and result in a loss of sales. Additionally, if we cause any such interruption, we could lose the affected merchants or damage our relationships with them. Our systems and operations, and those of our transaction processors, EFTNs and other service providers, could be exposed to damage or interruption from fire, natural disaster, unlawful acts, terrorist attacks, power loss, telecommunications failure, unauthorized entry and computer viruses. We cannot be certain that any measures we and our service providers have taken to prevent system failures will be successful or that we will not experience service interruptions. Further, our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur.

We rely on EFTNs and transaction processors; if we cannot renew our agreements with them, if they are unable to perform their services effectively or if they decrease the level of the transaction fees we receive, it could harm our business.

          We rely on several EFTNs and transaction processors to provide card authorization, data capture and settlement services to us and our merchant customers. Any inability on our part to renew our agreements with these or similar service providers or their failure to provide their services efficiently and effectively may damage our relationships with our merchants and may permit those merchants to terminate their agreements with us.

          Our ATM net sales depend to a significant extent upon the transaction fees we receive through EFTNs. If one or more of the EFTNs in which we participate reduces the transaction fees it pays us, and we are unable to route transactions to other EFTNs to replace them, our ATM net sales would be reduced.

We could lose access to our ATM vault cash and fees that we have earned due to circumstances beyond our control.

          Our current vault cash facility is secured by the cash we draw from it to place in ATMs, as well as by the withdrawal and interchange fees we have earned but not yet collected and a demand letter of credit, so the lender under that arrangement could seize the cash and fees in the event of a default.

          We obtain the cash that we use to fill our placement ATMs, which we call vault cash, in the United States pursuant to an agreement with TRM Inventory Funding Trust, for which one of our subsidiaries, TRM ATM Corporation, acts as servicer. Under the terms of the loan and servicing agreement, the Trust and the servicer must make periodic payments of fees related to the arrangement. The obligations under the loan and servicing agreement are secured by pledges of all of the Trust’s assets, including the vault cash, our uncollected withdrawal and interchange fees and a demand letter of credit. If there is a default under the loan and servicing agreement, the lender may terminate the loan and servicing agreement and seize the collateral, including existing vault cash, fees we have not yet received, and draw on the letter of credit. As a result, a default under the loan and servicing agreement could cause us to lose fees we had earned and suspend operations with respect to our placement ATMs unless we were able to rapidly arrange an alternative source of vault cash.

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          Our vault cash arrangement could go into default as a result of factors over which we have no control.

          The loan and servicing agreement for our vault cash facility contains events of default that include:

• An “event of bankruptcy” with respect to any entity on whose property more than 10% of our ATMs are located, if we are unable to remove all cash from those ATMs within five business days after the event of bankruptcy occurs. An event of bankruptcy includes the filing of a bankruptcy petition with a court, an entity admitting in writing that it is unable to satisfy its obligations as they become due or the board of directors of the entity voting to cause an event of bankruptcy, regardless of whether we are informed of any of these actions.

• Any depository bank or transportation agent, excepting one pre-approved bank and one pre-approved transportation agent, failing to maintain a specified debt rating.

• The amount of vault cash held by or maintained on the premises of entities, which would generally be our transportation agents and merchants, that have experienced an event of bankruptcy when added to the amount of cash owed from settlement banks that is past due exceeding a designated level.

          Due to these provisions, the bankruptcy or financial difficulty of certain of our merchants or the companies on which we rely for services could cause an event of default under our loan and servicing agreement and prevent us from having access to the vault cash we require to operate our placement ATMs. We do not have any operational control over our merchants or other service providers and may not be able to determine whether any of these entities are facing financial difficulty that could increase our risk of default under the loan and servicing agreement. As a result, we could lose access to our vault cash due to circumstances that we would be unable to foresee and that are beyond our control.

          If our vault cash arrangement terminates, we may be unable to obtain vault cash from alternative sources on acceptable terms or at all. If we do not have access to vault cash for our placement ATMs we will have to suspend our operations with respect to these ATMs, our results of operations will be reduced and the value of our shareholders’ investments will decrease. Additionally, there are cross-default provisions in our vault cash facility whereby if we fail to comply with the covenants of our restructured loan agreements and are declared to be in default by GSO Origination Funding Partners LP and other lenders, we may be declared in default of the provisions of the Loan and Servicing Agreement and the Securities Purchase Agreement as well, and the lenders may demand payment.

We have notified our vault cash provider that we intend to terminate our current vault cash arrangement and obtain our vault cash from another source; although we believe that we will have an agreement in place for a new vault cash arrangement that will be more cost-effective than the current arrangement, if we are unable to obtain vault cash for our placement ATMs, it would harm our business.

          In March 2008, we notified our current vault cash provider that we intend to terminate our current vault cash arrangement sometime during the second quarter of 2008. We have made arrangements with another provider of vault cash that we believe will provide vault cash for us at a lower cost. We do not anticipate that this change in vault cash providers will cause any significant interruption in our business. We have tested the new vault cash provider’s abilities in a small sample of our ATMs. This test created an exclusivity violation under our current vault cash agreement. Although we expect our current provider to cooperate in our transition to the new provider, they could declare us to be in default of TRM Inventory Funding Trust’s Loan and Servicing Agreement and demand repayment of our vault cash liability before we have finalized arrangements to replace that cash in our ATMs. If we do not have access to vault cash for our company-owned ATMs we will have to suspend our operations with respect to these ATMs and our revenues will be reduced.

We experienced substantial theft losses in our ATM operations in the past. If we were to experience a recurrence of these losses, our results of operations could be harmed.

          Our United States ATM operations experienced $569,000 in unreimbursed theft losses in 2005, as a result of which we implemented new measures to counter theft and vandalism. Our unreimbursed theft losses in 2006 were $201,000 and in 2007 were $145,000. We cannot assure you that the anti-theft and anti-vandalism measures we have taken will be sufficient to reduce or even maintain the 2007 level of loss in 2008. Failure to do so or to devise additional measures to counteract theft and vandalism may result in substantial theft and vandalism losses, harming our results of operations.

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          In the past we have had crime insurance to reimburse us for losses that exceed certain deductible levels. Since July 1, 2005, due to increases in both the deductible level and the cost of the insurance, we have insured only against catastrophic cash losses.

Risks Relating to Our Common Stock

We do not plan to pay dividends on our common stock.

          We do not plan to declare dividends on our common stock for the foreseeable future and, in any event, under the terms of our credit facility with GSO Origination Funding Partners LP and other lenders and the Lampe Facility, we are prohibited from doing so.

Our charter documents and Oregon law may inhibit a takeover that shareholders may consider favorable.

     The Oregon Business Corporation Act, our restated articles of incorporation and our restated bylaws contain provisions that could have the effect of delaying, deferring or preventing a change in control of our company or our management that shareholders may consider favorable or beneficial, which could reduce the value of our shareholders’ investments. These provisions could discourage proxy contests and make it more difficult for shareholders to elect directors and take other corporate actions. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions include:

• authorization to issue “blank check” preferred stock, which is preferred stock that can be created by our board of directors without prior shareholder approval and with rights senior to those of common stock;

• a classified board of directors, so that it could take three successive annual meetings to replace all directors;

• authority for directors to establish the size of the board of directors without shareholder approval;

• a requirement of a 75% vote of shareholders to remove a director for cause;

• a requirement of a 75% vote of shareholders for business combinations with a 5% or greater shareholder that is not approved by our board of directors, with only limited exceptions; and

• an advance notice requirement for shareholder proposals.

The delisting of our common stock from the NASDAQ Global Market may result in impairment of the price at which our common stock trades and the liquidity of the market for it.

          On March 12, 2008, we announced that we had failed to comply with NASDAQ’s minimum bid price requirement and as a result, no longer met the requirements for continued listing on the NASDAQ Global Market. We filed an election to transfer to the NASDAQ Capital Market. On March 19, 2007, we were notified by NASDAQ that our application to transfer our shares to the NASDAQ Capital Market was denied due to our failure to demonstrate compliance with the NASDAQ Capital Market’s initial inclusion requirements (other than bid price) as set forth in Marketplace Rule 4310(c). We received an additional NASDAQ Staff Determination Letter dated March 19, 2008, stating that our shares will be delisted from the NASDAQ Global Market as a result of our failure to satisfy the minimum stock price requirement of the NASDAQ Global Market as set forth in Marketplace Rule 4450(a).

          NASDAQ’s staff notified us that, unless we requested an appeal of the delisting determination, NASDAQ would suspend trading of our common stock at the opening of business on March 28, 2008, and our common stock would subsequently be delisted. We have appealed the Staff’s determination and requested a hearing, which will stay any delisting action pending the issuance of a decision by the Panel following the hearing.

          If our common stock is delisted, it will not be traded on any national stock exchange and it may not be traded on any exchange for the foreseeable future. In addition, even if we regain compliance and seek to be relisted, we cannot be certain that NASDAQ will approve our application for relisting or that any other exchange will approve our common stock for listing. As a consequence, the ability of a stockholder to sell our common stock, and the price obtainable for our common stock could be materially impaired.

ITEM 1B. UNRESOLVED STAFF COMMENTS

          None

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ITEM 2. PROPERTIES

          Our principal offices are located at 5208 N.E. 122nd Avenue, Portland, Oregon 97230-1074. We currently lease approximately 44,000 square feet in Portland and sublease approximately 19,000 square feet of that space to other tenants. The lease runs until 2010, with an option for an additional five-year term. We leased 3,100 square feet of office space in Philadelphia, Pennsylvania for use as executive offices under a month-to-month rental agreement until March 31, 2008. Effective March 1, 2008, we entered into a 38-month lease for 3,000 square feet of office space in Cherry Hill, New Jersey for use as executive office space. We vacated most of our warehouse space and storage units during 2007. We continue to be obligated under leases for an aggregate of approximately 14,000 square feet of warehouse space at five locations, including four locations that we no longer use. These leases expire at various times between 2008 and 2010. Following the sales of our ATM businesses in the United Kingdom and Canada and our United States photocopy business in January 2007, we have outsourced our service work and have substantially fewer employees and need less space. If we cannot renew any of the current leases we want to retain, we do not anticipate that we will have difficulty in leasing suitable replacement space.

ITEM 3. LEGAL PROCEEDINGS

          We are a defendant in various actions that have arisen in the normal course of business. We believe that the ultimate disposition of these matters will not have a material adverse effect on our business, financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          No matters were submitted to a vote of security holders during the fourth quarter of 2007.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

NASDAQ Delisting

          On September 12, 2007, we were notified by the NASDAQ that our common stock was subject to delisting from the NASDAQ Global Market because we were not in compliance with the Minimum Bid Price Rule because the bid price per share of our common stock closed below $1.00 per share for 30 consecutive business days. We were provided with 180 calendar days, or until March 10, 2007, to regain compliance with the Minimum Bid Price Rule. However, we were not able to do so. On March 12, 2008, we announced that we had failed to comply with NASDAQ’s minimum bid price requirement and as a result, no longer met the requirements for continued listing on the NASDAQ Global Market.

          We filed an election to transfer to the NASDAQ Capital Market. On March 19, 2007, we received a NASDAQ Staff Determination Letter denying our application to transfer our shares to the NASDAQ Capital Market due to our failure to demonstrate compliance with the NASDAQ Capital Market’s initial inclusion requirements (other than bid price) as set forth in Marketplace Rule 4310(c). We received an additional NASDAQ Staff Determination Letter dated March 19, 2008, stating that our shares will be delisted from the NASDAQ Global Market as a result of our failure to satisfy the minimum stock price requirement of the NASDAQ Global Market as set forth in Marketplace Rule 4450(a).

          NASDAQ’s staff notified us that, unless we requested an appeal of the delisting determination, NASDAQ would suspend trading of our common stock at the opening of business on March 28, 2008, and our common stock would subsequently be delisted. We have requested a hearing to appeal the Staff’s determination which will stay any delisting action pending the issuance of a decision by the Panel following the hearing. See Item 1A, “Risk Factors — Risks Relating to Our Common Stock — The delisting of our common stock from the NASDAQ Global Market may result in impairment of the price at which our common stock trades and the liquidity of the market for it.”

Market Price Range

          The following table sets forth the high and low bid prices as reported by the NASDAQ Global Market during the past two years.

	High		Low
2007
4th Quarter	$	1.00	$	0.30
3rd Quarter	$	1.45	$	0.75
2nd Quarter	$	2.94	$	1.00
1st Quarter	$	3.54	$	1.82
2006
4th Quarter	$	2.40	$	1.09
3rd Quarter	$	7.18	$	2.19
2nd Quarter	$	7.93	$	5.98
1st Quarter	$	9.94	$	5.82

          As of March 14, 2008, there were 17,213,226 shares of common stock outstanding held by 169 persons of record.

Dividends

          We have not paid any dividends on our common stock, and we do not plan to pay dividends on our common stock for the foreseeable future. We intend to retain earnings, if any, to fund our operations. Subject to our credit agreements discussed in the next paragraph, our Board of Directors will determine any changes in our dividend policy based upon its analysis of factors it deems relevant. We expect these factors will include our earnings, financial condition and cash requirements.

          Our ability to pay cash dividends on our common stock is subject to restrictions imposed by our credit agreements with GSO Origination Funding Partners LP and the other lenders and the Lampe Facility, which prohibit us from paying cash dividends on our common stock without our lenders’ consent.

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Stock Performance Graph

          The following graph provides a comparison of the cumulative total shareholder return for the period December 31, 2002 through December 31, 2007 for (i) our common stock, (ii) the NASDAQ Stock Market (US) and (iii) the NASDAQ Retail Trade Index, in each case assuming the investment of $100 on December 31, 2002 and the reinvestment of any dividends.

     

	12/31/2002		12/31/2003		12/31/2004		12/31/2005		12/31/2006		12/31/2007
TRM	$	100.00	$	1,332.81	$	3,707.81	$	1,164.06	$	334.38	$	73.44
NASDAQ (US)	$	100.00	$	149.52	$	162.72	$	166.18	$	182.57	$	197.98
NASDAQ Retail	$	100.00	$	139.25	$	176.61	$	178.29	$	194.71	$	177.15

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Securities Authorized for Issuance under Equity Compensation Plans

				Number of common shares
	Number of common shares			remaining available for future
	to be issued upon exercise		Weighted-average exercise	issuance under equity
	of outstanding options,		price of outstanding options,	compensation plans (excluding
	warrants and rights		warrants and rights	shares reflected in column (a))
Plan Category	(a)		(b)	(c)
Equity compensation plans approved by security holders:
1996 Restated Stock Incentive Plan		231,625	$  4.60		—
Omnibus Stock Incentive Plan:
Restricted stock awards		686,393
Options		30,000	$    .98
Total Omnibus Stock
Incentive Plan		716,393			703,870
Equity compensation plans not approved by security holders:
2001 Nonqualified Stock Option Plan		15,000	$12.12		—
Total		963,018			703,870

ITEM 6. SELECTED FINANCIAL DATA

          The selected financial data, except for other operating data, presented below as of December 31, 2006 and 2007 and for the years ended December 31, 2005, 2006 and 2007 have been derived from our audited financial statements included in this report. The selected financial data, except for other operating data, presented below as of December 31, 2003, 2004 and 2005 and for the years ended December 31, 2003 and 2004 have been derived from our financial statements not included in this report. This data should be read in conjunction with the financial statements, related notes and other financial information included elsewhere in this report.

Selected Financial Data
Years ended December 31, 2003 — 2007
(In thousands, except per share and other operating data)

	2003			2004			2005			2006			2007
Sales	$	16,110		$	31,725		$	125,874		$	107,656		$	90,386
Sales discounts		(3,211	)		(12,826	)		(76,673	)		(65,576	)		(56,711	)
Net sales		12,899			18,899			49,201			42,080			33,675
Operating loss		(7,689	)		(5,239	)		(9,646	)		(55,823	)		(8,510	)
Loss from continuing operations		(5,051	)		(3,490	)		(5,872	)		(53,566	)		(13,726	)
Income (loss) from discontinued operations		10,507			11,418			(2,999	)		(66,525	)		5,299
Net income (loss)		5,456			7,928			(8,871	)		(120,091	)		(8,427	)
Preferred stock dividends		(1,500	)		(1,329	)		(147	)		—			—
Loss from continuing operations available to common stockholders		(7,180	)		(5,787	)		(6,019	)		(53,566	)		(13,726	)
Basic and diluted loss per share from continuing operations		(1.02	)		(.63	)		(.41	)		(3.14	)		(.80	)
Balance Sheet Data:
Working capital (deficit)		2,263			(9,203	)		(89,172	)		(2,619	)		(4,681	)
Total assets		112,275			359,482			341,782			226,444			94,289
Long-term debt (excluding current portion)		37,358			196,167			1,066			—			3,009
Preferred stock		19,798			11,620			—			—			—
Shareholders’ equity		48,876			111,712			139,926			25,693			13,160
Other Operating Data:
Average number of transacting ATMs		1,249			3,011			14,530			12,378			10,253

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Notes regarding comparability of information:

     1. During the fourth quarter of 2004, we discontinued efforts in the software development segment of our business. We show the results of the software development segment as discontinued operations.

     2. In 2004 we acquired the ATM business of eFunds Corporation and completed four other acquisitions.

     3. During the third quarter of 2006 we recorded non-cash charges of $96.1 million for the impairment of certain assets, of which $43.3 million is included in continuing operations and $52.8 million is included in discontinued operations.

     4. In June 2006 we sold our United Kingdom photocopier business. In January 2007 we sold our ATM businesses in the United Kingdom, Germany and Canada and our United States photocopy business. In June 2007 we sold our Canadian photocopy business. We show the results of those business segments as discontinued operations. Other operating data shown above excludes the ATMs of the discontinued operations.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

          Information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business, including, without limitation, growth of our business (including acquisitions) 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. We have based these forward-looking statements on management’s current expectations about future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts, and by words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan” or other similar words or expressions.

          Any or all of the forward-looking statements in this report and in any other public statements we make may turn out to be wrong. This can occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. We discuss many of the risks and uncertainties that may impact our business in Item 1A — “Risk Factors.” Because of these risks and uncertainties, our actual results may differ materially from those that might be anticipated from our forward-looking statements. Other factors beyond those referred to above could also adversely affect us. Therefore, you are cautioned not to place undue reliance on our forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise except as required under the federal securities laws and the rules and regulations of the SEC.

Overview

          During 2006 we operated ATM networks in the United States, United Kingdom, Canada and Germany, and we operated photocopier networks in the United States, United Kingdom and Canada. In June 2006 we sold our United Kingdom photocopy business. In January 2007 we sold our ATM businesses in the United Kingdom, Germany and Canada and our United States photocopy business. In June 2007 we sold our Canadian photocopy business. Our remaining business operates ATMs in the United States. During 2007 our United States ATM networks had an average of 10,253 transacting ATMs.

          In 2004 we had net income of $7.9 million. In 2005 we incurred a net loss of $8.9 million, in 2006 we incurred a net loss of $120.1 million and in 2007 we incurred a net loss of $8.4 million.

          We acquired eFunds Corporation’s ATM business in November 2004. As a result, our United States ATM net sales increased from $18.9 million in 2004 to $49.2 million in 2005. In 2006 our net sales decreased to $42.1 million, primarily as a result of attrition of ATM contracts acquired in the acquisition of eFunds Corporation’s ATM business. Principally because of decreases in our sales and operating margins, we reviewed the carrying value of substantially all of our long-lived assets, which resulted in our recording non-cash charges of $96.1 million for asset impairments. Also contributing to the increased losses in 2006 were increases in our cost of vault cash and interest expense and a loss on early extinguishment of debt.

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          Subsequent to the end of fiscal year 2005, based upon our financial performance during the second half of 2005, we determined that we were in default under certain financial covenants contained in our credit facility administered by Bank of America. We entered into a forbearance agreement with the lenders with respect to that facility, and in June 2006 we refinanced our then-existing debt with a new credit facility with GSO Origination Funding Partners LP, Wells Fargo Foothill, and other lenders. However, our financial performance in the third quarter of 2006 caused us not to be in compliance with certain covenants in the new credit facility, and we entered into agreements with the lenders to restructure our loans. Under the modified agreements all but $25 million of our debt was due in the first quarter of 2007. Because of the new repayment terms, during January 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States photocopier business, and used $98.5 million from the proceeds of those sales to make principal and interest payments under our financing agreements. These payments repaid all but $2.0 million of our principal and accrued interest under the credit facility. In connection with these sales, we have made various representations and warranties and/or provided indemnities. The purchasers may make claims against us relating to the representations or warranties or provisions for adjustment of the sale prices, and those claims could be substantial. Because we used substantially all of the net proceeds from the business sales to reduce our debt, we might not have sufficient cash to pay such claims without additional financing which may not be available to us. We have entered into a settlement agreement with the acquirer of our United Kingdom ATM business which relieves us from all warranties and/or indemnities under the purchase agreement. This settlement agreement and an agreement to pay eFunds Corporation $2.5 million are discussed under “Liquidity and Capital Resources.”

          We expect to be able to refinance the outstanding balances under our financing agreement with GSO Origination Funding Partners and the other lenders and the $2.5 million liability due to eFunds Corporation, and we have begun initial efforts to do so. However, we can provide no assurance that we will be able to do so. If we are unable to refinance our debt or to get our lenders to agree to any further forbearance from calling our loans, we might be forced to seek protection of the courts through reorganization, bankruptcy or insolvency proceedings.

          ATM operations. We entered the ATM business in 1999, believing it to be a natural extension of our background in providing photocopiers to consumers in retail environments. From 1999 to 2005 we expanded our ATM networks to an average of 19,930 transacting ATMs in 2005. We grew our ATM business by acquiring ATMs or ATM networks, establishing new merchant relationships, expanding existing merchant relationships and displacing existing third-party operators as their contracts expired. As a result of the increasing size of our ATM networks, improved transaction pricing, our institution of a redeployment program for underperforming machines and favorable exchange rate movements, our ATM net sales increased from $34.5 million in 2003 to $50.5 million in 2004 and $90.5 million in 2005. In 2006, as a result of attrition of merchant contracts and limited capital available for expansion, our ATM net sales decreased to $81.7 million, including $39.6 million from our United Kingdom, German and Canadian ATM operations which we now report as discontinued operations. Since January 2007 we have operated ATMs only in the United States. Continued attrition of merchant contracts has resulted in a decrease in our United States ATM net sales to $33.7 million in 2007 from $42.1 million in 2006.

          ATM acquisitions. From the second half of 2003 through the end of 2005, we actively pursued acquisitions of ATM networks. We acquired a 20-ATM United States network in February 2004 from a company that continues to serve as a distributor for us. In June 2004, we entered the Canadian ATM market through our acquisition of Mighty Cash, which had 72 ATMs. We added 447 ATMs to our UK networks through our acquisition of Inkas Financial in March 2004, and added 350 ATMs to our UK networks by purchasing a portfolio of contracts in July 2004. In November 2004, we acquired the ATM business of eFunds, including ownership and/or management of approximately 14,000 ATMs in the United States and 1,700 ATMs in Canada. During the third quarter of 2005 we entered into agreements to acquire the ATM business of Travelex UK Limited in the United Kingdom. We subsequently determined that we would not complete this acquisition and that of one other ATM business that we had been evaluating, and previously capitalized external costs totaling $5.2 million relating to these acquisitions were charged to expense in the fourth quarter of 2005.

          Photocopier operations. Before we sold our United Kingdom photocopier business in June 2006, our United States photocopier business in January 2007 and our Canadian photocopier business in June 2007, our photocopier operations had been experiencing declining numbers of photocopies made per machine, from 24,144 in 2004 to 16,387 in 2006. We attribute this to increased competition from specialty full-service business centers, copy and print shops, photocopiers located at other convenient merchant locations and home photocopiers and printers. The number of photocopiers we had in service also decreased from an average of 25,239 during 2004 to an average of 20,289 during 2006 as we discontinued service at unprofitable or marginal locations. These trends, combined with the sale of our United Kingdom photocopy business, resulted in a decline of our photocopier net sales from $42.2 million in 2004 to $27.4 million in 2006. We now report all of our photocopier operations as discontinued operations.

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Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

	Results of Operations-Continuing Operations
	2006					2007
	Amount		%			Amount		%
	(in thousands, except operating and percentage data)
Transaction-based sales	$	98,448		100.0	%	$	83,582		100.0	%
Less discounts		65,576		66.6			56,711		67.9
Net transaction-based sales		32,872		33.4	%		26,871		32.1	%
Service and other sales		5,367					4,514
Sales of ATM equipment		3,841					2,290
Net sales		42,080					33,675
Cost of sales:
Cost of vault cash		6,482					5,399
Other		16,990					17,465
Gross profit	$	18,608				$	10,811
Operating data:
Average number of transacting ATMs		12,378					10,253
Withdrawal transactions		43,112,562					35,154,884
Average withdrawals per ATM per month		290					286
Average transaction-based sales per withdrawal transaction	$	2.28				$	2.37
Average discount per withdrawal transaction	$	1.52				$	1.61
Net transaction-based sales per withdrawal transaction	$	.76				$	.76

Sales

          In 2007, consolidated sales from continuing operations decreased by $17.3 million, or 16.0%, to $90.4 million from $107.7 million in 2006.

          ATM sales. We derive most of our ATM sales from transaction-based sales. We also generate ATM sales from the sale of ATM equipment and third-party service sales. We describe these sources of sales below.

• Transaction-based sales — sales we derive from withdrawal fees and interchange fees.

• Withdrawal fees — fees we receive from a processor derived from a customer making an ATM withdrawal. Withdrawal fees are sometimes referred to as surcharge or convenience fees in the industry.

• Interchange fees — fees that an EFTN charges the customer’s financial institution for routing a withdrawal transaction or an account balance inquiry. The interchange fee is shared between the EFTN and us, as the ATM service provider, based on an agreement between us and the EFTN. Interchange fees apply on all transactions on ATMs that we own and ATMs owned by merchants and managed or serviced by us.

• Service and other sales — fees we charge for providing repair and maintenance and other services and parts and supplies to merchants who purchase or rent ATMs from us and to third-party ATM operators.

• Sales of ATM equipment — sales of ATM equipment to merchants in our merchant-owned program and to independent operators.

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          Our United States ATM sales were $90.4 million for 2007 compared to $107.7 million for 2006. The $17.3 million decrease in ATM sales was due to a combination of a $14.9 million decrease in transaction-based sales, a $1.6 million decrease in sales of ATM equipment and an $853,000 decrease in service and other sales.

          The $17.3 million decrease in transaction-based sales resulted from attrition of merchant contracts in our ATM network. The average number of transacting ATMs in our network during 2007 decreased by 17.2% compared to 2006. The decrease in transacting ATMs is primarily a result of attrition in ATM contracts acquired from eFunds in 2004. See Item 1A — “Risk Factors — Risks Relating to Our ATM Business — If merchant-owned ATM customers terminate their relationships with us prior to the termination of their contracts or do not renew their contracts upon their expiration, it could reduce our ATM sales.”

          The average number of withdrawal transactions per ATM per month stayed almost constant in 2007 as compared to 2006. Average transaction-based sales per withdrawal increased by $.09, or 3.9%, due to increases in withdrawal fees.

Sales Discounts

          Our merchants receive fees from transactions generated by the ATMs on their premises. These fees, or sales discounts, represent a share of transaction fees. The amount of the discount depends on a variety of factors, including the type of arrangement under which we place the ATM with the merchant and the number of transactions at the ATM. Sales discounts in our United States ATM business were 67.9% of transaction-based sales in 2007 and 66.6% in 2006. The average discount per withdrawal transaction increased by $.09, matching the increase in transaction-based revenue per transaction.

Cost of Sales

          Cost of sales decreased by $608,000, but increased to 25.3% of gross sales in 2007, from 21.8% in 2006.

          Prior to the sale of our photocopy business, our field service employees maintained both our photocopy and ATM equipment. As a result of the sale of our United States photocopy business, we determined that it would be more economical to hire third parties to perform maintenance on our equipment and on merchant’s equipment where that is our responsibility. During the first and second quarters of 2007 we transitioned our ATM maintenance function from our own field service employees to third parties. During 2007, our expense for third party ATM service increased by $4.0 million as compared to 2006. This increase was partially offset by a decrease of $1.8 million in our cost of labor, parts and vehicle expense attributed to our United States ATM business. As of December 31, 2006, we had 129 field service employees in the United States doing maintenance on equipment for both our ATM and photocopy businesses. As of June 30, 2007, we had terminated all of our field service employees.

          Additionally, since we no longer have field service technicians on our staff, we are no longer using our inventory of parts and used ATMs in the normal course of business, and we have decided to sell or otherwise dispose of that inventory. As a result, cost of sales for 2007 includes a $270,000 charge to write down our inventories to their estimated net realizable value.

          The increases in ATM maintenance costs and inventory writedowns charged to cost of sales were offset by:

• A decrease in our cost of vault cash of $1.1 million or 16.7%, as compared to 2006. The number of ATMs for which we provide cash has decreased by 16.0% from December 2006 to December 2007.

• A decrease in armored car carrier costs of $356,000, or 10.8%, as compared to 2006. This decrease in expense is due primarily to the reduction in the number of ATMs for which we provide cash.

• A $1.4 million decrease in the cost of ATM machines sold due to the $1.6 million decrease in ATM sales as compared to 2006.

          In the past we have had crime insurance to reimburse us for losses that exceeded certain deductible levels. For the policy year beginning July 1, 2005, due to proposed increases in both the deductible level and the cost of the insurance, we began insuring only against catastrophic cash losses.

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Selling, General and Administrative Expense

          Selling, general and administrative expense attributed to continuing operations decreased by $14.1 million to $16.5 million in 2007 from $30.5 million in the prior year. Selling, general and administrative expense as a percent of sales decreased to 18.2% in 2007 from 28.4% in the prior year. Specific decreases included:

• Amortization expense decreased by $3.8 million due to the reduction of the basis of our intangible assets as a result of impairment charges taken in the third quarter of 2006.

• Labor costs (excluding non-cash stock compensation expense) decreased by $4.7 million, or approximately 44%. In connection with and following the sales of businesses in January and June 2007 we have substantially reduced our selling, general and administrative staff, from 102 employees as of December 31, 2006, to 39 employees as of December 31, 2007.

• Non-cash stock compensation expense decreased by $543,000. In the second quarter of 2006, we recorded $618,000 of expense in connection with the acceleration of the vesting of options granted to our former President and Chief Executive Officer.

• Legal and accounting fees decreased by $1.7 million, or approximately 41%, due in large part to our smaller size and sale of substantially all of our foreign operations in the first half of 2007.

• Outsourced services expense decreased by $1.5 million due to a settlement agreement with eFunds Corporation reducing our obligation under a Master Services Agreement.

• Consulting fees decreased by $896,000. We did not renew a one-year consulting agreement with our former Chief Executive Officer who resigned in March 2006. In addition, we reduced our use of other consultants who provided strategic and information technology consulting during 2006.

• Depreciation expense decreased by $642,000 primarily because our Oracle ERP software became fully depreciated in early 2007.

• A $493,000 decrease in travel expense due to the reduction in employees and a continued effort to control travel expenses during 2007.

          No general corporate overhead expenses have been allocated to discontinued operations.

Impairment Charges

     During the third quarter of 2006 we recorded non-cash charges of $96.1 million for the impairment of certain assets in our ATM and photocopier segments, as follows:

• ATM goodwill. Because of continuing decreases in sales and operating margins in the ATM segments and other factors, we re-evaluated our financial forecasts in the third quarter of 2006 and concluded that it was necessary to review goodwill in our United States, Canadian and United Kingdom ATM segments for impairment of value. The review, consisting of a comparison of the carrying value of the goodwill to its implied fair value, resulted in impairment charges of $20.4 million in the United States, $5.8 million in Canada and $17.5 million in the United Kingdom. Our estimate of the implied fair value of the United States ATM segment’s goodwill was based on the quoted market price of our common stock and the discounted value of estimated future cash flows over a six-year period with residual value, using an 11% discount rate. Our estimate of the implied fair value of the Canadian and United Kingdom ATM segments’ goodwill was based on the estimated selling prices of those ATM segments. The $20.4 million impairment charge relating to our United States ATM operations is included in the results of our continuing operations, while the charges relating to our Canadian and United Kingdom ATM operations are included in discontinued operations.

• Finite-lived intangible assets associated with the ATM businesses. Because of faster than anticipated attrition of customer contracts, operating losses and revised financial forecasts, we concluded that it was necessary to review the carrying value of the long-lived assets of our United States, Canadian and United Kingdom ATM segments. In that review, we determined that the future cash flows from those assets were not adequate to recover those assets, and we recorded impairment charges of $22.9 million in the United

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States, $272,000 in Canada and $7.7 million in the United Kingdom, based on comparisons of the carrying amounts of the assets to their estimated fair values. Our estimate of the fair value of the United States assets was based on the discounted values of estimated future cash flows over a seven-year period using an 11% discount rate. Our estimates of the fair value of the Canadian and United Kingdom assets were based on the estimated selling price of those ATM segments. The $22.9 million impairment charge relating to our United States ATM operations is included in the results of our continuing operations, while the charges relating to our Canadian and United Kingdom ATM operations are included in discontinued operations.

•

Photocopy equipment in the United States and Canada. Because of operating losses in our United States and Canadian photocopy segments and revised financial forecasts, we concluded that it was necessary to review the carrying value of those segments’ long-lived assets, which consist almost entirely of photocopy equipment. As a result, we determined that future cash flows from the photocopy segments were not adequate to recover the carrying value of that equipment, and we recorded impairment charges of $18.7 million in the United States and $2.7 million in Canada based on a comparison of the carrying amounts of these assets to their estimated fair values. Our estimates of the fair values of the asset groups were based on the estimated selling price of the United States photocopy segment and the discounted value of estimated future cash flows over a ten-year period using an 11% discount rate for the Canadian photocopy segment. Impairment charges relating to photocopy equipment are included in discontinued operations.

Restructuring Charges

          In connection with the corporate restructuring plan we announced in November 2006 and the subsequent sales of a substantial portion of our operations, we have made significant staff reductions, including termination by the end of May 2007 of substantially all of our United States field service employees. We have also vacated leased warehouse and office space occupied by the terminated employees. During the first six months of 2007 we paid severance of $167,000 to terminated employees. During the first six months of 2007 we vacated warehouse and office space in eleven United States locations. We leased the vacated space under leases with remaining terms up to seven years. We recorded a liability of $796,000 as of March 31, 2007, which was the estimated fair value of the costs that we expect to incur without any economic benefit, and we charged that amount to expense in the first quarter of 2007. We estimated the fair value of the liability based on the discounted value of the remaining lease payments, reduced by estimated sublease payments that we reasonably expect could be obtained for use of the properties.

          The costs for both severance payments and vacated leases are included in restructuring charges in our statement of operations for 2007.

Equipment Write-offs

          In the third quarter of 2007 contracts with three merchants that had TRM-owned ATMs in their stores were terminated, and we began removing those ATMs. In part because we no longer have technicians on our staff, we decided that we would not be refurbishing, upgrading and redeploying these ATMs, and we arranged to sell them to third parties. In addition, based on a review of our ATMs in storage, we decided that it would not be cost-effective to refurbish and upgrade most of our stored machines to current standards. As a result, in the third quarter of 2007 we charged $1.1 million to equipment write-offs to write down the equipment to be sold to its estimated net realizable value.

Interest Expense and Amortization of Debt Issuance Costs

          Interest expense and amortization of debt issuance costs attributed to continuing operations increased to $464,000 in 2007 from $1,000 in 2006. The terms of our financing agreements required us to use substantially all of the net proceeds from the sales of businesses in June 2006 and January 2007 to pay debt. Accordingly, we have allocated interest on the lesser of the amount repaid or debt outstanding to discontinued operations. Interest and amortization of debt issuance costs were allocated between continuing operations and discontinued operations as follows (in thousands):

	2006		2007
Continuing operations	$	1	$	464
Discontinued operations		12,974		1,289
	$	12,975	$	1,753

          The decrease in total interest and amortization of debt issue costs in 2007 was primarily due to decreased amounts owed on our credit facilities. Because the payments we made in January 2007 reduced the balance of our

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outstanding debt under our credit facility with GSO Origination Funding Partners LP and the other lenders to $2.0 million from $99.3 million at December 31, 2006, we expect our future interest expense to be substantially reduced from the 2005 and 2006 levels.

Loss on Early Extinguishment of Debt

          Loss on early extinguishment of debt for 2006 was $3.1 million. This loss resulted from writing off costs we had deferred in conjunction with refinancing our previous debt and payment of a prepayment penalty to our former lenders. The $4.8 million loss on early extinguishment of debt for 2007 resulted from writing off deferred financing costs of $4.1 million in connection with early payment of our term loans and line of credit and a $750,000 payment penalty accrued relating to the early termination of our vault cash arrangement.

Tax Rate

          For 2007 we did not allocate any tax provision to continuing operations. Our benefit for income taxes for 2006 was $5.2 million on a pretax loss from continuing operations of $58.8 million. The tax provision differs from the statutory rate due primarily to losses for which no tax benefit can be recorded. We did not record a tax benefit because we are uncertain that we will be able to realize the benefit of our net operating loss carryforwards and future deductible amounts. See Note 7 to our consolidated financial statements.

Loss from Discontinued Operations

          On June 28, 2006, we sold all of the outstanding shares of TRM Copy Centres (U.K.) Limited, our United Kingdom photocopier subsidiary, to an unrelated third party for cash.

          In December 2006 we entered into agreements to sell substantially all of the assets of our United States photocopy segment and our Canadian ATM segment. The sale of the Canadian ATM business closed January 12, 2007. The sale of the United States photocopy business closed January 29, 2007.

          Effective January 24, 2007, we sold all of the shares of our United Kingdom ATM subsidiary that owned our ATM businesses in the United Kingdom and Germany.

          On June 19, 2007, we sold substantially all of the assets of our Canadian photocopy business.

          See “Risk Factors — Risks Related to our Business Generally — We could be liable for sales price adjustments and warranty/indemnification claims relating to businesses we sold in 2006 and 2007,” for a discussion of possible sales price adjustments and warranty or indemnification claims including those relating to taxation matters.

          The operations of our Canadian, United Kingdom and German ATM businesses and our United Kingdom, United States and Canadian photocopy business are shown as discontinued operations for all periods presented in our consolidated statements of operations.

          Our pretax income from discontinued operations was $5.4 million in 2007, compared to a pretax loss of $65.9 million in 2006. Discontinued operations for 2006 includes impairment charges relating to goodwill, finite-lived intangible assets and equipment totaling $52.8 million. See Note 11 to our consolidated financial statements for additional information regarding our discontinued operations.

Net Income (Loss)

          Our net loss decreased by $111.7 million, to $8.4 million in 2007 from $120.1 million in 2006. The major factors contributing to the decreased net loss were:

• Impairment charges of $96.1 million in 2006, of which $52.8 million is included in discontinued operations. We had no impairment charges in 2007.

• A $14.1 million decrease in selling, general and administrative expense, partially offset by a $7.8 million decrease in gross profit.

• Gains on sales of discontinued operations of $9.8 million in 2007, compared to $1.9 million in 2006.

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Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

	Results of Operations-Continuing Operations
	2005					2006
	Amount		%			Amount		%
	(in thousands, except operating and percentage data)
Transaction-based sales	$	114,848		100.0	%	$	98,448		100.0	%
Less discounts		76,673		66.8			65,576		66.6
Net transaction-based sales		38,175		33.2	%		32,872		33.4	%
Service and other sales		8,363					5,367
Sales of ATM equipment		2,663					3,841
Net sales		49,201					42,080
Cost of sales:
Cost of vault cash		5,319					6,482
Other		16,884					16,990
Gross profit	$	26,998				$	18,608
Operating data:
Average number of transacting ATMs		14,530					12,378
Withdrawal transactions		50,388,584					43,112,562
Average withdrawals per ATM per month		289					290
Average transaction-based sales per withdrawal transaction	$	2.28				$	2.28
Average discount per withdrawal transaction	$	1.52				$	1.52
Net transaction-based sales per withdrawal transaction	$	.76				$	.76

Sales

          In 2006, consolidated sales from continuing operations decreased by $18.2 million, or 14.5%, to $107.7 million from $125.9 million in 2005.

          The $18.2 million decrease in ATM sales was due to a combination of a $16.4 million decrease in transaction-based sales and a $3.0 million decrease in service sales, partially offset by a $1.2 million increase in sales of ATM equipment.

          The $16.4 million decrease in transaction-based sales resulted from attrition of merchant contracts in our ATM network. The average number of transacting ATMs in our network during 2006 decreased by 14.8% compared to 2005. The decrease in transacting ATMs is primarily a result of attrition in ATM contracts acquired from eFunds in 2004. See Item 1A — “Risk Factors — Risks Relating to Our ATM Business — If merchant-owned ATM customers terminate their relationships with us prior to the termination of their contracts or do not renew their contracts upon their expiration, it could reduce our ATM sales.”

          The average number of withdrawal transactions per ATM per month and average transaction-based sales per withdrawal stayed almost constant in 2006 as compared to 2005.

Sales Discounts

          Sales discounts in our United States business were almost constant in 2006 as compared to 2005: 66.6% of transaction-based sales in 2006 as compared to 66.8% in 2005.

Cost of Sales

          Cost of sales in our United States ATM business increased by $1.3 million to $23.5 million in 2006 from $22.2 million in 2005, due to a $1.2 million increase in the cost of our vault cash.

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          We pay interest on the vault cash we use, and the interest rate is based on the rates the lender pays on asset-backed commercial paper notes used to fund the loans to us. During 2006 our average outstanding borrowings for vault cash were $79.3 million and we paid a weighted average interest rate of 6.81%. During 2005 our average outstanding borrowings for vault cash were $83.8 million and we paid a weighted average interest rate of 5.10%.

          An $846,000 decrease in third party service costs in 2006 compared to 2005 was offset by a $1.1 million increase in the cost of ATM machines sold.

          In the past we have had crime insurance to reimburse us for losses that exceeded certain deductible levels. For the policy year beginning July 1, 2005, due to proposed increases in both the deductible level and the cost of the insurance, we began insuring only against catastrophic cash losses.

Selling, General and Administrative Expense

          Selling, general and administrative expense decreased by $833,000 to $30.5 million in 2006 from $31.4 million in 2005. However, selling, general and administrative expense as a percent of sales increased to 28.4% in 2006 from 24.9% in 2005. Specific decreases included:

• A $2.2 million decrease in amortization expense due to declining amortization of intangible assets relating primarily to ATM contracts acquired in 2004, and further reduction of amortization following third quarter 2006 impairment charges that reduced the basis of the intangible assets being amortized.

• A $609,000 decrease in labor-related expense. This decrease was caused by a decrease in sales and administrative employees in the United States from 126 at the end of 2005 to 102 at the end of 2006.

• An $834,000 decrease in travel expense due to a concerted effort to control travel expenses during 2006.

          These decreases were partially offset by:

• Legal, accounting and consulting expenses increased by $2.2 million, primarily relating to restructuring of debt, efforts to sell parts of our business and related complex legal and accounting issues.

• Non-cash stock compensation increased by $1.0 million, $685,000 of which was due to the modification of options previously granted to former executives.

          No general corporate overhead expenses have been allocated to discontinued operations.

Impairment Charges

          During the third quarter of 2006 we recorded non-cash charges of $96.1 million for the impairment of certain assets in our ATM and photocopier segments, which we discuss in “Year Ended December 31, 2007 Compared to Year Ended December 31, 2006 — Impairment Charges.” There were no such charges in 2005.

Abandoned Acquisition Costs

          We determined that it was unlikely that we would complete the acquisition of the ATM business of Travelex UK Limited and one other ATM business that we had been evaluating during 2005. As a result, we charged to expense in the fourth quarter of 2005 a total of $5.2 million of previously capitalized external costs relating to these potential acquisitions.

Interest Expense and Amortization of Debt Issuance Costs

          Interest expense and amortization of debt issuance costs attributed to continuing operations decreased to $1,000 in 2006 from $1.9 million in 2005. The terms of our financing agreements required us to use substantially all of the net proceeds from the sales of businesses in June 2006 and January 2007 to pay debt. Accordingly, we have allocated interest on the lesser of the amount repaid or debt outstanding to discontinued operations. Interest and amortization of debt issuance costs were allocated between continuing operations and discontinued operations as follows (in thousands):

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	2005		2006
Continuing operations	$	1,861	$	1
Discontinued operations		8,357		12,974
	$	10,218	$	12,975

          The increase in total interest and amortization of debt issue costs in 2006 was primarily due to increased interest rates and loan fees on borrowings on our credit facilities.

Loss on Early Extinguishment of Debt

          Loss on early extinguishment of debt for 2006 was $3.1 million. This loss resulted from writing off costs we had deferred in conjunction with refinancing our previous debt and payment of a prepayment penalty to our former lenders. In 2005 we wrote off $513,000 of deferred financing costs in connection with the early payment of part of our term loan.

Other Income, Net

          Other income in 2005 includes a $1.3 million gain on sale of marketable equity securities and a $700,000 reimbursement from our directors and officers liability insurer. There were no other income or expense items in 2006 that were individually significant.

Tax Rate

          Our benefit for income taxes for 2006 was $5.2 million on a pretax loss from continuing operations of $58.8 million. The tax provision differs from the statutory rate due primarily to losses for which no tax benefit can be recorded. We did not record a tax benefit because we are uncertain that we will be able to realize the benefit of our net operating loss carryforwards and future deductible amounts. For 2005 our effective tax rate for continuing operations was 42.6%, resulting in a tax benefit of $4.4 million. See Note 7 to our consolidated financial statements.

Loss from Discontinued Operations

          As discussed in “Year Ended December 31, 2007 Compared to Year Ended December 31, 2006 — Loss from Discontinued Operations,” we show the operations of our Canadian, United Kingdom and German ATM businesses and our United Kingdom, United States and Canadian photocopy businesses as discontinued operations for all periods presented in our consolidated statements of operations.

          Our pretax loss from discontinued operations was $65.9 million in 2006, compared to a pretax loss of $3.5 million in 2005. Discontinued operations for 2006 includes impairment charges relating to goodwill, finite-lived intangible assets and equipment totaling $52.8 million. See Note 11 to our consolidated financial statements for additional information regarding our discontinued operations.

Net Income (Loss)

          Our net loss increased by $111.2 million, to $120.1 million in 2006 from $8.9 million in 2005. The major factors contributing to the increased net loss were:

• Impairment charges of $96.1 million in 2006, of which $52.8 million is included in discontinued operations.

• An $8.4 million decrease in gross profits resulting from an $18.2 million decrease in sales from continuing operations.

• The $3.1 million loss on early extinguishment of debt in 2006.

• A $2.8 million increase in interest expense and amortization of debt issuance costs.

These increases were partially offset by $5.2 million of abandoned acquisition costs in 2005 that did not recur in 2006.

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Liquidity and Capital Resources

General

          We incurred a net loss of $120.1 million in the year ended December 31, 2006. As a result of our financial performance for the three months ended September 30, 2006, we failed to meet certain financial covenants of our financing agreements with GSO Origination Funding Partners LP and other lenders. On November 20, 2006 we entered into amendments that restructured our loans and waived the failure to meet the loan covenants. Under the restructured loan agreements principal payments of $69.9 million were due in the first quarter of 2007. During January 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States photocopy business and used $98.4 million from the proceeds of those sales to make principal and interest payments under these loans, leaving a remaining balance of principal plus accrued interest of $2.0 million. We are uncertain whether our remaining operations can generate sufficient cash to comply with the covenants of our restructured loan agreements and to pay our obligations on an ongoing basis. Because there are cross-default provisions in TRM Inventory Funding Trust’s Loan and Servicing Agreement and our Securities Purchase Agreement in connection with the Lampe Facility, if we fail to comply with the covenants of our restructured loan agreements and are declared to be in default by GSO Origination Funding Partners LP and other lenders, we may be declared in default of the provisions of the Loan and Servicing Agreement and the Securities Purchase Agreement under the Lampe Facility as well, and the lenders may be able to demand payment. These factors, among others, may indicate that we may be unable to continue as a going concern for a reasonable period of time. We have received a report from McGladrey & Pullen, LLP regarding our consolidated financial statements for the year ended December 31, 2007, which included an explanatory paragraph stating that the consolidated financial statements were prepared assuming we will continue as a going concern. The report also stated that our uncertainty regarding our ability to meet our future obligations has raised substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. Our continuation as a going concern is contingent upon our ability to generate sufficient cash to pay our obligations on an ongoing basis.

          Our principal ongoing funding requirements are for working capital to finance our operations, fund capital expenditures and pay obligations under settlement agreements with Notemachine Limited and eFunds Corporation.

          During 2007, we used $5.6 million of cash in operating activities as compared to $869,000 generated from operating activities in the same period in the prior year. Cash used in operating activities in 2007 includes $3.1 million transferred to restricted cash as collateral for letters of credit. We expect to terminate the remaining letter of credit in the second quarter of 2008 resulting in release of the cash collateral. During 2007 we received $101.5 million cash proceeds from the sale of discontinued operations, and we used $98.6 million of that cash to pay debt, reducing the balance of our syndicated debt to $2.1 million at the end of 2007.

          We had cash and cash equivalents of $3.9 million at December 31, 2007, compared to $4.8 million at December 31, 2006, and a net working capital deficit of $4.7 million at December 31, 2007 compared to a net working capital deficit of $2.6 million at December 31, 2006. The working capital deficits were partially caused by the classification of all of our debt facilities as current liabilities due to our loan covenant defaults. As of December 31, 2006, we classified all of the assets of the businesses sold in January 2007 as current assets, because the proceeds from those sales were required to be used to pay debt classified as a current liability. This debt was substantially repaid in January 2007. Subject to the matters discussed in the following paragraphs, we believe that our liquidity and capital resources are adequate for our currently anticipated needs.

          In December 2007, we entered into an agreement in principle with eFunds to terminate a Master Services Agreement originally scheduled to terminate in 2009. In connection with the termination of that agreement we agreed to pay eFunds $2.5 million to settle disputed charges under the agreement. The payment will become due upon execution of a mutually acceptable settlement and release agreement.

          In November 2007, we entered into a settlement agreement with Notemachine, Limited, relating to the sale to Notemachine of our United Kingdom and German ATM businesses in January 2007. Pursuant to the settlement agreement, we agreed to repay £3,250,000 ($6.4 million using exchange rates as of December 31, 2007) in full and final settlement of claims by Notemachine relating to the sale. Payment terms under the settlement agreement were: £571,000 upon signing, £33,000 (interest only) in December 2007, £625,000 in January 2008, and 36 monthly payments of £71,212, including interest at 15% per annum, commencing February 1, 2008. The settlement agreement requires us to pay the remaining outstanding balance to Notemachine from the proceeds of any debt or equity financing, to the extent that proceeds are available following payment of any debt with prior or superior liens, including Term Loan B. We paid the November and December 2007 payments as scheduled, but paid only £250,000

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in January. The remainder of the payment scheduled in January 2008 was paid in February 2008 with proceeds from the loan described in the following section.

          As of December 31, 2007, fewer than 50 of our owned ATMs in the United States were not compliant with EPP and Triple DES. We plan to upgrade these remaining machines when upgrade parts are received from the manufacturers. These ATMs continue to operate on a limited basis under extension agreements with a few networks. We estimate that these remaining machines will be upgraded by April 30, 2008, however, our ability to complete these upgrades depends on parts and labor vendors with which our influence may be limited. We estimate that costs associated with upgrading these remaining machines will not exceed $50,000. In our merchant portfolio, approximately 1,300 ATMs that failed to meet the Triple DES standards were disabled on January 1, 2008, however, we anticipate that some number of these merchants will ultimately contact us to upgrade their machines. Additionally, almost 600 merchant machines were operating on a limited basis under their extension agreements with a few networks. These remaining machines are awaiting upgrade parts; we anticipate that most of these machines will be upgraded by April 30, 2008.

Term Loan Facility

          In February 2008, we entered into a Securities Purchase Agreement with LC Capital Master Fund, Ltd. and Lampe Conway & Co., LLC, serving as the administrative agent, pursuant to which we borrowed $1 million. £380,000 from the proceeds of the loan was used to pay the remainder of the January 2008 payment due to Notemachine, together with interest on the unpaid balance. The Lampe Facility loan bears interest equal to adjusted LIBOR (as defined in the Securities Purchase Agreement) plus (i) 5% for each interest period for which we pay interest in cash or (ii) 15% for each interest period for which we do not pay interest in cash. The Securities Purchase Agreement does not allow us to pay interest in cash until our Term Loan B has been paid in full. The Lampe Facility loan matures on the earliest of December 6, 2012 or immediately following our repayment of Term Loan B. We also granted a warrant to LC Capital Master Fund, Ltd., to purchase in the aggregate 2,500,000 shares of our common stock at an exercise price initially equally to $0.40 per share, subject to adjustment for any recapitalizations, stock combinations, stock dividends and stock splits. The warrant may be exercised at any time and expire on February 8, 2015. We have agreed to file a registration statement with the SEC covering the resale of the shares issuable on the exercise of the warrant pursuant to a registration rights agreement between us and LC Capital Master Fund, Ltd. The Securities Purchase Agreement contains affirmative and negative covenants that restrict our activities and those of our subsidiaries, including, among other things, restrictions on debt, liens, investments, dispositions and dividends. The Securities Purchase Agreement also contains events of default relating to customary matters, including payment and covenant defaults, cross defaults relating to other indebtedness and insolvency. Upon a default, LC Capital Master Fund, Ltd. can accelerate the maturity under the Lampe Facility, subject to a 180-day standstill with respect to any default or acceleration under the facility with GSO Origination Funding Partners LP and the other lenders.

Syndicated Credit Facility

          As of September 30, 2006, our financial performance caused us to not be in compliance with certain covenants in our credit agreements pursuant to which we then owed $94.9 million. Our lenders had the right to seek to accelerate the loans under the operative loan documents, but they did not do so or exercise other remedies. Instead, on November 20, 2006, we entered into agreements under which they waived our defaults and agreed with us to restructure our loans. As restructured, the interest rates on our loans were increased. The increased interest cost was deferred and added to principal. In addition, the maturity dates of the loans were changed so that a total of $69.9 million was due on or before February 28, 2007. The financial covenants were modified to require achievement of certain levels of earnings before interest, taxes, depreciation and amortization and certain other non cash expenses which we refer to as adjusted EBITDA, and to limit capital expenditures. For certain months during 2007, we were not in compliance with the adjusted EBITDA covenant. We have received waivers of the violations of our adjusted EBITDA covenant for all months through December 2007 for which we failed to comply. We also granted warrants to the holders of our Term Loan B to purchase 3.1 million shares of our common stock at a price of $1.3638 per share. The warrants are exercisable for a period of seven years following November 20, 2006. We agreed to file a registration statement with the SEC covering the resale of the shares issuable upon the exercise of the warrants and to use our best efforts to have the registration statement declared effective by the SEC no later than May 18, 2007. However, we were unable to file the registration statement by May 18, 2007 because we filed our Annual Report on Form 10-K for 2006 and our Quarterly Report on Form 10-Q for the first quarter of 2007 late. We expected to enter into further agreements requiring registration of our securities, and did so in February 2008. We have not received any demands from the warrant holders to file the registration statement as of the date of this report. As soon as reasonably practicable, we plan to file a registration statement covering the shares issuable upon exercise of the November 2006 warrants, shares issuable upon exercise of the warrant issued to LC Capital Master Fund, Ltd. and any other securities that we issue in the near future that require registration.

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     Because the present value of the cash flows under the terms of the revised debt instruments were less than 10% different than the present value of the remaining cash flows under the terms of the original instruments, we accounted for the restructuring of our loans as a modification of the previously outstanding debt. Accordingly, we charged to expense the legal fees we incurred and recorded the fair value of the warrants and loan fees as deferred financing costs.

     We estimated the total fair value of the warrants issued to the holders of Term Loan B to be $2.8 million using the Black-Scholes valuation model. We recorded the fair value of the warrants and $1.0 million of loan fees incurred from our lenders in connection with the restructuring of our loans in November 2006 as additional deferred financing costs. These costs, together with $2.8 million of previously unamortized deferred financing costs associated with the credit facility established in June 2006, aggregated $6.6 million. In connection with the early payment of most of our debt in January 2007, substantially all of the remaining unamortized deferred financing costs was charged to expense as a loss on early extinguishment of debt in the first quarter of 2007.

     Because we are uncertain whether we can comply with all of the terms of the restructured loan agreement, the balance of the loan has been classified as a current liability on our balance sheet.

     As discussed further in Note 11 to our consolidated financial statements, during the first six months of 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States and Canadian photocopy businesses and used $98.6 million from the proceeds of those sales to make principal and interest payments under our financing agreements with GSO Origination Funding Partners and other lenders. Following these payments, as of December 31, 2007, the only remaining balance under our term loans and line of credit was $2.1 million on our Term Loan B which is due in June 2012.

United States Vault Cash Facility

     General. In March 2000, we established a facility for funding the cash which is placed in our United States ATM equipment (which we refer to as “vault cash”). As of December 31, 2007, we had access to $100 million of vault cash under the facility of which $61.8 million was being used. The facility expires in 2012.

     Structure of the facility. The facility is based on the relationship between three primary companies. These companies are:

• TRM Inventory Funding Trust, or the Trust. The Trust is a Delaware business trust that was created pursuant to a deposit trust agreement between GSS Holdings, Inc. as depositor, Wilmington Trust Company as owner trustee, and TRM ATM Corporation as servicer. The majority equity holder in the Trust is Autobahn Funding Company, LLC, and the minority equity holder is GSS Holdings, Inc. Neither we, TRM ATM Corporation nor any of our other affiliates have any ownership interest in the Trust.

• TRM ATM Corporation, or TRM ATM. TRM ATM is one of our subsidiaries and acts as the servicer under the facility.

• Autobahn Funding Company, LLC, or Autobahn. Autobahn is an affiliate of DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, which is the lender under the facility. Autobahn is independent of us, TRM ATM and our other affiliates.

     Operation of the facility. We obtain our vault cash under the facility pursuant to a Loan and Servicing Agreement. In accordance with that agreement, Autobahn raises funds by issuing asset-backed commercial paper. Autobahn then loans those funds to the Trust at an interest rate equal to the interest rate borne by the commercial paper plus 1.35%. The loaned funds are then deposited into an account from which, at the direction of TRM ATM acting as the servicer of the facility, they are disbursed to armored car carriers for transportation to our United States ATMs. The loaned funds are then available for withdrawal from the ATMs by the public. The cash at all times remains the property of the Trust, and the Trust is ultimately obligated to repay Autobahn.

     The Trust, as borrower under the facility, and TRM ATM, as servicer, use their cash from operations, which is principally derived from ATM withdrawal and interchange fees, to fund a settlement account from which, in combination with the vault cash, TRM ATM directs repayment of the loans to the Trust, the interest on the loans, a specified return on the equity investment made by the investors in the Trust and the fees described below.

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     The Trust engages TRM ATM, as servicer, and other agents and contractors from time to time to perform all duties assigned under the Loan and Servicing Agreement.

     The Loan and Servicing Agreement contains covenants applicable to us, including a requirement to maintain a minimum tangible net worth of $12 million.

     Collateral and credit enhancement. The Trust’s borrowings from Autobahn are collateralized by the assets of the Trust, principally the vault cash. In addition, where the vault cash is placed in an ATM, the Trust has a security interest in all of the fees and charges earned or received with respect to that ATM until those fees are distributed to TRM ATM.

     Autobahn is a party to a liquidity purchase agreement with other lenders, which ensures that the Trust continues to have funds available for the term of the agreement and that Autobahn will have the funds necessary to repay the commercial paper it issues. Each lender party to the agreement is required to have a credit rating at least as high as the credit rating of the commercial paper that Autobahn issues.

     Cost of the facility. The primary costs paid in connection with the facility are:

• Interest on the loaned funds. The loans bear interest at an interest rate equal to 1.35% plus the interest rate borne by the commercial paper that was issued to raise the funds for the loans. Interest for the year ended December 31, 2007 was $4.7 million.

• Return for equity investors. Autobahn and GSS Holdings, Inc., as equity investors in the Trust, receive a return on the value of their investments, which were $1,485,000 and $15,000, respectively, as of December 31, 2007. Autobahn’s annual return is equal to 1.35% plus the interest rate borne by the commercial paper that is outstanding. GSS Holdings’ annual return is equal to 25.0%.

• Fees. Autobahn receives a commitment fee and TRM ATM, as servicer, and the collateral agent each receive administrative fees in connection with the facility. Autobahn’s fees for the year ended December 31, 2007 were $150,000.

     Risk of loss and insurance. Any risk with regard to the Trust or the ability of the Trust to repay the Trust’s debt resides with the Trust and with GSS Holdings as the minority equity investor and with Autobahn as the majority equity investor. TRM ATM serves only as an administrator or servicer of the Trust.

     We maintained a letter of credit totaling $3.1 million as of December 31, 2007, to guarantee the performance of the servicer of the facility. The Trust’s subcontractors maintain insurance on behalf of the Trust so as to ensure the cash is safe while stored at correspondent banks, and during delivery to ATM equipment and to vault or bank storage facilities.

     Cross-default provision. In January 2007 we entered into an amendment to our United States vault cash agreement which, among other changes, extended the facility for five years and reduced the facility size to $100 million. Because there are cross-default provisions in TRM Inventory Funding Trust’s Loan and Servicing Agreement, if we fail to comply with the covenants of our restructured loan agreements and are declared to be in default by GSO Origination Funding Partners LP and other lenders, we may be declared in default of the provisions of the Loan and Servicing Agreement as well, and the lender may be able to demand payment. Therefore, the Trust’s debt is classified as a current liability and the vault cash is classified as a current asset on our consolidated balance sheet.

     In March 2008, we notified our current vault cash provider that we intend to terminate our current vault cash arrangement sometime during the second quarter of 2008. We have made arrangements with another provider of vault cash that we believe will provide vault cash for us at a lower cost. We do not anticipate that this change in vault cash providers will cause any significant interruption in our business. We have tested the new vault cash provider’s abilities in a small sample of our ATMs. This test created an exclusivity violation under our current agreement. Although we expect our current provider to cooperate in our transition to the new provider, they could declare us to be in default of TRM Inventory Funding Trust’s Loan and Servicing Agreement and demand repayment of our vault cash liability before we have finalized arrangements to replace that cash in our ATMs. If we terminate our current vault cash arrangement prior to its maturity in 2012 and repay the Trust’s borrowings, we will owe a prepayment fee of $750,000. However, we will be able to terminate the letter of credit guaranteeing our performance as servicer of the facility, and restricted cash of $2.7 million held by our bank as collateral for the letter of credit will become available for use in operations. We expect to pay the prepayment fee from the released restricted cash.

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United Kingdom Vault Cash Facility

     Before its sale in January 2007, our United Kingdom ATM business obtained vault cash under an agreement with a local bank. Vault cash obtained under the program remained the property of the bank, and was not included on our balance sheet.

Canadian Vault Cash Facility

     Before its sale in January 2007, our Canadian ATM business obtained vault cash under an agreement with an armored car carrier that had a corresponding agreement with a local bank. As in our U.K. vault cash arrangement, the vault cash obtained under the Canadian program remained the property of the bank, and was not included on our balance sheet.

Off-balance Sheet Arrangements

     We have no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Contractual Commitments and Obligations

     The following table summarizes our contractual commitments and obligations as of December 31, 2007 (in thousands):

	Payments due by period
Contractual obligations	Total		2008		2009-2010		2011-2012		After 2012
TRM Corporation and subsidiaries
Long-term debt	$	4,142	$	—	$	—	$	4,142		—
Settlement agreement — Notemachine		6,309		2,824		3,346		139		—
Settlement agreement — eFunds		2,500		2,500		—		—		—
Operating leases		818		361		457		—
Total TRM Corporation and subsidiaries		13,769		5,685		3,803		4,281		—
TRM Inventory Funding Trust note payable		77,432		4,389		8,778		64,265		—
Total contractual cash obligations	$	91,201	$	10,074	$	12,581	$	68,546		—

     The long-term debt and TRM Inventory Funding Trust note payable are shown above in accordance with their contractual terms. However, because we believed it likely that our creditors would be able to demand payment of those debts during 2008, we classified them as current liabilities in our consolidated balance sheet.

     The above payments include interest where applicable, with interest on variable rate obligations assumed to remain constant at the rate in effect as of December 31, 2007.

Critical Accounting Policies and Estimates

     The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, sales, costs and expenses, and the disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments, including those related to impairments, depreciation, intangible assets, accounts receivable, inventories, and income taxes. We base our estimates and judgments on historical experience and on various assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

     We have identified the following policies as critical to our business operations and to understanding the results of those operations.

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     As of December 31, 2007, our assets include goodwill of $16.7 million and other intangible assets with a net carrying amount of $585,000. Statement of Financial Accounting Standards No. 142, or SFAS 142, “Goodwill and Other Intangible Assets” provides that goodwill and other intangible assets that have indefinite useful lives will not be amortized, but instead must be tested at least annually for impairment, and intangible assets that have finite useful lives should be amortized over their estimated useful lives. SFAS 142 also provides specific guidance for testing goodwill and other non-amortized intangible assets for impairment. SFAS 142 requires management to make certain estimates and assumptions in order to allocate goodwill to reporting units and to determine the fair value of a reporting unit’s net assets and liabilities, including, among other things, an assessment of market conditions, projected cash flows, interest rates, and growth rates, which could significantly impact the reported value of goodwill and other intangible assets. Furthermore, SFAS 142 exposes us to the possibility that changes in market conditions could result in potentially significant impairment charges in the future.

     We evaluate the recoverability of our goodwill by estimating the future discounted cash flows of the reporting unit to which the goodwill relates. We use discount rates corresponding to our cost of capital, risk adjusted as appropriate, to determine such discounted cash flows, and consider current and anticipated business trends, prospects, and other market and economic conditions when performing our evaluations. Such evaluations are performed at a minimum on an annual basis, or more frequently based on the occurrence of events that might indicate a potential impairment.

     We amortize finite-lived intangible assets over estimated useful lives of five to ten years. Acquired contracts, with a gross carrying amount of $479,000, are being amortized over ten years, primarily on an accelerated basis intended to reflect the cash flow patterns and duration used in estimating the value of those contracts. A reduction in the estimated useful lives of our intangible assets would result in additional amortization expense on a prospective basis.

     In accordance with Statement of Financial Accounting Standards No. 144, or SFAS 144, “Accounting for Impairment or Disposal of Long-Lived Assets,” long-lived assets such as equipment and purchased contract intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Whenever events or changes in circumstances indicate that our merchant contracts or equipment may be impaired, we evaluate the recoverability of the asset by measuring the related carrying amounts against the associated estimated undiscounted future cash flows. Should the sum of the expected future net cash flows be less than the carrying values of the tangible or intangible assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying values of the tangible or intangible assets exceeded the calculated fair value.

     During 2006, we recorded impairment charges of $96.1 million which we discuss in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impairment Charges”.

     We have established valuation allowances to reduce our deferred tax assets to the amount that we believe we will realize. Because we are uncertain that we will be able to realize the benefit of our net operating loss carryforwards and future deductible amounts, we have established valuation allowances that reduced the carrying value of our net deferred tax assets to zero as of December 31, 2006 and 2007. If we determine that we will realize deferred tax assets in the future, we will increase (decrease) net income (loss) in the period in which we make the determination.

New Accounting Standards

     In June 2006, the Financial Accounting Standards Board, or FASB, issued FASB Interpretation No. 48, or FIN 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FAS 109.” FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements. It prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation became effective for us beginning in 2007. Our adoption of FIN 48 did not have a material impact on our results of operations, financial position or cash flows.

     In September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements.” SFAS 157 establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. This statement does not require any new fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, except for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis for which delayed application is permitted until fiscal years beginning after November 15, 2008. We anticipate no material impact on our results of operations, financial position or cash flows as a result of adopting this statement.

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     In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115,” which allows companies the option to measure certain financial instruments and other items at fair value. The provisions of SFAS No. 159 are effective for us beginning in 2008. We are currently evaluating the impact, if any, this statement will have on our financial statements.

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51.” This statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This statement is effective for us beginning in 2009. We are currently evaluating the impact, if any, this statement will have on our financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risk from changes in interest rates and, until the sale of our foreign operations in January and June 2007, we had operations in the United Kingdom, Germany and Canada exposing us to foreign currency exchange rate risks. We do not hold or issue derivative commodity instruments or other financial instruments for trading purposes. Since the sales of our United Kingdom, German and Canadian ATM operations, we have no further foreign operations. However, we have a liability denominated in British pounds, exposing us to foreign currency exchange rate risk.

Interest Rate Risk

     We invest our cash in money market funds. The income earned from these money market funds is subject to changes in interest rates. Interest income was $187,000 for 2006 and $360,000 for 2007. A 10% change in interest rates earned would not have had a material effect on our net income.

     Interest on borrowings pursuant to our credit facility with GSO Origination Funding Partners LP is at variable rates. As of December 31, 2007, the interest rate on our $2.1 million term loan was 16.87%. If the interest rates on our borrowings under such syndicated loan facility as of December 31, 2007 increased by 1%, our interest cost would increase by $21,000 per year.

     Under our United States vault cash facility, the Trust borrows money pursuant to a note funded by the sale of commercial paper. The Trust owed $71.7 million at December 31, 2006 and $58.5 million at December 31, 2007 under this arrangement. The weighted average interest rate on these borrowings at December 31, 2007 was 7.40%. Interest and fees relating to the Trust’s borrowings, which are included in cost of sales in our consolidated financial statements, totaled $6.5 million and $5.5 million for the years ended December 31, 2006 and 2007, respectively. If the interest rate for the Trust’s borrowings at December 31, 2007 increased by 1%, to a weighted average of 8.40%, our cost of sales would increase by $585,000 per year.

     As a result of the sale of our United Kingdom and substantially all of our Canadian ATM operations, we no longer maintain vault cash facilities in those countries and do not have further interest rate risk thereunder.

Foreign Currency Risk

     As of December 31, 2007, we owed £2,679,000 ($5.3 million using exchange rates as of December 31, 2007) to the purchaser of our United Kingdom and German ATM businesses. If the value of the British pound were to fluctuate significantly from the December 31, 2007 exchange rate, our financial position would be affected. A 10% increase in the value of the British pound versus the United States dollar would increase our liability by $530,000. A 10% decrease in the value of the British pound versus the United States dollar would decrease our liability by $530,000. Since we pay interest at a rate of 15% per annum on this liability, our interest expense would also be affected by a fluctuation in the exchange rate.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements and supplementary data required by this item are included in this Annual Report on Form 10-K commencing on page 34.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders
TRM Corporation

We have audited the consolidated balance sheet of TRM Corporation and subsidiaries as of December 31, 2007, and the related consolidated statements of operations, shareholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of TRM Corporation and subsidiaries as of December 31, 2007, and the results of their operations and their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company incurred net losses in 2006 and 2007 of approximately $120 million and $8 million, respectively. It is uncertain if 2008 operations will generate sufficient cash to enable the Company to comply with the covenants of the Company’s loan agreements and to pay its obligations on an ongoing basis. A default under the Company’s financing agreement with GSO Origination Funding Partners LP may render the debt callable and trigger the cross-default provision in TRM Inventory Funding Trust’s Loan and Servicing Agreement. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We were not engaged to examine management’s assertion about the effectiveness of TRM Corporation’s internal control over financial reporting as of December 31, 2007 included in the accompanying Management’s Report on Internal Control over Financial Reporting and, accordingly, we do not express an opinion thereon.

/s/ McGladrey & Pullen, LLP

Blue Bell, Pennsylvania
March 28, 2008

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
TRM Corporation

In our opinion, the consolidated balance sheet as of December 31, 2006 and the related consolidated statements of operations, of shareholders’ equity and of cash flows for each of the two years in the period ended December 31, 2006 present fairly, in all material respects, the financial position of TRM Corporation and its subsidiaries (the “Company”) at December 31, 2006 and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule for each of the two years in the period ended December 31, 2006 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements (not separately presented herein), the Company incurred a net loss for 2006 resulting in its inability to meet certain financial covenants of its financing agreement with GSO Origination Funding Partners LP and other lenders, and based on its projections the Company does not expect to meet the required financial covenants during 2007, which may render the debt callable by the lenders and trigger the cross-default provisions in TRM Funding Trust’s Loan and Servicing Agreement. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As noted in Note 11 to the financial statements, during the year ended December 31, 2007, the Company disposed of its Canadian photocopy business. The financial statements for the each of two years ended December 31, 2006 have been retrospectively restated to reflect the Canadian photocopy business as a discontinued operation.

/s/ PricewaterhouseCoopers LLP

Portland, Oregon
May 23, 2007, except for the retrospective restatement of the Canadian photocopy operations as discontinued operations described in Note 11, which is as of March 28, 2008

35

TRM Corporation

Consolidated Balance Sheets
December 31, 2006 and 2007
(In thousands)

	2006			2007
Assets
Current assets:
Cash	$	4,784		$	3,859
Restricted cash		—			3,073
Accounts receivable, net		4,328			2,611
Income taxes receivable		215			—
Inventories		674			50
Prepaid expenses and other		1,579			369
Deferred financing costs		5,270			172
Restricted cash — TRM Inventory Funding Trust		73,701			61,805
Assets held for sale		106,081			—
Total current assets		196,632			71,939
Equipment, less accumulated depreciation and amortization		11,646			4,222
Goodwill		16,748			16,748
Intangible assets, less accumulated amortization		585			585
Other assets		833			795
Total assets	$	226,444		$	94,289
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	5,988		$	6,099
Income taxes payable		67			36
Accrued expenses		8,744			9,929
Term loans and line of credit		99,318			2,051
TRM Inventory Funding Trust note payable		71,697			58,505
Liabilities related to assets held for sale		13,437			—
Total current liabilities		199,251			76,620
Settlement agreement due after one year		—			3,009
Total liabilities		199,251			79,629
Minority interest		1,500			1,500
Commitments and contingencies (notes 10 and 15)
Shareholders’ equity:
Common stock, no par value -
50,000 shares authorized; 17,213 shares issued and outstanding (17,126 at December 31, 2006)		135,595			136,181
Additional paid-in capital		63			63
Accumulated other comprehensive income - Accumulated foreign currency translation adjustment		4,692			—
Accumulated deficit		(114,657	)		(123,084	)
Total shareholders’ equity		25,693			13,160
Total liabilities and shareholders’ equity	$	226,444		$	94,289

See accompanying notes to consolidated financial statements.

36

TRM Corporation

Consolidated Statements of Operations
Years ended December 31, 2005, 2006 and 2007
(In thousands, except per share data)

	2005			2006			2007
Sales	$	125,874		$	107,656		$	90,386
Less discounts		76,673			65,576			56,711
Net sales		49,201			42,080			33,675
Cost of sales:
Cost of vault cash		5,319			6,482			5,399
Other		16,884			16,990			17,465
Gross profit		26,998			18,608			10,811
Selling, general and administrative expense (including non-cash stock compensation of $1,051 in 2006 and $508 in 2007)		31,374			30,541			16,482
Impairment charges (note 14):
Goodwill		—			20,393			—
Other intangible assets		—			22,918			—
Abandoned acquisition costs		5,211			—			—
Restructuring charges		—			—			963
Equipment write-offs		59			579			1,876
Operating loss		(9,646	)		(55,823	)		(8,510	)
Interest expense and amortization of debt issuance costs		1,861			1			464
Loss on early extinguishment of debt		513			3,105			4,809
Other expense (income), net		(1,787	)		(169	)		(57	)
Loss from continuing operations before income taxes		(10,233	)		(58,760	)		(13,726	)
Provision (benefit) for income taxes (note 7)		(4,361	)		(5,194	)		—
Loss from continuing operations		(5,872	)		(53,566	)		(13,726	)
Discontinued operations:
Income (loss) from operations		(3,540	)		(65,948	)		5,437
Provision (benefit) for income taxes		(541	)		577			138
Income (loss) from discontinued operations		(2,999	)		(66,525	)		5,299
Net loss	$	(8,871	)	$	(120,091	)	$	(8,427	)
Basic and diluted per share information:
Loss from continuing operations	$	(5,872	)	$	(53,566	)	$	(13,726	)
Preferred stock dividends		(147	)		—			—
Loss from continuing operations available to common shareholders	$	(6,019	)	$	(53,566	)	$	(13,726	)
Weighted average common shares outstanding		14,542			17,034			17,178
Basic and diluted income (loss) per share:
Continuing operations	$	(.41	)	$	(3.14	)	$	(.80	)
Discontinued operations		(.21	)		(3.91	)		.31
Net loss	$	(.62	)	$	(7.05	)	$	(.49	)

See accompanying notes to consolidated financial statements.

37

TRM Corporation

Consolidated Statement of Shareholders’ Equity
Years ended December 31, 2005, 2006 and 2007
(In thousands)

																	Accumulated			Retained
															Additional		other			earnings
	Comprehensive			Preferred						Common					paid-in		comprehensive			(accumulated
	income (loss)			Shares			Amounts			Shares		Amounts			capital		income (loss)			deficit)			Total
Balances, December 31, 2004					1,044		$	11,620			13,139	$	81,075		$	63	$	4,502		$	14,452		$	111,712
Comprehensive loss:
Net loss	$	(8,871	)		—			—			—		—			—		—			(8,871	)		(8,871	)
Other comprehensive loss:
Foreign currency translation adjustment		(1,516	)		—			—			—		—			—		(1,516	)		—			(1,516	)
Other		(102	)		—			—			—		—			—		(102	)		—			(102	)
Comprehensive loss	$	(10,489	)
Conversion of Series A preferred stock					(1,044	)		(11,620	)		783		11,620			—		—			—			—
Exercise of stock options					—			—			117		307			—		—			—			307
Tax benefit of options exercised					—			—			—		242			—		—			—			242
Issuance of common stock, net					—			—			2,778		38,233			—		—			—			38,233
Exercise of warrants					—			—			54		37			—		—			—			37
Preferred stock dividends					—			—			—		—			—		—			(147	)		(147	)
Restricted stock expense					—			—			—		31			—		—			—			31
Balances, December 31, 2005					—			—			16,871		131,545			63		2,884			5,434			139,926
Comprehensive loss:
Net loss	$	(120,091	)		—			—			—		—			—		—			(120,091	)		(120,091	)
Other comprehensive loss:
Foreign currency translation adjustment:
Recognized in income		(1,538	)		—			—			—		—			—		(1,538	)		—			(1,538	)
Current period adjustment		3,272			—			—			—		—			—		3,272			—			3,272
Other		74			—			—			—		—			—		74			—			74
Comprehensive loss	$	(118,283	)
Exercise of stock options					—			—			235		91			—		—			—			91
Stock option expense					—			—			—		800			—		—			—			800
Restricted stock expense					—			—			—		339			—		—			—			339
Restricted shares vested					—			—			20		—			—		—			—			—
Issuance of warrants in conjunction with debt modification					—			—			—		2,820			—		—			—			2,820
Balances, December 31, 2006					—			—			17,126		135,595			63		4,692			(114,657	)		25,693
Comprehensive loss:
Net loss	$	(8,427	)		—			—			—		—			—		—			(8,427	)		(8,427	)
Other comprehensive loss - Foreign currency translation adjustment:
Recognized in income		(5,283	)		—			—			—		—			—		(5,283	)		—			(5,283	)
Current period adjustment		591			—			—			—		—			—		591			—			591
Comprehensive loss	$	(13,119	)
Exercise of stock options					—			—			18		25			—		—			—			25
Stock option expense (credit)					—			—			—		(2	)		—		—			—			(2	)
Restricted stock expense					—			—			—		510			—		—			—			510
Restricted shares vested					—			—			69		—			—		—			—			—
Other capital additions					—			—			—		53			—		—			—			53
Balances, December 31, 2007					—		$	—			17,213	$	136,181		$	63	$	—		$	(123,084	)	$	13,160

See accompanying notes to consolidated financial statements.

38

TRM Corporation

Consolidated Statements of Cash Flows
Years ended December 31, 2005, 2006 and 2007
(In thousands)

	2005			2006			2007
Operating activities:
Net loss	$	(8,871	)	$	(120,091	)	$	(8,427	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Impairment charges and asset write downs		—			96,062			3,592
Depreciation and amortization		21,441			19,965			3,152
Loss on disposal of equipment		2,006			1,182			834
Non-cash stock compensation		—			1,139			508
Gain on sale of investment in equity security		(1,312	)		—			—
Provision for doubtful accounts		1,832			912			171
Loss on early extinguishment of debt		—			2,560			4,059
Gain on sale of discontinued operations		—			(362	)		(4,528	)
Cumulative foreign currency translation adjustment recognized in income		—			(1,538	)		(5,283	)
Changes in items affecting operations, net of effects of business acquisitions and dispositions:
Restricted cash		—			—			(3,073	)
Accounts receivable		(764	)		4,840			1,753
Inventories		5,095			1,723			1,164
Income taxes receivable		(96	)		(4	)		215
Prepaid expenses and other		(134	)		617			1,359
Accounts payable		(6,760	)		601			374
Income taxes payable		—			67			—
Accrued expenses		6,282			(1,960	)		(1,500	)
Deferred income taxes		(5,222	)		(4,844	)		—
Total operating activities		13,497			869			(5,630	)
Investing activities:
Proceeds from sale of equipment		74			45			162
Capital expenditures		(15,116	)		(7,023	)		(61	)
Proceeds from sale of discontinued operations		—			4,280			101,540
Proceeds from sale of investment in equity security		9,583			—			—
Acquisition of intangible and other assets		(1,192	)		(862	)		(471	)
Total investing activities		(6,651	)		(3,560	)		101,170
Financing activities:
Borrowings on notes payable		26,543			119,148			1,374
Repayment of notes payable		(64,714	)		(114,079	)		(98,641	)
Debt financing costs		(833	)		(2,972	)		—
Principal payments on capital lease obligations		(2,093	)		(700	)		(25	)
Change in restricted cash — TRM Inventory Funding Trust		585			1,261			11,896
Repayment of TRM Inventory Funding Trust note payable, net of proceeds from issuance		(836	)		(1,572	)		(13,192	)
Net proceeds from sale of common stock		38,233			—			—
Proceeds from exercise of stock options and warrants		344			91			25
Preferred stock dividends		(367	)		—			—
Other		(87	)		(19	)		53
Total financing activities		(3,225	)		1,158			(98,510	)
Effect of exchange rate changes		511			(89	)		(1,257	)
Net increase (decrease) in cash and cash equivalents		4,132			(1,622	)		(4,227	)
Beginning cash and cash equivalents		5,576			9,708			8,086
Ending cash and cash equivalents, including $3,302 classified as assets held for sale at December 31, 2006	$	9,708		$	8,086		$	3,859
Supplemental cash flow information:
Non-cash transactions:
Conversion of Series A preferred stock to common stock	$	11,620		$	—		$	—
Issuance of warrants in conjunction with debt modification		—			2,820			—
Payments:
Cash paid for interest		10,271			9,312			605
Cash paid for income taxes (net of refunds)		522			1			(7	)

See accompanying notes to consolidated financial statements.

39

Notes to Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies

     Description of Business and Basis of Presentation

     TRM Corporation (“we” or “TRM”) provide self-service cash delivery and account balance inquiry through ATM machines.

     As of December 2005 we offered ATM services in retail locations in the United States, the United Kingdom, Germany and Canada and photocopier services in the United States, United Kingdom and Canada.

     In June 2006 we sold our United Kingdom photocopy business. In January 2007 we sold our ATM businesses in the United Kingdom, Germany and Canada and our United States photocopy business. In June 2007 we sold our Canadian photocopy business. The results of the businesses we have sold are reflected as discontinued operations in our consolidated statement of operations. Our remaining business operates ATMs in the United States. We provide the equipment, maintenance, supplies and point of sale materials required for each of our installations, while the retailer oversees the daily operation of the equipment, provides the necessary floor space and shares in the revenue generated by our offerings. During 2007 our United States ATM networks had an average of 10,253 transacting ATMs.

     We incurred a net loss of $120.1 million in the year ended December 31, 2006. As a result of our financial performance for the three months ended September 30, 2006, we failed to meet certain financial covenants of our financing agreements with GSO Origination Funding Partners LP and other lenders. On November 20, 2006, we entered into amendments that restructured our loans and waived the failure to meet the loan covenants. Under the restructured loan agreements principal payments of $69.9 million were due in the first quarter of 2007. During January 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States photocopy business and used $98.4 million from the proceeds of those sales to make principal and interest payments under these loans, leaving a remaining balance of principal plus accrued interest of $2.0 million as of January 31, 2007. We are uncertain whether our remaining operations can generate sufficient cash to comply with the covenants of our restructured loan agreements and to pay our obligations on an ongoing basis. Because there are cross-default provisions in TRM Inventory Funding Trust’s Loan and Servicing Agreement and the Securities Purchase Agreement under the Lampe Facility, if we fail to comply with the covenants of our restructured loan agreements and are declared to be in default by GSO Origination Funding Partners LP and other lenders, we may be declared in default of the provisions of the Loan and Servicing Agreement and the Securities Purchase Agreement under the Lampe Facility as well, and the lenders may be able to demand payment. Further, in March 2008, we notified our current vault cash provider that we intend to terminate our current vault cash arrangement sometime during the second quarter of 2008 and that we have made arrangements with another provider of vault cash that we believe will provide vault cash for us at a lower cost. We have used the new vault cash provider for a small test sample of our ATMs which is a violation of the covenants of the Loan and Servicing Agreement. Although we expect our current provider to cooperate in our transition to a new provider, they could declare us to be in default of TRM Inventory Funding Trust’s Loan and Servicing Agreement and demand repayment of our vault cash liability before we have finalized arrangements to replace that cash in our ATMs. These factors, among others, may indicate that we may be unable to continue as a going concern for a reasonable period of time. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. Our continuation as a going concern is contingent upon our ability to generate sufficient cash to pay our obligations on an ongoing basis.

     In connection with the sales of our ATM businesses in the United Kingdom, Germany and Canada, and our photocopy businesses in the United Kingdom, United States and Canada in 2006 and 2007, we have made various representations and warranties and/or provided indemnities. Further, the sales prices are subject to adjustment based on working capital amounts, the value of accounts receivable as of the closing of the sale or other factors. The purchasers may make claims against us relating to the representations or warranties or provisions for adjustment of the sales prices, and those claims could be substantial. The purchaser of our United Kingdom and German ATM businesses asserted claims pursuant to the sales agreement, and, in November 2007, we entered into a settlement agreement described further in Notes 6 and 11 pursuant to which we agreed to repay a portion of the purchase price.

     In November 2006 we announced the implementation of a corporate restructuring plan involving an initial reduction of then-existing controllable selling, general and administrative expenses of approximately 15%. Subsequent to that announcement, we have sold operations that accounted for approximately 61% of our net sales in 2006. In

40

connection with our restructuring plan and the sales of a substantial part of our operations, we have reduced our number of employees from 364 as of December 31, 2006 to 39 as of December 31, 2007.

     We expect to be able to refinance the outstanding balances under our financing agreement with GSO Origination Funding Partners and the other lenders and a $2.5 million liability due to eFunds Corporation described in Note 12, and we have begun initial efforts to do so. However, we can provide no assurance that we will be able to do so. If we are unable to refinance our debt or to get our lenders to agree to any further forbearance from calling our loans, we might be forced to seek protection of the courts through reorganization, bankruptcy or insolvency proceedings.

     Principles of Consolidation

          The consolidated financial statements include the accounts of TRM, its subsidiaries and TRM Inventory Funding Trust (see Note 3). Our subsidiaries at December 31, 2007 included TRM Copy Centers (USA) Corporation, TRM (Canada) Corporation, TRM ATM Corporation, TRM ATM Acquisition Corporation, Access Cash International LLC, and S-3 Corporation. We sold all of the outstanding shares of TRM Copy Centres (U.K.) Limited, our United Kingdom photocopier subsidiary, in June 2006. In January 2007 we sold all of the outstanding shares of TRM ATM (U.K.) Limited which owned TRM ATM Deutschland GmbH. These two companies operated ATMs in the United Kingdom and Germany. The results of operations of the subsidiaries that we have sold are included in our consolidated financial statements only through the dates of sale. Effective December 31, 2003, we adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 46R, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,” and, accordingly, consolidate the accounts of TRM Inventory Funding Trust in our consolidated financial statements.

     All significant intercompany transactions and accounts are eliminated. During 2005, 2006 and part of 2007 we had subsidiaries operating in Canada, the United Kingdom and Germany, whose functional currencies were the Canadian dollar, British pound and Euro. Assets and liabilities of foreign operations were translated into United States dollars at current exchange rates. Revenue and expense accounts were translated into United States dollars at average rates of exchange prevailing during the periods. Adjustments resulting from translating foreign functional currency financial statements into United States dollars were recorded directly to a separate component of shareholders’ equity.

     Fair Value of Financial Instruments

     Financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximate fair market value because of the short maturity of these instruments. Fair value approximates the carrying value of our borrowings under our variable-rate long-term debt, based upon interest rates available for the same or similar instruments.

     Restricted Cash

     Cash owned by TRM Inventory Funding Trust and held in our United States ATM network is considered to be restricted cash because the cash is only available for use in our ATM network and is not otherwise available for our use. However, as described in Note 3, because of a potential default under the Loan and Servicing Agreement, the Trust’s debt is classified as a current liability and the Trust’s cash is classified as a current asset in our consolidated balance sheet.

     We have $3.1 million cash held by a bank as collateral for our letter of credit as of December 31, 2007 that is also classified as restricted cash on our balance sheet.

     Revenue Recognition, Discounts and Accounts Receivable

     A portion or all, depending upon the arrangement with the retail business, of each ATM surcharge is paid to the retail business. We receive daily reports of ATM transactions electronically from our ATM network processors. On a monthly basis, the ATM transaction data is used to calculate the retailer’s applicable discount, which is generally dependent upon transaction volumes, and we generally remit the discount directly to the retailer’s bank account through electronic funds transfer. We recognize ATM revenue based on the actual monthly transactions reported by the ATM processing network. Total sales activity and discount amounts are reported separately in the consolidated statements of operations to arrive at net sales.

     Accounts receivable are shown net of allowance for doubtful accounts of $468,000 and $354,000 at December 31, 2006 and 2007, respectively.

41

     Inventories

     During 2007 we began outsourcing our ATM maintenance and no longer use our parts inventory. Accordingly, we have written that inventory down to its estimated net realizable value.

     Long-Lived Assets

     We account for long-lived assets, primarily equipment and amortizable intangible assets, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which requires us to review the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever events or changes in circumstances indicate that our merchant contracts or equipment may be impaired, we evaluate the recoverability of the asset by measuring the related carrying amounts against the associated estimated undiscounted future cash flows. Should the sum of the expected future net cash flows be less than the carrying values of the tangible or intangible assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying values of the tangible or intangible assets exceeded the calculated fair value.

     Equipment

     Equipment is recorded at cost plus amounts required to place equipment in service. Depreciation begins when the asset is placed in service. ATMs, furniture and fixtures and computer equipment are generally depreciated using the straight-line method over the estimated remaining useful lives of the related assets. Estimated useful lives are as follows:

ATMs	3-10 years
Oracle ERP system	7 years
Computer equipment	2-5 years
Furniture and fixtures	5-7 years

     Goodwill

     As of December 31, 2007, we have goodwill with a carrying amount of $16.7 million. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” we test goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with its carrying amount. An impairment loss is recognized for the difference between the carrying value of the goodwill and its computed fair value.

     Investment in marketable equity securities

     Our investment in a marketable equity security was classified as available-for-sale and was reported in other assets as of December 31, 2004 at a fair value of $8.3 million. Unrealized gains and losses were excluded from earnings and reported in other comprehensive income (loss). During 2005 we sold this security for $9.6 million and realized a gain of $1.3 million.

     Other expense (income), net

     Other expense (income), net for 2005 includes a $1.3 million gain on the sale of marketable equity securities, a $700,000 settlement from our directors’ and officers’ liability insurer and $197,000 of interest income. These amounts were partially offset by $233,000 in foreign exchange losses.

     Income Taxes

     We account for income taxes utilizing the asset and liability method. Under the asset and liability method, we determine deferred tax assets and liabilities based on differences between the financial reporting and income tax bases of assets and liabilities, and measure them by applying enacted tax rates and laws to the taxable years in which such differences are expected to reverse.

42

     Stock-Based Compensation

     Prior to 2006 we applied Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees,” and the related interpretations in accounting for stock-based compensation plans. Accordingly, we recognized no compensation expense for our stock-based compensation plans in the accompanying consolidated statements of operations for 2005.

     In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment,” an amendment of SFAS No. 123, “Accounting for Stock-Based Compensation.” SFAS 123R eliminates the ability to account for share-based payments using APB No. 25, and instead requires companies to recognize compensation expense using a fair-value based method for costs related to share-based payments, including stock options and employee stock purchase plans. The expense is measured as the fair value of the award at its grant date based on the estimated number of awards that are expected to vest, and recorded over the applicable service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price, the expected dividends on the underlying shares and the risk-free interest rate. The requirements of SFAS 123R became effective for our first quarter beginning January 1, 2006 and apply to all awards granted, modified or cancelled after that date, and to the portion of previously granted awards that had not vested by the adoption date. We adopted SFAS 123R effective January 1, 2006 on a prospective basis using the modified prospective transition method. SFAS 123R requires that stock-based compensation expense be based on awards that are ultimately expected to vest. We have recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. Because the majority of our previously granted stock options had vested prior to the end of 2005 and only 65,000 options were issued during 2006, the effect of adopting SFAS 123R on our results of operations, loss per share and cash flow for 2006 was not material.

     The following table illustrates the effect on net income (loss) and earnings per share as if we had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” during 2005 (in thousands, except per share data):

	2005
Net loss, as reported	$	(8,871	)
Deduct total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect		(1,484	)
Pro forma net loss	$	(10,355	)
Basic and diluted net loss per share:
As reported	$	(.62	)
Pro forma		(.72	)

     Net Income (Loss) Per Share

     Basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if convertible preferred shares outstanding at the beginning of each year were converted at those dates with related interest, preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options and warrants for which the market price exceeds exercise price, less shares which we could have purchased with related proceeds. All outstanding options, warrants and outstanding shares of preferred stock were excluded from the calculation of diluted earnings per share for 2005, 2006 and 2007 because their inclusion would have been antidilutive.

     Use of Estimates

     The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, sales, costs and expenses, and the disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments, including those related to impairments, depreciation, intangible assets, accounts receivable, inventories, and income taxes. We base our estimates and judgments on historical experience and on various assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not

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readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

     New Accounting Standards

     In June 2006, the FASB issued FASB Interpretation No. 48, (“FIN 48”), “Accounting for Uncertainty in Income Taxes,” an interpretation of FAS 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements. It prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation became effective for us beginning in 2007. Our adoption of FIN 48 did not have a material impact on our results of operations, financial position or cash flows.

     In September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements.” SFAS 157 establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. This statement does not require any new fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, except for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis for which delayed application is permitted until fiscal years beginning after November 15, 2008. We anticipate no material impact on our results of operations, financial position or cash flows as a result of adopting this statement.

     In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115,” which allows companies the option to measure certain financial instruments and other items at fair value. The provisions of SFAS No. 159 are effective for us beginning in 2008. We are currently evaluating the impact, if any, this statement will have on our financial statements.

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51.” This statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This statement is effective for us beginning in 2009. We are currently evaluating the impact, if any, this statement will have on our financial statements.

     Financial Statement Reclassifications

     Certain financial statement reclassifications have been made to prior year amounts to conform to the current year presentation. These changes had no impact on total assets, total liabilities, shareholders’ equity or net loss. As discussed in Note 11 we have reclassified the results of operations of our Canadian photocopier operations to discontinued operations for all periods presented.

2. Equipment

     Equipment (in thousands):

	December 31,
	2006			2007
ATMs	$	11,267		$	7,764
Computer equipment		7,116			5,200
Furniture and fixtures		1,307			1,150
Photocopy equipment		6,771			—
		26,461			14,114
Accumulated depreciation and amortization		(14,815	)		(9,892	)
	$	11,646		$	4,222

Depreciation of equipment included in continuing operations for 2005, 2006 and 2007 was $2,412,000, $2,768,000, and $2,016,000, respectively. See Note 14 regarding impairment of equipment in our former United States and Canadian photocopier operations.

3. Vault Cash

     On March 14, 2000, a Deposit Trust Agreement (“Agreement”) was entered into between GSS Holdings, Inc. as Depositor, Wilmington Trust Company as Owner Trustee, and TRM ATM Corporation (“Servicer”) as

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Administrator. By virtue of the Agreement, TRM Inventory Funding Trust (the “Trust”) was created. Neither Servicer, TRM nor any affiliates have any ownership interest in the Trust. Any risk with regard to the Trust or the ability of the Trust to repay the Trust’s debt resides with the Trust and with GSS Holdings as the Depositor (equity investor in the amount of $15,000 as of December 31, 2007), and with Autobahn Funding Company LLC (“Lender” and equity investor in the amount of $1,485,000 as of December 31, 2007), rather than with Servicer, which merely serves as an administrator and servicer of the Trust. Autobahn Funding Company LLC is related to DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main (“DZ Bank”) and is independent of the Servicer and us. The purpose of the Trust is to provide cash to be placed in our United States ATM machines (“vault cash”), by accessing commercial paper markets.

     The Trust borrows from and makes repayments to the Lender and makes other payments pursuant to a Loan and Servicing Agreement, and engages the Servicer and other agents and contractors from time to time to perform all duties assigned under the Loan and Servicing Agreement. Borrowings from the Lender are collateralized by the assets of the Trust, principally the vault cash. The Lender issues asset-backed commercial paper notes to fund the loans to the Trust. Interest on the Trust’s borrowings from the Lender, which are evidenced by a note, is at a rate equal to 1.35% plus the interest rate of the commercial paper notes that the Lender issues to fund the loans to the Trust. The Trust also pays to the Lender an amount equal to the Lender’s equity investment in the Trust times 1.35% plus the yield rate of the commercial paper notes outstanding. The Loan and Servicing Agreement contains covenants applicable to us, including a minimum tangible net worth requirement. We entered into an amendment to that agreement in November 2007, which reset the minimum net worth covenant to $12 million. In January 2007 we entered into an amendment which, among other changes, extended the facility for five years and reduced the facility size to $100 million. A liquidity agreement with DZ Bank ensures that the Trust continues to have funds available for the term of the agreement.

     When the vault cash is placed in the ATM, the Trust has a security interest in all of the fees and charges earned or received in connection with all revenue generating transactions initiated at the ATMs. The cash at all times remains the property of the Trust, and the Trust is ultimately obligated to repay the Lender. We maintain letters of credit totaling $3.1 million at December 31, 2007 to guarantee the performance of the Servicer. Subcontractors maintain insurance on behalf of the Trust to ensure the cash is safe while stored at correspondent banks, and during delivery to ATM machines and to the vault or bank storage facilities.

     Because we are the primary beneficiary of the Trust, the accounts of the Trust have been included in our consolidated financial statements. The Trust’s vault cash, amounting to $61.8 million at December 31, 2007 ($73.7 million at December 31, 2006) is reported as restricted cash in the accompanying consolidated balance sheet, and the balance of the Trust’s note payable to the Lender, which totaled $58.5 million at December 31, 2007 ($71.7 million at December 31, 2006), is reported as a liability. The Loan and Servicing Agreement matures in 2012. However, as discussed further in Notes 1 and 6, we are uncertain whether we can comply with all of the terms of our primary financing agreement. Since the lender has asserted that there are cross-default provisions in TRM Inventory Funding Trust’s Loan and Servicing Agreement, if we fail to comply with the terms of our financing agreement we may be in default of the provisions of the Loan and Servicing Agreement as well. We have also violated certain exclusivity provisions in the Loan and Servicing Agreement, and the lender may be able to demand payment. Therefore, the Trust’s debt is classified as a current liability and the vault cash is classified as a current asset.

     The expenses of the Trust, which are primarily interest and fees related to the Trust’s borrowings and bank charges, were $5,830,000 in 2005, $6,711,000 in 2006 and $5,670,000 in 2007 and are included in cost of sales in our consolidated statements of operations.

     The Lender issues commercial paper notes with maturities of not more than 270 days. The outstanding commercial paper on December 31, 2007 matured January 2, 2008. Interest rates on the outstanding commercial paper notes ranged from 2.3% to 4.4% during 2005, 4.3% to 5.4% during 2006 and 5.1% to 6.7% during 2007.

     Selected information on the Trust’s borrowings for the years ended December 31, 2005, 2006 and 2007 is as follows:

	2005			2006			2007
Maximum amount outstanding at any month end	$100.0 million			$89.5 million			$72.5 million
Average outstanding during the year	$83.8 million			$79.3 million			$64.7 million
Weighted average interest rate at year end		6.09	%		7.14	%		7.40	%
Weighted average interest rate during the year		5.10	%		6.81	%		6.98	%

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     In March 2008, we notified our current vault cash provider that we intend to terminate our current vault cash arrangement sometime during the second quarter of 2008. We have made arrangements with another provider of vault cash that we believe will provide vault cash for us at a lower cost. We do not anticipate that this change in vault cash providers will cause any significant interruption in our business. However, we have only used the new vault cash provider for a small test sample of our ATMs. Further, use of another vault cash provider’s cash in a test sample of our ATMs is a violation of our current agreement. Although we expect our current provider to cooperate in our transition to a new provider, they could declare us to be in default of TRM Inventory Funding Trust’s Loan and Servicing Agreement and demand repayment of our vault cash liability before we have finalized arrangements to replace that cash in our ATMs. If we terminate our current vault cash arrangement prior to its maturity in 2012 and repay the Trust’s borrowings, we will owe a prepayment fee of $750,000. We have accrued the prepayment fee and included it in our 2007 loss on early extinguishment of debt as of the end of the fourth quarter of 2007 when we violated the exclusivity covenant of the Loan and Servicing Agreement and the lender could demand early repayment.

     Before its sale in January 2007, our United Kingdom ATM business obtained vault cash under an agreement with a local bank. Vault cash obtained under the program remained the property of the bank.

     Before its sale in January 2007, our Canadian ATM business obtained vault cash under an agreement with an armored car carrier that has a corresponding agreement with a local bank. As in our United Kingdom vault cash arrangement, the vault cash obtained under the Canadian program remained the property of the bank.

4. Goodwill and Intangible Assets

     Goodwill:

     Activity in our goodwill accounts by segment was as follows (in thousands):

				United						United
				States			Canada			Kingdom
	ATM			ATM			ATM			ATM			Total
Balance December 31, 2005	$	118,875											$	118,875
Effect of exchange rate changes		834												834
Reallocation of goodwill (see Note 13)		(119,709	)	$	37,140		$	9,513		$	73,056			—
Impairment (see Note 14)					(20,392	)		(5,835	)		(17,516	)		(43,743	)
Effect of exchange rate changes								(309	)		97			(212	)
Reclassification to assets held for sale (see Note 11)								(3,369	)		(55,637	)		(59,006	)
Balance December 31, 2006 and 2007	$	—		$	16,748		$	—		$	—		$	16,748

     Intangible assets (in thousands):

	December 31, 2006							December 31, 2007
	Gross							Gross
	carrying		Accumulated					carrying		Accumulated
	amount		amortization			Net		amount		amortization			Net
Subject to amortization:
Acquired contracts	$	1,093	$	(696	)	$	397	$	479	$	(205	)	$	274
Other		1,579		(1,465	)		114		1,853		(1,616	)		237
		2,672		(2,161	)		511		2,332		(1,821	)		511
Not subject to amortization		74		—			74		74		—			74
	$	2,746	$	(2,161	)	$	585	$	2,406	$	(1,821	)	$	585

     Amortization of intangible and other assets, which is included in selling, general and administrative expense in continuing operations, was $6,504,000, $4,322,000 and $525,000 for 2005, 2006 and 2007, respectively. Estimated amortization expense for the next five years for intangible and other assets held at December 31, 2007 is: 2008 — $471,000; 2009 — $299,000; 2010 — $297,000; 2011 — $88,000, and 2012 — $46,000.

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5. Accrued Expenses (in thousands)

	December 31,
	2006		2007
Settlement agreement — Notemachine (Note 6)	$	—	$	2,292
Settlement agreement — eFunds (Note 12)		—		2,500
Accrued prepayment fee (Note 3)		—		750
Accrued payroll expenses		1,613		168
Interest payable		883		5
ATM maintenance and other expenses		973		588
Other accrued expenses		5,275		3,626
	$	8,744	$	9,929

6. Term Loans, Line of Credit and Other Debt:

     Term loans and lines of credit (in thousands)

	December 31,		December 31,
	2006		2007
Term loans	$	92,808	$	2,051
Line of credit		6,510		—
Total	$	99,318	$	2,051

     The weighted average interest rate on the term loans as of December 31, 2006 was 13.52%, and the interest rate on borrowings under the line of credit was 14.25%. As of December 31, 2007, the interest rate on the term loan was 16.87%.

     In June 2006, we established a credit facility which we used to refinance our then-existing term loan and lines of credit. In connection with the repayment of our term loan and lines of credit, we recorded a loss on early extinguishment of debt of $3.5 million of which $372,000 is included in discontinued operations. This loss resulted from writing off costs of $2.6 million we had deferred in conjunction with that debt and payment of a prepayment penalty of $860,000 to our former lenders. The new facility consisted of three related agreements:

• a $45.5 million credit agreement (the “First Lien Credit Agreement”) with GSO Origination Funding Partners LP (the “GSO Fund”), certain other lenders and Wells Fargo Foothill, Inc., serving as administrative agent, revolving lender, swing line lender and letter of credit issuer (“WFF”);

• a $40 million second lien loan agreement with the GSO Fund, certain other lenders and WFF (the “Second Loan Agreement” and, together with the First Lien Credit Agreement, the “Credit Agreements”); and

• a £12.9 million (approximately $25.5 million based on exchange rates as of December 31, 2006) facility agreement between our wholly-owned subsidiary, TRM (ATM) Limited and GSO Luxembourg Onshore Funding SarL (“GSO Lux”) as the original lender, facility agent and security agent (the “UK Facility Agreement”).

     The First Lien Credit Agreement consisted of a $30.5 million term loan facility and $15 million of revolving commitments. There was a letter of credit sublimit of $6.0 million under the revolving loan commitment. The Second Loan Agreement consisted of a $40 million term loan.

     Outstanding balances under the three agreements as of December 31, 2006 were as follows (in thousands):

First Lien Credit Agreement including $6,510 borrowing on line of credit	$	32,762
Second Loan Agreement		40,908
UK Facility Agreement		25,648
	$	99,318

     Prior to the restructuring discussed below, under the First Lien Credit Agreement, both the revolving loans and the term loan bore interest at the London Interbank Offered Rate (“LIBOR”) plus 4.0% while, under the Second Loan Agreement, the term loan bore interest at LIBOR plus 7.0%. Interest on all loans was payable quarterly. Under

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the First Lien Credit Agreement, we were required to pay quarterly installments of principal of $65,000, with the remaining unpaid principal due at maturity. Under the Second Loan Agreement, we were required to pay the entire principal balance at maturity. The revolving and term loans under the First Lien Credit Agreement were scheduled to mature on June 6, 2011. The term loan under the Second Loan Agreement was scheduled to mature on June 6, 2012.

     The UK Facility Agreement consisted of a £12.9 million term loan. Prior to restructuring, discussed below, the loan bore interest at LIBOR plus 4.0% plus an amount intended to compensate GSO Lux for reserve requirements at the Bank of England or the European Central Bank with respect to the loan.

     Affirmative covenants in the syndicated loan agreements included requirements to: achieve certain levels of earnings before interest, taxes, depreciation, amortization and certain other non cash expenses (“EBITDA”); maintain certain financial ratios related to funded debt, total debt and fixed charge coverage to earnings before taxes, depreciation, amortization and non cash expenses; and limit capital expenditures.

     As of September 30, 2006, our financial performance caused us to not be in compliance with three of the covenants in the Credit Agreements and the UK Facility Agreement: the minimum amount of consolidated EBITDA (annualized), the consolidated leverage ratio and the consolidated fixed charge coverage ratio. Our lenders had the right to seek to accelerate the loan under the operative loan documents, but they did not do so or exercise other remedies. Instead, on November 20, 2006, we entered into agreements under which they waived our defaults and agreed with us to restructure our loans. As restructured, the interest rates on our loans were increased. The increased interest cost was deferred and added to principal. In addition, the maturity dates of the loans were changed so that a total of $69.9 million was due on or before February 28, 2007. The financial covenants were modified to require achievement of certain levels of earnings before interest, taxes, depreciation and amortization and certain other non-cash expenses (“adjusted EBITDA”), adjusted monthly, and to limit capital expenditures. We did not comply with the adjusted EBITDA covenant for the months of December 2006 through October 2007. However, our lenders have granted waivers of our violation of the adjusted EBITDA covenant for those months. The terms of the Second Loan Agreement require that we maintain our common stock’s listing on the NASDAQ Global Market. We received a notice from NASDAQ that our common stock would be suspended from trading on the NASDAQ Global Market as of the opening of business on March 28, 2008 and would be subsequently delisted as a result of our failure to comply with NASDAQ’s Minimum Bid Price Rule unless we request an appeal of the staff’s determination. We have requested a hearing to appeal the staff’s determination.

     We also granted warrants to the holders of Term Loan B to purchase 3.1 million shares of our common stock at a price equal to a 5% premium above the weighted average price of our common stock for the seven trading days following November 20, 2006. Based on that formula, the exercise price of the warrants was set at $1.3638 per share. The warrants are exercisable for a period of seven years following November 20, 2006. We agreed to file a registration statement with the SEC covering the resale of the shares issuable upon the exercise of the warrants and to use our best efforts to have the registration statement declared effective by the SEC no later than May 18, 2007. However, we were unable to file the registration statement by May 18, 2007 because we filed our Annual Report on Form 10-K for 2006 and our Quarterly Report on Form 10-Q for the first quarter of 2007 late. We expected to enter into further agreements requiring registration of our securities, and did so in February 2008. As soon as reasonably possible, we plan to file a registration statement covering the shares issuable upon exercise of the November 2006 warrants, shares issuable upon exercise of a warrant issued in February 2008 to LC Capital Master Fund, Ltd. and any other securities that we issue in the near future that require registration. Under the terms of the registration rights agreement, the warrant holders can seek damages due to our inability to file the registration statement. We have not received any demands from the warrant holders to file the registration statement as of the date of this report; we plan to file the registration statement as soon as reasonably practicable. Because the present value of the cash flows under the terms of the revised debt instruments were less than 10% different than the present value of the remaining cash flows under the terms of the original instruments, we accounted for the restructuring of our loans as a modification of the previously outstanding debt. Accordingly, we charged to expense the legal fees we incurred and recorded the fair value of the warrants and loan fees as deferred financing costs.

     We estimated the total fair value of the warrants issued to the holders of Term Loan B to be $2.8 million using the Black-Scholes valuation model. We recorded the fair value of the warrants and $1.0 million of loan fees incurred from our lenders in connection with the restructuring of our loans in November 2006 as additional deferred financing costs. These costs, together with $2.8 million of previously unamortized deferred financing costs associated with the credit facility established in June 2006, aggregated $6.6 million. In connection with the early payment of most of our debt in January 2007, substantially all of the remaining unamortized deferred financing costs were charged to expense as a loss on early extinguishment of debt in the first quarter of 2007.

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     As discussed further in Note 11, during the first six months of 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States and Canadian photocopy business and used $98.6 million from the proceeds of those sales to make principal and interest payments under our financing agreements with GSO Origination Funding Partners and other lenders. These payments repaid all of our liability under the First Lien Credit Agreement, the UK Facility Agreement and Term Loan A and most of Term Loan B. Following these payments, as of December 31, 2007, the only remaining balance under our term loans and line of credit was $2.1 million on our Term Loan B which is due in June 2012.

     The borrowings pursuant to Term Loan B are collateralized by substantially all of our assets and the assets of our subsidiaries, and by a pledge of the stock of our United States subsidiaries and 65% of the stock of our foreign subsidiaries.

     Because we are uncertain whether we can comply with all of the terms of the restructured loan, the entire balance of the loan has been classified as a current liability on our balance sheet.

     Vault Cash Agreement

     Because there are cross-default provisions in TRM Inventory Funding Trust’s Loan and Servicing Agreement, if we fail to comply with the covenants of our restructured loan agreements and are declared to be in default by GSO Origination Funding Partners LP and other lenders, we may be declared in default of the provisions of the Loan and Servicing Agreement as well, and the lender may be able to demand payment. Therefore, the Trust’s debt is classified as a current liability and the vault cash is classified as a current asset on our consolidated balance sheet.

     Settlement Agreement

     In November 2007, we entered into a settlement agreement with Notemachine Limited, relating to the sale to Notemachine of our United Kingdom and German ATM businesses in January 2007. Pursuant to the settlement agreement, we agreed to repay £3,250,000 ($6.4 million using exchange rates as of December 31, 2007) in full and final settlement of claims by Notemachine relating to the sale. Payment terms under the settlement agreement were: £571,000 upon signing, £33,000 (interest only) in December 2007, £625,000 in January 2008, and 36 monthly payments of £71,212, including interest at 15% per annum, commencing February 1, 2008. The settlement agreement requires us to pay the remaining outstanding balance to Notemachine from the proceeds of any debt or equity financing, to the extent that proceeds are available following payment of any debt with prior or superior liens, including Term Loan B.

     We paid the November and December 2007 payments as scheduled, but paid only £250,000 in January. The remainder of the payment scheduled in January 2008 was paid in February 2008 with proceeds from the bridge loan described in the following paragraphs.

     Bridge Loan

     In February 2008, we entered into a Securities Purchase Agreement with LC Capital Master Fund, Ltd., as lender and Lampe Conway & Co., LLC, as administrative agent, pursuant to which we borrowed $1 million. £380,000 from the proceeds of the loan was used to pay the remainder of the January 2008 payment due to Notemachine, together with interest on the unpaid balance. The loan bears interest equal to adjusted LIBOR (as defined in the Securities Purchase Agreement) plus (i) 5% for each interest period for which we pay interest in cash or (ii) 15% for each interest period for which we do not pay interest in cash. The Securities Purchase Agreement does not allow us to pay interest in cash until our Term Loan B has been paid in full. The loan matures on the earliest of December 6, 2012 or immediately following our repayment of Term Loan B.

     In connection with the Securities Purchase Agreement, we granted a warrant to LC Capital Master Fund, Ltd., to purchase up to 2,500,000 shares of our common stock at an exercise price initially equal to $.40 per share, subject to adjustment for any recapitalizations, stock combinations, stock dividends and stock splits. The warrants are exercisable at any time and expire on February 8, 2015. We have agreed to register the shares subject to the warrants.

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7. Income Taxes

     The components of income tax expense (benefit) are as follows (in thousands):

	2005			2006			2007
Current:
Federal	$	—		$	—		$	—
State		74			59			138
Foreign		11			21			—
Deferred:
Federal		(2,544	)		(4,248	)		—
State		(274	)		(163	)		—
Foreign		(2,169	)		(286	)		—
	$	(4,902	)	$	(4,617	)	$	138

     Income tax expense (benefit) has been allocated as follows (in thousands):

	2005			2006			2007
Continuing operations	$	(4,361	)	$	(5,194	)	$	—
Discontinued operations		(541	)		577			138
	$	(4,902	)	$	(4,617	)	$	138

     Deferred tax assets (liabilities) are comprised of the following components (in thousands):

	December 31,
	2006			2007
Current:
Accrued liabilities	$	(93	)	$	202
Accounts receivable allowance		171			137
Unrealized exchange gains		47			—
Valuation allowance		(125	)		(339	)
	$	—		$	—
Noncurrent:
Net operating losses	$	17,619		$	20,499
Losses of foreign subsidiaries		2,288			—
Capital loss carryforward		525			—
Accrued intercompany interest		—			—
Depreciation and amortization:
Equipment		(1,519	)		(1,005	)
Goodwill		7,862			24,152
Intangible assets		10,735			10,275
Other		14			16
Valuation allowance		(37,524	)		(53,937	)
	$	—		$	—

     We have established a valuation allowance to reduce our deferred tax assets to the amount that we believe we will realize. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, during 2006 we determined that we may not realize all or part of our net deferred tax assets in the future, and, accordingly, we have recorded a full valuation allowance against our net deferred tax assets. If we determine that we will realize deferred tax assets in the future, we will increase income in the period in which we make the determination.

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     The effective tax rate for income (loss) from continuing operations differs from the federal statutory tax rate as follows:

	2005			2006			2007
Statutory federal rate		34.0	%		34.0	%		34.0	%
State taxes, net of federal benefit		4.5			7.4			—
Tax rate differential on foreign earnings		.9			(.2	)		—
Losses of foreign subsidiaries		—			4.5			—
Nondeductible expenses		(5.6	)		(3.1	)		—
Deferred tax asset valuation allowance		.2			(32.2	)		(34.0	)
United Kingdom interest settlement		8.8			—			—
Other		(.2	)		(1.6	)		—
		42.6	%		8.8	%		—	%

     Non-deductible expenses primarily consist of differences between expense for stock-based compensation and the deduction for stock-based compensation for United States tax purposes, 50% of meals and entertainment that are not deductible for United States tax purposes and certain intercompany interest amounts.

     As of December 31, 2007, we have net operating loss carryforwards of approximately $39 million available to offset future taxable income for United States federal income tax purposes which expire in the years 2020 through 2027. The tax benefit of net operating losses of approximately $145,000, relating to the benefit of options exercised, when and if realized, will be credited directly to common stock. Utilization of our United States net operating loss carryforwards may be subject to certain limitations in the event of a change in control of the Company. Our United States federal income tax returns for the years 2004-2007 are subject to examination and adjustment by the Internal Revenue Service.

     As of December 31, 2007, our Canadian subsidiary has net operating loss carryforwards of approximately $15 million available to offset future taxable income in Canada which expire in the years 2009 through 2017. However, we have sold the assets of our Canadian subsidiary, and it no longer has any operations.

8. Shareholders’ Equity

     Preferred Stock

     On June 24, 1998, we issued and sold 1,777,778 Series A Preferred Shares and warrants to purchase 500,000 shares of common stock for net proceeds of approximately $19.8 million. Warrants to purchase 54,000 shares were exercised in 2005, and the remaining warrants expired unexercised.

     Each share of Series A Preferred stock was convertible at any time at the option of the holder into 0.7499997 of a share of common stock. In addition, each share of preferred stock was to be automatically converted into 0.7499997 shares of common stock if the price of common stock was at least $20.00 for a period of 90 consecutive days. On March 5, 2005, this condition was satisfied. As a result, as of that date, each share of our Series A preferred stock was converted into 0.7499997 of a share of our common stock, leaving no Series A preferred stock remaining issued and outstanding.

     Repurchase of Common Stock

     In the fourth quarter of 2005 we announced that our Board of Directors had authorized the repurchase of shares of our common stock for up to $20.0 million. No shares were repurchased in 2006 or 2007. Any such repurchases would require approval from our lenders.

     Issuance of Common Stock

     During the fourth quarter of 2005, we entered into a Share Purchase Agreement under which we sold 2,778,000 unregistered shares of common stock for $14.54 per share. The sales proceeds, net of placement agent fees and other costs, were $38.2 million. We filed a resale registration statement with respect to shares issued in the transaction. The registration statement was declared effective on December 29, 2005.

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     Common Stock Warrants

     On November 20, 2006, we granted to the holders of our Term B loan warrants to purchase 3,072,074 shares of common stock at $1.3638 per share. These warrants expire in November 2013 (see Note 6).

     In February 2008, we granted a lender a warrant to purchase up to 2,500,000 shares of our common stock at an exercise price initially equal to $.40 per share. This warrant expires on February 8, 2015 (see Note 6).

     Common Stock Options and Restricted Stock Grants

     Non-cash stock compensation expense for 2006 and 2007 is included primarily in selling, general and administrative expense and includes amortization of stock options granted during 2006 and 2007 and previously unvested stock option grants and amortization of restricted shares of common stock granted to our directors and certain executive officers. During 2006 we accelerated the vesting of certain options granted to our former President and Chief Executive Officer and our former Executive Vice President. We recorded non-cash compensation expense of $685,000 in connection with these modifications during 2006.

     Non-cash compensation expense (in thousands):

	2006		2007
Modification of options previously granted	$	685	$	—
Amortization of:
Option grants		115		(2	)
Restricted shares		339		510
	$	1,139	$	508

     We have reserved 3,700,000 shares of common stock for issuance under our stock incentive plans. Under our plans we are authorized to issue incentive and nonqualified stock options and restricted shares of common stock. All options terminate no more than ten years from the date of grant and vest over various schedules ranging up to five years. We issue new shares upon exercise of options.

     A summary of stock option activity during 2006 and 2007 follows:

	Shares			Weighted
	under			average
	option			exercise price
Outstanding January 1, 2006		1,457,015		$	5.94
Options granted		65,000			3.09
Options exercised		(306,890	)		1.97
Options forfeited		(557,000	)		7.27
Outstanding December 31, 2006		658,125			6.39
Options granted		30,000			.98
Options exercised		(20,375	)		1.59
Options forfeited		(391,125	)		7.48
Outstanding December 31, 2007		276,625			4.62

     During the year ended December 31, 2006, options to purchase 306,890 common shares at prices from $1.15 to $6.50 were exercised, including options to purchase 285,140 shares that were exercised on a cashless basis as allowed under the Company’s Omnibus Stock Option Plan. As a result of the exercise of options during 2006, we issued 234,832 common shares. During the year ended December 31, 2007, options to purchase 20,375 common shares at prices from $1.15 to $1.80 were exercised, including options to purchase 4,375 shares that were exercised on a cashless basis. As a result of the exercise of options during 2007, we issued 17,718 common shares.

     As of December 31, 2007, options to acquire 213,292 shares at a weighted average exercise price of $5.51 per share were exercisable. As of December 31, 2007, there was approximately $1.6 million of total unrecognized compensation cost related to share-based compensation arrangements granted under our stock award plans that are expected to vest. We expect to recognize that cost over a weighted average period of 1.9 years.

     We did not grant any options during 2005. The weighted-average per share grant date fair value of options granted during 2006 and 2007 was $2.43 and $.89, respectively. The total intrinsic value of options exercised during 2005, 2006 and 2007 was $1.7 million, $1.6 million and $30,000, respectively.

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     Options outstanding that were fully vested or expected to vest as of December 31, 2007:

Number of shares under option		276,625
Weighted average exercise price	$	4.62
Aggregate intrinsic value		0
Weighted average remaining contractual term	3.3		years
Range of exercise prices	$	.98 - $13.99

     For purposes of the pro forma calculations for 2005 in the table set forth in Note 1 and to determine the amount of compensation expense beginning in 2006, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing method. The weighted average fair value of options granted during 2006 and 2007 as calculated by the Black-Scholes model, and the assumptions used are shown in the following table. No options were granted in 2005.

	2006			2007
Dividend yield		—			—
Expected volatility (based on historical data)		121.53% - 126.53	%		128.61	%
Risk-free interest rate		4.40% - 4.65	%		4.08	%
Expected life	3 - 5 years			6 years

     We have issued shares of restricted stock to our directors and certain officers. The restricted shares vest annually over periods of three to four years. A summary of restricted stock activity during 2006 and 2007 follows:

	Shares			Weighted average grant-date fair value
Unvested shares January 1, 2006		27,000		$	13.97
Restricted shares granted		273,000			5.98
Restricted shares vested		(19,950	)		8.04
Restricted shares forfeited		(22,010	)		11.40
Unvested shares December 31, 2006		258,040			6.20
Restricted shares granted		500,000			1.55
Restricted shares vested		(69,637	)		6.07
Restricted shares forfeited		(2,010	)		13.97
Unvested shares December 31, 2007		686,393			2.80

     The total fair value of restricted shares vested during 2006 and 2007 was $30,000 and $148,000, respectively.

9. Profit Sharing Retirement Plan

     We have a profit sharing retirement plan for eligible employees. The plan has profit sharing and 401(k) components. Our contribution under the profit sharing portion of the plan is discretionary. Under the 401(k) part of the plan, each employee may contribute, on a pre-tax basis, up to the maximum allowed under the Internal Revenue Code.

     No amounts were accrued or paid for profit sharing for 2005, 2006 and 2007. We paid matching contributions of $120,000, $129,000 and $65,000 to our defined contribution plans for the years ended December 31, 2005, 2006, and 2007, respectively.

10. Commitments and Contingent Liabilities

     We have operating leases, primarily for office and warehouse space, with expiration dates through 2010. Minimum lease payments for our operating leases are: 2008 — $361,000; 2009 - $352,000; and 2010 — $105,000.

     Rental expense included in continuing operations for 2005, 2006 and 2007 was $552,000, $441,000, and $296,000, respectively.

     As of December 31, 2007, Wells Fargo Foothill Inc. had issued a letter of credit on our behalf in the amount of $3.1 million to secure our performance in connection with our vault cash agreement.

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     We guaranteed certain equipment lease payments for TRM Copy Centres (UK) Ltd. when that company was our subsidiary. In June 2006 we sold all of the outstanding shares of that subsidiary to an unrelated third party. In October 2007 (the most recent date for which we have information from the lessor) the remaining balance payable under the leases we guarantee was £331,000 (approximately $655,000 using exchange rates as of December 31, 2007).

11. Discontinued Operations and Sales of Businesses

     During 2006 and 2007 we sold all of our photocopy operations and all of our ATM operations outside the United States. As a result, the operations of our Canadian, United Kingdom and German ATM businesses and our Canadian, United Kingdom and United States photocopy businesses are shown as discontinued operations in the accompanying statements of operations for all periods presented.

     In June 2006 we sold all of the outstanding shares of our United Kingdom photocopier subsidiary for £2.32 million (approximately $4.3 million using exchange rates as of the date of sale). We recorded a gain on the sale of $1.9 million, including recognition in income of foreign currency translation adjustments of $1.5 million that had previously been recorded in other comprehensive income.

     Effective January 1, 2007, we sold substantially all of the assets of our Canadian ATM business for approximately Canadian $13.0 million (U.S. $11.1 million using exchange rates as of January 12, 2007). We have recorded a gain on the sale of $2.3 million.

     Effective January 24, 2007, we sold all of the shares of our United Kingdom ATM subsidiary that owned our ATM businesses in the United Kingdom and Germany for approximately £43.2 million (approximately $84.7 million using exchange rates as of January 24, 2007), subject to certain adjustments. In November 2007 we entered into a settlement agreement pursuant to which we agreed to repay £3,250,000 as a final settlement of all claims under the sale and purchase agreement. In December 2007 we paid £571,000 of this liability. Payment terms for the remaining £2.7 million are described in Note 6. After taking into account the settlement agreement, we have recorded a gain on the sale of $4.8 million.

     On January 29, 2007, we sold substantially all of the assets of our United States photocopy business for approximately $8.8 million. We have recorded a gain on the sale of approximately $65,000.

     On June 19, 2007, we sold substantially all of the assets of our Canadian photocopy business for approximately Canadian $615,000 (approximately U.S. $582,000 using exchange rates as of June 19, 2007) in cash and assumption of liabilities, plus 50% of the cash flows from the operation of the business for seven years. We recorded a gain on the sale of approximately $2.7 million, substantially all due to recognition of currency exchange gains previously recorded in other comprehensive income.

     In connection with these sales, we made various representations and warranties and/or provided indemnities. The purchasers may make (and, in the case of the sale of United Kingdom ATM subsidiary, have made) claims against us relating to the representations, warranties or indemnities. Other than the purchaser of our former United Kingdom ATM subsidiary referred to above, none of the purchasers are pursuing claims against us.

     The aggregate of the sales prices for the businesses we sold in the first six months of 2007 was approximately $105 million, before selling costs. We used $98.6 million of the net cash proceeds of $102.4 million to make principal and interest payments on our debt. The balance was used to fund escrow deposits and deposits with our bank to collateralize outstanding letters of credit. As of December 31, 2007, $3.1 million was held by our bank as collateral for outstanding letters of credit, and is reported as restricted cash on our balance sheet.

     Because the terms of our financing agreements required us to use substantially all of the net proceeds from the sales of businesses to pay debt, we have allocated interest expense to discontinued operations based upon the lesser of the amount repaid or debt outstanding. No general corporate overhead has been allocated to discontinued operations.

     Net revenues of discontinued operations through the dates of sale (in thousands):

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	2005		2006		2007
Canada photocopy	$	3,604	$	3,405	$	1,102
United Kingdom photocopy		4,250		1,646		—
United States photocopy		26,345		22,390		1,368
Canada ATM		8,807		7,148		—
United Kingdom ATM		32,475		32,300		1,653
Germany ATM		—		146		130
	$	75,481	$	67,035	$	4,253

     Pretax income (loss) from discontinued operations through the dates of sale (in thousands):

	2005			2006								2007
							Gain
							on								Gain on
	Operations			Operations			sale		Total			Operations			sale		Total
Canada photocopy	$	(360	)	$	(2,944	)	$	—	$	(2,944	)	$	(2,975	)	$	2,664	$	(311	)
United Kingdom photocopy		(909	)		(788	)		1,900		1,112			—			—		—
United States photocopy		5,269			(16,481	)		—		(16,481	)		386			65		451
Canada ATM		(100	)		(7,430	)		—		(7,430	)		(113	)		2,242		2,129
United Kingdom ATM		(6,986	)		(39,141	)		—		(39,141	)		(1,617	)		4,840		3,223
Germany ATM		(454	)		(1,064	)		—		(1,064	)		(55	)		—		(55	)
	$	(3,540	)	$	(67,848	)	$	1,900	$	(65,948	)	$	(4,374	)	$	9,811	$	5,437

     Subsequent to the sales of our United States photocopy and Canadian photocopy and ATM businesses, we have resolved certain contingencies associated with those sales. In connection with the resolution of those contingencies and our settlement of claims by the purchaser of our United Kingdom ATM business, we recorded additional losses on the sales of discontinued operations of $221,000 in the second quarter of 2007, $1.6 million in the third quarter of 2007 and $213,000 in the fourth quarter of 2007.

     A charge of $2.7 million is included in discontinued operations for 2007 to write down the carrying amount of the assets of the Canadian photocopy business to their estimated fair value less cost to sell.

     Substantially all of the assets and liabilities of our United States photocopy business and our ATM businesses in Canada, the United Kingdom and Germany, which were sold in January 2007, are presented in the accompanying balance sheet as of December 31, 2006, as held for sale. The carrying amounts of assets reported as held for sale and related liabilities as of December 31, 2006 were as follows (in thousands):

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	United				United
	States		Canada		Kingdom		Germany
	photocopy		ATM		ATM		ATM		Total
Assets:
Cash and cash equivalents	$	—	$	—	$	3,198	$	104	$	3,302
Accounts receivable, net		2,858		68		1,059		56		4,041
Inventories		99		110		808		58		1,075
Prepaid expenses and other		108		—		1,474		—		1,582
Equipment		4,334		1,644		25,727		1,145		32,850
Goodwill		—		3,369		55,637		—		59,006
Intangible and other assets		248		3,140		837		—		4,225
	$	7,647	$	8,331	$	88,740	$	1,363	$	106,081
Liabilities:
Accounts payable	$	113	$	721	$	7,142	$	231	$	8,207
Accrued expenses		276		—		4,752		—		5,028
Current portion of obligations under capital leases		—		—		202		—		202
	$	389	$	721	$	12,096	$	231	$	13,437

12. Concentrations and Related Party Transactions

     We have purchased most of our ATMs from two suppliers, NCR Corporation and Triton Systems. In addition, NCR Corporation provides maintenance services for our company-owned installed ATMs. In 2005 we purchased equipment, parts and services from NCR Corporation in the amount of $4.8 million and from Triton Systems in the amount of $5.0 million. In 2006 we purchased equipment, parts and services from NCR Corporation aggregating $2.7 million and from Triton Systems aggregating $5.5 million. In 2007 we purchased equipment, parts and services from NCR Corporation aggregating approximately $1.6 million and from Triton Systems aggregating approximately $1.2 million. At December 31, 2007 we had $273,000 in accounts payable to NCR Corporation ($325,000 at December 31, 2006). At December 31, 2007 we had $268,000 in accounts payable to Triton Systems ($2.3 million at December 31, 2006).

     In connection with the acquisition of the eFunds ATM business, we entered into a Master Services Agreement with eFunds, (the “MSA”). The MSA had an initial term of five years. In December 2007, we entered into an agreement in principle with eFunds to terminate the MSA except for processing services, effective March 31, 2008. We incurred fees for services provided by eFunds of $6.4 million in 2005, $5.7 million in 2006 and $3.2 million in 2007. At December 31, 2007, we owed eFunds $3.3 million ($2.4 million at December 31, 2006). The December 31, 2007 balance owing to eFunds includes $2.5 million pursuant to the agreement to terminate the MSA (see Note 5). The $2.5 million payment is due upon execution of a mutually agreeable settlement and release agreement.

13. Segment Reporting

     Prior to the third quarter of 2006 we reported our operations in two segments — ATM and Photocopy. During the third quarter of 2006 our President and Chief Executive Officer began regularly reviewing operating results of our businesses on a geographical basis. Accordingly, we have modified our segment disclosures to reflect this change in our reporting practices. As a result of modifying our segment disclosures, during the third quarter of 2006 we reallocated goodwill of $119.7 million previously reported as an asset of our ATM segment to the new ATM segments as follows (in thousands):

United States ATM	$ 37,140
Canada ATM	9,513
United Kingdom ATM	73,056

     We reallocated the goodwill based on the estimated relative fair values of the segments. See Note 14 regarding impairment of goodwill.

     As of September 30, 2006 we had the following six segments: Automated Teller Machine (“ATM”) operations in the United

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States, Canada, the United Kingdom and Germany; and photocopy operations in the United States and Canada. The ATM segments owned and/or operated ATMs, sold ATM machines, and serviced equipment for others. The photocopy segments owned and maintained self-service photocopiers in retail establishments.

     In June 2006 we sold our United Kingdom photocopier subsidiary. In January 2007 we sold our United Kingdom ATM subsidiary that owned our ATM businesses in the United Kingdom and Germany, and we sold substantially all of the assets of our United States photocopier and Canadian ATM businesses. In June 2007 we sold substantially all of the assets of our Canadian photocopy business. As a result of these sales, we have presented the results of operations of our Canadian, United Kingdom and German ATM businesses and our Canadian, United Kingdom and United States photocopy businesses as discontinued operations for all periods presented in the accompanying statements of operations, and have excluded those operations from the segment information in this footnote. General corporate overhead previously charged to the discontinued operations has been reallocated to our remaining segment.

     As a result of the foregoing sales, we now have only one operating segment — ATM operations in the United States. Our United States ATM business owns and/or operates ATM machines, sells ATM machines and services equipment for others.

     Substantially all of our revenues from continuing operations for 2005, 2006 and 2007 were derived from sales to customers in the United States. As of December 31, 2007, substantially all of our assets were located in the United States.

     All revenues are attributed to external customers. One ATM customer accounted for 16%, 20% and 25% of our net sales from continuing operations in 2005, 2006 and 2007, respectively. A second ATM customer accounted for 8%, 9% and 11% of our net sales from continuing operations in 2005, 2006 and 2007, respectively.

     Information about our assets by segment and geographic location as of December 31, 2005 and 2006 follows (in thousands):

	December 31,
	2005		2006
Total assets:
United States ATM	$	228,683	$	114,329
Canada photocopy		6,279		4,318
Other segments (primarily classified as assets held for sale in 2006)		106,820		107,797
	$	341,782	$	226,444
Goodwill:
United States ATM	$	101,363	$	16,748
Other segments (classified as assets held for sale in 2006)		17,512		59,006
	$	118,875	$	75,754
Long-lived assets:
United States ATM	$	11,969	$	9,287
Canada photocopy		5,841		2,493
Other segments (primarily classified as assets held for sale in 2006)		53,899		32,716
	$	71,709	$	44,496

14. Impairment Charges

     During the third quarter of 2006 we recorded non-cash charges of $96.1 million for the impairment of certain assets, of which $43.3 million is included in continuing operations and $52.8 million is included in discontinued operations.

• ATM goodwill. Because of continuing decreases in sales and operating margins in the ATM segments and other factors, we re-evaluated our financial forecasts in the third quarter of 2006 and concluded that it was necessary to review goodwill in our United States, Canadian and United Kingdom ATM segments for impairment of value. The review, consisting of a comparison of the carrying value of the goodwill to its implied fair value, resulted in impairment charges of $20.4 million in the United States, $5.8 million in Canada and $17.5 million in the United Kingdom. Our estimate of the implied fair value of the United States ATM segment’s goodwill was based on the quoted market price of our common

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	stock and the discounted value of estimated future cash flows over a six-year period with residual value, using an 11% discount rate. Our estimate of the implied fair value of the Canadian and United Kingdom ATM segments’ goodwill was based on the estimated selling prices of those ATM segments.
•	Finite-lived intangible assets associated with the ATM businesses. Because of faster than anticipated attrition of customer contracts, operating losses and revised financial forecasts, we concluded that it was necessary to review the carrying value of the long-lived assets of our United States, Canadian and United Kingdom ATM segments. In that review, we determined that the future cash flows from those assets were not adequate to recover those assets, and we recorded impairment charges of $22.9 million in the United States, $272,000 in Canada and $7.7 million in the United Kingdom, based on comparisons of the carrying amounts of the assets to their estimated fair values. Our estimate of the fair value of the United States assets was based on the discounted values of estimated future cash flows over a seven-year period using an 11% discount rate. Our estimates of the fair value of the Canadian and United Kingdom assets were based on the estimated selling prices of those ATM segments.
•	Photocopy equipment in the United States and Canada. Because of operating losses in our United States and Canadian photocopy segments and revised financial forecasts, we concluded that it was necessary to review the carrying value of those segments’ long-lived assets, which consist almost entirely of photocopy equipment. As a result, we determined that future cash flows from the photocopy segments were not adequate to recover the carrying value of that equipment, and we recorded impairment charges of $18.7 million in the United States and $2.7 million in Canada based on a comparison of the carrying amounts of these assets to their estimated fair values. Our estimates of the fair values of the asset groups were based on the estimated selling price of the United States photocopy segment and the discounted value of estimated future cash flows over a ten-year period using an 11% discount rate for the Canadian photocopy segment.

15. Litigation and Potential Claims

     We are a defendant in various actions that have arisen in the normal course of business. We believe that the ultimate disposition of these matters will not have a material adverse effect on our business, financial condition or results of operations.

     As described in Note 11, in 2006 and 2007 we sold our ATM businesses in the United Kingdom, Germany and Canada, and our photocopy businesses in the United Kingdom, United States and Canada in five separate transactions. In connection with these sales, we have made various representations and warranties and provided indemnities. The purchasers may make claims against us relating to the representations, warranties or indemnities, or provisions for adjustment of the sales prices, and those claims could be substantial. The purchaser of our United Kingdom and German ATM businesses asserted claims pursuant to the sales agreement, and in November 2007, we entered into a settlement agreement described further in Notes 6 and 11 pursuant to which we agreed to repay a portion of the purchase price.

     During the second quarter of 2005 we reached a final settlement agreement in the amount of $700,000 with our directors’ and officers’ liability insurer to obtain reimbursement of monies we spent to settle litigation among certain former directors and shareholders, parties related to those former directors and shareholders and ourselves. We received the settlement payment of $700,000 and included it in other expense (income), net during the second quarter of 2005.

16. Corporate Restructuring, Equipment Write-downs and Inventory Write-down

     In connection with the corporate restructuring plan we announced in November 2006 and the subsequent sales of a substantial portion of our operations, we have made significant staff reductions, including termination of all of our United States field service employees. We have also vacated leased warehouse and office space occupied by the terminated employees. During the first six months of 2007 we paid severance of $167,000 to terminated employees. During the first quarter of 2007 we vacated warehouse and office space in eleven United States locations. The vacated space was leased under leases with remaining terms up to seven years. We recorded a liability of $796,000 as of March 31, 2007, which was the estimated fair value of the costs that we expect to incur without any economic benefit, and we charged that amount to expense in the first quarter of 2007. We estimated the fair value of the liability based on the discounted value of the remaining lease payments, reduced by estimated sublease payments that we reasonably expect could be obtained for use of the properties.

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     The costs for both severance payments and vacated leases are included in restructuring charges in our statement of operations for 2007.

     In the third quarter of 2007 contracts with three merchants that had TRM-owned ATMs in their stores were terminated, and we began removing those ATMs. In part because we no longer have field service technicians on our staff, we decided that we would not be refurbishing, upgrading and redeploying these ATMs, and we arranged to sell them to third parties. In addition, based on a review of our ATMs in storage, we decided that it would not be cost-effective to refurbish and upgrade most of our stored machines to current standards. As a result, in the third quarter of 2007 we charged $1.1 million to equipment write-offs to write down the equipment to be sold to its estimated net realizable value.

     Additionally, since we no longer have field service technicians on our staff, we are no longer using our inventory of parts and used ATMs in the normal course of business, and we have decided to sell or otherwise dispose of that inventory. As a result, in the third quarter of 2007 we charged $270,000 to cost of sales to write down our inventories to their estimated net realizable value.

17. Quarterly Financial Information (Unaudited)

	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2006:
Sales	$	29,517		$	27,552		$	26,414		$	24,173
Net sales		12,531			10,108			9,712			9,729
Gross profit		6,858			4,795			3,819			3,136
Loss from continuing operations		(605	)		(3,284	)		(44,132	)		(5,545	)
Loss from discontinued operations		(894	)		(1,213	)		(54,723	)		(9,695	)
Net loss		(1,499	)		(4,497	)		(98,855	)		(15,240	)
Basic and diluted loss per share:
Continuing operations		(.04	)		(.19	)		(2.58	)		(.32	)
Discontinued operations		(.05	)		(.07	)		(3.20	)		(.57	)
Net loss		(.09	)		(.26	)		(5.78	)		(.89	)
2007:
Sales	$	22,899		$	23,546		$	23,327		$	20,614
Net sales		8,631			8,797			8,337			7,910
Gross profit		2,744			2,768			2,710			2,589
Loss from continuing operations		(7,731	)		(1,933	)		(3,265	)		(797	)
Income (loss) from discontinued operations		5,500			(280	)		(1,624	)		1,703
Net income (loss)		(2,231	)		(2,213	)		(4,889	)		906
Basic and diluted income (loss) per share:
Continuing operations		(.45	)		(.11	)		(.19	)		(.05	)
Discontinued operations		.32			(.02	)		(.09	)		.10
Net income (loss)		(.13	)		(.13	)		(.28	)		.05

     In the second quarter of 2006 we established a new credit facility which we used to refinance our existing term loan and lines of credit, incurring a $3.5 million loss on early extinguishment of debt of which $3.1 million is included in continuing operations. Also in the second quarter of 2006 we sold our United Kingdom photocopier subsidiary and recorded a gain on the sale of $2.2 million.

     As discussed in Note 14, during the third quarter of 2006 we recorded impairment charges of $96.1 million for the impairment of equipment, goodwill and finite-lived intangible assets, of which $43.3 million is included in continuing operations and $52.8 million is included in discontinued operations.

     The loss from discontinued operations for the fourth quarter of 2006 includes a charge of $1.7 million for estimated value added taxes.

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     As discussed in Note 11, during the first quarter of 2007 we sold our Canadian, United Kingdom and German ATM businesses and our United States photocopy businesses. We recorded a net gain from these sales of $9.8 million in the first quarter of 2007. We used a substantial portion of the proceeds from the sale of these businesses to repay debt, resulting in a loss on early extinguishment of debt of $4.0 million in the first quarter of 2007. In the second quarter of 2007 we sold our Canadian photocopy business.

     As discussed in Note 16, we recorded restructuring charges of $963,000 in the first quarter of 2007, and we recorded equipment and inventory write-downs totaling $1.4 million in the third quarter of 2007.

     Subsequent to the sales of our United States photocopy and Canadian photocopy and ATM businesses, we have resolved certain contingencies associated with those sales. In connection with the resolution of those contingencies and our revised estimates and of the ultimate settlement of claims by the purchaser of our Untied Kingdom ATM business, we recorded additional losses on the sales of discontinued operations of $221,000 in the second quarter of 2007, $1.6 million in the third quarter of 2007, and $213,000 in the fourth quarter of 2007.

     A charge of $2.7 million is included in discontinued operations for the first quarter of 2007 to write down the carrying amount of the assets of our Canadian photocopy business to their estimated fair value less cost to sell.

     In the fourth quarter of 2007 we entered into an agreement with eFunds Corporation terminating our Master Services Agreement. In connection with the termination of that agreement we agreed to make a payment to eFunds that was approximately $2.0 million less than the liability we had recorded for services performed under the agreement. The $2.0 million was credited to expense in the fourth quarter of 2007.

     In the fourth quarter of 2007 we closed the bank accounts of our Canadian subsidiary and transferred the cash balances to a United States bank account, substantially liquidating the Canadian subsidiary. In connection with the substantial liquidation of that subsidiary we recognized in income from discontinued operations $2.7 million of currency exchange gains previously recorded in other comprehensive income.

     As discussed in Note 3, in the fourth quarter of 2007 we accrued a prepayment fee of $750,000 payable to the lender under TRM Inventory Funding Trust’s Loan and Servicing Agreement. The fee is included in our 2007 loss on early extinguishment of debt.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

     We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934, as amended, reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15(d)—15(e) under the Exchange Act) as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2007, our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and are operating in an effective manner.

Management’s Report on Internal Control Over Financial Reporting

     This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public

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accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

     Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934 as amended. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2007 using criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our management has concluded that our internal control over financial reporting was effective as of December 31, 2007.

Remediation of Previously Disclosed 2006 Material Weaknesses

We have remediated the following material weaknesses first reported as of December 31, 2006:

     Ineffective controls over segment disclosures and impairment analysis of goodwill and long-lived assets. Effective beginning in the fourth quarter of 2006, each quarter our senior accounting management prepares a summary and analysis of changes in our operations, organization and financial reporting practices that might affect our operating segments or reporting units, including a conclusion on the appropriateness of the operating segments and reporting units we have identified. Because of business sales, we currently have only one operating segment. Further, whenever we conclude that any of our long-lived assets must be tested for recoverability, our senior accounting management prepares a summary of the significant assumptions and methods used in the resulting analysis. These summaries are reviewed by our Chief Financial Officer.

     Inadequate staffing in the United Kingdom. In January 2007 we sold all of our operations in the United Kingdom.

     Based on our testing of our enhanced procedures relating to segment disclosures and impairment analysis, and the sale of all of our operations except our United States ATM operations, our management has determined that, as of December 31, 2007, we have remediated the material weaknesses in internal control over financial reporting as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006.

Changes in Internal Control Over Financial Reporting

     There were no changes in internal control over financial reporting during the fourth quarter of 2007.

ITEM 9B. OTHER INFORMATION

     None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

     The information required by this item will be set forth in our definitive proxy statement with respect to our 2008 annual meeting of shareholders to be filed not later than 120 days after December 31, 2007 and is incorporated herein by this reference.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item will be set forth in our definitive proxy statement with respect to our 2008 annual meeting of shareholders to be filed not later than 120 days after December 31, 2007 and is incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The information required by this item will be set forth in our definitive proxy statement with respect to our 2008 annual meeting of shareholders to be filed not later than 120 days after December 31, 2007 and is incorporated herein by this reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

     The information required by this item will be set forth in our definitive proxy statement with respect to our 2008 annual meeting of shareholders to be filed not later than 120 days after December 31, 2007 and is incorporated herein by this reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

          The information required by this item will be set forth in our definitive proxy statement with respect to our 2008 annual meeting of shareholders to be filed not later than 120 days after December 31, 2007 and is incorporated herein by this reference.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report

1. Financial Statements

	Page in this Report
Reports of Independent Registered Public Accounting Firms		34
Consolidated Balance Sheets as of December 31, 2006 and 2007		36
Consolidated Statements of Operations for the years ended December 31, 2005, 2006 and 2007		37
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2005, 2006 and 2007		38
Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2006 and 2007		39
Notes to Consolidated Financial Statements		40

2. Financial Statement Schedules:

II — Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

3. Exhibits:

     (a) The exhibits listed below are filed as part of this report

Exhibit
Number
2.1	Share Purchase Agreement dated May 18, 2006 between TRM Copy Centers (USA) Corporation, and Digital 4 Convenience PLC, (incorporated herein by reference to Exhibit 2.1 of Form 10-K for the fiscal year ended December 31, 2006)
2.2	Asset Purchase Agreement dated December 14, 2006 between TRM (Canada) Corporation, EZEE ATM LP, and TRM Corporation (incorporated herein by reference to Exhibit 2.2 of Form 10-K for the fiscal year ended December 31, 2006)
2.3	Asset Purchase Agreement dated December 13, 2006, by and among Skyview Capital, LLC, TRM Copy Centers, LLC, TRM Corporation, and TRM Copy Centers (USA) Corporation (incorporated herein by reference to Exhibit 2.3 of Form 10-K for the fiscal year ended December 31, 2006)
2.4	Agreement dated January 24, 2007 between TRM Corporation, and Notemachine Limited (incorporated herein by reference to Exhibit 2.4 of Form 10-K for the fiscal year ended December 31, 2006)
2.5	Asset Purchase Agreement dated June 19, 2007 between TRM (Canada) Corporation and Multitech Services Inc. (incorporated herein by reference to Exhibit 2.1 of Form 10-Q for the period ended March 31, 2007)
3.1	(a)	Amendments to the Restated Articles of Incorporation (incorporated herein by reference to Exhibit 3.1(a) of Form 10-K for the fiscal year ended June 30, 1998)
	(b)	Restated Articles of Incorporation (incorporated herein by reference to Exhibit 3.1(b) of Form 10-K for the fiscal year ended June 30, 1998)
3.2	Restated Bylaws (incorporated herein by reference to Exhibit 3.2 of Form 10-K for the fiscal year ended June 30, 1998)

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Exhibit
Number
4.1	Specimen Stock Certificate (incorporated herein by reference to Exhibit 4.1 of Form S-3/A filed on August 25, 2004 [No. 333-116748])
4.2	Articles V, VI and VII of the Restated Articles of Incorporation, as amended (See Exhibit 3.1)
4.3	Articles I, II, V, VII and X of the Restated Bylaws (See Exhibit 3.2)
4.4	Warrant to GSO Credit Opportunities Fund (Helios), L.P. (incorporated herein by reference to Exhibit 4.1 to Form 8-K filed on November 22, 2006)
4.5	Warrant to GSO Special Situations Overseas Benefit Plan Fund Ltd. (incorporated herein by reference to Exhibit 4.2 to Form 8-K filed on November 22, 2006)
4.6	Warrant to GSO Special Situations Fund Ltd. (incorporated herein by reference to Exhibit 4.3 to Form 8-K filed on November 22, 2006)
4.7	Warrant to GSO Domestic Capital Funding Partners LP (incorporated herein by reference to Exhibit 4.4 to Form 8-K filed on November 22, 2006)
4.8	Warrant to LC Master Fund, Ltd.
10.1	a)	Lease dated October 14, 1991 between Pacific Realty Associates, L. P. and Registrant (for Registrant’s training facility in Portland, Oregon) (incorporated herein by reference to Exhibit 10.7 of Form S-1 dated November 8, 1991 [No. 33-43829])
	b)	Lease amendment dated February 7, 1994, between Pacific Realty Associates, L.P. and Registrant (incorporated herein by reference to Exhibit 10.7 of Form 10-K for the fiscal year ended June 30, 1994)
	c)	Lease amendment dated August 10, 1994, between Pacific Realty Associates, L.P. and Registrant (incorporated herein by reference to Exhibit 10.5 of Form 10-K for the fiscal year ended June 30, 1995)
	d)	Lease dated August 10, 1994 between Pacific Realty Associates, L.P. and Registrant (for the Registrant’s corporate headquarters in Portland, Oregon) (incorporated herein by reference to Exhibit 10.4 of Form 10-K for the fiscal year ended June 30, 1995)
	e)	Lease amendment dated March 31, 2003 between Pacific Realty Associates, L.P. and Registrant (for the Registrant’s training facility in Portland, Oregon) (incorporated herein by reference to Exhibit 10.2 (e) of Form 10-K for the fiscal year ended December 31, 2003)
10.2	TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Appendix B to Notice of Annual Meeting of Shareholders and Proxy Statement dated May 17, 2005)
10.3	a)	Form of Incentive Stock Option Agreement under TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2(a) of Form 10-Q for the period ended June 30, 2005)
	b)	Form of Non Qualified Stock Option agreement under TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2(b) of Form 10-Q for the period ended June 30, 2005)
	c)	Form of Award Agreement under TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2(c) of Form 10-Q for the period ended June 30, 2005)
10.4	Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 28.1 of Form S-8 dated December 7, 1992 [No. 33-55370])
10.5	Form of Stock Option Agreements:
		a)	For option grants before fiscal 1994 (incorporated herein by reference to Exhibit 10.9 of Form S-1 dated November 8, 1991 [No. 33-43829])
		b)	For option grants during fiscal 1994 (incorporated herein by reference to Exhibit 10.10 of Form 10-K for the fiscal year ended June 30, 1994)
		c)	For option grants during fiscal 1995 (incorporated herein by reference to Exhibit 10.8 of Form 10-K for the fiscal year ended June 30, 1995)

64

Exhibit
Number
10.6	Employment Agreements:
		a)	Employment Agreement dated May 3, 2006 by and between TRM Corporation and Jeffrey F. Brotman (incorporated herein by reference to Exhibit 10.7(i) of Form 10-Q filed for the quarter ended March 31, 2006)
		b)	Employment Agreement dated May 21, 2007, by and between TRM Corporation and Richard B. Stern (incorporated herein by reference to Exhibit 10.6(c) of Form 10-Q for the period ended March 31, 2007)
		c)	Consulting Agreement dated December 12, 2006, by and between TRM Corporation and Danial J. Tierney
		d)	Severance Agreement dated December 12, 2006 by and between TRM Corporation and Danial J. Tierney
		e)	Retainer Agreement dated May 3, 2006 by and between TRM Corporation and Amy B. Krallman (incorporated herein by reference to Exhibit 10.7(j) of Form 10-Q filed for the quarter ended March 1, 2006)
		f)	Retainer Agreement dated May 31, 2007 by and between TRM Corporation and Jeffrey F. Brotman (incorporated herein by reference to Exhibit 10.6(b) of Form 10-Q for the period ended March 31, 2007)
		g)	Employment Agreement dated August 1, 2007 by and between TRM Corporation and Michael Dolan (incorporated herein by reference to Exhibit 10.6(a) of Form 10-Q for the period ended June 30, 2007)
		h)	Severance Agreement and Release of Claims dated September 17, 2007, by and between TRM Corporation and Daniel E. O’Brien (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed on September 19, 2007)
10.7	a)	Credit Agreement dated as of November 19, 2004, among TRM Corporation, TRM (ATM) Limited and certain subsidiaries, as Guarantors, and Bank of America, N.A. and other lenders party thereto (incorporated herein by reference to Exhibit 2.2 of Form 8-K filed November 26, 2004)
	b)	First Amendment and Waiver to Credit Agreement, dated as of November 14, 2005, among TRM Corporation, TRM (ATM) Limited and certain subsidiaries, as Guarantors, and Bank of America, N.A. and other lenders party thereto (incorporated herein by reference to Exhibit 10.8 of Form 10-Q for the period ended September 30, 2005)
	c)	Forbearance Agreement and Amendment, dated as of March 16, 2006 among TRM Corporation, TRM (ATM) Limited, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A. (incorporated herein by referenced to Exhibit 10.1 of Form 8-K filed March 20, 2006)
10.8	a)	Loan and Servicing Agreement dated March 17, 2000 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, Bank Deutsche Genossenschaftsbank AG, and Keybank National Association (incorporated herein by reference to Exhibit 10.11 of Form 10-Q for the quarter ended March 31, 2000)
	b)	Third Amendment to Loan and Servicing Agreement dated as of April 23, 2002 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.9 of Form 10-Q for the quarter ended June 30, 2002)
	c)	Fourth Amendment to Loan and Servicing Agreement dated as of July 22, 2002 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.10 of Form 10-Q for the quarter ended June 30, 2002)
	d)	Fifth Amendment to Loan and Servicing Agreement dated as of April 23, 2003 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(d) of Form 10-K for the fiscal year ended December 31, 2006)
	e)	Sixth Amendment to Loan and Servicing Agreement dated as of May 28, 2003 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association, (incorporated herein by reference to Exhibit 10.8(e) of Form 10-K for the fiscal year ended December 31, 2006)
	f)	Seventh Amendment to Loan and Servicing Agreement dated as of July 21, 2004 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association

65

Exhibit
Number
		(incorporated herein by reference to Exhibit 10.8(f) of Form 10-K for the fiscal year ended December 31, 2006)
	g)	Eighth Amendment to Loan and Servicing Agreement dated as of November 19, 2004 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 2.3 of Form 8-K filed November 26, 2004)
	h)	Ninth Amendment to Loan and Servicing Agreement dated as of March 30, 2005 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.10 (c) of Form 10-K for the fiscal year ended December 31, 2004)
	i)	Tenth Amendment to Loan and Servicing Agreement dated as of July 21, 2005 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association, as Collateral Agent (incorporated herein by reference to Exhibit 10.8(i) of Form 10-K for the fiscal year ended December 31, 2006)
	j)	Forbearance Agreement dated March 28, 2006 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed on March 29, 2006)
	k)	Eleventh Amendment to Loan and Servicing Agreement dated as of June 1, 2006 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(k) of Form 10-K for the fiscal year ended December 31, 2006)
	l)	Twelfth Amendment to Loan and Servicing Agreement dated as of September 30, 2006 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.15 of Form 10-Q for the quarter ended September 30, 2007)
	m)	Thirteenth Amendment to Loan and Servicing Agreement dated as of January 31, 2007 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(m) of Form 10-K for the fiscal year ended December 31, 2006)
	n)	Fourteenth Amendment to Loan and Servicing Agreement dated as of November 2, 2007 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8 of Form 10-Q for the quarter ended September 30, 2007)
	o)	Fifteenth Amendment to Loan and Servicing Agreement dated as of December 21, 2007 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association
10.9	a)	Rental Agreement by and between TRM (ATM) Limited and NCR Limited dated August 13, 2002 (incorporated herein by reference to Exhibit 10.14 of Form 10-Q for the quarter ended September 30, 2002)
	b)	Supplemental Agreement by and between TRM (ATM) Limited and NCR Limited dated August 13, 2002 (incorporated herein by reference to Exhibit 10.15 of Form 10-Q for the quarter ended September 30, 2002)
10.10	a)	Credit Agreement dated June 6, 2006, among TRM Corporation, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrowers, the Subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent, Revolving Lender, Swing Line Lender and L/C Issuer, and GSO Origination Funding Partners LP, the other lenders identified therein (incorporated herein by reference to Exhibit 10.8 of Form 10-Q filed for the quarter ended June 30, 2006)
	b)	Second Lien Loan Agreement dated June 6, 2006, among TRM Corporation, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrowers, the Subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent, Revolving Lender, Swing Line Lender and L/C Issuer, and GSO Origination Funding Partners LP, the other lenders identified therein

66

Exhibit
Number
		(incorporated herein by reference to Exhibit 10.9 of Form 10-Q filed for the quarter ended June 30, 2006)
	c)	Facility Agreement by and among TRM (ATM) Limited and GSO Luxembourg Onshore Funding SarL dated June 6, 2006 (incorporated herein by reference to Exhibit 10.10 of Form 10-Q filed for the quarter ended June 30, 2006)
	d)	First Amendment to Credit Agreement dated November 20, 2006, among TRM Corporation, TRM ATM Corporation, TRM Copy Centers (USA) Corporation, as Borrowers, the subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent and as a Lender and GSO Origination Funding Partners, LP, as a Lender (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed on November 22, 2006)
	e)	Amended and Restated Second Lien Loan Agreement dated November 20, 2006, among TRM Corporation, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrowers, the Subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent, GSO Origination Funding Partners LP, and the other lenders identified therein (incorporated herein by reference to Exhibit 10.2 of Form 8-K filed on November 22, 2006)
	f)	Supplemental Deed Amending a Facility Agreement dated November 2006, by and among TRM (ATM) Limited, GSO Luxembourg Onshore Funding SarL, Wells Fargo Foothill, Inc. and TRM Corporation (incorporated herein by reference to Exhibit 10.3 of Form 8-K filed on November 22, 2006)
	g)	Registration Rights Agreement dated November 20, 2006 (incorporated herein by reference to Exhibit 10.4 of Form 8-K filed on November 22, 2006)
10.11	a)	Securities Purchase Agreement dated February 8, 2008 by and among TRM Corporation, LC Capital Master Fund, Ltd., and Lampe, Conway & Co., LLC
	b)	Registration Rights Agreement dated February 8, 2008 between TRM Corporation and LC Capital Master Fund, Ltd.
14.1	Code of Ethics
21.1	Subsidiaries of the Registrant
23.1	Consent of McGladrey & Pullen, LLP
23.2	Consent of PricewaterhouseCoopers LLP
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14a and 15d-14a of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14a and 15d-14a of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	Certification of Principal Accounting Officer to Rules 13a-14a and 15d-14a of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer of TRM Corporation pursuant to 18 U.S.C. Section 1350
32.2	Certification of Chief Financial Officer of TRM Corporation pursuant to 18 U.S.C. Section 1350
32.3	Certification of Principal Accounting Officer of TRM Corporation pursuant to 18 U.S.C. Section 1350

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in Portland, Oregon, on March 31, 2008.

TRM CORPORATION
By:	/s/ Richard B. Stern
	Richard B. Stern
	President and Chief Executive Officer

POWER OF ATTORNEY

     Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on March 31, 2008 on behalf of the Registrant and in the capacities indicated:

Signature	Title
/s/ Richard B. Stern Richard B. Stern	President and Chief Executive Officer (Principal Executive Officer)
/s/ Michael J. Dolan Michael J. Dolan	Chief Financial Officer (Principal Financial Officer)
/s/ Jon S. Pitcher Jon S. Pitcher	Principal Accounting Officer (Principal Accounting Officer)
/s/ Jeffrey F. Brotman	Director
Jeffrey F. Brotman
/s/ Nancy Alperin	Director
Nancy Alperin
/s/ Tony C. Banks	Director
Tony C. Banks
/s/ Ethan S. Buyon	Director
Ethan S. Buyon
/s/ Alan D. Schreiber	Director
Alan D. Schreiber
/s/ Harmon S. Spolan	Director
Harmon S. Spolan
/s/ John S White	Director
John S. White

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EXHIBIT INDEX

Exhibit
Number
2.1	Share Purchase Agreement dated May 18, 2006 between TRM Copy Centers (USA) Corporation, and Digital 4 Convenience PLC, (incorporated herein by reference to Exhibit 2.1 of Form 10-K for the fiscal year ended December 31, 2006)
2.2	Asset Purchase Agreement dated December 14, 2006 between TRM (Canada) Corporation, EZEE ATM LP, and TRM Corporation (incorporated herein by reference to Exhibit 2.2 of Form 10-K for the fiscal year ended December 31, 2006)
2.3	Asset Purchase Agreement dated December 13, 2006, by and among Skyview Capital, LLC, TRM Copy Centers, LLC, TRM Corporation, and TRM Copy Centers (USA) Corporation (incorporated herein by reference to Exhibit 2.3 of Form 10-K for the fiscal year ended December 31, 2006)
2.4	Agreement dated January 24, 2007 between TRM Corporation, and Notemachine Limited (incorporated herein by reference to Exhibit 2.4 of Form 10-K for the fiscal year ended December 31, 2006)
2.5	Asset Purchase Agreement dated June 19, 2007 between TRM (Canada) Corporation and Multitech Services Inc. (incorporated herein by reference to Exhibit 2.1 of Form 10-Q for the period ended March 31, 2007)
3.1	(a)	Amendments to the Restated Articles of Incorporation (incorporated herein by reference to Exhibit 3.1(a) of Form 10-K for the fiscal year ended June 30, 1998)
	(b)	Restated Articles of Incorporation (incorporated herein by reference to Exhibit 3.1(b) of Form 10-K for the fiscal year ended June 30, 1998)
3.2	Restated Bylaws (incorporated herein by reference to Exhibit 3.2 of Form 10-K for the fiscal year ended June 30, 1998)
4.1	Specimen Stock Certificate (incorporated herein by reference to Exhibit 4.1 of Form S-3/A filed on August 25, 2004 [No. 333-116748])
4.2	Articles V, VI and VII of the Restated Articles of Incorporation, as amended (See Exhibit 3.1)
4.3	Articles I, II, V, VII and X of the Restated Bylaws (See Exhibit 3.2)
4.4	Warrant to GSO Credit Opportunities Fund (Helios), L.P. (incorporated herein by reference to Exhibit 4.1 to Form 8-K filed on November 22, 2006)
4.5	Warrant to GSO Special Situations Overseas Benefit Plan Fund Ltd. (incorporated herein by reference to Exhibit 4.2 to Form 8-K filed on November 22, 2006)
4.6	Warrant to GSO Special Situations Fund Ltd. (incorporated herein by reference to Exhibit 4.3 to Form 8-K filed on November 22, 2006)
4.7	Warrant to GSO Domestic Capital Funding Partners LP (incorporated herein by reference to Exhibit 4.4 to Form 8-K filed on November 22, 2006)
4.8	Warrant to LC Capital Master Fund, Ltd.

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Exhibit
Number
10.1	a)	Lease dated October 14, 1991 between Pacific Realty Associates, L. P. and Registrant (for Registrant’s training facility in Portland, Oregon) (incorporated herein by reference to Exhibit 10.7 of Form S-1 dated November 8, 1991 [No. 33-43829])
	b)	Lease amendment dated February 7, 1994, between Pacific Realty Associates, L.P. and Registrant (incorporated herein by reference to Exhibit 10.7 of Form 10-K for the fiscal year ended June 30, 1994)
	c)	Lease amendment dated August 10, 1994, between Pacific Realty Associates, L.P. and Registrant (incorporated herein by reference to Exhibit 10.5 of Form 10-K for the fiscal year ended June 30, 1995)
	d)	Lease dated August 10, 1994 between Pacific Realty Associates, L.P. and Registrant (for the Registrant’s corporate headquarters in Portland, Oregon) (incorporated herein by reference to Exhibit 10.4 of Form 10-K for the fiscal year ended June 30, 1995)
	e)	Lease amendment dated March 31, 2003 between Pacific Realty Associates, L.P. and Registrant (for the Registrant’s training facility in Portland, Oregon) (incorporated herein by reference to Exhibit 10.2 (e) of Form 10-K for the fiscal year ended December 31, 2003)
10.2	TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Appendix B to Notice of Annual Meeting of Shareholders and Proxy Statement dated May 17, 2005)
10.3	a)	Form of Incentive Stock Option Agreement under TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2(a) of Form 10-Q for the period ended June 30, 2005)
	b)	Form of Non Qualified Stock Option agreement under TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2(b) of Form 10-Q for the period ended June 30, 2005)
	c)	Form of Award Agreement under TRM Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2(c) of Form 10-Q for the period ended June 30, 2005)
10.4	Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 28.1 of Form S-8 dated December 7, 1992 [No. 33-55370])
10.5	Form of Stock Option Agreements:
		a)	For option grants before fiscal 1994 (incorporated herein by reference to Exhibit 10.9 of Form S-1 dated November 8, 1991 [No. 33-43829])
		b)	For option grants during fiscal 1994 (incorporated herein by reference to Exhibit 10.10 of Form 10-K for the fiscal year ended June 30, 1994)
		c)	For option grants during fiscal 1995 (incorporated herein by reference to Exhibit 10.8 of Form 10-K for the fiscal year ended June 30, 1995)
10.6	Employment Agreements:
		a)	Employment Agreement dated May 3, 2006 by and between TRM Corporation and Jeffrey F. Brotman (incorporated herein by reference to Exhibit 10.7(i) of Form 10-Q filed for the quarter ended March 31, 2006)
		b)	Employment Agreement dated May 21, 2007, by and between TRM Corporation and Richard B. Stern (incorporated herein by reference to Exhibit 10.6(c) of Form 10-Q for the period ended March 31, 2007)
		c)	Consulting Agreement dated December 12, 2006, by and between TRM Corporation and Danial J. Tierney
		d)	Severance Agreement dated December 12, 2006 by and between TRM Corporation and Danial J. Tierney
		e)	Retainer Agreement dated May 3, 2006 by and between TRM Corporation and Amy B. Krallman (incorporated herein by reference to Exhibit 10.7(j) of Form 10-Q filed for the quarter ended March 1, 2006)
		f)	Retainer Agreement dated May 31, 2007 by and between TRM Corporation and Jeffrey F. Brotman (incorporated herein by reference to Exhibit 10.6(b) of Form 10-Q for the period ended March 31, 2007)
		g)	Employment Agreement dated August 1, 2007 by and between TRM Corporation and Michael Dolan (incorporated herein by reference to Exhibit 10.6(a) of Form 10-Q for the period ended June 30, 2007)

70

Exhibit
Number
		h)	Severance Agreement and Release of Claims dated September 17, 2007, by and between TRM Corporation and Daniel E. O’Brien (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed on September 19, 2007)
10.7	a)	Credit Agreement dated as of November 19, 2004, among TRM Corporation, TRM (ATM) Limited and certain subsidiaries, as Guarantors, and Bank of America, N.A. and other lenders party thereto (incorporated herein by reference to Exhibit 2.2 of Form 8-K filed November 26, 2004)
	b)	First Amendment and Waiver to Credit Agreement, dated as of November 14, 2005, among TRM Corporation, TRM (ATM) Limited and certain subsidiaries, as Guarantors, and Bank of America, N.A. and other lenders party thereto (incorporated herein by reference to Exhibit 10.8 of Form 10-Q for the period ended September 30, 2005)
	c)	Forbearance Agreement and Amendment, dated as of March 16, 2006 among TRM Corporation, TRM (ATM) Limited, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A. (incorporated herein by referenced to Exhibit 10.1 of Form 8-K filed March 20, 2006)
10.8	a)	Loan and Servicing Agreement dated March 17, 2000 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, Bank Deutsche Genossenschaftsbank AG, and Keybank National Association (incorporated herein by reference to Exhibit 10.11 of Form 10-Q for the quarter ended March 31, 2000)
	b)	Third Amendment to Loan and Servicing Agreement dated as of April 23, 2002 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.9 of Form 10-Q for the quarter ended June 30, 2002)
	c)	Fourth Amendment to Loan and Servicing Agreement dated as of July 22, 2002 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.10 of Form 10-Q for the quarter ended June 30, 2002)
	d)	Fifth Amendment to Loan and Servicing Agreement dated as of April 23, 2003 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(d) of Form 10-K for the fiscal year ended December 31, 2006)
	e)	Sixth Amendment to Loan and Servicing Agreement dated as of May 28, 2003 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association, (incorporated herein by reference to Exhibit 10.8(e) of Form 10-K for the fiscal year ended December 31, 2006)
	f)	Seventh Amendment to Loan and Servicing Agreement dated as of July 21, 2004 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company, LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(f) of Form 10-K for the fiscal year ended December 31, 2006)
	g)	Eighth Amendment to Loan and Servicing Agreement dated as of November 19, 2004 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 2.3 of Form 8-K filed November 26, 2004)
	h)	Ninth Amendment to Loan and Servicing Agreement dated as of March 30, 2005 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.10 (c) of Form 10-K for the fiscal year ended December 31, 2004)
	i)	Tenth Amendment to Loan and Servicing Agreement dated as of July 21, 2005 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association, as Collateral Agent (incorporated herein by reference to Exhibit 10.8(i) of Form 10-K for the fiscal year ended December 31, 2006)
	j)	Forbearance Agreement dated March 28, 2006 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed on March 29, 2006)

71

Exhibit
Number
	k)	Eleventh Amendment to Loan and Servicing Agreement dated as of June 1, 2006 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(k) of Form 10-K for the fiscal year ended December 31, 2006)
	l)	Twelfth Amendment to Loan and Servicing Agreement dated as of September 30, 2006 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.15 of Form 10-Q for the quarter ended September 30, 2007)
	m)	Thirteenth Amendment to Loan and Servicing Agreement dated as of January 31, 2007 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8(m) of Form 10-K for the fiscal year ended December 31, 2006)
	n)	Fourteenth Amendment to Loan and Servicing Agreement dated as of November 2, 2007 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association (incorporated herein by reference to Exhibit 10.8 of Form 10-Q for the quarter ended September 30, 2007)
	o)	Fifteenth Amendment to Loan and Servicing Agreement dated as of December 21, 2007 among TRM Inventory Funding Trust, TRM ATM Corporation, Autobahn Funding Company LLC, DZ Bank AG, Deutsche Zentral-Genossenschaftsbank Frankfurt am Main, and U.S. Bank National Association
10.9	a)	Rental Agreement by and between TRM (ATM) Limited and NCR Limited dated August 13, 2002 (incorporated herein by reference to Exhibit 10.14 of Form 10-Q for the quarter ended September 30, 2002)
	b)	Supplemental Agreement by and between TRM (ATM) Limited and NCR Limited dated August 13, 2002 (incorporated herein by reference to Exhibit 10.15 of Form 10-Q for the quarter ended September 30, 2002)
10.10	a)	Credit Agreement dated June 6, 2006, among TRM Corporation, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrowers, the Subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent, Revolving Lender, Swing Line Lender and L/C Issuer, and GSO Origination Funding Partners LP, the other lenders identified therein (incorporated herein by reference to Exhibit 10.8 of Form 10-Q filed for the quarter ended June 30, 2006)
	b)	Second Lien Loan Agreement dated June 6, 2006, among TRM Corporation, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrowers, the Subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent, Revolving Lender, Swing Line Lender and L/C Issuer, and GSO Origination Funding Partners LP, the other lenders identified therein (incorporated herein by reference to Exhibit 10.9 of Form 10-Q filed for the quarter ended June 30, 2006)
	c)	Facility Agreement by and among TRM (ATM) Limited and GSO Luxembourg Onshore Funding SarL dated June 6, 2006 (incorporated herein by reference to Exhibit 10.10 of Form 10-Q filed for the quarter ended June 30, 2006)
	d)	First Amendment to Credit Agreement dated November 20, 2006, among TRM Corporation, TRM ATM Corporation, TRM Copy Centers (USA) Corporation, as Borrowers, the subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent and as a Lender and GSO Origination Funding Partners, LP, as a Lender (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed on November 22, 2006)
	e)	Amended and Restated Second Lien Loan Agreement dated November 20, 2006, among TRM Corporation, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrowers, the Subsidiaries of the Borrowers identified therein, Wells Fargo Foothill, Inc., as Administrative Agent, GSO Origination Funding Partners LP, and the other lenders identified therein (incorporated herein by reference to Exhibit 10.2 of Form 8-K filed on November 22, 2006)
	f)	Supplemental Deed Amending a Facility Agreement dated November 2006, by and among TRM (ATM) Limited, GSO Luxembourg Onshore Funding SarL, Wells Fargo Foothill, Inc. and TRM Corporation (incorporated herein by reference to Exhibit 10.3 of Form 8-K filed on November 22, 2006)
	g)	Registration Rights Agreement dated November 20, 2006 (incorporated herein by reference to Exhibit 10.4 of Form 8-K filed on November 22, 2006)

72

Exhibit
Number
10.11	a)	Securities Purchase Agreement dated February 8, 2008 by and among TRM Corporation, LC Capital Master Fund, Ltd., and Lampe, Conway & Co., LLC
	b)	Registration Rights Agreement dated February 8, 2008 between TRM Corporation and LC Capital Master Fund, Ltd.
14.1	Code of Ethics
21.1	Subsidiaries of the Registrant
23.1	Consent of McGladrey & Pullen, LLP
23.2	Consent of PricewaterhouseCoopers LLP
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14a and 15d-14a of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14a and 15d-14a of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	Certification of Principal Accounting Officer to Rules 13a-14a and 15d-14a of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer of TRM Corporation pursuant to 18 U.S.C. Section 1350
32.2	Certification of Chief Financial Officer of TRM Corporation pursuant to 18 U.S.C. Section 1350
32.3	Certification of Principal Accounting Officer of TRM Corporation pursuant to 18 U.S.C. Section 1350

73

Schedule II — Valuation and Qualifying Accounts

Years ended December 31, 2005, 2006 and 2007
(In thousands)

			Additions		Additions
	Balance at		Charged to		Charged								Balance at
	Beginning		Costs and		to Other		Deductions -						End of
	of Period		Expenses		Accounts		Write Offs			Reclassifications			Period
Year ended December 31, 2005
Allowance for deferred taxes	$	1,250	$	—	$	—	$	(34	)	$	—		$	1,216
Allowance for doubtful accounts		532		1,832		—		(622	)		—			1,742
Year ended December 31, 2006
Allowance for deferred taxes		1,216		41,332		—		—			(4,899	)(1)		37,649
Allowance for doubtful accounts		1,742		912		—		(1,140	)		(1,046	)(1)		468
Year ended December 31, 2007
Allowance for deferred taxes		37,649		16,627		—		—			—			54,276
Allowance for doubtful accounts		468		171		—		(285	)		—			354

¹ Reclassified as assets held for sale

EX-4.8

Exhibit 4.8

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD OR TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF THE SAID ACT AND APPLICABLE STATE SECURITIES LAWS HAVE BEEN COMPLIED WITH OR UNLESS COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED.

February 8, 2008

TRM CORPORATION

COMMON STOCK PURCHASE WARRANT

Void after February 8, 2015

     This Warrant (the “Warrant”) entitles LC Capital Master Fund, Ltd. (including any successors or assigns, the “Holder”), for value received, to purchase from TRM Corporation, an Oregon corporation, at any time and from time to time, subject to the terms and conditions set forth herein, during the period starting from 5:00 a.m., Eastern Time, on the Initial Exercise Date (as defined in Section 1 below) to 5:00 p.m., Eastern Time, on the Expiration Date (as defined in Section 1 below) at which time this Warrant shall expire and become void, all or any portion of the Warrant Shares at the Exercise Price (as defined in Section 1 below). This Warrant also is subject to the following terms and conditions:

     1. Definitions.  As used in this Warrant, the following terms shall have the respective meanings set forth below or elsewhere in this Warrant as referred to below:

     “Affiliate” means any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a Person, as such terms are used and construed under Rule 144, and any Person (or group of Persons) who share(s) voting or investment power or is (are) deemed a beneficial owner(s), as such terms are used and construed under Rule 13d-3 of the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended, including, without limitation, any Person that serves as a general partner and/or investment adviser or in a similar capacity of a Person.

     “Common Stock” means the common stock, no par value per share, of the Company (including any securities into which or for which such shares may be exchanged for, or converted into, pursuant to any stock dividend, stock split, stock combination, recapitalization, reclassification, reorganization or other similar event).

     “Company” means TRM Corporation, an Oregon corporation.

     “Exercise Price” means $0.40 per share of Common Stock, as applicable and as adjusted from time to time pursuant to the terms of this Warrant.

     “Expiration Date” means February 8, 2015.

     “Fair Market Value” shall mean (i) if the Common Stock is traded on NASDAQ or any other national securities exchange, then the last reported sale price per share of Common Stock on The NASDAQ Stock Market or such other national securities exchange in which such Common Stock is quoted or listed, as the case may be, on the date immediately preceding each date the Warrant is exercised or, if no such sale price is reported on such date, such price on the next preceding business day in which such price was reported, (ii) if the Common Stock is traded over-the-counter with an average weekly trading volume as reported on the Pink Sheets of not less than 250,000 shares for each of the four full trading weeks ending on the trading day immediately preceding the date the Warrant is exercised, then the average of the closing bid and asked prices over the five (5) trading days ended on the trading day immediately preceding each date the Warrant is exercised or (iii) if such Common Stock is not traded, quoted or listed on The NASDAQ Stock Market or any national securities exchange or the over-the-counter market, then the fair market value of a share of Common Stock, as determined in good faith by the Board of Directors of the Company in a manner consistent with the Board of Directors’ past valuation practices.

     “Holder” has the meaning set forth in the preamble of this Warrant.

     “Initial Exercise Date” means the date hereof.

     “Person” (whether or not capitalized) means an individual, entity, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof.

     “SEC” means the Securities and Exchange Commission

     “Securities Purchase Agreement” means that certain Securities Purchase Agreement dated February 8, 2008”), among the Company, the respective Lenders party thereto and Lampe, Conway & Co., LLC, as Administrative Agent for the Lenders.

     “Warrant Shares” means an aggregate of 2,500,000 shares of Common Stock, which amount shall be adjusted to give effect to all adjustments thereto provided for herein.

     2. Exercise of Warrant.

          2.1 Method of Exercise; Payment.

               (a) Cash Exercise. Subject to all of the terms and conditions hereof, this Warrant may be exercised, in whole or in part, with respect to any Warrant Shares, at any time and from time to time during the period commencing on the Initial Exercise Date and ending at 5:00 p.m., Eastern Time, on the Expiration Date, by surrender of this Warrant to the Company at its principal office, accompanied by a subscription substantially in the form attached hereto, executed by the Holder and accompanied by (a) wire transfer of immediately available funds or (b) certified or official bank check payable to the order of the Company, in each case in the amount obtained by multiplying (i) the number of Warrant Shares for which the Warrant is being exercised, as designated in such subscription, by (ii) the Exercise Price. Thereupon, the Holder shall be entitled to receive the number of duly authorized, validly issued, fully paid and nonassessable Warrant Shares determined as provided for herein.

               (b) Cashless Exercise/Conversion. Subject to all of the terms and conditions hereof, the Holder shall have the right to convert this Warrant, in whole or in part, with respect to any Warrant Shares, at any time and from time to time during the period commencing on the Initial Exercise Date and ending at 5:00 p.m., Eastern Time, on the Expiration Date, by surrender of this Warrant to the Company at its principal office, accompanied by a conversion notice substantially in the form attached hereto, executed by the Holder. Thereupon, the Holder shall be entitled to receive a number of duly authorized, validly issued, fully paid and nonassessable Warrant Shares equal to:

                    (i) (A) (x) the number of Warrant Shares (subject to adjustment as provided in Section 3 hereof) which such Holder would be entitled to receive upon exercise of such Warrant for the number of Warrant Shares designated in such conversion notice (without giving effect to any adjustment thereof pursuant to this subsection), multiplied by (y) the Fair Market Value of each such Warrant Share so receivable upon such exercise

minus

                         (B) x) the number of Warrant Shares (subject to adjustment as provided in Section 3 hereof) which such Holder would be entitled to receive upon exercise of such Warrant for the number of Warrant Shares designated in such conversion notice (without giving effect to any adjustment thereof pursuant to this subsection), multiplied by (y) the Exercise Price

divided by

                    (ii) the Fair Market Value per Warrant Share.

          2.2 Immediate Vesting. This Warrant shall be exercisable with respect to Warrant Shares immediately upon its issuance.

          2.3 Delivery of Stock Certificates on Exercise. As soon as practicable after the exercise of this Warrant, and in any event within four (4) business days thereafter, the Company, at its expense, and in accordance with

applicable securities laws, will cause to be issued in the name of and delivered to the Holder, or as the Holder may direct (subject in all cases, to the provisions of Section 8 hereof), a certificate or certificates for the number of Warrant Shares purchased by the Holder on such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the Fair Market Value.

          2.4 Shares To Be Fully Paid and Nonassessable. All Warrant Shares issued upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, free of all liens, taxes, charges and other encumbrances or restrictions on sale (other than those set forth herein).

          2.5 Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon the exercise of this Warrant. With respect to any fraction of a share of Common Stock called for upon any exercise hereof, the Company shall make a cash payment to the Holder as set forth in Section 2.3 hereof.

          2.6 Issuance of New Warrants; Company Acknowledgment. Upon any partial exercise of this Warrant, the Company, at its expense, will forthwith and, in any event within ten (10) business days, issue and deliver to the Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable, in the aggregate, for the balance of the Warrant Shares. Moreover, the Company shall, at the time of any exercise of this Warrant, upon the request of the Holder, acknowledge in writing its continuing obligation to afford to the Holder any rights to which the Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant; provided, however, that if the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to the Holder any such rights.

          2.7 Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or similar tax which may be payable in respect of any transfer involved in the issuance of, and the preparation and delivery of certificates (if applicable) representing, (i) any Warrant Shares purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s name or the name of any transferee of all or any portion of this Warrant.

     3. Payment of Exercise Price. The Exercise Price for the Warrant Shares being purchased may be paid (i) in cash, by certified check or by wire transfer to an account designated in writing by the Company, (ii) by the Holder surrendering a number of Warrant Shares having a Fair Market Value on the date of exercise equal to, greater than (but only if by a fractional share) or less than the required aggregate Exercise Price, in which case the Holder shall receive the number of Warrant Shares to which it would otherwise be entitled upon such exercise, less the surrendered shares, or (iii) any combination of the methods described in the foregoing clauses (i) and (ii).

     4. Adjustment of Exercise Price. The Exercise Price shall be subject to adjustment from time to time upon the happening of certain events as follows:

          4.1 Subdivision or Combination of Stock. If at any time or from time to time after the date hereof, the Company shall subdivide (by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision shall be reduced proportionately and the number of Warrant Shares (calculated to the nearest whole share) shall be increased proportionately such that the number of Warrant Shares immediately after such subdivision shall constitute the same percentage of Common Stock (calculated on a fully diluted basis) as the Warrant Shares had represented immediately preceding the subdivision, and conversely, in the event the outstanding shares of Common Stock shall be combined (whether by stock combination, reverse stock split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be increased proportionately and the number of Warrant Shares (calculated to the nearest whole share) shall be reduced proportionately such that the number of Warrant Shares immediately after such combination shall constitute the same percentage of Common Stock (calculated on a fully diluted basis) as the Warrant Shares had represented immediately preceding the combination. The Exercise Price and the number of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 4.1.

          4.2 Adjustment for Stock Dividends. If at any time after the date hereof, the Company shall declare a dividend or make any other distribution upon any class or series of stock of the Company payable in shares of Common Stock or securities convertible into shares of Common Stock, the Exercise Price and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately to reflect the issuance of any shares of Common Stock or convertible securities, as the case may be, issuable in payment of such dividend or distribution. The Exercise Price and the number of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 4.2.

          4.3 Adjustments for Reclassifications. If the Common Stock issuable upon the conversion of this Warrant shall be changed into the same or a different number of shares of any class(es) or series of stock, whether by reclassification or otherwise (other than an adjustment under Sections 4.1 and 4.2 or a merger, consolidation, or sale of assets provided for under Section 4.4), then and in each such event, the Holder hereof shall have the right thereafter to convert each Warrant Share into the kind and amount of shares of stock and other securities and property receivable upon such reclassification, or other change by holders of the number of shares of Common Stock into which such Warrant Shares would have been convertible immediately prior to such reclassification or change, all subject to successive adjustments thereafter from time to time pursuant to and in accordance with, the provisions of this Section 4.

          4.4 Adjustments for Merger or Consolidation. In the event that, at any time or from time to time after the date hereof, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other Person, (c) sell or transfer all or substantially all of its properties or assets, or (d) sell or transfer more than 50% of the voting capital stock of the Company (whether issued and outstanding, newly issued, from treasury, or any combination thereof) to any other person under any plan or arrangement contemplating the consolidation or merger, sale or transfer, or dissolution of the Company, then, in each such case, the Holder, upon the exercise of this Warrant as provided in Section 2.1 hereof at any time or from time to time after the consummation of such reorganization, consolidation, merger or sale or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Warrant Shares issuable on such exercise immediately prior to such consummation or such effective date, as the case may be, the stock and property (including cash) to which the Holder would have been entitled upon the consummation of such consolidation or merger, or sale or transfer, or in connection with such dissolution, as the case may be, if the Holder had so exercised this Warrant immediately prior thereto (assuming the payment by the Holder of the Exercise Price therefor as required hereby in a form permitted hereby, which payment shall be included in the assets of the Company for the purposes of determining the amount available for distribution), all subject to successive adjustments thereafter from time to time pursuant to, and in accordance with, the provisions of this Section 4.

          4.5 Adjustments for Issuances Below Conversion Price. In the event that, at any time or from time to time after the date hereof, the Company shall issue Common Stock or securities convertible, directly or indirectly, into Common Stock at a price, conversion price or exercise price (as the case may be, assuming ultimate conversion of such security into Common Stock) less than the Exercise Price then in effect hereunder, then the Exercise Price for the Warrant Shares shall be reduced to such lower price relating to such issuance; provided, however, that the Exercise Price for the Warrant Shares shall not be reduced upon the issuance of: (i) options to purchase Common Stock or Common Stock issued or issuable upon the exercise of options to purchase Common Stock issued pursuant to a stock option plan approved by the Board of Directors; or (ii) pursuant to any dividend payable in Common Stock for which appropriate adjustment is made.

          4.6 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any such transfer) referred to in this Section 4, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of Common Stock and other securities and property receivable upon the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such Common Stock or other securities, including, in the case of any such transfer, the Person acquiring all or substantially all of the properties or assets or more than 50% of the voting capital stock of the Company (whether issued and outstanding, newly issued or from treasury or any combination thereof), whether or not such Person shall have expressly assumed the terms of this Warrant.

          4.7 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price and number of Warrant Shares pursuant to this Section 4, this Warrant shall, without any action on the part of the Holder, be adjusted in accordance with this Section 4, and the Company, at its expense, promptly shall compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The Company will forthwith send a copy of each such certificate to the Holder in accordance with Section 10.4 below.

     5. Registration Rights. The Warrant Shares shall be entitled to registration rights and all other rights as applicable to such shares in accordance with that certain Registration Rights Agreement, as defined in the Securities Purchase Agreement, as the same may be amended from time to time.

     6. Notices of Record Date. Upon (a) any establishment by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or right or option to acquire securities of the Company, or any other right, or (b) any capital reorganization, reclassification, recapitalization, merger or consolidation of the Company with or into any other corporation, any transfer of all or substantially all the assets of the Company, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a majority of the Company’s voting stock (whether newly issued, or from treasury, or previously issued and then outstanding, or any

combination thereof), the Company shall mail to the Holder at least ten (10) business days, or such longer period as may be required by law, prior to the record date specified therein, a notice specifying (i) the date established as the record date for the purpose of such dividend, distribution, option or right and a description of such dividend, distribution, option or right, (ii) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to become effective and (iii) the date, if any, fixed as to when the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up.

     7. Exchange of Warrant. Subject to the provisions of Section 8 hereof (if and to the extent applicable), this Warrant shall be exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for new warrants of like tenor, each registered in the name of the Holder or in the name of such other persons as the Holder may direct (upon payment by the Holder of any applicable transfer taxes). Each of such new warrants shall be exercisable for such number of Warrant Shares as the Holder shall direct, provided that all of such new warrants shall represent, in the aggregate, the right to purchase the same number of Warrant Shares and cash, securities or other property, if any, which may be purchased by the Holder upon exercise of this Warrant at the time of its surrender.

     8. Transfer Provisions, etc.

          8.1 Legends. Each certificate representing any Warrant Shares issued upon exercise of this Warrant, and of any shares of Common Stock into which such Warrant Shares may be converted, shall bear the following legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER SAID ACT.”

          8.2 Mechanics of Transfer.

               (a) Any transfer of all or any portion of this Warrant (and the Warrant Shares), or of any interest herein or therein, that is otherwise in compliance with applicable law shall be effected by surrendering this Warrant to the Company at its principal office, together with a duly executed form of assignment, in the form attached hereto. In the event of any such transfer of this Warrant, the Company shall issue a new warrant or warrants of like tenor to the transferee(s), representing, in the aggregate, the right to purchase the same number of Warrant Shares and cash, securities or other property, if any, which may be purchased by the Holder upon exercise of this Warrant at the time of its surrender.

               (b) In the event of any transfer of all or any portion of this Warrant in accordance with Section 8.2(a) above, the Company shall issue (i) a new warrant of like tenor to the transferee, representing the right to purchase the number of Warrant Shares, and cash, securities or other property, if any, which were purchasable by the Holder of the transferred portion of this Warrant, and (ii) a new warrant of like tenor to the Holder, representing the right to purchase the number of Warrant Shares, and cash, securities or other property, if any, purchasable by the Holder of the un-transferred portion of this Warrant. Until this Warrant or any portion thereof is transferred on the books of the Company, the Company may treat the Holder as the absolute holder of this Warrant and all right, title and interest therein for all purposes, notwithstanding any notice to the contrary.

          8.3 Restrictions on Transferability of Securities.

               (a) This Warrant and the Warrant Shares issuable upon exercise of this Warrant (the “Securities”) shall not be sold, assigned, transferred or pledged except upon the conditions specified in this Section.

               (b) Each Holder agrees to comply in all respects with the provisions of this Warrant. Such Holder agrees not to make any disposition of all or any portion of the Securities unless and until (X) there is then in effect a registration statement under the Securities Act of 1933, as amended (the “Securities Act”)

covering such proposed disposition and such disposition is made in accordance with such registration statement or (Y) such Holder shall have notified the Company of the proposed disposition, and if reasonably requested by the Company, such holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such shares under the Securities Act. Notwithstanding the foregoing, no registration statement or opinion of counsel shall be necessary for a transfer by a Holder (i) to a fund, partnership, limited liability company or other entity that is affiliated with such transferring Holder, (ii) to a partner or member (or retired partner or member) of such transferring holder, or to the estate of any such partner or member (or retired partner or member), (iii) to such transferring Holder’s spouse, siblings, lineal descendants or ancestors by gift, will or intestate succession or (iv) in compliance with Rule 144 (or any successor provision) of the Securities Act so long as the Company is furnished with satisfactory evidence of compliance with such rule; provided, however, that, in the case of (i), (ii) or (iii), the transferee agrees in writing to be subject to the terms hereof to the same extent as if he or she were an original holder hereunder.

          8.4 Warrant Register. The Company shall keep at its principal office a register for the registration, and registration of transfers, of the Warrants. The name and address of each Holder of one or more of the Warrants, each transfer thereof and the name and address of each transferee of one or more of the Warrants shall be registered in such register. The Company shall give to any Holder of a Warrant promptly upon request therefor, a complete and correct copy of the names and addresses of all registered Holders of the Warrants.

     9. Lost, Stolen or Destroyed Warrant. Upon receipt by the Company of evidence satisfactory to it of loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of a customary affidavit of the Holder and indemnity agreement, or, in the case of mutilation, upon surrender of this Warrant, the Company at its expense will execute and deliver, or will instruct its transfer agent to execute and deliver, a new Warrant of like tenor and date, and any such lost, stolen or destroyed Warrant thereupon shall become void.

     10. General.

          10.1 Authorized Shares, Reservation of Shares for Issuance. At all times while this Warrant is outstanding, the Company shall maintain its corporate authority to issue, and shall have authorized and reserved for issuance upon exercise of this Warrant, such number of shares of Common Stock, any other capital stock or other securities as shall be sufficient to perform its obligations under this Warrant (after giving effect to any and all adjustments to the number and kind of Warrant Shares purchasable upon exercise of this Warrant).

          10.2 No Impairment. The Company will not, by amendment of its Restated Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, sale or other transfer of any of its assets or properties, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith carry out all such terms and take such action as may be necessary or appropriate in order to protect the rights of the Holder hereunder against impairment. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor on such exercise, and (b) will take all action that may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

          10.3 No Rights as Stockholder. The Holder shall not be entitled to vote or to receive dividends or to be deemed the holder of Common Stock that may at any time be issuable upon exercise of this Warrant for any purpose whatsoever, nor shall anything contained herein be construed to confer upon the Holder any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance or reclassification of stock, change of par value or change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive notice of meetings (except to the extent otherwise provided in this Warrant), or to receive dividends or subscription rights, until the Holder shall have exercised this Warrant and been issued Warrant Shares in accordance with the provisions hereof.

          10.4 Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been given if personally delivered or delivered by overnight courier or mailed by first-class registered or certified mail, postage prepaid, return receipt requested, or sent by fax machine, addressed as follows:

               (a) if to the Company at:

TRM Corporation
5208 N.E. 122^nd Avenue
Portland, OR 97230
Attention: Richard Stern
Fax: (215) 832-0078

with copies to:

Ledgewood
1900 Market St., Suite 750
Philadelphia, PA 19103
Attention: Lisa A. Ernst, Esq.
Fax: (215) 735-2513

               (b) if to the Holder, at the Holder’s address appearing in the books maintained by the Company.

     11. Amendment and Waiver. No failure or delay of the Holder in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Holder are cumulative and not exclusive of any rights or remedies which it would otherwise have. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the Holder.

     12. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York, as such laws are applied to contracts entered into and wholly to be performed within the State of New York and without giving effect to any principles of conflicts or choice of law that would result in the application of the laws of any other jurisdiction.

     13. Covenants To Bind Successor and Assigns. All covenants, stipulations, promises and agreements in this Warrant contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

     14. Severability. In case any one or more of the provisions contained in this Warrant shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

     15. Construction. The definitions of this Warrant shall apply equally to both the singular and the plural forms of the terms defined. Wherever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The section and paragraph headings used herein are for convenience of reference only, are not part of this Warrant and are not to affect the construction of or be taken into consideration in interpreting this Warrant.

     16. Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. In any action or proceeding brought to enforce any provision of this Warrant or where any provision hereof is validly asserted as a defense, the successful party to such action or proceeding shall be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.

[SIGNATURE PAGE FOLLOWS]

In Witness Whereof, the Company has executed this Common Stock Purchase Warrant as of the date first set forth above.

COMPANY: TRM CORPORATION
By:	/s/ Richard B. Stern
	Name:	Richard B. Stern
	Title:	President & Chief Executive Officer

NOTICE AND
SUBSCRIPTION

To:	TRM CORPORATION.	Date:
	5208 N.E. 122nd Avenue
	Portland, OR 97230

     The undersigned hereby irrevocably elects to exercise the right of purchase represented by the attached Warrant for, and to exercise thereunder,                      shares of Common Stock, of TRM Corporation, an Oregon corporation, and tenders herewith payment of $                    , representing the aggregate purchase price for such shares based on the price per share provided for in such Warrant. Such payment is being made in accordance with Section 2.1(a) of the attached Warrant.

     Please issue a certificate or certificates for such shares of Common Stock in the following name or names and denominations and deliver such certificate or certificates to the person or persons listed below at their respective addresses set forth below:

     If said number of shares of Common Stock shall not be all the shares of Common Stock issuable upon exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of such shares of Common Stock less any fraction of a share of Common Stock paid in cash.

Dated:                      ,
	Signature

The undersigned TRM Corporation hereby acknowledges receipt of this Notice and Subscription and authorizes issuance of the shares of Common Stock described above.
TRM Corporation

By:

Title:

Date:

FORM OF ASSIGNMENT

(To be executed upon assignment of Warrant)

     For value received,                                          hereby sells, assigns and transfers unto                      the attached Warrant [                    % of the attached Warrant], together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                      attorney to transfer said Warrant [said percentage of said Warrant] on the books of TRM Corporation, an Oregon corporation, with full power of substitution in the premises.

     If not all of the attached Warrant is to be so transferred, a new Warrant is to be issued in the name of the undersigned for the balance of said Warrant.

     The undersigned hereby agrees that it will not sell, assign, or transfer the right, title and interest in and to the Warrant unless applicable federal and state securities laws have been complied with.

Dated:                      ,
	Signature

FORM OF CONVERSION NOTICE

To:	TRM CORPORATION	Date:
	5208 N.E. 122nd Avenue
	Portland, OR 97230

The undersigned registered holder of the attached Warrant hereby irrevocably converts such Warrants with respect to                     1 Warrant Shares which such holder would be entitled to receive upon the exercise hereof, and requests that the certificates for such shares be issued in the name of, and delivered to                     , whose address is as follows:

Such conversion is being made in accordance with Section 2.1(b) of the attached Warrant. The undersigned hereby represents and warrants as follows:

     (a) the undersigned is acquiring such shares of Common Stock for its own account for investment and not for resale or with a view to distribution thereof in violation of the Securities Act; and

     (b) the undersigned is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act and was not organized for the purpose of acquiring the Warrant or such shares of Common Stock. The undersigned’s financial condition is such that it is able to bear the risk of holding such securities for an indefinite period of time and the risk of loss of its entire investment. The undersigned has sufficient knowledge and experience in investing in companies similar to the Company so as to be able to evaluate the risks and merits of its investment in the Company.

Dated:
	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	(Street Address)
	(City)	(State)	(Zip Code)

     The undersigned TRM Corporation hereby acknowledges receipt of this Conversion Notice and authorizes issuance of the shares of Common Stock described above.

TRM Corporation

By:

Title:

Date:

1 Insert here the number of Warrant Shares into which the Warrant is convertible (or, in the case of a partial conversion, the number of Warrant Shares as to which the Warrants evidenced by this Warrant Certificate are then being converted). In the case of a partial conversion, a new Warrant Certificate will be issued and delivered, representing the unconverted portion of the Warrants, to the holder surrendering this Warrant Certificate.

EX-10.8(O)

Exhibit 10.8(o)

FIFTEENTH AMENDMENT TO LOAN AND SERVICING AGREEMENT

     THIS FIFTEENTH AMENDMENT TO LOAN AND SERVICING AGREEMENT, dated as of December 21, 2007 (this “Amendment”), is entered into among TRM Inventory Funding Trust (“Borrower”), TRM ATM Corporation, in its individual capacity (“TRM ATM”) and as Servicer (in such capacity, “Servicer”), Autobahn Funding Company LLC (“Lender”), DZ Bank AG Deutsche Zentral-Genossenschaftsbank, as Administrative Agent (in such capacity, “Administrative Agent”) and as Liquidity Agent (in such capacity “Liquidity Agent”), and U.S. Bank National Association, as Collateral Agent (“Collateral Agent”).

RECITALS

          Borrower, TRM ATM, Servicer, Lender, Administrative Agent, Liquidity Agent and Collateral Agent are each a party to that certain Loan and Servicing Agreement, dated as of March 17, 2000 (as amended, the “Agreement”); and

          The parties to the Agreement desire to amend the Agreement as hereinafter set forth.

AGREEMENT

          1. Certain Defined Terms. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Agreement.

          2. Amendments to Agreement. Effective as of Effective Date (as defined in Section 3 below), the definition of “Excess Concentrations” in the Agreement shall be amended and restated in its entirety as follows:

     2.1 “Excess Concentrations” means, at any time, the sum of (a) the aggregate of all Cash stored in any single ATM in excess of the lesser of (A) the applicable insurance coverage with respect to the Cash stored in such ATM and (B) $80,000 (provided that if (I) such ATM is in a location where security or other personnel are employed to monitor such ATM 24 hours a day, the limit specified in clause (B) shall be $160,000 or (II) such ATM is located in a casino, the limit specified in clause (B) shall be $300,000), (b) in the event that more than 25% of the ATMs are located in or on property owned or operated (directly or indirectly) by a single Person (other than the Pantry Entities or the Cumberland Entities) or in facilities owned or operated (directly or indirectly) by the same retailer (other than the Pantry Entities or the Cumberland Entities), an amount of Cash equal to the product of (i) the average amount of Cash in all such ATMs and (ii) the number of such ATMs in excess of such 25% level, (c) in the event that more than 60% of the ATMs are located in or on property owned or operated (directly or indirectly) by the Pantry Entities or in facilities owned or operated (directly or indirectly) by the Pantry Entities, an amount of Cash equal to the product of (i) the average amount of Cash in all such ATMs and (ii) the number of such ATMs in excess of such 60% level, (d) in the event that more than 35% of the ATMs are located in or on property owned or operated (directly or indirectly) by the Cumberland Entities or in facilities owned or operated (directly or indirectly) by the Cumberland Entities, an amount of Cash equal to the product of (i) the average amount of Cash in all such ATMs and (ii) the number of such ATMs in excess of such 35% level, (e) in the event that more than 10% of the ATMs have greater than $60,000 in Cash, an amount of Cash equal to the product of (i) the average amount of Cash in all such ATMs and (ii) the number of such ATMs in excess of such 10% level, (f) in the event that more than 2% of the ATMs have greater than $100,000 in Cash, an amount of Cash equal to the product of (i) the average amount of Cash in all such ATMs and (ii) the number of such ATMs in excess of such 2% level, and (g) in the event that more than 5% of the ATMs have greater than $60,000 in Cash and are located in a single State, an amount of Cash equal to the product of (i) the average amount of Cash in all such ATMs and (ii) the number of such ATMs in excess of such 5% level.

          3. Conditions to Effectiveness and Retroactive Application of Amendments. This Amendment shall become effective as of the date first written above (the “Effective Date”) when the Administrative Agent shall have received counterparts of this Amendment, duly executed by all parties hereto.

          4. Representations and Warranties. Each of the Borrower, TRM ATM and Servicer represents and warrants to the other parties hereto that (a) each of the representations and warranties of such Person set forth in the Agreement is true and correct as of the date of the execution and delivery of this Amendment by such Person, with the same effect as if made on such date, (b) the execution and delivery by such Person of this Amendment and the performance by such Person of its obligations under the Agreement, as amended hereby (as so amended, the “Amended Agreement”), (i) are within the powers of such Person, (ii) have been duly authorized by all necessary action on the part of such Person, (iii) have received all necessary governmental approval and (iv) do not and will not contravene or conflict with (A) any provision of law or the certificate of incorporation or by-laws or other organizational documents of such Person or (B) any agreement, judgment, injunction, order, decree or other instrument binding on such Person and (c) the Amended Agreement is the legal, valid and binding obligation of such Person enforceable against such Person in accordance with its terms.

          5. Effect of Amendment. Except as expressly amended and modified by this Amendment, all provisions of the Agreement shall remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to “this Agreement,” “hereof,” “herein” or words of similar effect referring to the Agreement shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

          6. Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

          7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the law of the State of New York without regard to any otherwise applicable principles of conflict of laws.

          8. Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment, the Agreement or any provision hereof or thereof.

     IN WITNESS WHEREOF, the parties have caused this Amendment 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/ Michael G. Oller, Jr.
	Name: Michael G. Oller, Jr.
	Title: Senior Financial Services Officer
TRM ATM CORPORATION
By:	/s/ Michael J. Dolan
	Name: Michael J. Dolan
	Title: Chief Financial Officer
AUTOBAHN FUNDING COMPANY LLC
By:	DZ Bank AG Deutsche Zentral-
	Genossenschaftsbank, as its attorney-in-fact
By:	/s/ Sandeep Srinath
Name: Sandeep Srinath

Title: Vice President
By:	/s/ Christian Haesslein
	Name: Christian Haesslein
	Title: Assistant Vice President
DZ BANK AG DEUTSCHE ZENTRAL-
	GENOSSENSCHAFTSBANK,
	as Administrative Agent and Liquidity Agent
By:	/s/ Sandeep Srinath
	Name: Sandeep Srinath
	Title: Vice President
By:	/s/ Christian Haesslein
	Name: Christian Haesslein
	Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION
By:	/s/ Toby Robillard
	Name: Toby Robillard
	Title: Vice President

December 21, 2007

Wilmington Trust Company,
  not in its individual capacity
  but solely as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration

Re: Fifteenth Amendment to Loan and Servicing Agreement

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

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

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

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

Very truly yours, TRM ATM CORPORATION, as Administrator
By:	/s/ Michael J. Dolan
	Name:	Michael J. Dolan
	Title:	Chief Financial Officer

Acknowledged, Agreed and Consent to:
AUTOBAHN FUNDING COMPANY LLC
By: DZ Bank AG Deutsche Zentral-Genossenschaftsbank,
As its attorney-in-fact

By:	/s/ Sandeep Srinath
	Name: Sandeep Srinath
	Title: Vice President
By:	/s/ Christian Haesslein
	Name: Christian Haesslein
	Title: Assistant Vice President
GSS HOLDINGS, INC.
By:	/s/ Bernard J. Angelo
	Name: Bernard J. Angelo
	Title: Vice President

EX-10.11(A)

Exhibit 10.11(a)

Execution Version

SECURITIES PURCHASE AGREEMENT
dated as of

February 8, 2008,

among

TRM CORPORATION,

THE LENDERS PARTY HERETO

and

LAMPE, CONWAY & CO., LLC

as Administrative Agent

     SECURITIES PURCHASE AGREEMENT dated as of February 8, 2008, among TRM CORPORATION, an Oregon corporation (the “Borrower”), the Lenders (as defined in Article I), and LAMPE, CONWAY & CO., LLC, as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders.

PRELIMINARY STATEMENT

     The Borrower owes money to Notemachine Limited (“Notemachine”) pursuant to that certain Settlement Agreement, dated as of November 20, 2007, by and between Notemachine and the Borrower (the “Settlement Agreement”).

     In connection with the Borrower’s obligations under the Settlement Agreement, the Borrower has requested the Lenders to extend credit in the form of Loans on the Closing Date, in an aggregate principal amount of $1,000,000. The proceeds of the Loans are to be used solely (a) to pay amounts owed to Notemachine under the Settlement Agreement, (b) for working capital of the Loan Parties and (c) to pay fees and expenses incurred in connection with the foregoing and the Loans.

     Simultaneously with entering into this Agreement, the Borrower and the Lenders are entering into that certain Registration Rights Agreement, dated as of the date hereof (the “Registration Rights Agreement”) attached as Exhibit F hereto, relating to the Warrant Shares.

     The Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:

     “Acquisition” means the Borrower’s acquisition of all or substantially all of the assets of LJR Consulting Corp., d/b/a Access to Money.

     “Acquisition Agreement” means a definitive asset purchase agreement, merger agreement or other agreement for the Acquisition (including all schedules, exhibits, amendments, supplements and modifications thereto) and any other documents ancillary thereto, in each case, in form and substance acceptable to the Administrative Agent.

     “Adjusted LIBO Rate” shall mean, with respect to any Interest Period, an interest rate per annum equal to the product of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

     “Administrative Agent” shall have the meaning assigned to such term in the Preamble.

     “Administrative Questionnaire” shall mean an Administrative Questionnaire in the form of Exhibit A, or such other form as may be supplied from time to time by the Administrative Agent.

     “Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified; provided, however, that, for purposes of Section 6.07, the term “Affiliate” shall also include any person that directly or indirectly owns 5% or more of any class of Equity Interests of the person specified or that is an officer or director of the person specified.

     “Agreement” shall mean this Securities Purchase Agreement.

     “Applicable Cash Percentage” shall mean, for any day, with respect to any Loan, 5.00% per annum.

     “Applicable PIK Percentage” shall mean, for any day, with respect to any Loan, 15.00% per annum.

     “Asset Sale” shall mean the sale, transfer or other disposition (by way of acquisition, casualty, condemnation or otherwise) by the Borrower or any Subsidiary to any person other than the Borrower or any Subsidiary Guarantor of (a) any Equity Interests of the Borrower or any Subsidiary (other than directors’ qualifying shares) or (b) any other assets of the Borrower or any Subsidiary (other than (i) inventory, damaged, obsolete or worn out assets, scrap and Permitted Investments, in each case disposed of in the ordinary course of business, (ii) dispositions between or among Foreign Subsidiaries and (iii) any

sale, transfer or other disposition (including casualty losses and condemnations) or series of related sales, transfers or other dispositions having a value not in excess of $100,000).

     “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent, in the form of Exhibit B or such other form as shall be approved by the Administrative Agent.

     “Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America.

     “Borrower” shall have the meaning assigned to such term in the Preamble.

     “Business Day” shall mean any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by law to close and any day on which banks are not open for dealings in dollar deposits in the London interbank market.

     “Capital Lease Obligations” of any person shall mean the obligations of such person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “Change in Control” shall mean the occurrence of any of the following on or after the Closing Date:

     (a) the direct or indirect sale, lease, transfer conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole;

     (b) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (within the meaning of Rule 13d-3 of the SEC under the Exchange Act) of more than 40% of the Equity Interests of the Borrower having the right to vote for the election of members of the Board of Directors thereof;

     (c) individuals who on the Closing Date constitute the Board of Directors of the Borrower (together with any new directors whose appointment by the Board of Directors of the Borrower or whose nomination by the Board of Directors of the Borrower for election by the Borrower’s stockholders was approved by a vote of at least a majority of the members of the Board of Directors then in office who either were members of the Board of Directors on the Closing Date or whose appointment or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the board of directors then in office; and

     (d) any change in control (or similar event, however denominated) with respect to the Borrower or any other Subsidiary shall occur under and as defined in any indenture or agreement in respect of Material Indebtedness to which the Borrower or any other Subsidiary is a party.

     “Change in Law” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.09, by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

     “Charges” shall have the meaning assigned to such term in Section 10.09.

     “Closing Date” shall mean February 8, 2008.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

     “Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Loans hereunder as set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed its Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.04. The initial aggregate amount of the Lenders’ Commitments is $1,000,000.

     “Common Stock” shall have the meaning assigned to such term in Section 2.16.

     “Company Option Plan” shall have the meaning assigned to such term in Section 3.29.

     “Contingent Obligation”, as applied to any person, means any direct or indirect liability, contingent or otherwise, of that person (i) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (ii) with respect to any acceptance, letter of credit or surety bond or similar facility issued for the account of that person or as to which that person is otherwise liable for reimbursement of drawings, or (iii) under Hedging Agreements. Contingent Obligations shall include (a) the direct or indirect Guarantee, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such person for the obligation of another through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence. The amount of any Hedging Agreement shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such person, based on the assumption that such Hedging Agreement had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such Hedging Agreement provides for the netting of amounts payable by and to such person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such person, then in each such case, the amount of such obligation shall be the net amount so determined. The amount of any other Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.

     “Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

     “Credit Facilities” shall mean the loan facilities provided for by this Agreement.

     “Default” shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default.

     “Disqualified Stock” shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case at any time on or prior to the first anniversary of the Stated Maturity, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in clause (a) above, in each case at any time prior to the first anniversary of the Stated Maturity.

     “dollars” or “$” shall mean lawful money of the United States of America.

     “Domestic Subsidiary” shall mean any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

     “Dormant Subsidiary” means each of S-3 Corporation, a Delaware corporation, TRM Services Limited, a company organized under the laws of England and Wales, TRM (Canada) Corporation, a corporation organized under the laws of Canada and registered as an extra provincial company under the laws of British Columbia (with additional extra provincial registrations in Quebec and Ontario), or FPC (France) Ltd., an Oregon corporation (in each case, as to which such designation has not been withdrawn by the Borrower in a written notice to the Administrative Agent or deemed withdrawn pursuant to Section 6.14).

     “Employee” means any current officer, director, consultant, employee, independent contractor, agent and other person, who renders services to the Borrower or any of its Subsidiaries.

     “Environmental Laws” shall mean all former, current and future Federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, directives, orders (including consent orders), and agreements in each case, relating to protection of the environment, natural resources, human health and safety or the

presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to, Hazardous Materials.

     “Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

     “Equity Interests” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

     “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan, (e) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the adoption of any amendment to a Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, (g) the receipt by the Borrower or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA, (h) the occurrence of a “prohibited transaction” with respect to which the Borrower or any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which the Borrower or any such Subsidiary could otherwise be liable or (i) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of the Borrower or any Subsidiary.

     “Event of Default” shall have the meaning assigned to such term in Article VIII.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.14(a)(iv), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.14(a).

     “Expense Reimbursement Letter” shall mean that certain letter agreement re reimbursement of fees and expenses, dated January 29, 2008, between the Borrower and the Administrative Agent.

     “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

     “Financial Officer” of any person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such person.

     “Financing Documents” shall mean this Agreement, the Registration Rights Agreement, the Subsidiary Guaranty, the Expense Reimbursement Letter, the promissory notes executed and delivered pursuant to Section 2.03(a)(iii), and the Warrants executed and delivered pursuant to Section 2.16.

     “Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

     “GAAP” shall mean United States generally accepted accounting principles applied on a consistent basis.

     “Governmental Authority” shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality, regulatory body, board or commission.

     “Granting Lender” shall have the meaning assigned to such term in Section 10.04(i).

     “GSO” shall mean, as the context requires, GSO Origination Funding Partners, LP, the other Lenders from time to time party to the GSO Loan Documents and Wells Fargo Foothill, Inc.

     “GSO Loan Documents” shall mean the Amended and Restated Second Lien Loan Agreement, dated as of November 20, 2006, the Borrower, TRM ATM Corporation and TRM Copy Centers (USA) Corporation, as Borrower, the Subsidiaries of the Borrowers identified therein, as the Guarantors, Wells Fargo Foothill, Inc., as Administrative Agent, GSO Origination Funding Partners, LP, a Delaware limited partnership, and the other Lenders from time to time party thereto (as the same may be amended, supplemented, amended and restated or otherwise modified from time to time and including all schedules, and supplements thereto) and any other documents ancillary thereto (as the same may be amended, supplemented, amended and restated or otherwise modified from time to time).

     “Guarantee” of or by any person shall mean any obligation, contingent or otherwise, of such person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment of such Indebtedness or other obligation or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.

     “Hazardous Materials” shall mean (a) any petroleum products or by products and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.

     “Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

     “Indebtedness” of any person shall mean, without duplication, (a) all obligations of such person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such person upon which interest charges are customarily paid, (d) all obligations of such person under conditional sale or other title retention agreements relating to property or assets purchased by such person, (e) all obligations of such person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees by such person of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i) all obligations of such person as an account

party in respect of letters of credit and (j) all obligations of such person in respect of bankers’ acceptances. The Indebtedness of any person shall include the Indebtedness of any partnership in which such person is a general partner.

     “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

     “Indemnitee” shall have the meaning assigned to such term in Section 10.05(a)(i).

     “Information” shall have the meaning assigned to such term in Section 10.16.

     “Intellectual Property” shall mean (a) patents, patent applications, patent disclosures and inventions, (b) trademarks, service marks, trade names, logos and corporate names and registrations and applications for registration thereof, (c) copyrights (registered and unregistered) and copyrightable works and registrations and applications for registration thereof, (d) mask works and registrations and applications for registration thereof, (e) computer software, data, databases and documentation thereof, (f) trade secrets and other confidential information (including, without limitation, ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, financial and marketing plans and customer and supplier lists and information) and (g) other intellectual property rights.

     “Interest Payment Date” means the 8^th day of each month, commencing May 8, 2008, provided if any such day is not a Business Day, such Interest Payment Date shall be extended to the next succeeding Business Day and interest shall accrue for each day of such extension and (b) the date of any payment of principal in accordance with this Agreement.

     “Interest Period” means a period commencing on an Interest Payment Date and ending on the next succeeding Interest Payment Date determined under clause (a) of the definition thereof; provided that (x) the first Interest Period for any Loan shall commence on the Closing Date and end on the next succeeding Interest Payment Date, and (y) no Interest Period with respect to any portion of the Loans shall extend beyond the Maturity Date. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

     “Lenders” shall mean (a) the persons listed on Schedule 2.01 (other than any such person that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any person that has become a party hereto pursuant to an Assignment and Acceptance.

     “LIBO Rate” means, with respect to any Interest Period, the rate appearing on Reuters Page LIBOR01 (or on any successor or substitute page or service providing rate quotations comparable to those currently provided on such page, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., New York time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a three-month maturity (rounded upward to the nearest 1/16 of one percent). In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Interest Period shall be the three-month London Interbank Offered Rate (rounded upward to the nearest 1/16 of one percent) as published in The Wall Street Journal on such date of determination, and if this later index ceases to exist or is no longer published or announced, then the term “LIBO Rate” means the Prime Rate (rounded upward to the nearest 1/16 of one percent) as published in The Wall Street Journal on such date of determination. The LIBO Rate shall be determined on any date of determination by the Administrative Agent or, if no Administrative Agent then exists, by the Lender of the Loan on which interest is owed.

     “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

     “Loan Parties” shall mean the Borrower and the Subsidiary Guarantors.

     “Loans” shall mean the loans made by the Lenders to the applicable Borrower pursuant to clause (a) of Section 2.02 and any PIK interest paid hereunder.

     “Margin Stock” shall have the meaning assigned to such term in Regulation U.

     “Material Adverse Change” shall mean a Material Adverse Effect or the existence of any action, suit, investigation, litigation or proceeding pending or threatened that (i) would reasonably be expected to (A) have a material adverse effect on the

assets, liabilities, customer or supplier relationships, financial condition, operations or results of operations of the Borrower and its Subsidiaries taken as a whole, (B) materially adversely affect the ability of the Borrower and its Subsidiaries to perform its obligations under the Financing Documents or (ii) would reasonably be expected to materially adversely affect the Transactions or prevent the anticipated use of the proceeds of the Loans.

     “Material Adverse Effect” shall mean a material adverse change in the assets, liabilities, customer or supplier relationships, financial condition, operations or results of operations of the Borrower and its Subsidiaries, provided, however, in each case, not including any change that (A) is generally applicable to the U.S. economy, (B) is generally applicable to automatic teller machine service and product providers or (C) relates to changes in generally accepted accounting principles generally applicable to companies serving as Internet protocol data and voice providers occurring after the date of the Acquisition Agreement

     “Material Indebtedness” shall mean Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower or any Subsidiary in an aggregate principal amount exceeding $250,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

     “Maturity Date” shall mean the earliest of (i) consummation of the Acquisition, (ii) the date that the Borrower obtains proceeds from a debt issuance in an amount equal to or greater than the amount of Indebtedness outstanding under the GSO Loan Documents (plus any accrued and unpaid interest thereon) plus the principal amount of the Loans then outstanding (plus any accrued and unpaid interest thereon), (iii) the date immediately following the Borrower’s repayment in full in cash of the Indebtedness of the Borrower and certain of its Subsidiaries under the GSO Loan Documents or (iv) Stated Maturity.

     “Maximum Rate” shall have the meaning assigned to such term in Section 10.09.

     “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

     “Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

     “Notemachine” shall have the meaning assigned to such term in the preliminary statement to this Agreement.

     “Obligations” shall mean all obligations of every nature of each Loan Party from time to time owed to the Administrative Agent, the Lenders or any of them under the Financing Documents, whether for principal, interest, fees, expenses, indemnification or otherwise.

     “OFAC” shall have the meaning assigned to such term in Section 3.24(a)(iii).

     “Organizational Documents” means with respect to any person, its charter, certificate or articles of incorporation, bylaws, articles of organization, operating agreement, members agreement, partnership agreement, voting trust, or similar agreement or instrument governing the formation or operation of such person.

     “Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Financing Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Financing Document.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

     “Permitted Investments” shall mean:

     (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

     (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by any

domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

     (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria of clause (c) above;

     (e) investments in “money market funds” within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (a) through (d) above; and

     (f) investments in so-called “auction rate” securities rated AAA or higher by S&P or Aaa or higher by Moody’s and which have a reset date not more than 90 days from the date of acquisition thereof.

     “person” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, Governmental Authority or other entity.

     “PIK” shall have the meaning assigned to such term in Section 2.04(b).

     “Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

     “Qualified Capital Stock” of any person shall mean any Equity Interest of such person that is not Disqualified Stock.

     “Register” shall have the meaning assigned to such term in Section 10.04(a)(iii).

     “Registration Rights Agreement” shall have the meaning assigned to such term in the preliminary statement to this Agreement.

     “Regulation T” shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

     “Regulation U” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

     “Regulation X” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

     “Related Fund” shall mean, with respect to any Lender that is a fund or commingled investment vehicle that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

     “Related Parties” shall mean, with respect to any specified person, such person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such person and such person’s Affiliates.

     “Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture.

     “Required Lenders” shall mean, at any time, Lenders having Loans and Commitments representing more than 50% of the sum of all Loans and Commitments at such time.

     “Responsible Officer” of any person shall mean any executive officer or Financial Officer of such person and any other officer or similar official thereof responsible for the administration of the obligations of such person in respect of this Agreement.

     “Restricted Indebtedness” shall mean Indebtedness of the Borrower or any Subsidiary, the payment, prepayment, repurchase or defeasance of which is restricted under Section 6.09(a)(i).

     “Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any Subsidiary.

     “S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.

     “SEC” shall mean the United States Securities and Exchange Commission.

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

     “Settlement Agreement” shall have the meaning assigned to such term in the preliminary statement to this Agreement.

     “Solvent” shall have the meaning assigned to such term in Section 3.21.

     “SPC” shall have the meaning assigned to such term in Section 10.04(a)(viii).

     “Stated Maturity” shall mean December 6, 2012.

     “Statutory Reserves” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the Board). Loans bearing interest at a rate determined by reference to the Adjusted LIBO Rate shall be deemed to constitute Eurocurrency Liabilities as defined in Regulation D of the Board and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

     “Subsidiary” shall mean, with respect to any person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Borrower after giving effect to the Transactions.

     “Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(a), and each other Subsidiary that otherwise provides a guarantee in respect of the Obligations, in each case, pursuant to the Subsidiary Guaranty.

     “Subsidiary Guaranty” means the Subsidiary Guaranty in substantially the form attached hereto as Exhibit G.

     “Synthetic Purchase Agreement” shall mean any swap, derivative or other agreement or combination of agreements pursuant to which the Borrower or any Subsidiary is or may become obligated to make (a) any payment in connection with a purchase by any third party from a person other than the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment (other than on account of a permitted purchase by it of any Equity Interest or Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that no phantom stock or similar plan providing for payments only to current or former directors, officers or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.

     “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

     “Terrorism Order” shall have the meaning assigned to such term in Section 3.24.

     “Transactions” shall mean, collectively, the transactions to occur on or about the Closing Date pursuant to the Financing Documents, including (a) the execution and delivery of the Financing Documents and the borrowings hereunder;

(b) the payment of certain amounts owed to Notemachine in accordance with the Settlement Agreement; (c) the issuance of the Warrants as set forth herein and (d) the payment of related fees and expenses.

     “TRM SEC Documents” shall mean the Borrower’s (a) Form 10-Q for the quarterly period ended September 30, 2007 and filed with the SEC on November 8, 2007, (b) Form 8-K filed with the SEC on December 21, 2007 and (c) Form 8-K filed with the SEC on November 26, 2007.

     “USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

     “Warrants” means one or more warrants to purchase Common Stock, dated as of the date hereof, issued by the Borrower to the Lenders, in substantially the form attached hereto as Exhibit D.

     “Warrant Shares” shall have the meaning assigned to such term in Section 2.16.

     “wholly owned Subsidiary” of any person shall mean a subsidiary of such person of which securities (except for directors’ qualifying shares) or other ownership interests representing 100% of the Equity Interests are, at the time any determination is being made, owned, Controlled or held by such person or one or more wholly owned Subsidiaries of such person or by such person and one or more wholly owned Subsidiaries of such person.

     “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

     SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”; and the words “asset” and “property” shall be construed as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, (a) any reference in this Agreement to any Financing Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time and (b) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided, however, that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article VI or any related definition to eliminate the effect of any change in GAAP occurring after the date of this Agreement on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI or any related definition for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.

     SECTION 1.03. Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted as an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Default if such action is taken or condition exists.

ARTICLE II

The Credits

     SECTION 2.01. Commitments. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make a Loan to the Borrower on the Closing Date in a principal amount not to exceed its Commitment at a purchase price of 100.0% of par. Amounts paid or prepaid in respect of Loans may not be reborrowed.

     SECTION 2.02. Loans. (a)  The failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender).

     (i) Each Lender shall make the Loan to be made by it hereunder on the Closing Date by wire transfer of immediately available funds to such account in New York City as the Borrower may designate not later than 1:00 p.m., New York City time.

     SECTION 2.03. Evidence of Debt; Repayment of Loans. (a)  The Borrower hereby unconditionally promises to pay to each Lender the principal amount of each Loan of such Lender as provided in Section 2.07.

     (i) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from the Loan made by such Lender, including the amounts of principal and cash or PIK interest payable and paid to such Lender from time to time under this Agreement.

     (ii) The entries made in the accounts maintained pursuant to paragraph (b) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms.

     (iii) On the Closing Date, the Borrower shall execute and deliver to each Lender a promissory note payable to such Lender and its registered assigns in substantially the form attached hereto as Exhibit C.

     SECTION 2.04. Interest on Loans. (a)  Subject to the provisions of Section 2.05, the Loans shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate then in effect plus (i) for each Interest Period ending on an Interest Payment Date on which the Borrower pays all accrued and unpaid interest on the Loans in cash, the Applicable Cash Percentage, and (ii) for each other Interest Period, the Applicable PIK Percentage.

     (i) Interest on each Loan shall be payable on the Interest Payment Dates, at the Borrower’s option (i) in cash or (ii) in kind (“PIK”) in the form of additional Loans (valued at 100% of the face amount thereof, which shall be rounded upward to the nearest $1.00); provided, however, that the Borrower may not pay interest in cash until such time as the Indebtedness of the Borrower and certain of its Subsidiaries under the GSO Loan Documents has been paid in full. The applicable Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as the case may be, shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

     SECTION 2.05. Default Interest. While any Event of Default exists, to the extent permitted by law, the Obligations shall bear cash (or, until such time as the Indebtedness of the Borrower and certain of its Subsidiaries under the GSO Loan Documents has been paid in full, PIK) interest (after as well as before judgment), payable on demand, at the rate otherwise applicable to a Loan pursuant to Section 2.04 plus 2.00% per annum.

     SECTION 2.06. Termination of Commitments. The Commitments shall automatically terminate upon the making of the Loans on the Closing Date. Notwithstanding the foregoing, all the Commitments shall automatically terminate at 5:00 p.m., New York City time, on February 15, 2008 if the Closing Date shall not have occurred by such time.

     SECTION 2.07. Repayment of Loans. To the extent not previously paid, all Loans (including capitalized PIK interest) shall be due and payable on the Maturity Date together with accrued and unpaid cash or PIK interest on the principal amount to be paid to but excluding the date of payment. The Borrower shall pay all such amounts to the Lenders on the Maturity Date or, if the Maturity Date is not a Business Day, on the next preceding Business Day. Notwithstanding anything to the contrary in the foregoing or in the definition of “Maturity Date”, any repayment of the Loans on the date of consummation of the Acquisition shall be deemed an optional prepayment of the Loans pursuant to Section 2.08(a) hereof (but not subject to Section 2.08(b)) unless the Loans are repaid with the proceeds of a debt financing provided by the Administrative Agent or its Affiliates.

     SECTION 2.08. Prepayment. (a)  The Borrower shall have the right at any time and from time to time to prepay any of the Loans, in whole or in part, at 100% of the principal amount so prepaid, plus accrued and unpaid cash or PIK interest thereon, to but excluding the applicable prepayment date (provided, however, that each partial prepayment shall be in an amount that is an integral multiple of $100,000 and not less than $500,000). The Borrower will give at least 5 Business Days’ prior written notice of each optional prepayment under this Section 2.08(a) to the Administrative Agent and the Lenders. Each such notice shall specify the prepayment date, the aggregate principal amount of the Loans to be prepaid on such date, the principal amount of each Loan owned by such Lender to be prepaid (determined in accordance with Section 2.11), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid. Such notice shall be irrevocable and shall commit the Borrower to prepay the Loans by the amount stated therein on the date stated therein.

     (i) Upon the issuance or incurrence by the Borrower or any of its Subsidiaries of any Indebtedness (other than Indebtedness permitted under Section 6.01), or the issuance by the Borrower or any of its Subsidiaries of its or their Equity Interests, in either case resulting in net proceeds to the Borrower or its Subsidiaries of $3,100,000 in the aggregate, the Borrower shall promptly use 100% of all such proceeds received by the Borrower or any of its Subsidiaries in excess of $3,100,000 to either (i) prepay the existing Indebtedness of the Borrower or (ii) prepay the principal amount of the Loans plus accrued and unpaid cash or PIK interest thereon. The provisions of this clause (b) shall not be deemed to be implied consent to any such issuance or incurrence otherwise prohibited by the terms and conditions of this Agreement.

     (ii) All prepayments under this Section 2.08 shall be subject to Section 2.10.

     SECTION 2.09. Reserve Requirements; Change in Circumstances. (a) Notwithstanding any other provision of this Agreement, if any Change in Law shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by any Lender (except any such reserve requirement which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or the London interbank market any other condition affecting this Agreement or Loans made by such Lender, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise) by an amount deemed by such Lender to be material, then the Borrower will pay to such Lender, upon demand, such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

     (i) If any Lender shall have determined that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender pursuant hereto to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

     (ii) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as applicable, as specified in paragraph (a) or (b) above shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.

     (iii) Failure or delay on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be under any obligation to compensate any Lender under paragraph (a) or (b) above with respect to increased costs or reductions with respect to any period prior to the date that is 120 days prior to such request if such Lender knew or could reasonably have been expected to know of the circumstances giving rise to such increased costs or reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such increased costs or reductions; provided further that the foregoing limitation shall not apply to any increased costs or reductions arising out of the retroactive application of any Change in Law within such 120-day period. The protection of this Section shall be available to each Lender and regardless of any possible contention of the invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.

     SECTION 2.10. Indemnity. The Borrower shall indemnify each Lender against any loss or expense that such Lender may sustain or incur as a consequence of any default in the making of any payment or prepayment required to be made hereunder. A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.10 shall be delivered to the Borrower and shall be conclusive absent manifest error.

     SECTION 2.11. Pro Rata Treatment. Each payment or prepayment of principal of the Loans and each payment of cash or PIK interest on the Loans shall be allocated pro rata among the Lenders in accordance with the respective principal amounts of their outstanding Loans.

     SECTION 2.12. Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim against the Borrower or any other Loan Party, or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of any Loan as a result of which the unpaid principal portion of its Loans

shall be proportionately less than the unpaid principal portion of the Loans of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans of such other Lender, so that the aggregate unpaid principal amount of the Loans and participations in Loans held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all Loans then outstanding as the principal amount of its Loans prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all Loans outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other event; provided, however, that if any such purchase or purchases or adjustments shall be made pursuant to this Section 2.12 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. The Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a participation in a Loan deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower to such Lender by reason thereof as fully as if such Lender had made a Loan directly to the Borrower in the amount of such participation.

     SECTION 2.13. Payments. (a)  The Borrower shall make each payment (including principal of or interest on any Loan or any fees or other amounts but excluding PIK interest paid in accordance with the terms hereof) hereunder and under any other Financing Document not later than 12:00 (noon), New York City time, on the date when due in immediately available dollars, without setoff, defense or counterclaim. Each such payment that is payable to a Lender shall be paid directly to such Lender at the office identified on Schedule 2.01 for such Lender or as otherwise directed by such Lender in writing from time to time, and each such payment that is payable to the Administrative Agent shall be paid directly to the Administrative Agent, at its office identified on Schedule 2.01 or as otherwise directed by the Administrative Agent in writing from time to time.

     (i) Except as otherwise expressly provided herein, whenever any payment (including principal of or cash or PIK interest on any Loan or any fees or other amounts) hereunder or under any other Financing Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, if applicable.

     SECTION 2.14. Taxes. (a)  Any and all payments by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Financing Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that, if the Borrower or any other Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or such Loan Party shall make such deductions and (iii) the Borrower or such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

     (i) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

     (ii) The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Financing Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on behalf of itself, shall be conclusive absent manifest error.

     (iii) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or any other Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent or the applicable Lender, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent or the applicable Lender, as the case may be.

     (iv) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable

law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate.

     (v) If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.14, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.14 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other person.

     SECTION 2.15. Assignment of Loans Under Certain Circumstances; Duty to Mitigate. If (a) any Lender shall request compensation under Section 2.09 or (b) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority on account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts (which shall not require such Lender to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action inconsistent with its internal policies or legal or regulatory restrictions or suffer any disadvantage or burden deemed by it to be significant) (i) to file any certificate or document reasonably requested in writing by the Borrower or (ii) to assign its rights and delegate and transfer its obligations hereunder to another of its offices, branches or affiliates, if such filing or assignment would reduce its claims for compensation under Section 2.09 or would reduce amounts payable pursuant to Section 2.14, as the case may be, in the future. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such filing or assignment, delegation and transfer.

     SECTION 2.16. Issuance of Warrant. Subject to and upon the terms and conditions set forth in this Agreement, the Borrower agrees to issue to the Lenders on the Closing Date, Warrants to purchase in the aggregate 2,500,000 shares (the “Warrant Shares”) of the Borrower’s Common Stock, no par value per share (“Common Stock”), at an exercise price initially equal to $0.40 per Warrant Share, which shall be appropriately adjusted subsequently for any recapitalizations, stock combinations, stock dividends, stock splits and the like which occur after the Closing Date as set forth in the Form of Warrants.

ARTICLE III

Representations and Warranties of the Borrower

     The Borrower represents and warrants to the Administrative Agent and each of the Lenders that:

     SECTION 3.01. Organization; Powers. Each of the Loan Parties (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure so to qualify could not reasonably be expected to result in a Material Adverse Effect, and (d) has the power and authority to execute, deliver and perform its obligations under each of the Financing Documents and each other agreement or instrument contemplated thereby to which it is or will be a party and, in the case of the Borrower, to borrow hereunder.

     SECTION 3.02. Authorization. Except as set forth in Schedule 3.02, the Transactions (a) have been duly authorized by all requisite corporate and, if required, stockholder action and (b) will not (i) violate (A) any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or other constitutive documents or by-laws of the Borrower or any Subsidiary, (B) any order of any Governmental Authority or (C) any provision of any indenture, agreement or other instrument to which the Borrower or any Subsidiary is a party or by which any of them or any of their property is or may be bound, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any such indenture, agreement or other instrument or (iii) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by the Borrower or any Subsidiary.

     SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Financing Document when executed and delivered by each Loan Party thereto will constitute, a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms.

     SECTION 3.04. Governmental Approvals. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the Transactions, except for such as have been made or obtained and are in full force and effect.

     SECTION 3.05. Financial Statements. The Borrower has heretofore furnished to the Lenders (a) U.S. GAAP audited consolidated or combined, as applicable, balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower for the 2004, 2005 and 2006 fiscal years, audited by and accompanied by the opinion of McGladrey & Pullen LLP or PricewaterhouseCoopers, LLC, as applicable, independent public accountants and (b) U.S. GAAP unaudited consolidated or combined, as applicable, balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower for (i) each subsequent fiscal quarter ended 45 days before the Closing Date and (ii) to the extent available, each fiscal month after the most recent fiscal quarter for which financial statements were received by the Lenders as described above and ended 45 days before the Closing Date and, in each case, certified by the chief financial officer of the Borrower. Such financial statements present fairly the financial condition and results of operations and cash flows of the Borrower as of such dates and for such periods. Such balance sheets and the notes thereto disclose all material liabilities, direct or contingent, of the Borrower as of the dates thereof. Such financial statements were prepared in accordance with GAAP applied on a consistent basis, subject, in the case of unaudited financial statements, to year-end audit adjustments and the absence of footnotes.

     SECTION 3.06. No Material Adverse Change. Except as disclosed in the TRM SEC Documents or on Schedule 3.06, no Material Adverse Change has occurred since December 31, 2006.

     SECTION 3.07. Title to Properties; Possession Under Leases; Intellectual Property. (a)  Except as would not reasonably be expected to have a Material Adverse Effect, each of the Loan Parties has good and marketable title to, or valid leasehold interests in, all its properties and assets, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes. All such properties and assets are free and clear of Liens, other than Liens expressly permitted by Section 6.02.

     (i) Except as would not reasonably be expected to have a Material Adverse Effect, each of the Loan Parties (i) has complied with all obligations under all leases to which it is a party and all such leases are in full force and effect and (ii) enjoys peaceful and undisturbed possession under all such leases.

     (ii) As of the Closing Date, the Borrower and its Subsidiaries own or have the right to use, all Intellectual Property used in the conduct of their business, except where the failure to own or have such right to use in the aggregate could not reasonably be expected to result in a Material Adverse Effect. No claim has been asserted and is pending by any person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower know of any valid basis for any such claim, except for such claims that in the aggregate could not reasonably be expected to result in a Material Adverse Effect. The use of such Intellectual Property by the Borrower and its Subsidiaries does not infringe on the rights of any person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

     SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing Date a list of all Subsidiaries and the percentage ownership interest of the Borrower or any other Subsidiary therein. The shares of capital stock or other ownership interests so indicated on Schedule 3.08 are fully paid and non-assessable and are owned by the Borrower or such other Subsidiary, directly or indirectly, free and clear of all Liens other than Liens permitted by Section 6.02. Each Dormant Subsidiary has no assets, liabilities or employees, and no Dormant Subsidiaries conducts any business or generates any revenues.

     SECTION 3.09. Litigation; Compliance with Laws. (a)  Except as disclosed in Schedule 3.09 or the TRM SEC Documents, there are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Borrower, threatened against or affecting any of the Loan Parties or any business, property or rights of any such person that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

     (i) Except as disclosed in Schedule 3.09 or the TRM SEC Documents, none of the Loan Parties or any of their respective material properties or assets is in violation of, nor will the continued operation of their material properties and assets as currently conducted violate, any law, rule or regulation (including any zoning, building, Environmental Law, ordinance, code or approval or any building permits), or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.

     (ii) None of the Loan Parties is, in any material respect, in conflict or default with respect to or in violation of any applicable laws, regulations, orders or judgments.

     SECTION 3.10. Agreements. (a)  None of the Loan Parties is a party to any agreement or instrument or subject to any corporate restriction that has resulted or could reasonably be expected to result in a Material Adverse Effect.

     (i) Except as disclosed in the TRM SEC Documents, none of the Loan Parties is or has been in any material respect in default under or in violation of the performance of any of its obligations under any material agreement, and, to the knowledge of the Loan Parties, no other party thereto is in default under or in violation of the performance of any of its obligations under any such material agreement.

     SECTION 3.11. Federal Reserve Regulations. (a)  None of the Loan Parties is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

     (i) No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation T, U or X.

     SECTION 3.12. Government Regulation. None of the Loan Parties is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940. None of the Loan Parties is subject to regulation under the Federal Power Act, the Interstate Commerce Act, the ICC Termination Act, as amended, or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or Contingent Obligations or which may otherwise render all or any portion of the Obligations unenforceable.

     SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the Loans only for the purposes specified in the preliminary statement to this Agreement.

     SECTION 3.14. Taxes. Each of the Loan Parties has filed or caused to be filed all Federal, state, local and foreign tax returns or materials required to have been filed by it and has paid or caused to be paid all taxes due and payable by it and all assessments received by it, except taxes that are being contested in good faith by appropriate proceedings and for which the applicable Loan Party shall have set aside on its books adequate reserves.

     SECTION 3.15. Disclosure. All factual information (taken as a whole) furnished by or on behalf of the Borrower and its Subsidiaries in writing to the Administrative Agent or any Lender (including all information contained in the Schedules hereto or in the other Financing Documents) for purposes of or in connection with this Agreement, the other Financing Documents, or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Borrower or its Subsidiaries in writing to the Administrative Agent or any Lender will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. No representation or warranty of any Loan Party contained in any Financing Document or in any other document, certificate or written statement furnished to the Agent or the Lenders by or on behalf of the Borrower or any of its Subsidiaries for use in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact. There are no facts known (or which should upon the reasonable exercise of diligence be known) to the Loan Parties (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in such other documents, certificates and statements furnished to the Administrative Agent and the Lenders for use in connection with the transactions contemplated hereby.

     SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in material liability of the Borrower or any of its ERISA Affiliates. The present value of all benefit liabilities under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation date applicable thereto, exceed the fair market value of the assets of such Plan, and the present value of all benefit liabilities of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation dates applicable thereto, exceed the fair market value of the assets of all such underfunded Plans.

     SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17, none of the Loan Parties (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

     SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct description of all insurance maintained by the Loan Parties and the Closing Date. As of the Closing Date, all insurance maintained by the Loan Parties is in full force and effect and all premiums have been duly paid. Such insurance maintained by the Loan Parties is in such amounts and covers such risks and liabilities as are in accordance with normal industry practice.

     SECTION 3.19. Location of Real Property and Leased Premises. The Borrower and its Subsidiaries do not own any real property. The Borrower and the Subsidiaries have valid leases in all the real property leased by the Borrower and the Subsidiaries.

     SECTION 3.20. Labor Matters. As of the Closing Date, there are no strikes, lockouts or slowdowns against any of the Loan Parties pending or, to the knowledge of the Borrower, threatened. The hours worked by and payments made to employees of the Loan Parties have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters. All payments due from any of the Loan Parties, or for which any claim may be made against any of the Loan Parties, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of any of the Loan Parties. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any of the Loan Parties is bound.

     SECTION 3.21. Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of the Loans and after giving effect to the application of the proceeds of the Loans, each Loan Party will be Solvent. As used herein with respect to any Loan Party, “Solvent” shall mean (a) the fair value of the assets of such Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of such Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) such Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) such Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

     SECTION 3.22. Transactions. The Borrower has delivered to the Administrative Agent a complete and correct copy of the Settlement Agreement (including all schedules, exhibits, amendments, supplements and modifications thereto). No Loan Party or, to the knowledge of the Borrower, any other person party thereto is in default in the performance or compliance with any material provisions thereof. The Settlement Agreement complies in all material respects with all applicable laws. All representations and warranties set forth in the Settlement Agreement were true and correct in all material respects at the time as of which such representations and warranties were made (or deemed made).

     SECTION 3.23. Financial Advisors. Except as set forth in Schedule 3.23, no agent, broker, investment banker, finder, financial advisor or other person is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee from the Borrower with respect to this Agreement or any of the other Financing Documents or any of the transactions contemplated hereby, and the Borrower hereby indemnifies the Lenders and the Administrative Agent against, and agrees that it will hold the Lenders and the Administrative Agent harmless from, any claim, demand or liability for any such broker’s or finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses (including reasonable fees, expenses and disbursements of counsel) arising in connection with any such claim, demand or liability.

     SECTION 3.24. Foreign Assets Control Regulations, Etc. (a)  Neither the borrowing of the Loans by the Borrower hereunder nor its use of the proceeds thereof will violate (i) the United States Trading with the Enemy Act, as amended, (ii) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto, (iii) Executive Order No. 13,224, 66 Fed Reg 49,079 (2001), issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism) (the “Terrorism Order”) or (iv) the USA PATRIOT ACT. No part of the proceeds from the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

     (i) No Loan Party (i) is or will become a “blocked person” as described in Section 1 of the Terrorism Order or (ii) engages or will engage in any dealings or transactions, or is otherwise associated, with any such blocked person or any such person.

     (ii) Each of the Loan Parties and its Affiliates are in compliance, in all material respects, with the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001).

     (iii) None of the Loan Parties nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of any of the Loan Parties is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); the Borrower will not directly or indirectly use the proceeds of the Loans or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

     SECTION 3.25. Representations of other Loan Parties. The representations and warranties of each Subsidiary Guarantor contained in the Financing Documents to which it is a party are true and correct as of the date they are made and shall be true and correct at the time of the Closing Date.

     SECTION 3.26. Loans to Officers and Directors. There are no outstanding loans made by the Borrower or any of its Subsidiaries to any of their officers, directors or shareholders (directly or indirectly) or any of such persons’ Affiliates.

     SECTION 3.27. Internal Controls. The Borrower and its Subsidiaries maintain a system of internal control over financial reporting. Such internal controls over financial reporting provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. There are no significant deficiencies or material weaknesses in the design or operation of the Borrower’s and its Subsidiaries’ ability to record, process, summarize and report financial data. Except as disclosed in the TRM SEC Documents, there is and has been no fraud, whether or not material, that involves management or other Employees who have a significant role in the Borrower’s and/or its Subsidiaries’ internal controls.

     SECTION 3.28. Subordinated Indebtedness; Ranking. The Obligations constitute senior indebtedness that is entitled to the benefits of the subordination provisions, if any, of all unsecured Indebtedness and Contingent Obligations of the Borrower and its Subsidiaries. All liabilities of the Borrower and its Subsidiaries under the Financing Documents constitute direct, unconditional and general obligations of the Borrower and its Subsidiaries and rank in right of payment either pari passu or senior to all other unsecured Indebtedness and Contingent Obligations of the Borrower and its Subsidiaries.

     SECTION 3.29. Capitalization and Voting Rights.

     (i) Authorized Stock. 50,000,000 shares of Common Stock, of which 17,213,226 shares are issued and outstanding as of the date hereof, and no shares are held in treasury as of the date hereof.

     (ii) Valid Issuance. The outstanding shares of Common Stock are all duly and validly authorized and issued, fully paid and nonassessable, and were issued in compliance with all applicable state and federal laws concerning the issuance of securities.

     (iii) Rights to Acquire. Except for (i) restricted stock and options to purchase an aggregate of 963,081 shares of Common Stock granted and outstanding under the Borrower’s Omnibus Stock Incentive Plan (the “Company Option Plan”) and (ii) warrants to purchase an aggregate of 3,072,074 shares of Common Stock granted and outstanding, there are not outstanding any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Borrower of any shares of its capital stock as of the date hereof. The Borrower has reserved a total of 3,700,000 shares of Common Stock for issuance under the Company Option Plan (including the shares described above).

     (iv) Other than the Registration Rights Agreement, the Borrower is not a party or subject to any agreement or understanding and, to the Borrower’s knowledge, there is no agreement or understanding between any persons and/or entities which affects or relates to the voting or giving of written consents with respect to any security of the Borrower.

     SECTION 3.30. Valid Issuance of the Warrant Shares. The Warrants and the Warrant Shares have been duly authorized, and the Warrant Shares, upon issuance pursuant to the terms of the Warrants, will be validly issued, fully paid and nonassessable and not subject to any encumbrances, preemptive rights or any other similar contractual rights of the stockholders of the Borrower or any other person. The Borrower has reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon the exercise in full of the Warrants.

ARTICLE IV

Conditions of Lending

     The obligations of the Lenders to make Loans hereunder are subject to the satisfaction of the following conditions on the Closing Date:

     SECTION 4.01. Representations and Warranties. The representations and warranties set forth in Article III of this Agreement and in each other Financing Document shall be true and correct.

     SECTION 4.02. Default; Event of Default. Except as set forth in Schedule 4.02, at the time of and immediately after the Closing Date, no Default or Event of Default shall have occurred and be continuing.

     SECTION 4.03. Opinion of Counsel. The Administrative Agent shall have received, on behalf of itself and the Lenders, a favorable written opinion of (i) Ledgewood, counsel for the Loan Parties, substantially to the effect set forth in Exhibit E-1, and (ii) Perkins Coie with respect to matters of Oregon law, substantially to the effect set forth in Exhibit E-2, in each case, (A) dated the Closing Date, (B) addressed to the Administrative Agent and the Lenders, and (C) covering such other matters relating to the Financing Documents and the Transactions as the Administrative Agent shall reasonably request, and the Borrower hereby requests such counsel to deliver such opinions.

     SECTION 4.04. Legal Matters. All legal matters incident to this Agreement, the extensions of credit hereunder and the other Financing Documents shall be satisfactory to the Lenders and to the Administrative Agent.

     SECTION 4.05. Secretary Certificates; Other Documents. The Administrative Agent shall have received the following from or with respect to each Loan Party:

     (i) a copy of the certificate or articles of incorporation or other such Organizational Document, including all amendments thereto, certified as of a recent date by either the Secretary of State of the state of its organization or such Governmental Authority, and a certificate certifying that such Loan Party has paid all franchise taxes due and payable on or prior to the date of such certificate and such Loan Party is duly organized and in good standing under the laws of such jurisdiction;

     (ii) a certificate of the Secretary of each Loan Party dated the Closing Date and certifying (A) that attached thereto are true and complete copies of the Organizational Documents of such Loan Party as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party authorizing the execution, delivery and performance of the Financing Documents to which such person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation or other such Organizational Document of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer executing any Financing Document or any other document delivered in connection herewith on behalf of such Loan Party;

     (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above; and

     (iv) such other documents as the Lenders or the Administrative Agent may reasonably request.

     SECTION 4.06. Officer Certificate. The Administrative Agent shall have received a certificate, dated the Closing Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions precedent set forth in paragraphs (a) and (b) of this Article IV.

     SECTION 4.07. Closing Fees, Expenses. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Financing Document.

     SECTION 4.08. Insurance Policies. The Administrative Agent shall have received a copy of, or a certificate as to coverage under, the insurance policies required by Section 5.02.

     SECTION 4.09. Consummation of Transactions. The Transactions shall have been, or substantially simultaneously with the funding of the Loans on the Closing Date shall be, consummated in accordance with applicable law and on the terms described herein and all other material related documentation, in each case in the form provided to the Administrative Agent.

     SECTION 4.10. No Poison Pills. No stockholder rights plan or “poison pill” shall have been triggered or otherwise become exercisable in connection with the Transactions.

     SECTION 4.11. Financing Statements. The Lenders shall have received the financial statements and opinions referred to in Section 3.05.

     SECTION 4.12. Solvency Certificate. The Administrative Agent shall have received a certificate from the chief financial officer of the Borrower, in form and substance satisfactory to the Administrative Agent, to the effect that each of the Loan Parties, in each case after giving effect to the Transactions and the other transactions contemplated hereby, is Solvent.

     SECTION 4.13. Consents. All requisite Governmental Authorities and other material third parties, including without limitation GSO, shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required, all applicable appeal periods shall have expired and there shall not be any pending or threatened litigation, governmental, administrative or judicial action, actual or threatened, that could reasonably be expected to restrain, prevent or impose materially burdensome conditions on the Transactions.

     SECTION 4.14. Patriot Act. The Administrative Agent and the Lenders shall have received, to the extent requested, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.

     SECTION 4.15. Proceedings. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and the other Financing Documents shall be reasonably satisfactory to the Lenders and the Administrative Agent, and the Lenders and the Administrative Agent shall have received all such counterpart originals or certified or other copies of such documents as the Lenders or Agent may reasonably request.

ARTICLE V

Affirmative Covenants

     The Borrower covenants and agrees with each Lender that so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Financing Document shall have been paid in full, unless the Required Lenders (or the Administrative Agent acting at the written direction of the Required Lenders) shall otherwise consent in writing, the Borrower will, and will cause each of the Subsidiaries to:

     SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties. (a) Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise expressly permitted under Section 6.05.

     (i) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply in all material respects with all applicable laws, rules, regulations and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted; and at all times maintain and preserve all property material to the conduct of such business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times.

     SECTION 5.02. Insurance. Keep its insurable properties adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such extent and against such risks, including fire and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses operating in the same or similar

locations, including public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by it; and maintain such other insurance as may be required by law.

     SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other obligations promptly and in accordance with their terms (provided that, with respect to overdue accounts payable as of the Closing Date disclosed as Defaults on Schedule 4.02, the Borrower shall not be required to discharge such accounts payable until the date that is 90 days after the Closing Date) and pay and discharge promptly when due, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Borrower shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien.

     SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower, furnish to the Administrative Agent and each Lender:

     (i) within 90 days after the end of each fiscal year, its consolidated and consolidating balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close of such fiscal year and the results of its operations and the operations of such Subsidiaries during such year, together with comparative figures for the immediately preceding fiscal year, all audited by McGladrey & Pullen LLP or other independent public accountants of recognized national standing reasonably acceptable to the Administrative Agent and accompanied by an opinion of such accountants (which opinion shall be without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements fairly present the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated and consolidating basis in accordance with GAAP consistently applied;

     (ii) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, its consolidated and consolidating balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter and the results of its operations and the operations of such Subsidiaries during such fiscal quarter and the then elapsed portion of the fiscal year, together with comparative figures for the same periods in the immediately preceding fiscal year, all certified by one of the Financial Officers of the Borrower as fairly presenting the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;

     (iii) concurrently with any delivery of financial statements under paragraph (a) or (b) above, a certificate of the accounting firm (in the case of paragraph (a)) or Financial Officer (in the case of paragraph (b)) opining on or certifying such statements (which certificate, when furnished by an accounting firm, may be limited to accounting matters and disclaim responsibility for legal interpretations) certifying that no Event of Default or Default has occurred or, if such an Event of Default or Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto;

     (iv) within 90 days after the beginning of each fiscal year of the Borrower, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flows as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget;

     (v) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with any Governmental Authority or securities exchange, or distributed to its shareholders, as the case may be;

     (vi) promptly after the receipt thereof by the Borrower or any of its Subsidiaries, a copy of any “management letter” received by any such person from its certified public accountants and the management’s response thereto;

     (vii) promptly after the request by any Lender, all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act; and

     (viii) promptly, from time to time, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Financing Document, as the Administrative Agent or any Lender may reasonably request.

     SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent and each Lender prompt written notice of the following:

     (i) any Event of Default or Default, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;

     (ii) the filing or commencement of, or any threat or notice of intention of any person to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority, against the Borrower or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;

     (iii) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount exceeding $100,000; and

     (iv) any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect.

     SECTION 5.06. Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings. Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. Each Loan Party will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender to visit and inspect the financial records and the properties of such person at reasonable times and as often as reasonably requested and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent or any Lender to discuss the affairs, finances and condition of such person with the officers thereof and independent accountants therefor.

     SECTION 5.07. Use of Proceeds. Use the proceeds of the Loans only for the purposes specified in the preliminary statement to this Agreement.

     SECTION 5.08. Employee Benefits. Comply in all material respects with the applicable provisions of ERISA and the Code.

     SECTION 5.09. Compliance with Environmental Laws. Comply, and cause all lessees and other persons occupying its properties to comply, in all material respects with all Environmental Laws applicable to its operations and properties; obtain and renew all material environmental permits necessary for its operations and properties; and conduct any remedial action in accordance with Environmental Laws; provided, however, that neither the Borrower nor any Subsidiary shall be required to undertake any remedial action required by Environmental Laws to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

     SECTION 5.10. Preparation of Environmental Reports. If a Default caused by reason of a breach of Section 3.17 or Section 5.09 shall have occurred and be continuing for more than 20 days without the Borrower or any Subsidiary commencing activities reasonably likely to cure such Default, at the written request of the Required Lenders through the Administrative Agent, provide to the Lenders within 45 days after such request, at the expense of the Loan Parties, an environmental site assessment report regarding the matters which are the subject of such Default prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or remedial action in connection with such Default.

     SECTION 5.11. Further Assurances.

     (i) Upon the consummation of any acquisition of any person by any of the Loan Parties, upon the formation by any of the Loan Parties of any Subsidiary, or upon any Subsidiary ceasing to be a Dormant Subsidiary (either because the Borrower voluntarily withdraws such designation or because such designation is deemed withdrawn pursuant to Section 6.14), the Borrower shall cause the person so acquired or formed, or such Subsidiary that is no longer a Dormant Subsidiary, as the case may be, at the election of the Administrative Agent or Required Lenders, to be designated as a Subsidiary Guarantor of the Obligations. Such person shall become a Loan Party by executing and delivering a joinder to the Guaranty Agreement, in form and substance satisfactory to the Administrative Agent.

     (ii) Notwithstanding anything to the contrary in paragraph (a) of this Section 5.11, no Foreign Subsidiary shall be required to guarantee the Obligations to the extent making such guarantee (i) would result in adverse tax consequences to the Borrower (as certified to the Administrative Agent by a Financial Officer of the Borrower) or (ii) is prohibited by applicable law.

     SECTION 5.12. Ranking. Ensure that, at all times, all liabilities of the Borrower and its Subsidiaries under this Agreement or the other Financing Documents shall rank in right of payment either pari passu or senior to all other unsecured Indebtedness and Contingent Obligations of the Borrower and its Subsidiaries.

     SECTION 5.13. Post-Closing Covenants. Within 10 Business Days of the Closing Date, the Borrower shall take all necessary corporate action to appoint to its board of directors a nominee selected by the Administrative Agent and identified by the Administrative Agent to the Borrower.

ARTICLE VI

Negative Covenants

     The Borrower covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Financing Document have been paid in full, unless the Required Lenders (or the Administrative Agent acting at the written direction of the Required Lenders) shall otherwise consent in writing, the Borrower will not, nor will it cause or permit any of the Subsidiaries to:

     SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any Indebtedness, except:

               (1) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any extensions, renewals or replacements of such Indebtedness to the extent the principal amount of such Indebtedness is not increased (other than Indebtedness extended to the Borrower and certain of its Subsidiaries under the GSO Loan Documents, the principal amount of which Indebtedness may be increased by an aggregate amount not to exceed the sum of $1,000,000 plus the amount of accrued but unpaid interest on such Indebtedness), neither the final maturity nor the weighted average life to maturity of such Indebtedness is decreased, such Indebtedness, if subordinated to the Obligations, remains so subordinated on terms no less favorable to the Lenders, and the original obligors in respect of such Indebtedness remain the only obligors thereon;

               (2) Indebtedness created hereunder and under the other Financing Documents;

               (3) intercompany Indebtedness of the Borrower and the Subsidiaries to the extent permitted by Section 6.04(3);

               (4) Capital Lease Obligations in an aggregate principal amount not in excess of $100,000 at any time outstanding;

               (5) Indebtedness of the Borrower incurred substantially simultaneously with the closing of the Acquisition for purposes of financing the Acquisition not to exceed $15,000,000 in the aggregate;

               (6) Indebtedness under performance bonds or with respect to workers’ compensation claims, in each case incurred in the ordinary course of business; and

               (7) accounts payable and accrued expenses, liabilities or other obligations to pay the deferred purchase price of property or services, from time to time incurred in the ordinary course of business which are not greater than ninety (90) days past the date of invoice or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP.

     SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any property or assets (including Equity Interests or other securities of any person, including the Borrower or any Subsidiary) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:

               (1) Liens on property or assets of the Borrower and the Subsidiaries existing on the date hereof and set forth in Schedule 6.02; provided that such Liens shall secure only those obligations which they secure on the date hereof and extensions, renewals and replacements thereof permitted hereunder;

               (2) Liens on property or assets of the Borrower and its Subsidiaries securing obligations under the GSO Loan Documents;

               (3) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or assets of any person that becomes a Subsidiary after the date hereof prior to the time such person becomes a Subsidiary, as the case may be; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such person becoming a Subsidiary, (ii) such Lien does not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien secures only those obligations which it secures on the date of such acquisition or the date such person becomes a Subsidiary, as the case may be;

               (4) Liens for taxes not yet due or which are being contested in compliance with Section 5.03;

               (5) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business and securing obligations that are not due and payable or which are being contested in compliance with Section 5.03;

               (6) pledges and deposits made in the ordinary course of business in compliance with workmen’s compensation, unemployment insurance and other social security laws or regulations;

               (7) deposits to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capital Lease Obligations), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

               (8) zoning restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; and

               (9) purchase money security interests in real property, improvements thereto or equipment hereafter acquired (or, in the case of improvements, constructed) by the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by Section 6.01, (ii) such security interests are incurred, and the Indebtedness secured thereby is created, within 90 days after such acquisition (or construction), (iii) the Indebtedness secured thereby does not exceed 100% of the lesser of the cost or the fair market value of such real property, improvements or equipment at the time of such acquisition (or construction) and (iv) such security interests do not apply to any other property or assets of the Borrower or any Subsidiary.

     SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement, directly or indirectly, with any person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred unless (a) the sale or transfer of such property is permitted by Section 6.05 and (b) any Capital Lease Obligations or Liens arising in connection therewith are permitted by Section 6.01 and 6.02, as the case may be.

     SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any Equity Interests, evidences of indebtedness or other securities of, make or permit to exist any loans or advances to, or make or permit to exist any investment or any other interest in, any other person, except:

               (1) (i) investments by the Borrower and the Subsidiaries existing on the date hereof in the Equity Interests of the Borrower and the Subsidiaries and (ii) additional investments by the Borrower and the Subsidiaries in the Equity Interests of the Borrower and the Subsidiaries; provided that the aggregate amount of investments by Loan Parties in, and loans and advances by Loan Parties to, Subsidiaries that are not Loan Parties (determined without regard to any write-downs or write-offs of such investments, loans and advances) shall not exceed $100,000 at any time outstanding;

               (2) Permitted Investments;

               (3) loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that the aggregate amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (determined without regard to any write-downs or write-offs of such investments, loans and advances) shall not exceed $100,000 at any time outstanding;

               (4) the Borrower and the Subsidiaries may make loans and advances in the ordinary course of business to their respective employees so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $250,000; and

               (5) the Borrower and the Subsidiaries may enter into Hedging Agreements that are not speculative in nature.

     SECTION 6.05. Acquisitions, Consolidations, Sales of Assets and Acquisitions. (a)Merge into or consolidate with any other person, or permit any other person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all the assets (whether now owned or hereafter acquired) of the Borrower or less than all the Equity Interests of any Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a series of transactions) all or any substantial part of the assets of any other person, except that (i) the Borrower and any Subsidiary may purchase and sell inventory in the ordinary course of business, (ii) the Borrower or another Loan Party may enter into the Acquisition Agreement (but not close the Acquisition until the (A) Loans have been repaid in full in accordance with this Agreement and (B) the Indebtedness of the Borrower and certain of its Subsidiaries under the GSO Loan Documents has been repaid in full in cash) and (iii) if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing any wholly owned Subsidiary of the Borrower may merge into or consolidate with any other wholly owned Subsidiary of the Borrower in a transaction in which the surviving entity is a wholly owned Subsidiary of the Borrower and no person other than the Borrower or a wholly owned Subsidiary receives any consideration (provided that if any party to any such transaction is a Loan Party, the surviving entity of such transaction shall be a Loan Party).

     (i) Make any Asset Sale otherwise permitted under paragraph (a) above unless (i) such Asset Sale is for consideration at least 75% of which is cash, (ii) such consideration is at least equal to the fair market value of the assets being sold, transferred, leased or disposed of and (iii) the fair market value of all assets sold, transferred, leased or disposed of pursuant to this paragraph (b) shall not exceed $500,000 in the aggregate.

     SECTION 6.06. Restricted Payments; Restrictive Agreements. (a)  Declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment (including pursuant to any Synthetic Purchase Agreement), or incur any obligation (contingent or otherwise) to do so; provided, however, that (i) any Subsidiary of the Borrower may declare and pay dividends or make other distributions ratably to its equity holders and (ii) the Borrower and the Subsidiaries may make Restricted Payments in the form of distributions payable solely in the common stock or other common Equity Interests of such person;

     (i) Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (i) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (ii) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (A) the foregoing shall not apply to restrictions and conditions imposed by the GSO Loan Documents, (B) the foregoing shall not apply to restrictions and conditions imposed by law or by any Financing Document, (C) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (D) clause (i) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (E) subject to Section 5.12, clause (i) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

     SECTION 6.07. Transactions with Affiliates. Except for transactions between or among Loan Parties or between the Lenders or the Administrative Agent, on the one hand, and the Loan Parties, on the other hand, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except that the Borrower or any Subsidiary may engage in any of the foregoing transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties.

     SECTION 6.08. Business of the Borrower and its Subsidiaries. With respect to the Borrower and each of its Subsidiaries, engage at any time in any business or business activity other than the business currently conducted by it and business activities reasonably incidental thereto.

     SECTION 6.09. Other Indebtedness and Agreements. (a)  Permit (i) any waiver, supplement, modification, amendment (other than with respect to the GSO Loan Documents, but only to the extent such waiver, supplement, modification or amendment is not prohibited by Section 6.01 hereof), termination or release of any indenture, instrument or agreement

pursuant to which any Material Indebtedness of the Borrower or any of the Subsidiaries is outstanding if the effect of such waiver, supplement, modification, amendment, termination or release would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in a manner adverse to the Borrower, any of the Subsidiaries or the Lenders or (ii) any waiver, supplement, modification or amendment of its certificate of incorporation, by-laws, operating, management or partnership agreement or other organizational documents.

     (i) (i) Make any distribution, whether in cash, property, securities or a combination thereof, other than regular scheduled payments of principal and interest as and when due (to the extent not prohibited by applicable subordination provisions), in respect of, or pay, or commit to pay, or directly or indirectly (including pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or otherwise acquire for consideration, or set apart any sum for the aforesaid purposes, any Indebtedness (other than the Loans) or (ii) pay in cash any amount in respect of any Indebtedness or preferred Equity Interests that may at the obligor’s option be paid in kind or in other securities; provided, however, that the Borrower may make payments of principal and interest on the Indebtedness of the Borrower and certain of its Subsidiaries under the GSO Loan Documents prior to such payments becoming due.

     SECTION 6.10. Fiscal Year. With respect to the Borrower and each Subsidiary, change their fiscal year-end to a date other than December 31.

     SECTION 6.11. Certain Equity Securities. Issue any Equity Interest that is not Qualified Capital Stock.

     SECTION 6.12. Amendments or Waivers of Documents Relating to Indebtedness.

     (i) Amendments of Documents Relating to Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, amend or otherwise change the terms of any Indebtedness, or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, change the subordination provisions thereof (or of any guaranty thereof), or change any collateral therefor (other than to release such collateral), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any additional rights on the holders of such Indebtedness (or a trustee or other representative on their behalf) which would be adverse to any of the Loan Parties, the Lenders or the Administrative Agent, provided that the foregoing shall not prohibit the Borrower or any of its Subsidiaries from amending or otherwise changing the terms of the GSO Loan Documents to the extent such amendment or change is not prohibited by Section 6.1 hereof.

     (ii) Amendments of Organizational Documents. The Borrower will not, and will not permit any of its Subsidiaries to, make any amendment, restatement, supplement or other modification to such person’s Organizational Documents in any manner adverse to the Lenders or the Administrative Agent without obtaining the prior written consent of the Required Lenders to such amendment, restatement, supplement or other modification.

     SECTION 6.13. Wholly-Owned Subsidiaries. Neither the Borrower nor any Subsidiary of the Borrower will own, form or acquire any Subsidiary other than Subsidiaries that are wholly owned Subsidiaries of the Borrower.

     SECTION 6.14. Dormant Subsidiaries. The Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly, permit (a) the combined gross revenue of all Dormant Subsidiaries for the period of four fiscal consecutive quarters most recently ended to exceed $500, (b) the combined total assets of the Dormant Subsidiaries at any time to be more than $500 or (c) any Dormant Subsidiary to own, or possess the right to use, any Intellectual Property or other assets that individually or in the aggregate are material to the business of the Borrower and its Subsidiaries, taken as a whole. The Borrower may withdraw the designation of any Subsidiary as a Dormant Subsidiary at any time in a written notice to the Administrative Agent. If, at any time, the Borrower is not in compliance with clauses (a) through (c) above, unless the Borrower has notified the Administrative Agent in writing (1) within 5 Business Days after the date the Borrower is required to deliver financial statements for the applicable fiscal quarter or year pursuant to Section 5.04(a) or (b) (in the case of clause (a) of this Section 6.14) or (2) within 5 Business Days of such occurrence (in the case of clause (b) or (c) of this Section 6.14) that such designation has been withdrawn for one or more Dormant Subsidiaries sufficient to comply with this Section 6.14, then such designation shall be deemed to have been withdrawn as to all such Subsidiaries (in the case of clause (a) or (b)) or the applicable Subsidiary (in the case of clause (c)) and each such Subsidiary as to which such designation is deemed to have been withdrawn shall thereupon be deemed to have ceased to be a Dormant Subsidiary. Any Subsidiary for which such designation has been withdrawn or deemed withdrawn may not be re-designated as a Dormant Subsidiary. Nothing contained herein shall prohibit the Dormant Subsidiaries from engaging in any dissolution, liquidation, consolidation or merger, and such action shall not be deemed a Default or Event of Default.

ARTICLE VII

Representations and Warranties of the Lenders

Each Lender represents and warrants, severally and not jointly, to the Borrower that:

     SECTION 7.01. Authorization. All action on the part of the Lenders and, if applicable, its officers, directors, managers, members, shareholders and/or partners necessary for the authorization, execution, delivery and performance of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated herein and therein, has been taken. When executed and delivered, each of this Agreement and the Registration Rights Agreement will constitute the legal, valid and binding obligation of each Lender, enforceable against each Lender in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and by general equitable principles. Each Lender has all requisite corporate power and authority to enter into each of this Agreement and the Registration Rights Agreement, and to carry out and perform its obligations under the terms hereof and thereof.

     SECTION 7.02. Purchase Entirely for Own Account. Each Lender is acquiring the Loans, the Warrant Shares and the Warrants for its own account for investment and not for resale or with a view to distribution thereof in violation of the Securities Act.

     SECTION 7.03. Investor Status; Etc. Each Lender certifies and represents to the Borrower that it is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act and was not organized for the purpose of acquiring any of the Loans, the Warrants or the Warrant Shares. Each Lender’s financial condition is such that it is able to bear the risk of holding the Loans, the Warrants and Warrant Shares for an indefinite period of time and the risk of loss of its entire investment. Each Lender has sufficient knowledge and experience in investing in companies similar to the Borrower so as to be able to evaluate the risks and merits of its investment in the Borrower.

     SECTION 7.04. No Conflict. The execution and delivery of this Agreement and the Registration Rights Agreement by each Lender, and the consummation of the transactions contemplated hereby and thereby, will not conflict with or result in any violation of or default by such Lender (with or without notice or lapse of time, or both) under any provision of the organizational documents of such Lender.

     SECTION 7.05. Brokers. Each Lender has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement.

ARTICLE VIII

Events of Default

     In case of the happening of any of the following events (“Events of Default”):

               (1) any representation or warranty made or deemed made in or in connection with any Financing Document or the Loans made hereunder, or any representation, warranty, statement or information contained in any report, certificate, financial statement or other instrument furnished in connection with or pursuant to any Financing Document, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished;

               (2) default shall be made in the payment of any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;

               (3) default shall be made in the payment of any interest on any Loan or any fee or any other amount (other than an amount referred to in (b) above) due under any Financing Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of three Business Days;

               (4) default shall be made in the due observance or performance by the Borrower or any Subsidiary of any covenant, condition or agreement contained in Section 5.01(a), 5.05(i) or 5.08 or in Article VI;

               (5) default shall be made in the due observance or performance by the Borrower or any Subsidiary of any covenant, condition or agreement contained in any Financing Document (other than those

specified in (b), (c) or (d) above) and such default shall continue unremedied for a period of 20 days after notice thereof from the Administrative Agent or any Lender to the Borrower;

               (6) (i) the Borrower or any Subsidiary shall fail to pay any principal or interest, regardless of amount, due in respect of any Material Indebtedness, when and as the same shall become due and payable; provided that this clause (i) shall not apply to any Default or Event of Default disclosed in Schedule 4.02 and existing on the date hereof, or (ii) any other event or condition occurs that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (ii) shall not apply to (A) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness or (B) any Default or Event of Default disclosed in Schedule 4.02; and provided further that with respect to any default under the GSO Loan Documents, such default shall only constitute an Event of Default under this clause (f) if such default continues for 180 days without cure or waiver;

               (7) any event or condition occurs that results in any Material Indebtedness coming due prior to its scheduled maturity date or the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; provided further that with respect to an event resulting in the Indebtedness under the GSO Loan Documents becoming due, or requiring the prepayment, repurchase, redemption or defeasance of such Indebtedness, such event shall only constitute an Event of Default under this clause (g) if such event continues for 180 days without being rescinded or waived by the holders of such Indebtedness;

               (8) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower or any Subsidiary, or of a substantial part of the property or assets of the Borrower or a Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of the property or assets of the Borrower or a Subsidiary or (iii) the winding-up or liquidation of the Borrower or any Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

               (9) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in (g) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of the property or assets of the Borrower or any Subsidiary, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any action for the purpose of effecting any of the foregoing;

               (10) one or more judgments shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Borrower or any Subsidiary to enforce any such judgment and such judgment is for the payment of money in an aggregate amount in excess of $250,000;

               (11) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in liability of the Borrower and its ERISA Affiliates in an aggregate amount exceeding $250,000;

               (12) any Subsidiary Guarantor shall deny in writing that it has any further liability under the Subsidiary Guaranty (other than as a result of the discharge of such Subsidiary Guarantor in accordance with the terms of the Financing Documents);

               (13) any material subordinated Indebtedness of the Borrower and the Subsidiaries constituting Material Indebtedness shall cease (or any Loan Party or an Affiliate of any Loan Party shall so assert), for any reason, to be validly subordinated to the Obligations as provided in the agreements evidencing such subordinated Indebtedness;

               (14) the Borrower or any of its Subsidiaries shall be convicted under any criminal law that could lead to a forfeiture of any material property of such person;

               (15) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to the Loan Parties described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate forthwith the Commitments and (ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable (and accrued cash or PIK interest thereon) and any unpaid accrued fees and all other liabilities of the Loan Parties accrued hereunder and under any other Financing Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Financing Document to the contrary notwithstanding; and in any event with respect to the Loan Parties described in paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding (and accrued cash or PIK interest thereon) and any unpaid accrued fees and all other liabilities of the Borrower accrued hereunder and under any other Financing Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived the Borrower, anything contained herein or in any other Financing Document to the contrary notwithstanding.

ARTICLE IX

The Administrative Agent

     Each of the Lenders hereby irrevocably appoints the Administrative Agent its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Financing Documents, together with such actions and powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, the Administrative Agent is hereby expressly authorized to execute any and all documents (including releases) as contemplated by and in accordance with the provisions of this Agreement.

     The person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such person and its affiliates may provide debt financing, equity capital or other services (including financial advisory services) to any of the Loan Parties (or any person engaged in similar business as that engaged in by any of the Loan Parties) as if such person was not performing the duties specified herein, and may accept fees and other consideration from any of the Loan Parties for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

     The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Financing Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is instructed in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08), and (c) except as expressly set forth in the Financing Documents, the Administrative Agent shall not have any duty to disclose, nor shall it be liable for the failure to disclose, any information relating to the Borrower or any of the Subsidiaries that is communicated to or obtained by the person serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Financing Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Financing Document, (iv) the validity, enforceability, effectiveness or genuineness of any Financing Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Financing Document, other than to confirm receipt of items expressly required to be delivered to such Agent.

     The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper person. The Administrative Agent may also rely upon any statement made to it orally or by

telephone and believed by it to have been made by the proper person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

     The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Credit Facilities as well as activities as Administrative Agent.

     Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.05 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while acting as Administrative Agent.

     Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Financing Document, any related agreement or any document furnished hereunder or thereunder.

ARTICLE X

Miscellaneous

     SECTION 10.01. Notices. Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

     (i) if to the Borrower, to it at 5208 N. E. 122nd Avenue, Portland, OR 97230, Attention of Richard Stern, President and Chief Executive Officer (Fax No. 215-832-0078), with a copy (which shall not constitute notice) to Ledgewood, PC, 1900 Market Street, Suite 750, Philadelphia, PA 19103, Attention: J. Baur Whittlesey (Fax No. 215-735-2513);

     (ii) if to the Administrative Agent, to Lampe, Conway & Co., LLC, 680 Fifth Street, Suite 1202, New York, NY 10019, Attention: Richard Conway, with a copy (which shall not constitute notice) to Milbank, Tweed, Hadley & McCloy LLP, 601 South Figueroa Street, 30th Floor, Los Angeles, CA 90017, Attention: Melainie K. Mansfield (Fax No. 213-629-5063); and

     (iii) if to a Lender, to it at its address (or fax number) set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender shall have become a party hereto.

     All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by fax or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 10.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 10.01. As agreed to among the Borrower, the Administrative Agent and the applicable Lenders from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.

     SECTION 10.02. Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Financing Document shall be considered to have been relied upon by the Lenders and shall survive the making by the Lenders of the Loans, regardless of any investigation made by the Lenders or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or fee or any other amount payable under this Agreement or any other Financing Document is outstanding and unpaid and so long as the Commitments have not been terminated. The provisions of Section 2.09, 2.10, 2.14 and 10.05 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments or unenforceability of any term or provision of this Agreement or any other Financing Document, or any investigation made by or on behalf of the Administrative Agent or any Lender.

     SECTION 10.03. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower, the Administrative Agent and each of the Lenders party hereto as of the date hereof and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto.

     SECTION 10.04. Successors and Assigns. (a) Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrower, the Administrative Agent or the Lenders that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

     (i) Each Lender may assign to one or more assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), with the prior written consent of the Borrower and the Administrative Agent (such consents not to be unreasonably withheld or delayed); provided, however, that (i) the consent of the Borrower shall not be required to any such assignment made (A) to another Lender or an Affiliate of a Lender, (B) during the primary syndication of the Loans and the Commitments to persons identified to the Borrower prior to the Closing Date or (C) after the occurrence and during the continuance of any Event of Default, (ii) the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall be in an integral multiple of, and not less than, $500,000 (or, if less, the entire remaining amount of such Lender’s Commitment or Loans), (iii) the parties to each such assignment shall manually execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 (provided that only one such fee shall be payable in the case of concurrent assignments to persons that, after giving effect to such assignments, will be Related Funds), and (iv) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and all applicable tax forms. Upon acceptance and recording pursuant to paragraph (e) of this Section 10.04, from and after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement and (B) the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 2.09, 2.10, 2.14 and 10.05).

     (ii) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Commitment, and the outstanding balance of its Loans, without giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance; (ii) except as set forth in (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Financing Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrower or any Subsidiary or the performance or observance by the Borrower or any Subsidiary of any of its obligations under this Agreement, any other Financing Document or any other instrument or document furnished pursuant hereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements referred to in Section 3.05 or delivered pursuant to Section 5.04 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such

assignee appoints and authorizes 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; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

     (iii) The Borrower shall maintain at its principal executive offices in Portland, Oregon a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The Borrower, the Administrative Agent and the Lenders may treat each person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Administrative Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

     (iv) Upon its receipt of, and consent to, a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) above, if applicable, and the written consent of the Administrative Agent and, if required, the Borrower to such assignment and any applicable tax forms, the Administrative Agent shall (i) accept such Assignment and Acceptance and (ii) notify the Borrower of such acceptance. The Borrower shall promptly record the information contained therein in the Register. No assignment shall be effective unless it has been recorded in the Register as provided in this paragraph (e).

     (v) Each Lender may without the consent of the Borrower or the Administrative Agent sell participations to one or more banks or other persons in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other persons shall be entitled to the benefit of the cost protection provisions contained in Section 2.09 and 2.14 to the same extent as if they were Lenders (but, with respect to any particular participant, to no greater extent than the Lender that sold the participation to such participant) and (iv) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans and to approve any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications or waivers decreasing any fees payable to such participating bank or person hereunder or the amount of principal of or the rate at which interest is payable on the Loans in which such participating bank or person has an interest, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans in which such participating bank or person has an interest, increasing or extending the Commitments in which such participating bank or person has an interest or releasing any Subsidiary Guarantor (other than in connection with the sale of such Subsidiary Guarantor in a transaction permitted by Section 6.05).

     (vi) Any Lender or participant may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.04, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure of information designated by the Borrower as confidential, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders pursuant to Section 10.16.

     (vii) Any Lender may at any time assign all or any portion of its rights under this Agreement to secure extensions of credit to such Lender or in support of obligations owed by such Lender; provided that no such assignment shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.

     (viii) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this

Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 10.04, any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in the Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.

     (ix) The Borrower shall not assign or delegate any of its rights or duties hereunder without the prior written consent of the Administrative Agent and each Lender, and any attempted assignment without such consent shall be null and void.

     SECTION 10.05. Expenses; Indemnity. (a)  The Borrower agrees to pay all out-of-pocket expenses incurred by the Administrative Agent in connection with the syndication of the Credit Facilities and the preparation and administration of this Agreement and the other Financing Documents or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby or thereby contemplated shall be consummated) or incurred by the Administrative Agent or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement and the other Financing Documents or in connection with the Loans made hereunder, including the fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, counsel for the Administrative Agent, and, in connection with any such enforcement or protection, the fees, charges and disbursements of any other counsel for the Administrative Agent or any Lender.

     (i) The Borrower agrees to indemnify the Administrative Agent, each Lender and each Related Party of any of the foregoing persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Financing Document or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the Transactions and the other transactions contemplated thereby (including the syndication of the Credit Facilities), (ii) the use of the proceeds of the Loans, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their respective Affiliates), or (iv) any actual or alleged presence or Release of Hazardous Materials on any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Borrower or the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted primarily from the gross negligence or willful misconduct of such Indemnitee.

     (ii) To the extent that the Borrower fails to pay any amount required to be paid by them to the Administrative Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the outstanding Loans and unused Commitments at the time.

     (iii) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

     (iv) The provisions of this Section 10.05 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Financing Document, or any investigation made by or on behalf of the Administrative Agent or any Lender. All amounts due under this Section 10.05 shall be payable on written demand therefor.

     SECTION 10.06. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, except to the extent prohibited by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement and other Financing Documents held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such other Financing Document and although such obligations may be unmatured. The rights of each Lender under this Section 10.06 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

     SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER FINANCING DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

     SECTION 10.08. Waivers; Amendment. (a)  No failure or delay of the Administrative Agent or any Lender in exercising any power or right hereunder or under any other Financing Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Financing Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Financing Document or consent to any departure by the Borrower or any other Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

     (i) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders (or the Administrative Agent acting at the written direction of the Required Lenders); provided, however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of or any scheduled principal payment date or date for the payment of any interest on any Loan, or waive or excuse any such payment or any part thereof, or decrease the rate of interest on any Loan, without the prior written consent of each Lender directly adversely affected thereby (other than any waiver of any increase in the interest rate applicable to the Loans as a result of the occurrence of a Default or an Event of Default), (ii) increase or extend the Commitment or decrease or extend the date for payment of any fees of any Lender without the prior written consent of such Lender, (iii) amend or modify the pro rata requirements of Section 2.11, the provisions of Section 10.04(a)(ix) or the provisions of this Section or release any Subsidiary Guarantor (other than in connection with the sale of such Subsidiary Guarantor in a transaction permitted by Section 6.05), without the prior written consent of each Lender, (iv) modify the protections afforded to an SPC pursuant to the provisions of Section 10.04(a)(viii) without the written consent of such SPC or (vi) reduce the percentage contained in the definition of the term “Required Lenders” without the prior written consent of each Lender (it being understood that with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Commitments on the date hereof); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder or under any other Financing Document without the prior written consent of the Administrative Agent.

     SECTION 10.09. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 10.09 shall be cumulated and the interest and Charges payable to such Lender in respect of other periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

     SECTION 10.10. Entire Agreement. This Agreement and the other Financing Documents constitute the entire contract between the parties relative to the subject matter hereof. Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement and the other Financing Documents. Nothing in this Agreement or in the other Financing Documents, expressed or implied, is intended to confer upon any person (other than the parties hereto and thereto, their respective successors and assigns permitted hereunder and, to the extent expressly contemplated hereby, the Related

Parties of each of the Administrative Agent and the Lenders) any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Financing Documents.

     SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11

     SECTION 10.12. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Financing Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

     SECTION 10.13. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 10.03. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

     SECTION 10.14. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

     SECTION 10.15. Jurisdiction; Consent to Service of Process. (a)  The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Financing Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Financing Documents against the Borrower, or their respective properties in the courts of any jurisdiction.

     (i) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Financing Documents in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

     (ii) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

     SECTION 10.16. Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ officers, directors, employees and agents, including accountants, legal counsel and other advisors (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or quasi-regulatory authority (such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) in connection with the exercise of any remedies hereunder or under the other Financing Documents or any suit, action or proceeding relating to the enforcement of its rights hereunder or thereunder, (e) subject to an agreement containing provisions substantially the same as those of this Section 10.16, to (i) any actual or prospective assignee of or participant in any of its rights or obligations under this Agreement and the other Financing Documents or (ii) any actual or

prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any Subsidiary or any of their respective obligations, (f) with the consent of the Borrower or (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 10.16. For the purposes of this Section, “Information” shall mean all information received from the Borrower or any Subsidiary and related to the Borrower or any Subsidiary or their business, other than any such information that was available to the Administrative Agent or any Lender on a nonconfidential basis prior to its disclosure by the Borrower or any Subsidiary; provided that, in the case of Information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any person required to maintain the confidentiality of Information as provided in this Section 10.16 shall be considered to have complied with its obligation to do so if such person has exercised the same degree of care to maintain the confidentiality of such Information as such person would accord its own confidential information.

     SECTION 10.17. USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower and the Subsidiary Guarantors that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower and the Subsidiary Guarantors, which information includes the name and address of the Borrower and the Subsidiary Guarantors and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower and the Subsidiary Guarantors in accordance with the USA PATRIOT Act.

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

TRM CORPORATION, as the Borrower
By	/s/ Richard B. Stern
	Name:	Richard B. Stern
	Title:	President and Chief Executive Officer
LAMPE, CONWAY & CO., LLC, as Administrative Agent
By	/s/ Richard F. Conway
	Name:	Richard F. Conway
	Title:	Managing Member
LC CAPITAL MASTER FUND, LTD., as a Lender
By	/s/ Richard F. Conway
	Name:	Richard F. Conway
	Title:	Director

Schedules and Exhibits List ⁽¹⁾

SCHEDULES
Schedule 1.01(a)	-	Subsidiary Guarantors
Schedule 2.01	-	Lenders and Commitments
Schedule 3.02	-	Authorization
Schedule 3.06	-	Material Adverse Change
Schedule 3.08	-	Subsidiaries
Schedule 3.09	-	Litigation; Compliance with Laws
Schedule 3.17	-	Environmental Matters
Schedule 3.18	-	Insurance
Schedule 3.23	-	Financial Advisors
Schedule 4.02	-	Default; Event of Default
Schedule 6.01	-	Existing Indebtedness
Schedule 6.02	-	Existing Liens
EXHIBITS
Exhibit A	-	Form of Administrative Questionnaire
Exhibit B	-	Form of Assignment and Acceptance
Exhibit C	-	Form of Promissory Note
Exhibit D	-	Form of Warrant
Exhibit E-1	-	Form of Opinion of Ledgewood
Exhibit E-2	-	Form of Opinion of Perkins Coie
Exhibit F	-	Form of Registration Rights Agreement
Exhibit G	-	Form of Subsidiary Guaranty

⁽¹⁾ Pursuant to Regulation S-K Item 601(b)(2), the Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

EX-10.11(B)

Exhibit 10.11(b)

REGISTRATION RIGHT AGREEMENT

     Registration Rights Agreement (this “Agreement”) dated as of February 8, 2008, by and between TRM Corporation, an Oregon corporation (the “Company”), and each of the Persons listed on the signature page hereto (each, a “Buyer”).

RECITALS

          WHEREAS, in connection with the Securities Purchase Agreement, of even date herewith, by and among the parties hereto (the “Loan Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Loan Agreement, to, among other things, issue to the Buyers warrants to purchase shares of the Company’s common stock, no par value per share (the “Warrants” and the shares of common stock issuable upon exercise of the Warrants, the “Warrant Shares”);

          WHEREAS, to induce the Buyer to execute and deliver the Loan Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and applicable state securities laws.

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

          1. Definitions. As used in this Agreement:

          (a) “Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

          (b) “Demand Registration” has the meaning set forth in Section 2(a)(i).

          (c) “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

          (d) “Other Holder” shall have the meaning set forth in Section 2(b).

          (e) “Other Securities” shall have the meaning set forth in Section 2(b).

          (f) “Person” means a natural person, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

          (g) “Piggyback Registration” has the meaning set forth in Section 3(a).

          (h) “Registrable Shares” means (i) the Warrant Shares issued or issuable upon exercise of the Warrants and (ii) any shares of capital stock issued or issuable with respect to the Warrant Shares and the Warrants as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on exercises of the Warrants; provided, however, that any such Registrable Shares shall not include any Warrant Shares (i) the sale of which has been registered pursuant to the Securities Act and have been sold pursuant to such registration or (ii) which have been sold to the public, or are transferable without any restrictions, pursuant to Rule 144 under the Securities Act. For all purposes of this Agreement, a Person will be deemed to be a holder of Registrable Shares whenever such Person has the then existing right to acquire such Registrable Shares (by exercise or conversion of securities or otherwise), whether or not such acquisition has actually been effected.

          (i) “Registration Expenses” has the meaning ascribed to it in Section 5.

          (j) “Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

          (k) “Shelf Registration Statement” means a shelf registration statement of the Company filed with the Commission which covers some or all of the Registrable Shares, as applicable, and, at the option of the Company, such shares of capital stock (or other securities of the Company) as the Company shall designate therein, on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, and any amendments and supplements to such registration statement, including post-effective amendments, in each case including the prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

          2. Demand Registration.

          (a) Requests for Registration. (i) Any time after the date hereof, any holder of the Registrable Shares may request registration under the Securities Act of any or all of its Registrable Shares for sale in the manner specified in such request; provided that the Company shall not be obligated to register Registrable Shares pursuant to this Section 2(a)(i) on more than two occasions in the aggregate. With respect to any Shelf Registration Statement, the Company will use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part thereof to be useable by the holders for one year from its effective date or such shorter period that will terminate when all the Registrable Shares covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be Registrable Shares, and after the effectiveness of the Shelf Registration Statement, promptly upon the request of any holder to take any action reasonably necessary to register the sale of any Registrable Shares of such holder and to identify such holder as a selling security holder. Any registrations requested pursuant to this Section 2(a)(i) shall be referred to as a “Demand Registration.”

          (ii) A registration will not count as a Demand Registration until it has become effective and unless the holders of Registrable Shares requesting such registration are able to register and sell at least 80% of the Registrable Shares requested to be included in such registration.

          (b) Priority on Demand Registrations. The Company shall have the right to cause the registration of additional equity securities (“Other Securities”) for sale for the account of any Person (each, an “Other Holder”) in any registration of Registrable Shares requested by the holders thereof pursuant to paragraph (a) above; provided, however, that if the Company is advised in writing by a nationally recognized investment banking firm selected by such holders that, in such firm’s good faith view, the number of Registrable Shares and Other Securities requested to be included (i) creates a substantial risk that the price per share in such registration will be materially and adversely affected or (ii) exceeds the number of Registrable Shares and Other Securities which can be sold in such offering, then the Company will include in such registration, prior to the inclusion of any Other Securities, the number of Registrable Shares requested to be included which in the opinion of such underwriters can be sold, pro rata among the respective holders on the basis of the number of Registrable Shares owned by such holders.

          (c) Restrictions on Registrations. The Company may postpone for up to 90 days the filing or the effectiveness of a registration statement for a Demand Registration if the Company delivers to the holders of Registrable Shares that have requested such Demand Registration a certificate executed by the Company’s Chief Executive Officer to the effect that such Demand Registration, if effected, would have a material adverse effect on any bona fide, material proposal or plan by the Company to engage in any financing, acquisition of assets or any merger, consolidation, tender offer or other significant transaction; provided, however, that the Company may not utilize this right more than twice in any twelve-month period.

          3. Piggyback Registrations.

          (a) Right to Piggyback. Whenever the Company proposes to register any of its securities under the Securities Act (whether or not for its own account) and the registration form to be used may be used for the registration of Registrable Shares (a “Piggyback Registration”), the Company will give prompt written notice to all holders of Registrable Shares of its intention to effect such a registration and, subject to the terms hereof, will include in such registration all Registrable Shares with respect to which the Company has received written requests for inclusion therein within 15 days after the receipt of the Company’s notice.

          (b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration (i) creates a substantial risk that the price per share in such registration will be materially and adversely affected, or (ii) exceeds the number which can be sold in such offering, then the Company will include in such registration: first, the securities the Company proposes to sell and second, the Registrable Shares and the Other Securities requested to be included in such registration to the extent that, in the opinion of

such underwriters, they can be sold, pro rata among the holders of such Registrable Shares and the Other Holders on the basis of the number of Registrable Shares and Other Securities requested to be so registered.

          (c) Priority on Secondary Registrations. If a Piggyback Registration is not an underwritten primary registration but is an underwritten secondary registration on behalf of holders of the Company’s securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration (i) creates a substantial risk that the price per share in such registration will be materially and adversely affected, or (ii) exceeds the number which can be sold in such offering, then the Company will include in such registration the number of securities (including Registrable Shares) that such underwriters advise can be so sold without adversely affecting such offering, allocated pro rata among the Other Holders and the holders of Registrable Shares on the basis of the number of securities (including Registrable Shares) requested to be included therein by each Other Holder and each holder of Registrable Shares.

          4. Registration Procedures.

          (a) Whenever any holders of Registrable Shares have requested that any Registrable Shares be registered pursuant to this Agreement, the Company will use its best efforts to effect the registration and the sale of such Registrable Shares in accordance with the intended method of disposition thereof, and pursuant thereto the Company will as expeditiously as possible:

          (i) prepare and file with the Commission a registration statement with respect to such Registrable Shares (after the holders of Registrable Shares included in such offering have had a reasonable opportunity to review and comment on such registration statement (and each amendment or prospectus filing related thereto)) and cause such registration statement to become and remain effective for such period as may be reasonably necessary to effect the sale of such securities as described in such request;

          (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

          (iii) furnish to each seller of Registrable Shares and the underwriters of the securities being registered such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller or underwriters may reasonably request in order to facilitate the disposition of the Registrable Shares owned by such seller or the sale of such securities by such underwriters;

          (iv) register or qualify such Registrable Shares under such other securities or blue sky laws of such jurisdictions as any seller or, in the case of an underwritten public offering, the managing underwriter, reasonably requests and do any and all other acts and things which may be reasonably necessary to enable such seller to consummate the disposition in such jurisdictions of the Registrable Shares owned by such seller (provided, however, that the Company will not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection or (y) consent to general service of process in any such jurisdiction);

          (v) cause all such Registrable Shares to be listed or authorized for quotation on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed or quoted or, if similar securities are not then so listed or quoted, as the holders thereof may reasonably request;

          (vi) provide a transfer agent and registrar for all such Registrable Shares not later than the effective date of such registration statement;

          (vii) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Shares being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Shares;

          (viii) make available for inspection by any seller of Registrable Shares, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent

retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with the preparation of such registration statement;

          (ix) notify each seller of such Registrable Shares, promptly after it shall receive notice thereof, of the time when such registration statement has become effective or a supplement to any prospectus forming a part of such registration statement has been filed;

          (x) notify each seller of such Registrable Shares of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;

          (xi) prepare and file with the Commission, promptly upon the request of any seller of such Registrable Shares, any amendments or supplements to such registration statement or prospectus which, in the written opinion of counsel selected by the holders of a majority of the Registrable Shares being registered, may be required under the Securities Act in connection with the distribution of Registrable Shares by such seller;

          (xii) prepare and promptly file with the Commission and promptly notify each seller of such Registrable Shares of the filing of such amendment or supplement to such registration statement or prospectus as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such securities is required to be delivered under the Securities Act, any event shall have occurred as the result of which any such prospectus or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

          (xiii) advise each seller of such Registrable Shares, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order is issued;

          (xiv) refrain from filing any such registration statement, prospectus, amendment or supplement to which counsel selected by the holders of a majority of the Registrable Shares being registered shall have objected in writing on the grounds that such amendment or supplement may not comply in all material respects with the requirements of the Securities Act;

          (xv) at the request of any seller of such Registrable Shares furnish on the date or dates provided for in the underwriting agreement, if any, or upon the effective date of the registration statement: (A) an opinion of counsel, addressed to the underwriters, if any, and the sellers of Registrable Shares, covering such matters as such underwriters, if any, and sellers may reasonably request and as are customarily covered by the issuer’s counsel in an underwritten offering; and (B) a letter or letters from the independent certified public accountants of the Company addressed to the underwriters, if any, and the sellers of Registrable Shares, covering such matters as such underwriters, if any, and sellers may reasonably request and as are customarily covered in accountant’s letters in connection with an underwritten offering;

          (xvi) during such time as any holders of Registrable Shares may be engaged in a distribution of Registrable Shares, comply with Regulation M promulgated under the Exchange Act, to the extent applicable; and

          (xvii) otherwise use its best efforts to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement in accordance with the intended method of disposition and to make generally available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

          (b) Each holder of Registrable Shares that sells Registrable Shares pursuant to a registration under this Agreement agrees as follows:

          (i) Such seller shall cooperate as reasonably requested by the Company with the Company in connection with the preparation of the registration statement, and for so long as the Company is obligated to file and keep effective the registration statement, shall provide to the Company, in writing, for use in the registration statement, all such information regarding such seller and its plan of distribution of the Registrable Shares as may be reasonably

necessary to enable the Company to prepare the registration statement and prospectus covering the Registrable Shares, to maintain the currency and effectiveness thereof and otherwise to comply with all applicable requirements of law in connection therewith; and

          (ii) During such time as such seller may be engaged in a distribution of the Registrable Shares, such seller shall (A) comply with Regulation M promulgated under the Exchange Act, to the extent applicable, (B) distribute the Registrable Shares under the registration statement solely in the manner described in the registration statement and (C) cease distribution of such Registrable Shares pursuant to such registration statement upon receipt of written notice from the Company that the prospectus covering the Registrable Shares contains any untrue statement of a material fact or omits a material fact required to be stated therein or necessary to make the statements therein not misleading.

          5. Registration Expenses.

          (a) All expenses incident to the Company’s performance of or compliance with this Agreement, including all registration and filing fees, fees of transfer agents and registrars, fees and expenses of compliance with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, printing expenses, road show expenses, fees and disbursements of counsel for the Company, fees and expenses of the Company’s independent certified public accountants, and the fees and expenses of any underwriters (excluding underwriting discounts and commissions attributable to the Registrable Shares included in such registration) and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”), will be borne by the Company. In addition, the Company will pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance obtained by the Company and the expenses and fees for listing or authorizing for quotation the securities to be registered on each securities exchange or automated quotation system on which any shares of common stock are then listed or quoted.

          (b) In connection with each Demand Registration and each Piggyback Registration effected pursuant to this Agreement, the Company will reimburse the holders of Registrable Shares covered by such registration for such holders’ out-of-pocket expenses and the reasonable fees and expenses of one special counsel for the holders chosen by the holders of a majority of such Registrable Shares.

          (c) Notwithstanding paragraphs (a) and (b) above, the holders of the Registrable Shares agree that in the event any such holders voluntarily withdraw their registration demand, such holders shall pay their pro rata portion of Registration Expenses incurred in such registration or surrender a single registration demand, as set forth in Section 2(a) above, as a result of such withdrawal.

          6. Indemnification.

          (a) In the event of a registration of the Registrable Shares under the Securities Act pursuant to the terms hereof, the Company agrees to indemnify, hold harmless and defend, to the fullest extent permitted by law, each seller of Registrable Shares, its officers, directors shareholders, partners, members, employees and agents and each Person who controls such seller (within the meaning of the Securities Act or the Exchange Act) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees except as limited by Section 6(c)) caused by (i) any untrue or alleged untrue statement of a material fact contained in any registration statement under which such Registrable Shares were registered, any prospectus or preliminary prospectus contained therein or any amendment thereof or supplement thereto, any Issuer Free Writing Prospectus or any amendment thereof or supplement thereto, (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law, except insofar as the same are caused by or contained in any information furnished in writing to the Company or any managing underwriter by such seller or any such controlling person expressly for use therein. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act or the Exchange Act) to the same extent as provided above with respect to the indemnification of the sellers of Registrable Shares (and with the same exception with respect to information furnished or omitted by such underwriter or controlling person thereof) and in connection therewith the Company shall enter into an underwriting agreement in customary form containing such provisions for indemnification and contribution as shall be reasonably requested by the underwriters.

          (b) In connection with any registration statement in which a seller of Registrable Shares is participating, each such seller will furnish to the Company in writing such information as the Company reasonably requests

for use in connection with any such registration statement or prospectus and, to the fullest extent permitted by law, will indemnify, hold harmless and defend the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act) and each underwriter and controlling person thereof against any losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees except as limited by Section 6(c)) resulting from any untrue statement of a material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information so furnished in writing to the Company or any managing underwriter by such seller or a controlling person thereof expressly for use therein; provided that the obligation to indemnify will be several, not joint and several, among such sellers of Registrable Shares, and the liability of each such seller of Registrable Shares will be limited to the net amount received by such seller from the sale of Registrable Shares pursuant to such registration statement.

          (c) Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give such notice shall not limit the rights of such Person except to the extent such failure to give notice shall materially prejudice the rights of the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment (with written advice of counsel) a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not enter into any settlement without the indemnified party’s prior written consent unless such settlement includes an unconditional release of the indemnified party from liability relating to the claim. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment (with written advice of counsel) of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.

          (d) Each party hereto agrees that, if for any reason the indemnification provisions contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation (even if the holders or any underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or, except as provided in Section 6(c), defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no holder shall be required to contribute an amount greater than the dollar amount of the proceeds received by such holder with respect to the sale of any Registrable Shares. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders’ obligations in this Section 6(d) to contribute shall be several in proportion to the amount of Registrable Shares registered by them and not joint.

          (e) The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the offering of Registrable Shares in a registration statement.

          7. Compliance with Rule 144. The Company shall (i) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after 90 days after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public, (ii) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act and (iii) at the request of any holder who proposes to sell securities in compliance with Rule 144, forthwith furnish to such holder a written statement of compliance with the reporting requirements of the Commission as set forth in Rule 144 and make available to such holders such information as will enable the holders to make sales pursuant to Rule 144.

          8. Form S-3 Registrations. In case the Company shall receive a written request from holders of at least 25% of the Registrable Shares that the Company effect a registration on Form S-3, and any related qualification or compliance with respect to all or a part of the Registrable Shares owned by such holder or holders, the Company will:

          (a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other holders of Registrable Shares; and

          (b) as soon as practicable, but in any event within 15 business days, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such holder’s or holders’ Registrable Shares as are specified in such request, together with all or such portion of the Registrable Shares of any other holder or holders joining in such request as are specified in a written request given within five (5) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 8: (i) if Form S-3 is not available for such offering by the holders; (ii) if the Company shall furnish to the holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 30 days after receipt of the request of the holder or holders under this Section 8; provided, however, that the Company shall not utilize this right more than once in any twelve month period; (iii) if the Company has, in the six (6)-month period preceding the date of such request, already effected a registration pursuant to this Section 8; or (iv) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

          (c) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Shares and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the holders. All Registration Expenses incurred in connection with a registration requested pursuant to this Section 8, including, without limitation, all registration, filing, qualification, printer’s and accounting fees and the reasonable fees and disbursements of counsel for the selling holder or holders and counsel for the Company, shall be borne by the Company. Registrations effected pursuant to this 8 shall not be counted as Demand Registrations effected pursuant to Section 2.

          9. Participation in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

          10. Amendments and Waivers. Except as otherwise expressly provided herein, the provisions of this Agreement may be amended or waived at any time only by the written agreement of the Company and a majority in interest of the holders of the Registrable Shares; provided that any such amendment or waiver shall apply equally to all holders of Registrable Shares. Any waiver, permit, consent or approval of any kind or character on the part of any such holders of any provision or condition of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in writing.

          11. Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto, whether so expressed or not. In addition, the provisions of this Agreement which are for the benefit of the holders of Registrable Shares are also for the benefit of, and enforceable by, any subsequent holder of Registrable Shares who consents in writing to be bound by this Agreement.

          12. Final Agreement. This Agreement constitutes the final agreement of the parties concerning the matters referred to herein, and supersedes all prior agreements and understandings.

          13. Limit on Future Registration Rights. The Company will not grant any other registration rights to any Person (other than (a) registration rights that are subordinate to or, in the case of registration rights granted to the seller in connection with stock issued as consideration in connection with the Acquisition (as defined in the Loan Agreement), no more than pari passu with, the registration rights granted herein to the holders of Registrable

Shares and (b) registration rights previously granted to the Other Holders) without the consent from holders of at least 51% of the Registrable Shares.

          14. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

          15. Descriptive Heading. The descriptive headings of this Agreement are inserted for convenience of reference only and do not constitute a part of and shall not be utilized in interpreting this Agreement.

          16. Notices. Any notices required or permitted to be sent hereunder shall be delivered personally or mailed, certified mail, return receipt requested, or delivered by overnight courier service to the following addresses, or such other addresses as shall be given by notice delivered hereunder, or transmitted by facsimile transmission, and shall be deemed to have been given upon delivery, if delivered personally, when confirmation of transmission is received, if transmitted by facsimile, three business days after mailing, if mailed, one business day after delivery to the courier, if delivered by overnight courier service, or, in the case of facsimile transmission, when received:

          If to the holders of Registrable Shares, to the addresses set forth on the record books of the Company.

If to the Company:

5208 N. E. 122nd Avenue
Portland, OR 97230
Telephone: (215) 832-0074
Telecopier: (215) 832-0078

          17. GOVERNING LAW. THE VALIDITY, MEANING AND EFFECT OF THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.

          18. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument. Each party shall receive a duplicate original of the counterpart copy or copies executed by it and the Company.

          19. Injunctive Relief0.4. Injunctive Relief. Each of the parties hereto acknowledges that in the event of a breach by any of them of any material provision of this Agreement, the aggrieved party may be without an adequate remedy at law. Each of the parties therefore agrees that in the event of such a breach hereof the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach hereof. By seeking or obtaining any such relief, the aggrieved party shall not be precluded from seeking or obtaining any other relief to which it may be entitled.

* * * * * * *

          This Registration Agreement was executed on the date first set forth above.

TRM CORPORATION
By:	/s/ Richard B. Stern
	Name: Richard B. Stern Title: Chief Executive Officer and President
LC CAPITAL MASTER FUND, LTD.
By:	/s/ Richard F. Conway
	Name: Richard F. Conway Title: Director

EX-14.1

Exhibit 14.1

CODE OF ETHICS
(January 2008)

Introduction

The Board of Directors of TRM Corporation and its subsidiaries (“TRM” or the “Company”) has developed and adopted this Code of Ethics (this “Code”) to deter wrongdoing and to promote:

• Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interests between personal and professional relationships;

• Full, fair, accurate timely and understandable disclosure in TRM’s annual and quarterly reports and in other public communications made by TRM;

• Compliance with applicable governmental laws, rules and regulations;

• The prompt reporting of violations of this Code to an appropriate person or persons identified in the Code; and

• Accountability for adherence to this Code.

This Code applies to all directors, officers and employees of TRM, including, but not limited to, the chief executive officer, the chief financial officer, the principal accounting officer, the controller, and persons performing similar functions (who are collectively referred to as the “Senior Financial Officers”).

The Human Resources Department is responsible for distributing this Code to all employees. It is the responsibility of the directors, the executive officers, the Senior Financial Officers and each department head to demonstrate both in actions and words the importance of this Code to all officers and employees under their supervision.

Please take the time to read this Code carefully, since you are responsible for knowing and understanding its contents. If you need more information or have any questions, contact the Human Resources Department of TRM Corporation via telephone at (503) 943-2760, or email at richardorlandini@trm.com.

Legal Compliance

Maintaining the Company’s reputation as a premier institution and a good corporate citizen demands that you conduct the Company’s business in full compliance with all applicable federal, state, and local laws and regulations, whether in the United States, Canada, the United Kingdom or any country in which the Company might conduct business, all rules of the NASDAQ Stock Market or other self-regulatory organizations applicable to the Company, and the provisions of this Code. These laws, rules and regulations are extensive and this Code does not attempt to identify all of the laws that govern the conduct of the Company’s business. Some of the specific areas with which employees are expected to comply, to the extent applicable, include, but are not limited to:

• Securities laws;

• Privacy and intellectual property laws;

• Laws prohibiting employment discrimination;

• Anti-trust and similar laws;

• Foreign corrupt practice laws; and

• Limitations on political contributions.

Many resources are available to you to become familiar with the laws, rules and regulations that apply to your scope of responsibility within the Company. From time to time, the Company will issue policies, procedures and guidelines that outline appropriate legal procedures to be followed. You are expected to read these materials and become familiar with their content.

Confidentiality

Maintaining the quality and confidentiality of the Company’s information, whether technical, sales and marketing, legal or other data, will ensure that the Company remains competitive and viable.

Therefore, you are permitted to use and disclose proprietary and/or confidential information only as authorized and only in furtherance of TRM’s business. In addition, you are responsible for making sure adequate safeguards are used

to prevent the disclosure or loss of proprietary and/or confidential information. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed.

An employee must also maintain the confidentiality of third party information that TRM has agreed to maintain confidential to the extent of any such confidentiality or nondisclosure agreement. An employee’s obligation to protect TRM proprietary and confidential information exists whether or not the information is explicitly labeled or otherwise designated as being proprietary or confidential, and the obligation continues even after leaving the company.

To avoid inadvertent disclosure, never discuss any information that is confidential with any unauthorized person, including family members or friends, who might inadvertently pass on this information to someone else. Furthermore, you should not discuss confidential information even with authorized TRM employees if you are in the presence of others who are not authorized; for example, while in a public area such as a restaurant, an airplane or an elevator. If you believe that confidential information may have been inadvertently disclosed, please contact the Legal Department immediately. If someone outside TRM asks you questions about the Company or our business activities relating to proprietary or confidential information, do not attempt to answer them unless you are authorized to do so. If you are not authorized, refer the person to the appropriate source within TRM. If you are uncertain as to whether you are authorized to answer the question or to whom the inquiry be referred, consult the TRM Legal Department before providing any information.

Conflicts of Interest

Members of the Company’s Board of Directors have a special responsibility because our directors are prominent individuals with substantial other responsibilities. To avoid conflicts of interest, directors are expected to disclose to their fellow directors any personal interest they may have in a matter that comes before the Board and to recuse themselves from participation in any decision in which there is a conflict between their personal interests and the interests of the Company. Directors must at all times honor the fiduciary duties imposed upon them by law in their capacity as directors, including their duty of loyalty to the Company.

The following guidelines apply to employees of the Company:

Employees of the Company are expected to conduct all of their business affairs ethically and honestly and with the highest sense of integrity. This requires you to ensure that your business dealings on behalf of the Company are never influenced by—or even appear to be influenced by—your own personal interests.

The Company has adopted the following guidelines to protect both the Company and employees against conflicts of interest, and from situations that create an appearance of a conflict of interest. Since conflicts of interest are not always clear-cut, you should discuss with the Legal Department of TRM, any question about any situation, transaction or relationship that reasonably could give rise to an actual or apparent conflict of interest.

Please note that a conflict of interest can be created by your own actions or by the actions of anyone acting on your behalf, including members of your immediate family, household, or others with whom you have a committed or similarly close relationship. This Code will refer to such persons as “Family and Close Relations.” Because no two situations are alike, you should contact the Legal Department of TRM if you have any questions about the applicability of these guidelines to a specific family or personal relationship.

1. Competing Employment. Employees may not work for, have a business association with, provide any services or materials to or receive any compensation for services or employment from any competitor of the Company.

2. Interests In Other Businesses. You and Family and Close Relations must avoid any direct or indirect financial relationship with other businesses that could cause divided loyalty. You may not have any financial interest in or receive compensation from any customer, party with whom the Company has a strategic business relationship, supplier or vendor of the Company. You must disclose to the Company any employment by your Family and Close Relations in positions of authority at a firm that competes with the Company or does business with the Company as a customer, vendor, supplier or party with whom the Company has a strategic business relationship. You must avoid conducting Company business with Family and Close Relations, either directly or indirectly, at a customer, supplier, party with whom the Company has a strategic business relationship or vendor unless you have prior written permission from the Legal Department of TRM Corporation. This provision will not prevent you from owning less than 5% of the stock of a publicly-traded company provided that the investment is not so large financially either in absolute dollars or a percentage of your total investment portfolio that it creates the appearance of a conflict of interest.

3. Outside Directorships. The Company encourages its employees to be active in industry and civic associations, including membership in other companies’ boards of directors. Employees who serve on outside boards of a profit-making organization are required, prior to acceptance, to obtain written approval from the Executive Management Committee of TRM. As a general rule, you may not accept a position as an outside director of any current or likely competitor of the Company. Furthermore, in the absence of an overriding benefit to the Company and a procedure to avoid any financial conflict (such as refusal of compensation and refusal from involvement in that company’s relationship with the Company), approval is likely to be denied where the Company employee either directly or through people in his or her chain of command has responsibility to affect or implement the Company’s business relationship with the other company. Approval of a position as a director of a company that supports or promotes a competitor’s products or services is also likely to be denied.

If the Executive Management Committee approves an outside directorship, you may keep compensation earned from that directorship unless the terms of the committee’s approval state otherwise. Generally, however, you may not receive any form of compensation (including stock options, stock or cash) for service on a board of directors of a company if the service is at the request of the Company or in connection with the Company’s investment in, or a significant relationship exists with, that company and the directorship is as a consequence or in connection with that relationship. Any company that is a vendor, supplier, party with whom the Company has a strategic business relationship or customer of the Company has a “relationship” with the Company. “Significant” is broadly defined to include a sole-source vendor/supplier, or one in which the Company is responsible for generating five percent or more of the outside company’s revenues. When membership on a board of directors is other than at the Company’s request, and a potential for conflict of interest exists (even if no compensation is received), you are expected to recuse yourself from any involvement in the Company’s relationship with that company. It is therefore important that you recognize that your membership should be an opportunity to provide expertise and to broaden your own experience, but you should not be put in a position where the other company expects to use your board membership as a way to get access to or to influence Company decisions.

The Company may at any time rescind prior approvals in order to avoid a conflict or appearance of a conflict of interest for any reason deemed to be in the best interests of the Company. In addition, the Company will periodically conduct an inquiry of employees to determine the status of their membership on outside boards.

4. Business Opportunities. You may not use Company business opportunities for your own personal gain. This includes any opportunity to profit from transactions in the consumer convenience services industry or other lines of business engaged in or planned by the Company or business opportunities which you discover during the course of your employment, or through the use of Company property or information. You should not engage in business in a personal capacity with competitors, customers, parties with whom the Company has a strategic business relationship, vendors, or suppliers of the Company unless doing so as a personal or business consumer on terms generally available to others on terms and conditions no less favorable than those which are made available to you.

5. Gifts, Favors and Personal Entertainment. You may not solicit or accept, directly or indirectly, any cash or monetary equivalents, objects of value or preferential treatment from any person or business that has or is seeking business with the Company where doing so may influence or appear to influence your business judgment.

• You may accept gifts, services or other items of value (but not cash) under the following circumstances:

o You may accept meals, travel, lodging, refreshment, or other normal business courtesies of reasonable value either in the course of a business meeting or to satisfy a reasonable business purpose of the Company.

o You may accept meals and entertainment, such as the occasional sporting event, provided that you do not do so frequently or under circumstances where your judgment could be influenced, or where the cumulative value of the entertainment is excessive. Any meals and entertainment involving substantial travel or an extended number of days cannot be accepted without written permission by the Legal Department of TRM.

o You may accept discounts or rebates on merchandise or services that do not exceed those available to members of the general public.

o You may accept non-cash gifts of reasonable value including for commonly-recognized events or occasions, such as a promotion, new job, wedding, retirement, birthday or holiday.

o You may receive awards from civic, charitable, educational or religious organizations of reasonable value for recognition of services and accomplishments.

o You may receive gifts, gratuities, amenities or favors received because of family or personal relationships when the circumstances make it clear that it is those relationships rather than the business of the Company that are the motivating factor.

Financial Reporting

As a public company it is of critical importance that TRM’s filings with the Securities and Exchange Commission and other public disclosures be accurate and timely. Depending on his or her position with the Company, an employee may be called upon to provide information to assure that TRM’s public reports are complete, fair and understandable. The Company expects all of its personnel to take this responsibility very seriously and to provide prompt and accurate answers to inquiries related to TRM’s public disclosure requirements.

Senior Financial Officers have the primary responsibility for ensuring that the disclosure in the Company’s periodic reports is full, fair, accurate, timely and understandable. Therefore, Senior Financial Officers are required to familiarize themselves with the disclosure requirements applicable to TRM Corporation as well as the business and financial operations of TRM Corporation. Senior Financial Officers are responsible for adequately supervising the preparation of the financial disclosures in the periodic reports required to be filed by TRM Corporation.

In the performance of their duties, Senior Financial Officers and other Company employees are prohibited from knowingly misrepresenting facts. A Company employee will be considered to have knowingly misrepresented facts if he or she knowingly (1) makes, or permits or directs another to make, materially false or misleading entries in an entity’s financial statements or records; (2) fails to correct materially false and misleading financial statements or records; (3) signs, or permits another to sign, a document containing materially false and misleading information; or (4) falsely responds, or fails to respond, to specific inquiries of the Company’s internal or external auditors.

Waivers

The Company expects that all of its directors, officers and employees will strictly adhere to this Code. Notwithstanding the foregoing, there may be special circumstances under which the Company may elect to waive a particular provision of this Code for a limited purpose. Waivers of this Code for any employee of the Company other than officers or directors of TRM Corporation may only be made by the Legal Department of TRM. Any waiver of this Code for officers or directors of TRM Corporation may only be made by its Board of Directors and must be promptly disclosed, including the reasons therefor, to the shareholders of TRM Corporation and to appropriate regulators, if and as required by applicable law or rules of the NASDAQ Stock Market or other self-regulatory organization then applicable to the Company. For the purpose of this section of the Code, the term “officer” shall mean those officers covered in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended.

Responsibilities for Compliance

Where a director, officer, or employee believes or determines that an actual, potential, or apparent violation of this Code exists he or she must promptly report it in writing, on an anonymous basis if so desired, to TRM’s Legal Department. Complaints will be promptly investigated by the Legal Department or, in the case of actual, potential or apparent violations involving accounting or auditing matters, another duly appointed delegatee of the Audit Committee pursuant to the Audit Committee’s policies and procedures. Should the director, officer or employee feel that the complaint is not being addressed appropriately, he or she must report it in writing, on an anonymous basis if so desired, to ethics@trm.com, which is posted on the TRM website or send to Julie Wilson, Esquire, Ledgewood, P.C., 1900 Market Street, Suite 750, Philadelphia, PA 19103. This will forward the complaint to outside counsel on behalf of the Audit Committee, who will promptly investigate the complaint.

Full and timely disclosure of the facts will help meet your responsibilities under this Code and will enable the Company to maintain the highest ethical standards. No officer, director, or employee will be discharged, threatened, or discriminated or retaliated against because the person or someone else acting on his or her behalf makes a good faith disclosure concerning another officer, director, or employee. Officers, directors and employees are obliged to cooperate with investigations into Code violations and must always be truthful and forthcoming in the course of any such investigations.

Any director, officer or employee who has a good-faith belief that he or she has been harassed, discharged, threatened, discriminated against or otherwise retaliated against because of a disclosure of securities law violations or fraudulent activity in violation of this Code, or because of assistance in an investigation, should promptly bring his or her complaint of retaliation to the attention of the Legal Department or the Audit Committee of TRM Corporation via our outside counsel in the case where you reasonably believe that the Legal Department is involved in the retaliation. The Legal Department (or such other duly appointed designee) will have authority to investigate any such claim of retaliation and, if retaliation has occurred, to promptly recommend corrective action.

Consequences of Violations

Violations of any provision of this Code, including retaliation against someone who has made a complaint of a violation, may result in disciplinary action including termination of employment or other relationship with the Company. In addition, certain violations could result in the imposition of civil and/or criminal sanctions. Illegal actions on the part of persons covered by this Code will be reported to the appropriate authorities.

EX-21.1

Exhibit 21.1

Subsidiaries of TRM Corporation (formerly TRM Copy Centers Corporation)

	State or Place
Subsidiary	of Incorporation
TRM Copy Centers (USA) Corporation	Oregon
TRM (Canada) Corporation 1	Ontario
FPC France Ltd. 1	Oregon
TRM ATM Corporation	Oregon
TRM ATM Acquisition Corporation	Delaware
S-3 Corporation 1	Delaware
Access Cash International LLC 1	Delaware
TRM Services Limited	U.K.

¹ TRM (Canada) Corporation and FPC France Ltd. are subsidiaries of TRM Copy Centers (USA) Corporation. S-3 Corporation and Access Cash International LLC are subsidiaries of TRM ATM Corporation.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statements on Form S-8 (Nos. 333-92535, 333-26989, 333-67433 and 333-128068) of TRM Corporation of our report dated March 28, 2008 relating to our audit of the consolidated financial statements, which appear in the Annual Report on Form 10-K of TRM Corporation for the year ended December 31, 2007.

/s/ McGladrey & Pullen, LLP

Blue Bell, Pennsylvania
March 28, 2008

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-92535, 333-26989, 333-67433 and 333-128068) of TRM Corporation of our report dated May 23, 2007, except for the retrospective restatement of the Canadian photocopy operations as discontinued operations described in Note 11, which is as of March 28, 2008, relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Portland, Oregon
March 28, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14a AND 15d-14a
OF THE SECURITIES AND EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Richard B. Stern, certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2007 of TRM Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2008	By:	/s/ Richard B. Stern
		Richard B. Stern
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULES 13a-14a AND 15d-14a
OF THE SECURITIES AND EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

     I, Michael J. Dolan, certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2007 of TRM Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2008	By:	/s/ Michael J. Dolan
		Michael J. Dolan
		Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO RULES 13a-14a AND 15d-14a
OF THE SECURITIES AND EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Jon S. Pitcher, certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2007 of TRM Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2008	By:	/s/ Jon S. Pitcher
		Jon S. Pitcher
		Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
OF TRM CORPORATION
PURSUANT TO 18 U.S.C. SECTION 1350

     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Richard B. Stern, Chief Executive Officer of TRM Corporation (the “Company”), hereby certify that the accompanying Annual Report of the Company on Form 10-K for the year ended December 31, 2007 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 31, 2008	By:	/s/ Richard B. Stern
		Richard B. Stern
		Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF
CHIEF FINANCIAL OFFICER
OF TRM CORPORATION
PURSUANT TO 18 U.S.C. SECTION 1350

     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Michael J. Dolan, Chief Financial Officer of TRM Corporation (the “Company”), hereby certify that the accompanying Annual Report of the Company on Form 10-K for the year ended December 31, 2007 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 31, 2008	By:	/s/ Michael J. Dolan
		Michael J. Dolan
		Chief Financial Officer

EX-32.3

Exhibit 32.3

CERTIFICATION OF
PRINCIPAL ACCOUNTING OFFICER
OF TRM CORPORATION
PURSUANT TO 18 U.S.C. SECTION 1350

     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Jon S. Pitcher, Principal Accounting Officer of TRM Corporation (the “Company”), hereby certify that the accompanying Annual Report of the Company on Form 10-K for the year ended December 31, 2007 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 31, 2008	By:	/s/ Jon S. Pitcher
		Jon S. Pitcher
		Principal Accounting Officer