EXHIBIT 10.11
SECOND AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
This Second Amended and Restated Agreement dated as of May 30, 2000 (this
"Agreement") is between Bank of America, N.A. (the "Bank") and TRM Corporation
(the "Borrower") and supersedes the First Amended and Restated Business Loan
Agreement between Bank and Borrower dated as of March 29, 2000, under which Bank
provided a standby letter of credit to which Section 1.6 now applies.
1. LINE OF CREDIT AMOUNT AND TERMS
1.1 LINE OF CREDIT AMOUNT.
(a) During the availability period described below, the Bank will provide
a line of credit to the Borrower. The amount of the line of credit (the
"Commitment") is equal to the amount indicated for each period specified below:
PERIOD AMOUNT
From the date of this Agreement through June 30, 2001 $30,000,000.00
From July 1, 2001 through June 30, 2002 $25,000,000.00
(b) This is a revolving line of credit providing for cash advances.
During the availability period, the Borrower may repay principal amounts and
reborrow them.
(c) If Borrower sells or disposes of any interest in TRM ATM Corporation
such that Borrower no longer holds more than 50% of the ownership and voting
interests in such Corporation, the Commitment shall automatically be reduced to
Ten Million Dollars ($10,000,000.00).
(d) Upon three (3) Banking Days' prior written notice to the Bank,
Borrower may, at any time, and from time to time, permanently and irrevocably
reduce the Commitment in an amount of not less than Five Hundred Thousand
Dollars ($500,000.00) to an amount not less than the outstanding principal
amount of advances at such time; provided, however, any such reduction which
occurs before July 1, 2001 shall not apply to reduce the Commitment for the
period July 1, 2001 through June 30, 2002 except to the extent that all
reductions prior to July 1, 2001 exceed in the aggregate Five Million Dollars
($5,000,000.00). Any such reduction shall be accompanied by the payment of all
accrued and unpaid fees with respect to the portion of the Commitment being
reduced.
(e) The Borrower agrees not to permit the outstanding principal balance
of advances under the line of credit to exceed the Commitment.
1.2 COMMITMENT PERIOD. The line of credit is available between the date
of this Agreement and June 30, 2002 or such earlier date as the Commitment may
terminate as provided in this Agreement (the "Expiration Date").
1.3 INTEREST RATE.
(a) Unless the Borrower elects an optional interest rate as described
below, the interest rate is the Bank's Prime Rate plus the Applicable Margin set
forth under the appropriate heading in Section 1.5 below. Interest will be
calculated on the basis of a 360-day year and actual days elapsed, which results
in more interest than if a 365-day year were used.
(b) The Prime Rate is the rate of interest publicly announced from time
to time by the Bank as its Prime Rate. The Prime Rate is set by the Bank based
on various factors, including the Bank's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans. The Bank may price loans to its customers at, above, or
below the Prime Rate. Any change in the Prime Rate shall take effect at the
opening of business on the day specified in the public announcement of a change
in the Bank's Prime Rate.
1.4 REPAYMENT TERMS.
Second Amended and Restated Loan Agreement - Page 1
(a) The Borrower will pay interest on April 30, 2000, and then at the end
of each month thereafter until payment in full of any principal outstanding
under this line of credit; provided, however, that interest on any Portion
bearing interest at an IBOR Rate or a LIBOR Rate shall be paid at the end of
each interest period until payment in full of any principal outstanding under
this line of credit.
(b) The Borrower will repay the principal balance of advances so that
such balance at no time exceeds the Commitment.
(c) Borrower will repay the principal amount of advances by an amount
equal to the amount of any financing secured by ATM machines unless Borrower
demonstrates to the satisfaction of the Bank that the ATM machines in which
security interests are to be created were financed from sources other than the
Bank. This repayment shall be made whether such financing is obtained by
Borrower, TRM ATM Corporation or any other affiliate of Borrower.
(d) If Borrower has not prepaid the principal balance of the advances in
full on or before the Expiration Date, the Borrower will repay the principal
amount of the advances outstanding on the Expiration Date in 36 successive equal
monthly installments starting July 31, 2002. On June 30, 2005, the Borrower will
repay the remaining principal balance of the advances plus any interest then
due. This is called the "Term Repayment Option."
(e) The Borrower may prepay the advances in full or in part at any time.
The prepayment will be applied to the most remote payment of principal due under
this Agreement.
1.5 APPLICABLE MARGIN. The Applicable Margin shall be the following
amounts per annum, based upon the ratio of Funded Debt to EBITDA (as defined in
the "Covenants" section of this Agreement), as set forth in the most recent
compliance certificate received by the Bank as required in the "Covenants"
section; provided, however, that, until the Bank receives the first compliance
certificate, such amounts shall be those indicated for pricing level 4 set forth
below:
Applicable Margin
(in percentage points per annum)
Pricing
Level Ratio Prime Rate + LIBOR / IBOR Rate +
----- ----- ------------ -------------------
1 greater than 2.00:1.0 0.25% 2.25%
greater than 1.75:1.0 but less than or equal to
2 2.00:1.0 0.00% 2.00%
greater than 1.25:1.0 but less than or equal to
3 1.75:1.0 0.00% 1.75%
greater than 0.00:1.0 but less than or equal to
4 1.25:1.0 0.00% 1.50%
The Applicable Margin shall be in effect from the date the most recent
compliance certificate is received by the Bank until the date the next
compliance certificate is received; provided, however, that if the Borrower
fails to deliver the next compliance certificate within thirty (30) days of the
date it is due, the Applicable Margin from the date such compliance certificate
was due until the date such compliance certificate is received by the Bank shall
be the highest pricing level set forth above, whereupon the pricing level shall
be based on the ratio reflected in such compliance certificate. Pricing to be
set quarterly. If the Term Repayment Option is chosen, the Applicable Margin for
every interest rate will increase 0.25%
1.6 LETTERS OF CREDIT.
(a) The line of credit may be used for financing standby letters of
credit (either in U.S. or foreign currency) with a maximum maturity of two years
but not to extend beyond the Expiration Date. The standby letters of credit may
include a provision providing that the maturity date will be automatically
extended each year for an additional year unless the Bank gives written notice
to the contrary; provided, however, that each letter of credit must include a
final maturity date not later than the Expiration Date which will not be subject
to automatic extension.
(b) The amount of the standby letters of credit outstanding at any one
time (including amounts drawn on the letters of credit and not yet reimbursed)
may not exceed Three Million Dollars ($3,000,000.00), which sum is a sub-limit
included within the Commitment and is not in addition thereto.
Second Amended and Restated Loan Agreement - Page 2
(c) Any sum drawn under a standby letter of credit may, at the option of
the Bank, be added to the principal amount outstanding under this Agreement. The
amount will bear interest and be due as described elsewhere in this Agreement.
(d) If there is an Event of Default under this Agreement, Borrower shall
immediately prepay and make the Bank whole for any outstanding letters of
credit.
(e) The issuance of any letter of credit and any amendment to any letter
of credit is subject to the Bank's written approval and must be in form and
content satisfactory to the Bank and in favor of a beneficiary acceptable to the
Bank.
(f) Borrower shall sign the Bank's form Application and Agreement for
Standby Letter of Credit.
(g) Borrower agrees to pay the Bank a non-refundable fee equal to the
Applicable Margin for LIBOR/IBOR Rate described in Section 1.5 less 25 basis
points applied to the outstanding undrawn amount of each standby letter of
credit. Such fee shall be calculated and payable on the date each letter of
credit is issued, and quarterly in advance thereafter, calculated on the basis
of the face amount outstanding on the day the fee is calculated, and utilizing
the Applicable Margin in effect on such date.
2. OPTIONAL INTEREST RATES
2.1 OPTIONAL RATES. Instead of the interest rate based on the Bank's
Prime Rate, the Borrower may elect the optional interest rates listed below
during interest periods agreed to by the Bank and the Borrower. The optional
interest rates shall be subject to the terms and conditions described later in
this Agreement. Any principal amount bearing interest at an optional rate under
this Agreement is referred to as a "Portion". Each optional interest rate is a
rate per year. Interest will be paid on the last day of each interest period. At
the end of any interest period, the interest rate will revert to the rate based
on the Prime Rate, unless the Borrower has designated another optional interest
rate for the Portion. No Portion will be converted to a different interest rate
during the applicable interest period, although the Applicable Margin can be
changed pursuant to Section 1.5. Upon the occurrence, and during the
continuation, of an Event of Default under this Agreement, the Bank may
terminate the availability of optional interest rates for interest periods
commencing after the Event of Default occurs. The following optional interest
rates are available:
(a) IBOR Rates.
(b) LIBOR Rates.
2.2 IBOR RATE. The election of IBOR Rates shall be subject to the
following terms and requirements:
(a) The interest period during which the IBOR Rate will be in effect will
be 90 days or less. The last day of the interest period will be determined by
the Bank using the practices of the offshore dollar inter-bank market.
(b) Each IBOR Rate Portion will be for an amount not less than the
following:
(i) for interest periods of between 7 days and 90 days, One
Million Dollars ($1,000,000).
(ii) for interest periods of between 7 days and 15 days, an
amount which, when multiplied by the number of days in the
applicable interest period, is not less than fifteen
million (15,000,000) dollar-days.
(c) The Borrower may not elect an IBOR Rate with respect to any principal
amount which is scheduled to be repaid before the last day of the applicable
interest period.
(d) The "IBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All amounts in the
calculation will be determined by the Bank as of the first day of the interest
period.)
IBOR Rate = IBOR Base Rate plus the Applicable Margin
-------------------------------------
(1.00 - Reserve Percentage)
Second Amended and Restated Loan Agreement - Page 3
Where,
(i) "IBOR Base Rate" means the interest rate at which the
Bank's Grand Cayman Branch, Grand Cayman, British West
Indies, would offer U.S. dollar deposits for the applicable
interest period to other major banks in the offshore dollar
inter-bank market.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained
by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Federal Reserve
Board Regulation D, rounded upward to the nearest 1/100 of
one percent. The percentage will be expressed as a decimal,
and will include, but not be limited to, marginal,
emergency, supplemental, special, and other reserve
percentages.
(e) Each prepayment of an IBOR Rate Portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of accrued
interest on the amount prepaid, and a prepayment fee as described below. A
"prepayment" is a payment of an amount on a date earlier than the scheduled
payment date for such amount as required by this Agreement.
(f) The prepayment fee shall be in an amount sufficient to compensate the
Bank for any loss, cost or expense incurred by it as a result of the prepayment,
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Portion
or from fees payable to terminate the deposits from which such funds were
obtained. The Borrower shall also pay any customary administrative fees charged
by the Bank in connection with the foregoing. For purposes of this paragraph,
the Bank shall be deemed to have funded each Portion by a matching deposit or
other borrowing in the applicable interbank market, whether or not such Portion
was in fact so funded.
(g) The Bank will have no obligation to accept an election for an IBOR
Rate Portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods
equal to the interest period, of an IBOR Rate Portion are
not available in the offshore dollar inter-bank market; or
(ii) the IBOR Rate does not accurately reflect the cost of an
IBOR Rate Portion.
2.3 LIBOR RATE. The election of LIBOR Rates shall be subject to the
following terms and requirements:
(a) The interest period during which the LIBOR Rate will be in effect
will be one, two, or three months. The first day of the interest period must be
a day other than a Saturday or a Sunday on which the Bank is open for business
in New York and London and dealing in offshore dollars (a "LIBOR Banking Day").
The last day of the interest period and the actual number of days during the
interest period will be determined by the Bank using the practices of the London
inter-bank market.
(b) Each LIBOR Rate Portion will be for an amount not less than the
following:
(i) for interest periods of one, two or three months, One
Million Dollars ($1,000,000).
(c) The "LIBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All amounts in the
calculation will be determined by the Bank as of the first day of the interest
period.)
LIBOR Rate = London Inter-Bank Offered Rate plus the Applicable Margin
----------------------------------------
(1.00 - Reserve Percentage)
Where,
(i) "London Inter-Bank Offered Rate" means the interest rate at
which the Bank's London Branch, London, Great Britain,
would offer U.S. dollar deposits for the applicable
interest period to other major banks in the London
inter-bank market at approximately 11:00 a.m. London time
two (2) London Banking Days before the commencement of the
interest period. A "London Banking Day"
Second Amended and Restated Loan Agreement - Page 4
is a day on which the Bank's London Banking Center is open
for business and dealing in offshore dollars.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained
by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Federal Reserve
Board Regulation D, rounded upward to the nearest 1/100 of
one percent. The percentage will be expressed as a decimal,
and will include, but not be limited to, marginal,
emergency, supplemental, special, and other reserve
percentages.
(d) The Borrower shall irrevocably request a LIBOR Rate Portion no later
than 12:00 noon time on the LIBOR Banking Day preceding the day on which the
London Inter-Bank Offered Rate will be set, as specified above. For example, if
there are no intervening holidays or weekend days in any of the relevant
locations, the request must be made at least three days before the LIBOR Rate
takes effect.
(e) The Borrower may not elect a LIBOR Rate with respect to any principal
amount which is scheduled to be repaid before the last day of the applicable
interest period.
(f) Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of accrued
interest on the amount prepaid and a prepayment fee as described below. A
"prepayment" is a payment of an amount on a date earlier than the scheduled
payment date for such amount as required by this Agreement.
(g) The prepayment fee shall be in an amount sufficient to compensate the
Bank for any loss, cost or expense incurred by it as a result of the prepayment,
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Portion
or from fees payable to terminate the deposits from which such funds were
obtained. The Borrower shall also pay any customary administrative fees charged
by the Bank in connection with the foregoing. For purposes of this paragraph,
the Bank shall be deemed to have funded each Portion by a matching deposit or
other borrowing in the applicable interbank market, whether or not such Portion
was in fact so funded.
(h) The Bank will have no obligation to accept an election for a LIBOR
Rate Portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods
equal to the interest period, of a LIBOR Rate Portion are
not available in the London inter-bank market; or
(ii) the LIBOR Rate does not accurately reflect the cost of a
LIBOR Rate Portion.
3. FEES AND EXPENSES
3.1 FEES.
(a) LOAN FEE. The Borrower agrees to pay a loan fee in the amount of
Twenty Five Thousand and 00/100 Dollars ($25,000.00). This fee is due on or
before the date of this Agreement. On the Expiration Date, the Borrower shall to
pay a one time loan fee of 0.25% of the principal balance unpaid on the
Expiration Date.
(b) UNUSED COMMITMENT FEE. The Borrower agrees to pay a fee on any
difference between the Commitment and the amount of credit it actually uses
(including, for this purpose, outstanding standby letters of credit), determined
by the weighted average credit outstanding during the specified period. The fee
will be calculated at 0.125% and charged quarterly in arrears.
3.2 EXPENSES. The Borrower agrees to immediately repay the Bank for
expenses that include, but are not limited to, filing, recording and search
fees, appraisal fees, title report fees and documentation fees.
3.3 REIMBURSEMENT COSTS.
(a) The Borrower agrees to reimburse the Bank for any expenses it incurs
in the preparation of this Agreement and any agreement or instrument required by
this Agreement in excess of those fees and costs listed above. Expenses include,
but are not limited to, reasonable attorneys' fees, including any allocated
costs of the Bank's in-house counsel.
Second Amended and Restated Loan Agreement - Page 5
(b) The Borrower agrees to reimburse the Bank for the cost of periodic
appraisals of the personal property collateral securing this Agreement, at such
intervals as the Bank may reasonably require. The appraisals may be performed by
employees of the Bank or by independent appraisers. In the absence of an Event
of Default which is continuing, the Bank will not charge Borrower for more than
one (1) periodic appraisal per year.
4. COLLATERAL AND GUARANTIES
4.1 PERSONAL PROPERTY. The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or will own
in the future as listed below. The collateral is further defined in the pledge
agreement and security agreement(s) executed by the Borrower. In addition, all
personal property collateral securing this Agreement shall also secure all other
present and future obligations of the Borrower to the Bank (excluding any
consumer credit covered by the federal Truth in Lending law, unless the Borrower
has otherwise agreed in writing). All personal property collateral securing any
other present or future obligations of the Borrower to the Bank shall also
secure this Agreement.
(a) Machinery and equipment, excluding ATM machines.
(b) Inventory, excluding ATM machines.
(c) Receivables.
(d) General intangibles, excluding general intangibles relating to ATM
machines.
(e) Contract rights, excluding contract rights relating to ATM machines.
(f) 100% of the shares of stock or other equity interests in TRM Copy
Centers (USA) Corporation.
4.2 LENT COLLATERAL - TRM COPY CENTERS (USA) CORPORATION. The
Borrower's obligations to the Bank under this Agreement will be secured by
personal property now owned or owned in the future by TRM Copy Centers (USA)
Corporation as listed below. The collateral is further defined in security
agreement(s) executed by TRM Copy Centers (USA) Corporation.
(a) Machinery and equipment.
(b) Inventory.
(c) Receivables.
(d) General intangibles
(e) Contract rights.
(f) 100% of the shares of stock or other equity interests in FPC France
Ltd. And TRM Copy Centres (Overseas) Ltd.
(g) Sixty-five percent (65%) of the shares of stock or other equity
interests in TRM Copy Centres (Canada) Ltd.
4.3 LENT COLLATERAL - TRM COPY CENTRES (OVERSEAS) LTD.
Borrower's obligations to the Bank under this Agreement will be
secured by sixty-five percent (65%) of the shares of stock or other equity
interests in TRM Copy Centres (U.K.) Ltd., which are owned by TRM Copy Centres
(Overseas) Ltd. TRM Copy Centres (U.K.) Ltd. and TRM Copy Centres (Canada) Ltd.
are referred to in this Agreement as the "Material Foreign Subsidiaries."
4.4 SUBSIDIARY GUARANTIES. The Borrower's obligations to the Bank under
this Agreement will be guaranteed by TRM Copy Centers (USA) Corporation, TRM
Copy Centres (Overseas) Ltd. and FPC France Ltd. The foregoing are called
"Guarantors."
Second Amended and Restated Loan Agreement - Page 6
5. DISBURSEMENTS, PAYMENTS AND COSTS
5.1 REQUESTS FOR CREDIT. Each request for an extension of credit will be
made in writing in a manner acceptable to the Bank, or by another means
acceptable to the Bank.
5.2 DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each
payment by the Borrower will be:
(a) made at the Bank's branch (or other location) selected by the Bank in
consultation with the Borrower, from time to time;
(b) made for the account of the Bank's branch selected by the Bank in
consultation with the Borrower, from time to time;
(c) made in immediately available funds;
(d) evidenced by records kept by the Bank. In addition, the Bank may, at
its discretion, require the Borrower to sign one or more promissory notes.
5.3 TELEPHONE AND TELEFAX AUTHORIZATION.
(a) The Bank may honor telephone or telefax instructions for advances or
repayments or for the designation of optional interest rates given, or purported
to be given, by any one of the individuals authorized to sign loan agreements on
behalf of the Borrower, or any other individual designated by any one of such
authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn from
the Borrower's account number 28011-01047, or such other of the Borrower's
accounts with the Bank as designated in writing by the Borrower.
(c) The Borrower will indemnify and hold the Bank harmless from all
liability, loss, and costs in connection with any act resulting from telephone
or telefax instructions the Bank reasonably believes are made by any individual
authorized by the Borrower to give such instructions. This paragraph will
survive this Agreement's termination, and will benefit the Bank and its
officers, employees, and agents.
5.4 DIRECT DEBIT (PRE-BILLING).
(a) The Borrower agrees that the Bank will debit the Borrower's deposit
account number 28011-01047, or such other of the Borrower's accounts with the
Bank as designated in writing by the Borrower (the "Designated Account") on the
date each payment of principal and interest and any fees from the Borrower
becomes due (the "Due Date"). If the Due Date is not a Banking Day, the
Designated Account will be debited on the next Banking Day.
(b) Approximately 5 days prior to each Due Date, the Bank will mail to
the Borrower a statement of the amounts that will be due on that Due Date (the
"Billed Amount"). The calculation will be made on the assumption that no new
extensions of credit or payments will be made between the date of the billing
statement and the Due Date, and that there will be no changes in the applicable
interest rate.
(c) The Bank will debit the Designated Account for the Billed Amount,
regardless of the actual amount due on that date (the "Accrued Amount"). If the
Billed Amount debited to the Designated Account differs from the Accrued Amount,
the discrepancy will be treated as follows:
(i) If the Billed Amount is less than the Accrued Amount, the
Billed Amount for the following Due Date will be increased
by the amount of the discrepancy. The Borrower will not be
in default by reason of any such discrepancy.
(ii) If the Billed Amount is more than the Accrued Amount, the
Billed Amount for the following Due Date will be decreased
by the amount of the discrepancy.
Regardless of any such discrepancy, interest will continue
to accrue based on the actual amount of principal
outstanding without compounding. The Bank will not pay the
Borrower interest on any overpayment.
Second Amended and Restated Loan Agreement - Page 7
(d) The Borrower will maintain sufficient funds in the Designated Account
to cover each debit. If there are insufficient funds in the Designated Account
on the date the Bank enters any debit authorized by this Agreement, the debit
will be reversed.
5.5 BANKING DAYS. Unless otherwise provided in this Agreement, a Banking
Day is a day other than a Saturday, Sunday or other day on which the Bank is
open for business in Oregon. All payments and disbursements which would be due
on a day which is not a Banking Day will be due on the next Banking Day. All
payments received on a day which is not a Banking Day will be applied to the
credit on the next Banking Day.
5.6 ADDITIONAL COSTS. The Borrower will pay the Bank, on demand, for the
Bank's costs or losses arising from any statute or regulation, or any request or
requirement of a regulatory agency which is applicable to all national banks or
a class of all national banks. The costs and losses will be allocated to the
loan in a manner determined by the Bank, using any reasonable method. The costs
include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets and
commitments for credit.
5.7 INTEREST CALCULATION. Except as otherwise stated in this Agreement,
all interest and fees, if any, will be computed on the basis of a 360-day year
and the actual number of days elapsed. This results in more interest or a higher
fee than if a 365-day year is used. Installments of principal which are not paid
when due under this Agreement shall continue to bear interest until paid.
5.8 DEFAULT RATE. Upon the occurrence of and during the continuation of
any Event of Default under this Agreement, principal amounts outstanding under
this Agreement will at the option of the Bank bear interest at a rate which is
two (2) percentage point(s) higher than the rate of interest otherwise provided
under this Agreement. This will not constitute a waiver of any Event of Default.
6. CONDITIONS
Before the Bank is required to extend any additional credit to the Borrower
under this Agreement, it must receive any documents and other items it may
reasonably require as conditions precedent to such extensions of credit, except
as provided in the "Open Terms Letter" between the parties executed the same
date as this Agreement:
6.1 AUTHORIZATIONS. Evidence that the execution, delivery and performance
by the Borrower and each Guarantor of this Agreement and any instrument or
agreement required under this Agreement have been duly authorized.
6.2 GOVERNING DOCUMENTS. A copy of the Borrower's articles of
incorporation.
6.3 SECURITY AGREEMENTS. (i) Original security agreements signed by
Borrower and by TRM Copy Centers (USA) Corporation, (ii) original pledge
agreements signed by Borrower and TRM Copy Centers (USA) Corporation covering
all of the equity securities of the Guarantors, (iii) original pledge agreements
signed by TRM Copy Centers (USA) Corporation and TRM Copy Centres (Overseas)
Ltd. covering sixty-five percent (65%) of the equity securities of the Material
Foreign Subsidiaries, and (iv) such assignments, financing statements, fixture
filings and delivery of pledged securities indorsed in blank, which the Bank
requires in connection with such security agreements and pledge agreement, all
in form and substance satisfactory to Bank..
6.4 EVIDENCE OF PRIORITY. Evidence that security interests and liens in
favor of the Bank are valid, enforceable, and prior to all others' rights and
interests, except those the Bank consents to in writing.
6.5 INSURANCE. Evidence of insurance coverage, as required in the
"Covenants" section of this Agreement.
6.6 GUARANTIES. Guaranties signed by TRM Copy Centers (USA) Corporation,
TRM Copy Centres (Overseas) Ltd. and FPC France Ltd.
6.7 LEGAL OPINION. Written opinions from the Borrower's Oregon legal
counsel, covering such matters as the Bank may require. The legal counsel and
the terms of the opinion must be acceptable to the Bank.
Second Amended and Restated Loan Agreement - Page 8
6.8 GOOD STANDING. Certificates of good standing or existence for the
Borrower and each Guarantor and Material Foreign Subsidiary from its state or
country of formation.
6.9 OTHER ITEMS. Any other items that the Bank reasonably requires.
7. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties. Each request
for an extension of additional credit constitutes a renewed representation:
7.1 ORGANIZATION OF BORROWER. The Borrower, each Guarantor and each
Material Foreign Subsidiary is a corporation duly formed and existing under the
laws of the state or jurisdiction where organized.
7.2 AUTHORIZATION. This Agreement, and any instrument or agreement
required hereunder, are within the Borrower's powers, have been duly authorized,
and do not conflict with any of its or their organizational papers.
7.3 ENFORCEABLE AGREEMENTS. This Agreement and each other agreement to be
signed by Borrower is a legal, valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms, and any
instrument or agreement required hereunder, when executed and delivered, will be
similarly legal, valid, binding and enforceable. Each Guarantee is the legal,
valid and binding agreement of the Guarantor that signs it, enforceable against
such Guarantor in accordance with its terms.
7.4 GOOD STANDING. In each state or country in which the Borrower or a
Guarantor or Material Foreign Subsidiary does business, it is properly licensed,
in good standing (if applicable) and, where required, in compliance with
fictitious name statutes, except where such failure would not have a Material
Adverse Effect.
7.5 NO CONFLICTS. This Agreement and the other agreements required herein
does not conflict with any law, agreement, or obligation by which the Borrower
or any Guarantor or Material Foreign Subsidiary is bound, except where such
conflict would not have a Material Adverse Effect.
7.6 FINANCIAL INFORMATION. All financial and other information that has
been or will be supplied to the Bank is:
(a) sufficiently complete to fairly present the Borrower's consolidated
financial condition, including all material contingent liabilities.
(b) in material compliance with all government regulations that apply.
7.7 LAWSUITS. There is no lawsuit, tax claim or other dispute, pending or
threatened against Borrower, which seeks, together with related lawsuits, tax
claims or other disputes, an aggregate of more than Two Hundred Fifty Thousand
Dollars ($250,000.00), except as has been disclosed in writing to the Bank prior
to the date hereof, or pursuant to Section 8.12(e).
7.8 COLLATERAL. All collateral required in this Agreement is owned by the
grantor of the security interest free of any title defects or any liens or
interests of others, except for Permitted Liens.
7.9 PERMITS, FRANCHISES. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged, except where such failure would
not have a Material Adverse Effect.
7.10 OTHER OBLIGATIONS. The Borrower is not in default on any material
obligation for borrowed money, any material purchase money obligation or any
other material lease, commitment, contract, instrument or obligation.
7.11 TAX MATTERS. The Borrower has no knowledge of any pending material
assessments or material adjustments of its taxes for any year, except as have
been previously disclosed to the Bank in writing.
7.12 NO TAX AVOIDANCE PLAN. The Borrower's obtaining of credit from the
Bank under this Agreement does not have as a principal purpose the avoidance of
U.S. withholding taxes.
Second Amended and Restated Loan Agreement - Page 9
7.13 NO EVENT OF DEFAULT. There is no event which is, or with notice or
lapse of time or both would be, an Event of Default under this Agreement.
7.14 INSURANCE. The Borrower has obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.
7.15 LOCATION OF BORROWER. The Borrower's place of business (or, if the
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrower's signature on this Agreement.
7.16 MATERIAL ADVERSE EFFECT. "Material Adverse Effect" means any set of
circumstances or events which:
(a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or any
related document;
(b) is or could reasonably expect to be material and adverse to the
condition (financial or otherwise), business, assets, operations or prospects of
Borrower and the Guarantors and Material Foreign Subsidiaries, taken as a whole,
or
(c) materially impairs or could reasonably be expected to materially
impair the ability of Borrower and the Guarantors, taken as a whole, to perform
their obligations under this Agreement, the Guaranties or any related
document(s).
7.17 PERMITTED LIENS. "Permitted Liens" means:
(a) Liens in favor of the Bank;
(b) Liens for taxes not yet due;
(c) Liens outstanding on the date of this Agreement, disclosed in writing
to the Bank;
(d) Carriers', warehousemen's, mechanics', materialmen's or other like
liens arising in the ordinary course of business, which are not overdue for a
period of more than 60 days, or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the applicable person;
(e) Attachment, judgment or similar liens arising in connection with
litigation or other legal proceedings (and not otherwise an Event of Default
hereunder) in the ordinary course of business that are currently being contested
in good faith by appropriate proceedings, and for which adequate reserves have
been set aside;
(f) Purchase money security interests in equipment which is non-ATM
equipment or other equipment or other fixed assets acquired after the date of
this Agreement, if the total principal amount of debts secured by such liens
does not exceed One Million Dollars ($1,000,000.00) during any one fiscal year.
(g) Security interests in ATM machines and related equipment owned by
Borrower, but not in ATM machines and related equipment owned by Guarantors or
Material Foreign Subsidiaries.
8. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:
8.1 USE OF PROCEEDS. To use the proceeds of the credit only to finance
working capital of Borrower and to finance purchase of copy machines for
Guarantors and Material Foreign Subsidiaries and ATM machines for Borrower or
its subsidiaries. In addition, up to Seven Million Dollars ($7,000,000.00) of
such proceeds may be used for the initial capitalization of ▇▇▇▇▇▇▇▇▇▇.▇▇▇, and
up to Two Million Dollars ($2,000,000.00) of such Seven Million Dollars
($7,000,000.00) may be used for the acquisition by ▇▇▇▇▇▇▇▇▇▇.▇▇▇ of Strategic
Software Solutions.
8.2 FINANCIAL INFORMATION. To provide the following financial information
and statements in form and content reasonably acceptable to the Bank, and such
additional information as requested by the Bank from time to time:
Second Amended and Restated Loan Agreement - Page 10
(a) Within 120 days of the Borrower's fiscal year end, the Borrower's
annual financial statements, certified and dated by an authorized financial
officer of the Borrower. These financial statements must be audited (with an
unqualified opinion) by a Certified Public Accountant reasonably acceptable to
the Bank.
(b) Within 45 days of the period's end, the Borrower's quarterly
financial statements, certified and dated by an authorized financial officer of
the Borrower. The statements shall be prepared by Borrower on a consolidated
basis, with consolidating financial statements included for information purposes
only.
(c) Copies of the Borrower's Form 10-K Annual Report within ten (10) days
after the date of filing with the Securities and Exchange Commission.
(d) Copies of the Borrower's Form 10-Q Quarterly Report within ten (10)
days after the date of filing with the Securities and Exchange Commission.
(e) Within 60 days of fiscal year end, Borrower prepared budgets for
subsequent two (2) years.
(f) Within the period(s) provided in (a) and (b) above, a compliance
certificate of the Borrower signed by an authorized financial officer of the
Borrower setting forth (i) the information and computations in sufficient detail
(including detailed computations removing the results for ▇▇▇▇▇▇▇▇▇▇.▇▇▇ where
necessary) to establish that the Borrower is in compliance with all financial
covenants at the end of the period covered by the financial statements then
being furnished and (ii) whether there existed as of the date of such financial
statements and whether there exists as of the date of the certificate, any
default under this Agreement and, if any such default exists, specifying the
nature thereof and the action the Borrower is taking and proposes to take with
respect thereto.
8.3 TANGIBLE NET WORTH. To maintain on a consolidated basis Tangible Net
Worth at least equal to at least 90% of Tangible Net Worth on December 31, 1999
and increasing quarterly by 50% of net income for such quarter (no credit for
losses), and 75% of new equity proceeds.
"Tangible Net Worth" means the gross book value of the Borrower's consolidated
assets (excluding goodwill, patents, trademarks, trade names, organization
expense, unamortized debt discount and expense, capitalized or deferred research
and development costs, deferred marketing expenses, deferred receivables, and
other like intangibles), less total consolidated liabilities, including but not
limited to accrued and deferred income taxes, and any reserves against assets.
"Tangible Net Worth" shall not include any assets or liabilities of
▇▇▇▇▇▇▇▇▇▇.▇▇▇.
8.4 FUNDED DEBT TO EBITDA RATIO. To maintain on a consolidated basis a
ratio of Funded Debt to EBITDA not exceeding the amounts indicated for each
period specified below:
Period Ratio
------ -----
From the date of this Agreement through June 29, 2001 Less than 2.50:1.0
From June 30, 2001 through June 29, 2002 Less than 2.25:1.0
From June 30, 2002 and thereafter Less than 2.00:1.0
"Funded Debt" means all outstanding indebtedness for borrowed money and other
interest-bearing indebtedness, including current and long term indebtedness.
"EBITDA" means the sum of net income before taxes, plus interest expense, plus
depreciation, depletion, amortization and other non-cash charges. This ratio
will be calculated at the end of each fiscal quarter, using the results of that
quarter and the three (3) immediately preceding fiscal quarters. "EBITDA" shall
not include any income, interest expense, depreciation, depletion, amortization
or other non-cash charges of ▇▇▇▇▇▇▇▇▇▇.▇▇▇.
8.5 FIXED CHARGE COVERAGE RATIO. To maintain on a consolidated basis a
Fixed Charge Coverage Ratio of at least 2.0:1.0.
"Fixed Charge Coverage Ratio" means the ratio of (a) the sum of EBITDAR, less
taxes and dividends and less extensions of credit to or investments in
▇▇▇▇▇▇▇▇▇▇.▇▇▇ in excess of those described in Section 8.11(f), to (b) the sum
of current portion of long-term debt, plus interest expense, plus rents.
"EBITDAR" means the sum of net income before taxes, plus interest expense, plus
depreciation, depletion, amortization, rents and other non-cash charges. Rents
include operating lease expense as well as the "Cash
Second Amended and Restated Loan Agreement - Page 11
Provision Fee for ATM Cash" as defined in the Loan and Servicing Agreement dated
as of March 17, 2000 among TRM Inventory Funding Trust, TRM ATM Corporation,
Autobahn Funding Company, LLC and DG Bank Deutsche Genossenschaftsbank HG, and
KeyBank National Association (the "Loan and Servicing Agreement"). "EBITDAR"
shall not include any income, interest expense, depreciation, depletion,
amortization, rents or other non-cash charges of ▇▇▇▇▇▇▇▇▇▇.▇▇▇.
This ratio will be calculated at the end of each fiscal quarter, using the
results of that quarter and the three (3) immediately preceding fiscal quarters.
8.6 OTHER DEBTS. Not to have outstanding or incur, or to permit any
subsidiary of Borrower to have or incur, any direct or contingent liabilities
(other than those to the Bank), or become liable for the liabilities of others,
without the Bank's written consent. This does not prohibit:
(a) Acquiring goods, supplies, or merchandise on normal trade credit.
(b) Endorsing negotiable instruments received in the usual course of
business.
(c) Obtaining surety bonds in the usual course of business.
(d) Liabilities in existence on the date of this Agreement and reflected
in Borrower's most recent financial statements or otherwise disclosed in writing
to the Bank.
(e) Additional debts for the acquisition of equipment or other fixed
assets, to the extent permitted elsewhere in Sections 8.6 or 8.7.
(f) Additional funded indebtedness for financing ATM machines limited to
Forty Million Dollars ($40,000,000.00) during the period where the ratio of
Funded Debt to EBITDA is greater than 2.25:1.0 but less than 2.50:1.0, and
Seventy Five Million Dollars ($75,000,000.00) during the period where the ratio
of Funded Debt to EBITDA is greater than 2.0:1.0 but less than 2.25:1.0.
8.7 OTHER LIENS. Not to create, assume, or allow, or permit Borrower or
any Guarantor or Material Foreign Subsidiary to create, assume or allow, any
security interest or lien (including judicial liens) on property it now or later
owns, except for Permitted Liens.
8.8 CAPITAL EXPENDITURES. Not to spend or incur obligations to acquire
equipment or other fixed assets, and not to permit any Guarantor or Material
Foreign Subsidiary to spend or incur obligations to acquire equipment or other
fixed assets, exceeding, in the aggregate for Borrower, Guarantors and Material
Foreign Subsidiaries, Ten Million Dollars ($10,000,000.00) in any one fiscal
year.
8.9 DIVIDENDS; STOCK REPURCHASES. Not to declare or pay any dividends on
any of its common shares except dividends payable in capital stock of the
Borrower, and not to repurchase or redeem any of its capital stock. However,
notwithstanding the foregoing prohibition, Borrower may declare and pay
dividends or repurchase capital stock so long as no Event of Default has
occurred and is continuing, and so long as the total of all dividends and stock
repurchases in any period of four consecutive quarters does not exceed 50% of
the Borrower's consolidated net income after taxes for such four quarters. Not
to pay any dividend on any of its preferred shares, if any Event of Default has
occurred and is continuing.
8.10 LOANS TO OFFICERS. Not to make, or permit any of its subsidiaries to
make, any loans, advances or other extensions of credit (including extensions of
credit in the nature of accounts receivable or notes receivable arising from the
sale or lease of goods or services) to any of its executives, officers,
directors or shareholders (or any relatives of any of the foregoing), except in
the ordinary course of business not exceeding at any one time an aggregate of
Two Hundred Thousand Dollars ($200,000.00).
8.11 LOANS AND INVESTMENTS. Not to have any existing, or make, or permit
any of its subsidiaries to have or make, any new loans or other extensions of
credit to, or investments in, any individual or entity, or make any capital
contributions or other transfers of assets to any individual or entity, except
for:
(a) existing investments in the Borrower's current subsidiaries.
Second Amended and Restated Loan Agreement - Page 12
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business to non-affiliated entities.
(c) investments in any of the following:
(i) certificates of deposit;
(ii) U.S. treasury bills and other obligations of the federal
government.
(d) extensions of credit to or investments in Guarantors and Material
Foreign Subsidiaries.
(e) extensions of credit to or investments in TRM ATM Corporation only
for the purposes of acquiring ATM machines, contributing to costs for
facilities, employees or services shared with Borrower, and for payment of other
infrastructure expenses related to ATM expansion.
(f) extensions of credit to or investments in ▇▇▇▇▇▇▇▇▇▇.▇▇▇ not to
exceed Seven Million Dollars ($7,000,000.00) from proceeds of the credit as
provided in Section 8.1.
(g) after receipt of compliance certificate and financial statements
required for the fiscal quarter ended March 31, 2001, Borrower may make
additional extensions of credit to or investments in ▇▇▇▇▇▇▇▇▇▇.▇▇▇ if:
(i) Borrower is in compliance with all financial covenants and
will continue to be in compliance, both before and
immediately after giving effect to such extensions of
credit or investment on a pro-forma basis;
(ii) the Commitment exceeds and will exceed by at least Five
Million Dollars ($5,000,000) the amount of credit Borrower
is actually using, both immediately before and immediately
after such extension of credit or investment;
(iii) Borrower notifies Bank before making any extension of
credit or investment permitted under this provision and
provides the Bank with a calculation showing compliance
with the conditions applicable to this provision; and
(iv) Borrower retains more than fifty percent (50%) direct or
indirect beneficial ownership of all voting interests and
ownership interests in ▇▇▇▇▇▇▇▇▇▇.▇▇▇ at all times after
such extension of credit or investment, the retention of
such interests becoming a covenant of Borrower from and
after such time.
(h) capital expenditures permitted by Section 8.8.
8.12 NOTICES TO BANK. To promptly notify the Bank in writing of:
(a) any substantial dispute between the Borrower (or any Guarantor or
Material Foreign Subsidiary) and any government authority.
(b) any Event of Default under this Agreement, or any event which, with
notice or lapse of time or both, would constitute an Event of Default.
(c) any material adverse change in the Borrower's (or any Guarantor's or
Material Foreign Subsidiary's) business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit.
(d) any change in the Borrower's name, legal structure, place of
business, or chief executive office if the Borrower has more than one place of
business.
(e) any lawsuit, tax claim or other dispute, pending or threatened
against Borrower, which seeks, together with related lawsuits, tax claims or
other disputes, an aggregate of more than Two Hundred Fifty Thousand Dollars
($250,000.00).
8.13 BOOKS AND RECORDS. To maintain adequate books and records.
Second Amended and Restated Loan Agreement - Page 13
8.14 AUDITS. To allow the Bank and its agents to inspect the Borrower's,
Guarantors' and Material Foreign Subsidiaries' properties and examine, audit,
and make copies of books and records at any reasonable time. If any of the
Borrower's, Guarantors' and Material Foreign Subsidiaries' properties, books or
records are in the possession of a third party, the Borrower authorizes that
third party to permit the Bank or its agents to have access to perform
inspections or audits and to respond to the Bank's requests for information
concerning such properties, books and records, affording Borrower an opportunity
to be present. Bank's right to inspect will be on prior notice to Borrower
unless an Event of Default has occurred and is continuing.
8.15 COMPLIANCE WITH LAWS. To comply, and to cause each of its
subsidiaries to comply, with the laws (including any fictitious name statute),
regulations, and orders of any government body with authority over its business,
and that of its subsidiaries.
8.16 PRESERVATION OF RIGHTS. To maintain and preserve all material rights,
privileges, and franchises the Borrower and its subsidiaries now have.
8.17 MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or
replacements to keep the Borrower's and its subsidiaries' properties in good
working condition.
8.18 PERFECTION OF LIENS. To help the Bank perfect and protect, and to
cause its subsidiaries to perfect and protect, Bank's security interests and
liens, and reimburse it for related costs it incurs to protect its security
interests and liens.
8.19 COOPERATION. To take any action, and to cause its subsidiaries to
take any action reasonably requested by the Bank to carry out the intent of this
Agreement.
8.20 INSURANCE.
(a) INSURANCE COVERING COLLATERAL. To maintain all risk property damage
insurance policies covering the tangible property comprising the collateral.
Each insurance policy must be in an amount reasonably acceptable to the Bank.
The insurance must be issued by an insurance company reasonably acceptable to
the Bank and must include a lender's loss payable endorsement in favor of the
Bank in a form reasonably acceptable to the Bank.
(b) GENERAL BUSINESS INSURANCE. To maintain insurance reasonably
satisfactory to the Bank as to amount, nature and carrier covering property
damage (including loss of use and occupancy) to any of the properties or
Borrower or its subsidiaries, public liability insurance including coverage for
contractual liability, product liability and workers' compensation and business
interruption insurance, and any other insurance which is usual for the
Borrower's business.
(c) EVIDENCE OF INSURANCE. Upon the request of the Bank, to deliver to
the Bank a copy of each insurance policy, or, if permitted by the Bank, a
certificate of insurance listing all insurance in force.
8.21 ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's written
consent, do any of the following things or permit any Guarantor or Material
Foreign Subsidiary to do such things:
(a) engage in any material business activities substantially different
from the Borrower's, Guarantor's or Material Foreign Subsidiary's present
business.
(b) liquidate or dissolve the Borrower's, Guarantor's or Material Foreign
Subsidiary's business, except that a Guarantor or Material Foreign Subsidiary
may liquidate if its assets are transferred to Borrower or another Guarantor or
Material Foreign Subsidiary.
(c) enter into any consolidation, merger, or other combination, or become
a partner in a partnership, a member of a joint venture, or a member of a
limited liability company without written consent of Bank.
(d) sell, assign, lease, transfer or otherwise dispose of any part of the
Borrower's or any Guarantor's or Material Foreign Subsidiary's business or the
Borrower's or any Guarantor's or Material Foreign Subsidiary's assets except in
the ordinary course of the Borrower's or Guarantor's or Material Foreign
Subsidiary's business, and except that Borrower, Guarantors and Material Foreign
Subsidiaries may dispose of their presently owned Savin liquid toner copy
machines.
Second Amended and Restated Loan Agreement - Page 14
(e) enter into any sale and leaseback agreement covering any of its
equipment or other fixed assets (other than relating to Savin liquid toner copy
machines).
(f) acquire or purchase a business or its assets.
(g) voluntarily suspend its business for more than 7 days in any 30-day
period.
(h) pledge or mortgage of assets of Borrower or any Guarantor or Material
Foreign Subsidiary, except for Permitted Liens.
(i) except for loans or capital contributions specifically permitted
herein, transfer money or assets to TRM ATM Corporation or any other affiliate
whose business is utilizing ATM machines.
9. HAZARDOUS WASTE INDEMNIFICATION
The Borrower will indemnify and hold harmless the Bank from any loss or
liability the Bank incurs in connection with or as a result of this Agreement,
which directly or indirectly arises out of the use, generation, manufacture,
production, storage, release, threatened release, discharge, disposal or
presence of a hazardous substance. This indemnity will apply whether the
hazardous substance is on, under or about the Borrower's property or operations
or property leased to the Borrower. The indemnity includes but is not limited to
reasonable attorneys' fees (including the reasonable estimate of the allocated
cost of in-house counsel and staff). The indemnity extends to the Bank, its
parent, subsidiaries and all of their directors, officers, employees, agents,
successors, attorneys and assigns. "Hazardous substances" means any substance,
material or waste that is or becomes designated or regulated as "toxic,"
"hazardous," "pollutant," or "contaminant" or a similar designation or
regulation under any federal, state or local law (whether under common law,
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including without limitation petroleum or natural gas. This indemnity
will survive repayment of the Borrower's obligations to the Bank.
10. DEFAULT
If any of the following events (each an Event of Default) occurs, the Bank may
do one or more of the following: declare the Borrower in default, stop making
any additional credit available to the Borrower, and require the Borrower to
repay its entire debt immediately and without prior notice. If an Event of
Default occurs under the paragraph entitled "Bankruptcy," below, with respect to
the Borrower, then the entire debt outstanding under this Agreement will
automatically be due immediately.
10.1 FAILURE TO PAY. The Borrower fails to make a payment under this
Agreement within two (2) Banking Days after the date when due.
10.2 LIEN PRIORITY. The Bank fails to have an enforceable first lien
(except for any prior liens permitted by this Agreement or to which the Bank has
consented in writing) on or security interest in any property given as security
for this Agreement (or any guaranty).
10.3 FALSE INFORMATION. The Borrower (or any Guarantor or Material Foreign
Subsidiary) has given the Bank materially false or misleading information or
representations.
10.4 BANKRUPTCY. The Borrower (or any Guarantor or Material Foreign
Subsidiary) files a bankruptcy petition or the Borrower or any Guarantor or
Material Foreign Subsidiary makes a general assignment for the benefit of
creditors. A bankruptcy petition is filed against the Borrower or any Guarantor
or Material Foreign Subsidiary and remains undismissed for 45 days; provided,
however, the Bank will not be obligated to extend any additional credit to
Borrower during such period.
10.5 RECEIVERS. A receiver or similar official is appointed for a
substantial portion of the Borrower's (or any Guarantor's or Material Foreign
Subsidiary's) business, or the business is terminated, or any Guarantor or
Material Foreign Subsidiary is liquidated or dissolved (unless such Guarantor's
or Material Foreign Subsidiary's assets are transferred to Borrower or another
Guarantor or Material Foreign Subsidiary as contemplated by Section 8.21(b)).
10.6 JUDGMENTS. Any unstayed and unsatisfied final judgments or
arbitration awards are entered against the Borrower (or any Guarantor or
Material Foreign Subsidiary), or the Borrower (or any Guarantor or Material
Foreign Subsidiary) enters into any settlement agreements with respect to any
litigation or arbitration, in an aggregate amount
Second Amended and Restated Loan Agreement - Page 15
outstanding at any time of One Million Dollars ($1,000,000.00) or more in excess
of any insurance coverage, or in excess of uncontested indemnity rights
satisfactory to Bank.
10.7 GOVERNMENT ACTION. Any government authority takes action that the
Bank believes will have a Material Adverse Effect upon the Borrower's (or any
Guarantor's or Material Foreign Subsidiary's) financial condition or ability to
repay.
10.8 MATERIAL ADVERSE CHANGE. A material adverse change occurs, or is
reasonably likely to occur, in the business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit, of the
Borrower and the Guarantors and the Material Foreign Subsidiaries, taken as a
whole.
10.9 CROSS-DEFAULT. Any default occurs under any agreement (excluding the
Loan and Servicing Agreement) in connection with any credit in excess of One
Million Dollars ($1,000,000.00) of the Borrower (or any Guarantor or Material
Foreign Subsidiary or TRM ATM Corporation or any other subsidiary of Borrower),
or which the Borrower (or any Guarantor or Material Foreign Subsidiary or TRM
ATM Corporation or any other subsidiary of Borrower) has guaranteed if the
default is not cured within thirty (30) days; provided, however, the Bank will
not be obligated to extend any additional credit to the Borrower during such
period.
10.10 CROSS-DEFAULT - LOAN AND SERVICING AGREEMENT. Any event of default
occurs under the Loan and Servicing Agreement followed by the automatic
occurrence of the "Termination Date" or the optional acceleration of the
"Termination Date" as defined in the Loan and Servicing Agreement. Any default
occurs in any future agreement which replaces the Loan and Servicing Agreement
resulting in an acceleration of the "Termination Date" or similar remedy.
10.11 DEFAULT UNDER RELATED DOCUMENTS. (i) Any default occurs under any
guaranty, subordination agreement, security agreement, pledge agreement, deed of
trust, mortgage, or other document required by this Agreement, or (ii) any such
document is no longer in effect; provided, however, in the case of clause (ii)
of this section, if, in the Bank's opinion, the breach is capable of being
remedied, the breach will not be considered an Event of Default under this
Agreement for a period of thirty (30) days after the date on which the Bank
gives written notice of the breach to the Borrower; provided, further, that the
Bank will not be obligated to extend any additional credit to the Borrower
during that period.
10.12 OTHER BANK AGREEMENTS. The Borrower (or any Guarantor or Material
Foreign Subsidiary) fails to meet the conditions of, or fails to perform any
obligation under any other agreement the Borrower (or any Guarantor or Material
Foreign Subsidiary) has with the Bank or any affiliate of the Bank, after giving
effect to any applicable cure period specified therein. If, in the Bank's
opinion, the breach is capable of being remedied, the breach will not be
considered an Event of Default under this Agreement for a period of thirty (30)
days after the date on which the Bank gives written notice of the breach to the
Borrower (such cure period to run concurrently with any applicable cure period
specified in such agreement); provided, however, that the Bank will not be
obligated to extend any additional credit to the Borrower during that period.
10.13 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the
conditions of, or fails to perform any obligation under, any term of this
Agreement not specifically referred to in this Article. This includes any
failure or reasonably anticipated failure by the Borrower to comply with any
financial covenants set forth in this Agreement, whether such failure is
evidenced by financial statements delivered to the Bank or is otherwise known to
the Borrower or the Bank. If, in the Bank's opinion, the breach is capable of
being remedied, the breach will not be considered an Event of Default under this
Agreement for a period of thirty (30) days after the date on which the Bank
gives written notice of the breach to the Borrower; provided, however, that the
Bank will not be obligated to extend any additional credit to the Borrower
during that period.
11. ENFORCING THIS AGREEMENT; MISCELLANEOUS
11.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.
11.2 OREGON LAW. This Agreement is governed by Oregon law.
11.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrower's
and the Bank's successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Bank's prior consent. The Bank may sell
participations in or, with the prior written consent of Borrower, not to be
unreasonably withheld, assign this
Second Amended and Restated Loan Agreement - Page 16
loan, and may exchange financial information about the Borrower with actual or
potential participants or assignees (subject to Section 11.5 hereof). If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrower.
11.4 ARBITRATION AND WAIVER OF JURY TRIAL.
(a) This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Bank, whether arising in contract, tort or by
statute, including but not limited to controversies or claims that arise out of
or relate to: (i) this Agreement (including any renewals, extensions or
modifications); or (ii) any document related to this Agreement (collectively a
"Claim").
(b) At the request of the Borrower or the Bank, any Claim shall be
resolved by arbitration in accordance with the Federal Arbitration Act (Title 9,
U. S. Code) (the "Act"). The Act will apply even though this Agreement provides
that it is governed by the law of a specified state.
(c) Arbitration proceedings will be determined in accordance with the
Act, the rules and procedures for the arbitration of financial services disputes
of JAMS/Endispute, LLC, a Delaware limited liability company or any successor
thereof ("JAMS"), and the terms of this paragraph. In the event of any
inconsistency, the terms of this paragraph shall control.
(d) The arbitration shall be administered by JAMS and conducted in any
U.S. state where real or tangible personal property collateral for this
credit is located or if there is no such collateral, in Oregon. All Claims
shall be determined by one arbitrator; however, if Claims exceed Five Million
Dollars ($5,000,000), upon the request of any party, the Claims shall be
decided by three arbitrators. All arbitration hearings shall commence within
ninety (90) days of the demand for arbitration and close within ninety (90)
days of commencement and the award of the arbitrator(s) shall be issued
within thirty (30) days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of
the hearing for up to an additional sixty (60) days. The arbitrator(s) shall
provide a concise written statement of reasons for the award. The arbitration
award may be submitted to any court having jurisdiction to be confirmed and
enforced.
(e) The arbitrator(s) will have the authority to decide whether any Claim
is barred by the statute of limitations and, if so, to dismiss the arbitration
on that basis. For purposes of the application of the statute of limitations,
the service on JAMS under applicable JAMS rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the
arbitrator(s). The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this Agreement.
(f) This paragraph does not limit the right of the Borrower or the Bank
to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii)
initiate judicial or nonjudicial foreclosure against any real or personal
property collateral; (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as but not limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.
(g) The filing of a court action is not intended to constitute a waiver
of the right of the Borrower or the Bank, including the suing party, thereafter
to require submittal of the Claim to arbitration.
(h) BY AGREEING TO BINDING ARBITRATION, THE PARTIES IRREVOCABLY AND
VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
CLAIM. FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO LIMIT THIS AGREEMENT TO
ARBITRATE, TO THE EXTENT ANY CLAIM IS NOT ARBITRATED, THE PARTIES IRREVOCABLY
AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
SUCH CLAIM. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING
INTO THIS AGREEMENT.
11.5 SEVERABILITY; WAIVERS; CONFIDENTIALITY.
(a) If any part of this Agreement is not enforceable, the rest of the
Agreement may be enforced.
(b) The Bank retains all rights, even if it makes a loan after an Event
of Default. If the Bank waives an Event of Default, it may enforce a later Event
of Default. Any consent or waiver under this Agreement must be in writing.
Second Amended and Restated Loan Agreement - Page 17
(c) Bank shall use any confidential non-public information concerning
Borrower and its subsidiaries that is furnished to it by or on behalf of
Borrower and its subsidiaries in connection with this Agreement (collectively,
"Confidential Information") solely for the purpose of evaluating and providing
products and services to them, and administering and enforcing this Agreement
and related documents, and it will hold the Confidential Information in
confidence. Notwithstanding the foregoing, Bank may disclose Confidential
Information to (i) any governmental agency or regulatory body having or claiming
to have authority to regulate or oversee any aspect of the Bank's business in
connection with the exercise of such authority or claimed authority; (ii) the
extent necessary or appropriate to effect or preserve Bank's security or to
enforce any right or remedy in connection with any claims asserted by or against
Bank; (iii) representatives whom it determines need to know such information for
the purposes set forth in this Section; and (iv) any bank or financial
institution or other entity to which Bank has assigned or desires to assign an
interest or participation in this Agreement or the advances, provided that any
such recipient of Confidential Information agrees to keep such Confidential
Information confidential as specified herein. For purposes hereof, the term
"Confidential Information" shall not include information that is in Bank's
possession prior to its being provided by or on behalf of Borrower, and shall
not include information which is or becomes publicly available other than
through a breach hereof by the Bank, or information that becomes available to
the Bank on a non-confidential basis.
11.6 ADMINISTRATION COSTS. The Borrower shall pay the Bank for all
reasonable costs incurred by the Bank in connection with administering this
Agreement.
11.7 ATTORNEYS' FEES. The Borrower shall reimburse the Bank for any
reasonable costs and attorneys' fees incurred by the Bank in connection with the
preparation of this Agreement or related documents and in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator. In the event that any case is commenced by or against the
Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar
or successor statute, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation, protection, or
enforcement of any rights of the Bank in such a case. As used in this paragraph,
"attorneys' fees" includes the allocated costs of the Bank's in-house counsel,
including attorneys' fees at trial, on appeal or review.
11.8 ONE AGREEMENT. This Agreement and any related security or other
agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between the
Bank and the Borrower concerning this credit;
(b) replace any prior oral or written agreements between the Bank and the
Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete and
exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
11.9 INDEMNIFICATION. The Borrower will indemnify and hold the Bank
harmless from any loss, liability, damages, judgments, and costs of any kind
resulting from claims against the Bank, relating to or arising directly or
indirectly out of (a) this Agreement or any document required hereunder, (b) any
credit extended or committed by the Bank to the Borrower hereunder, and (c) any
litigation or proceeding related to or arising out of this Agreement, any such
document, or any such credit. This indemnity includes but is not limited to
reasonable attorneys' fees (including the allocated cost of in-house counsel).
This indemnity extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys, and assigns. This
indemnity will not, however, indemnify the Bank or any other person from
liabilities caused by the gross negligence or willful misconduct of the Bank or
such person. This indemnity will survive repayment of the Borrower's obligations
to the Bank. All sums due to the Bank hereunder shall be obligations of the
Borrower, due and payable immediately without demand.
11.10 NOTICES. All notices required under this Agreement shall be
personally delivered or sent by first class mail, postage prepaid, or by
overnight courier, to the addresses on the signature page of this Agreement, or
sent by facsimile to the fax numbers listed on the signature page, or to such
other addresses as the Bank and the Borrower may specify from time to time in
writing. Notices sent by first class mail shall be deemed delivered on the
earlier of
Second Amended and Restated Loan Agreement - Page 18
actual receipt or on the fourth business day after deposit in the U.S. mail.
Notices sent by other means shall be deemed delivered on actual receipt.
11.11 HEADINGS. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.
11.12 COUNTERPARTS. This Agreement may be executed in as many counterparts
as necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.
11.13 ORAL AGREEMENTS. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND
COMMITMENTS MADE BY THE BANK AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.
This Agreement is executed as of the date stated at the top of the first page.
BANK OF AMERICA, N.A. TRM CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Typed Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Typed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: Vice President and Chief Financial Officer
Address where notices to the Bank are to be sent: Address for Notices:
Oregon Commercial Banking #02801 ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Second Amended and Restated Loan Agreement - Page 19