10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2006

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

5208 N.E. 122nd Avenue
Portland, Oregon 97230

(Address of principal executive offices) (Zip Code)

(503) 257-8766

(Registrant’s telephone number, including area code)

     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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer   o   Accelerated filer   þ   Non-accelerated filer   o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES   o   NO   þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 16,872,339 shares of common stock outstanding at March 31, 2006.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II – OTHER INFORMATION
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS
SIGNATURE
EMPLOYMENT AGREEMENT DATED MAY 3,2006
RETAINER AGREEMENT DATED MAY 3,2006
SECTION 302 CERTIFICATION OF CEO OF TRM CORP.
SECTION 302 CERTIFICATION OF CFO FOR TRM CORPORATION
SECTION 302 CERTIFICATION PRINCIPAL ACCOUNTING OFFICER
SECTION 906 CERTIFICATION OF CEO OF TRM CORP.
SECTION 906 CERTIFICATION OF CFO OF TRM CORP.
SECTION 906 CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TRM Corporation
Consolidated Balance Sheets
(unaudited)
(in thousands)

	December 31,			March 31,
	2005			2006
Assets
Current assets:
Cash and cash equivalents	$	9,708		$	3,170
Accounts receivable, net		13,231			14,136
Income tax receivable		211			298
Inventories		1,930			2,052
Prepaid expenses and other		3,610			4,194
Deferred tax asset		1,036			991
Restricted cash — TRM Inventory Funding Trust		74,962			78,450
Total current assets		104,688			103,291
Equipment, less accumulated depreciation and amortization		71,709			68,506
Deferred tax asset		1,631			1,794
Goodwill		118,875			118,692
Other intangible assets, less accumulated amortization		43,044			40,325
Other assets		1,835			1,861
Total assets	$	341,782		$	334,469
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	13,218		$	12,799
Accrued expenses		14,788			8,108
Accrued expenses of TRM Inventory Funding Trust		152			154
Current portion of long-term debt		91,605			90,070
TRM Inventory Funding Trust note payable		73,269			76,799
Current portion of obligations under capital leases		828			765
Total current liabilities		193,860			188,695
Obligations under capital leases		686			505
Deferred tax liability		5,430			5,120
Other long-term liabilities		380			367
Total liabilities		200,356			194,687
Minority interest		1,500			1,500
Shareholders’ equity:
Common stock, no par value — 50,000 shares authorized; 16,872 shares issued and outstanding (16,871 at December 31, 2005)		131,545			131,630
Additional paid-in capital		63			63
Accumulated other comprehensive income:
Accumulated foreign currency translation adjustments		2,958			2,650
Other		(74	)		4
Retained earnings		5,434			3,935
Total shareholders’ equity		139,926			138,282
Total liabilities and shareholders’ equity	$	341,782		$	334,469

See accompanying notes to consolidated financial statements.

1

TRM Corporation
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)

	Three months ended
	March 31,
	2005			2006
Sales	$	58,812		$	52,953
Less discounts		25,407			24,037
Net sales		33,405			28,916
Cost of sales:
Cost of vault cash		2,045			2,211
Other		15,454			14,959
Gross profit		15,906			11,746
Selling, general and administrative expense (including non-cash stock compensation of $83 in 2006)		11,088			11,526
Asset write-offs		152			187
Operating income		4,666			33
Interest expense		2,404			2,278
Other expense (income), net		(246	)		(297	)
Income (loss) before income taxes		2,508			(1,948	)
Provision (benefit) for income taxes		857			(449	)
Net income (loss)	$	1,651		$	(1,499	)
Basic and diluted per share information:
Net income (loss)	$	1,651		$	(1,499	)
Preferred stock dividends		(147	)		—
Income allocated to Series A preferred shareholders		(57	)		—
Net income (loss) available to common shareholders	$	1,447		$	(1,499	)
Weighted average common shares outstanding		13,408			16,871
Dilutive effect of stock options		892			—
Dilutive effect of warrants		84			—
Weighted average common shares outstanding, assuming dilution		14,384			16,871
Net income (loss) per share:
Basic	$	.11		$	(.09	)
Diluted	$	.10		$	(.09	)

See accompanying notes to consolidated financial statements.

2

TRM Corporation
Consolidated Statement of Shareholders’ Equity
(unaudited)
(in thousands)

										Accumulated
								Additional		other
	Comprehensive			Common				paid-in		comprehensive			Retained
	income			Shares		Amounts		capital		income			earnings			Total
Balances, December 31, 2005					16,871	$	131,545	$	63	$	2,884		$	5,434		$	139,926
Comprehensive loss:
Net loss	$	(1,499	)		—		—		—		—			(1,499	)		(1,499	)
Other comprehensive income (loss):
Foreign currency translation adjustment		(308	)		—		—		—		(308	)		—			(308	)
Other		78			—		—		—		78			—			78
Comprehensive loss	$	(1,729	)
Exercise of stock options					1		2		—		—			—			2
Amortization of restricted stock grants							47										47
Stock option expense					—		36		—		—			—			36
Balances, March 31, 2006					16,872	$	131,630	$	63	$	2,654		$	3,935		$	138,282

See accompanying notes to consolidated financial statements.

3

TRM Corporation
Consolidated Statements of Cash Flows
(unaudited)
(In thousands)

	Three months ended
	March 31,
	2005			2006
Operating activities:
Net income (loss)	$	1,651		$	(1,499	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		4,928			5,337
Non-cash stock compensation		—			83
Loss on disposal of equipment		151			230
Provision for doubtful accounts		27			50
Changes in items affecting operations:
Accounts receivable		(2,838	)		(467	)
Inventories		(126	)		688
Income tax receivable		25			(87	)
Prepaid expenses and other		(285	)		(585	)
Accounts payable		(3,987	)		(407	)
Accrued expenses		(1,050	)		(6,679	)
Deferred income taxes		706			(431	)
Total operating activities		(798	)		(3,767	)
Investing activities:
Proceeds from sale of equipment		35			21
Capital expenditures		(4,794	)		(963	)
Acquisition of intangible and other assets		(465	)		(164	)
Total investing activities		(5,224	)		(1,106	)
Financing activities:
Borrowings on notes payable		5,697			6,254
Repayment of notes payable		(2,501	)		(7,745	)
Principal payments on capital lease obligations		(614	)		(275	)
Increase in restricted cash		(1,153	)		(3,488	)
Proceeds from issuance of TRM Inventory Funding Trust note, net of repayments		1,248			3,530
Proceeds from exercise of stock options		72			2
Preferred stock dividends		(220	)		—
Other		(13	)		(13	)
Total financing activities		2,516			(1,735	)
Effect of exchange rate changes		2			70
Net decrease in cash and cash equivalents		(3,504	)		(6,538	)
Beginning cash and cash equivalents		5,576			9,708
Ending cash and cash equivalents	$	2,072		$	3,170
Supplemental cash flow information:
Non-cash transactions -
Conversion of preferred shares to common shares	$	11,620		$	—
Payments:
Cash paid for interest	$	2,799		$	1,959
Cash paid for income taxes	$	101		$	133

See accompanying notes to consolidated financial statements.

4

TRM Corporation

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Interim Financial Data

     The consolidated financial statements of TRM Corporation and its subsidiaries included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("the SEC") and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are necessary for a fair statement of the results of the interim periods. These consolidated financial statements should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2005. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The results of operations for the periods presented are not necessarily indicative of the results to be expected for any subsequent interim period or for the year ending December 31, 2006.

     Our consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We incurred a net loss of $8.9 million in 2005 and a net loss of $1.5 million in the first quarter of 2006. As a result of our 2005 and first quarter 2006 financial performance, we failed to meet certain financial covenants of our financing agreement with Bank of America, N.A. and other lenders. As discussed further in Note 5, we have entered into a Forbearance Agreement and Amendment with our lenders pursuant to which they have agreed not to take any action with regard to our covenant violations prior to June 15, 2006. However, we do not expect to meet all of our financial covenants for the second quarter of 2006, because some of the covenant calculations include results of operations for the most recent twelve-month period, and we incurred substantial losses in the fourth quarter of 2005. Therefore, we expect that the lenders will have the right to require payment in full of our outstanding debt under our financing agreement ($90.1 million at March 31, 2006) unless we refinance our debt under the financing agreement or obtain additional forbearance. In addition, there are claimed cross-default provisions in our facility for funding the cash which is placed in our ATMs (“vault cash”) in the United States. We have entered into a forbearance agreement with the lenders under the United States vault cash facility which also terminates on June 15, 2006. If we do not refinance the outstanding debt under our financing agreement or obtain additional forbearance, we expect to be declared in default of the provisions of our vault cash facility as well, and the lender will 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. 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 continue to defer payment of our liabilities under our financing agreement, or to refinance them.

5

     We expect to be able to refinance the outstanding balances under our financing agreement and have entered into a letter of intent with an investment firm to do so. However, we can provide no assurance that we will succeed in finalizing the refinancing before the end of the forbearance period, or at all. If we are unable to refinance our debt or to get our lenders to agree to further forbearance from calling our loans, we might be forced to seek protection of the courts through reorganization, bankruptcy or insolvency proceedings.

     If we refinance the outstanding balances under our financing agreement, or if the balance is demanded by the lender, the remaining unamortized deferred financing costs of $2.4 million as of March 31, 2006 associated with this credit facility will need to be written off in the period of refinancing or demand.

2. Financial Statement Reclassifications

     Certain financial statement reclassifications have been made to prior period amounts to conform to the current period presentation. These changes had no impact on shareholders’ equity or previously reported net income.

3. Net Income Per Share

     Basic and diluted net income (loss) per share are based on the weighted average number of shares outstanding during each period, with diluted net income (loss) per share including the effect of potentially dilutive securities. For diluted net income (loss) per share, the calculation includes the effect of potentially dilutive securities, unless such effect is antidilutive. Weighted average common shares outstanding, assuming dilution, include the incremental shares that would be issued upon the assumed exercise of stock options. For the three months ended March 31, 2006, our stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been dilutive. Our options could be antidilutive in the future.

4. Inventories (in thousands):

	December 31,		March 31,
	2005		2006
Parts	$	1,239	$	1,611
ATMs held for resale		654		380
Paper, toner and developer		37		61
Total	$	1,930	$	2,052

5. Long-Term Debt (in thousands):

	December 31,			March 31,
	2005			2006
Syndicated loan facility:
Term loan	$	82,182		$	80,315
Lines of credit		9,394			9,755
Other long term debt		29			—
		91,605			90,070
Less current portion of long term debt		(91,605	)		(90,070	)
	$	—		$	—

6

     In November 2004 we and Bank of America, N.A., our primary lender, executed a credit agreement to refinance our existing revolving loan. The facility included a $120 million term loan maturing in November 2010 and $15 million each for domestic and foreign revolving lines of credit maturing November 19, 2009. Bank of America, N.A. has issued a letter of credit in the amount of $3.8 million at March 31, 2006 to guarantee our performance under our agreements relating to TRM Inventory Funding Trust and a letter of credit of £750,000 (approximately $1.3 million) in connection with our attempt to acquire the ATM business of Travelex. The agreement contains covenants that require us to maintain a minimum net worth and certain financial ratios related to debt coverage and funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) and contains certain cross-default provisions.

     On March 15, 2006, because of defaults in covenants requiring certain funded debt to earnings and debt coverage ratios, we entered into a Forbearance Agreement and Amendment with the lenders. We have also failed to meet the funded debt to earnings and debt coverage ratios for the first quarter of 2006. However, pursuant to the Forbearance Agreement and Amendment and subject to certain conditions, the lenders have agreed until June 15, 2006, to forbear from exercising any and all rights or remedies available to them as a result of the events of default we have acknowledged. Under the terms of the amended agreement, the maximum amounts available under our domestic and foreign lines of credit until June 15, 2006 have been reduced to $15 million and $5 million, respectively. The amendment to our agreement also increased the interest rates on borrowings under our credit facility.

     As of March 31, 2006, we had balances of $80.3 million outstanding pursuant to the term loan, $6.3 million under the domestic line of credit, and $3.5 million under the foreign line of credit. The amounts available to us at March 31, 2006 under the domestic and foreign lines of credit as amended was $5.1 million. Interest is due monthly on the term loan; principal is payable in quarterly installments of $1.9 million through September 30, 2010, with the remaining balance due November 19, 2010. We may be required to prepay a portion of the loans under certain conditions. We believe that it is unlikely that we will meet certain of the financial covenants at the end of the second quarter of 2006, in which case the lenders will have the right to require payment in full of our outstanding debt unless the forbearance period is extended. Therefore, the entire balance of the term loan and borrowings under the lines of credit is classified as a current liability on our consolidated balance sheet. Interest is at one of two rates, elected at our option, for the term loan and revolving loans:

• the base rate plus the applicable rate, or

• the London Interbank Offered Rate (“LIBOR”) plus the applicable rate plus mandatory costs.

The base rate is equal to the higher of the federal funds rate, plus ¹/2 of 1%, or the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” LIBOR is the British Bankers Association LIBOR as published by Reuters. Mandatory costs reflect the costs of compliance with the requirements of the Bank of England and/or the Financial Services Authority and the requirements of the European Central Bank.

7

     The applicable rate for the term loan under the amended agreement is as follows:

• Where our consolidated leverage ratio, that is, the ratio of our debt to EBITDA is less than 2.5, the applicable rate is 4.5% for LIBOR loans and 3.0% for base rate loans; and

• Where our consolidated leverage ratio is greater than or equal to 2.5, the applicable rate is 5.0% for LIBOR loans and 3.5% for base rate loans.

     The applicable rate for the domestic and foreign lines of credit under the amended agreement is as follows:

• Where our consolidated leverage ratio is less than 2.25, the applicable rate is 3.25% for LIBOR loans and 1.75% for base rate loans.

• Where our consolidated leverage ratio is greater than or equal to 2.25 but less than 2.75, the applicable rate is 3.5% for LIBOR loans and 2.0% for base rate loans.

• Where our consolidated leverage ratio is greater than or equal to 2.75 but less than 3.25, the applicable rate is 3.75% for LIBOR loans and 2.25% for base rate loans.

• Where our consolidated leverage ratio is greater than or equal to 3.25, the applicable rate is 4.0% for LIBOR loans and 2.5% for base rate loans.

The foreign line of credit accrues interest as a LIBOR loan.

     As of March 31, 2006, the weighted average interest rate on the term loan was 9.78%; interest rates on the domestic and foreign lines of credit were 10.25% and 7.35%, respectively.

     We entered into a three-year interest rate cap on March 31, 2005 with a notional amount of $50 million. If the LIBOR interest rate rises above 5% any time through March 31, 2008, we will receive payments that reduce the interest rate on the $50 million notional amount to 5% plus the applicable rate and mandatory costs in accordance with the loan agreement. The objective of the interest rate cap is to ensure that we are not exposed to interest rate increases beyond 5% on $50 million of our outstanding term loan for the three-year period which began March 31, 2005. Pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” we have designated the interest rate cap as a cash flow hedge of $50 million of our LIBOR-based variable rate term loan. We expect the hedge of the term loan to be highly effective in offsetting potential changes in cash flows attributed to an increase in interest rates beyond 5%. Accordingly, we record as a component of accumulated other comprehensive income (loss) all unrealized gains and losses on the interest rate cap. We will record any realized gains on the interest rate cap as a reduction of interest expense on the term loan, if and when the LIBOR interest rate exceeds 5%. We are exposed to credit risk arising from the counterparty to the interest rate cap, but currently believe that our exposure to such credit risk is low.

8

     Borrowings pursuant to the agreement with Bank of America, N.A. are collateralized by a first lien on our United States companies’ machinery and equipment, inventories, receivables and intangible assets, as well as a pledge of the stock of certain of our foreign subsidiaries.

6. Shareholders’ Equity

  Common Stock Options

     Prior to 2006, we applied Accounting Principles Board Opinion 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. The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” during the first quarter of 2005 (in thousands, except per share data):

	Three months ended
	March 31, 2005
Net income, as reported	$	1,651
Deduct total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(373	)
Pro forma net income	$	1,278
Basic net income per share:
As reported	$	.11
Pro forma	$	.08
Diluted net income per share:
As reported	$	.10
Pro forma	$	.08

     In December 2004, the Financial Accounting Standards Board 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 to be 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 would be based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the

9

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 are 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 have not vested by the adoption date. We have 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 most of our previously granted stock options had vested prior to the end of 2005 and no new options have been issued during 2006, the effect of adopting SFAS 123R on our results of operations, loss per share and cash flow for the first quarter of 2006 was not material.

     Non-cash stock compensation expense for the first three months of 2006 is included in selling, general and administrative expense and includes amortization of previously unvested stock option grants and amortization of restricted shares of common stock granted to our directors during 2005, as follows (in thousands):

Option grants	$	36
Restricted shares		47
	$	83

     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 the quarter ended March 31, 2006 follows:

	Shares			Weighted
	under			average
	option			exercise price
Balance January 1, 2006		1,457,015		$	5.94
Options exercised		(1,250	)		1.80
Options forfeited		(28,750	)		9.06
Balance March 31, 2006		1,427,015			5.88

     As of March 31, 2006, options to acquire 1,296,763 shares at a weighted average exercise price of $6.11 per share were exercisable. As of March 31, 2006, there was approximately $398,000 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 1.4 years.

     During the fourth quarter of 2005, grants of 27,000 restricted shares were made to our directors, of which 3,000 shares were forfeited during the first quarter of 2006, and 24,000 shares

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remained outstanding as of March 31, 2006. The fair value of the shares at the grant date was $13.97 per share. None of the restricted shares had vested as of March 31, 2006.

     We did not grant any options in the first quarter of 2005 or the first quarter of 2006. The intrinsic value of options exercised was $114,000 and $6,000 during the first quarter of 2005 and 2006, respectively.

     Options outstanding that were fully vested or expected to vest as of March 31, 2006:

Number of shares under option		1,427,015
Weighted average exercise price	$	5.88
Aggregate intrinsic value	$	1,393,000
Weighted average remaining contractual term	2.7 years

     All fully vested options are currently exercisable as of March 31, 2006.

     None of our outstanding options were modified during 2005 or during the first quarter of 2006. However, in April 2006 we extended the termination date of certain options and accelerated the vesting of certain options granted to our former President and Chief Executive Officer. In connection with this action we will record non-cash compensation expense of $618,000 in the second quarter of 2006.

7. Provision for Income Taxes

     Our effective tax rate for the first three months of 2006 was 23.0%, resulting in a tax benefit of $449,000. For the first three months of 2005, our effective tax rate was 34.2%, and the tax provision was $857,000. The 2006 rate differs from the United States statutory rate of 34% due to the nondeductiblity of interest in the United Kingdom and losses in Canada, for which no tax benefit can be recorded.

8. Segment Reporting

     We have two reportable segments: Automated Teller Machines (“ATM”) and Photocopy. ATM owns and operates ATM machines in retail establishments, sells ATM machines, and services equipment for others. Photocopy owns and maintains self-service photocopiers in retail establishments.

     The accounting policies of the segments are substantially the same as those described in Note 1 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2005. We evaluate each segment’s performance based on operating income or loss excluding costs of raising capital and pursuing potential acquisitions. Information regarding the operations of these reportable segments is as follows (in thousands):

11

	Three months ended
	March 31,
	2005			2006
Net sales:
ATM	$	24,527		$	21,302
Photocopy		8,878			7,614
	$	33,405		$	28,916
Operating income (loss) excluding unallocated costs:
ATM	$	5,753		$	2,192
Photocopy		477			(602	)
	$	6,230		$	1,590
Reconciliation of segment data to income (loss) before income taxes:
Operating income excluding unallocated costs	$	6,230		$	1,590
Unallocated costs		(1,564	)		(1,557	)
Interest expense		(2,404	)		(2,278	)
Other income, net		246			297
Income (loss) before income taxes	$	2,508		$	(1,948	)

     Management periodically reviews the expenses associated with each business segment as well as those expenses that are for general corporate purposes, but not directly related to the operation of any one business segment, such as the cost of raising capital and pursuing acquisitions. Unallocated costs are those expenses management believes are attributable to general corporate purposes.

Total assets as of March 31, 2006 (in thousands):

ATM (including goodwill of $118.7 million)	$	290,662
Photocopy		43,807
	$	334,469

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

     Statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business constitute 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 “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2005. 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

     We are a large-scale, multinational owner and operator of automated teller machine, or ATM, networks with operations in the United States, the United Kingdom and Canada. During the first quarter of 2006 our networks had an average of 18,321 transacting ATMs. In addition, with an average of 23,420 self-service merchant-based photocopiers in the United States, the United Kingdom and Canada during the first quarter of 2006, we believe we have the largest photocopier network in the world.

     In 2005, we incurred a net loss of $8.9 million. Subsequent to the end of 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 the credit facility administered by Bank of America. We have entered into a forbearance agreement with the lenders with respect to that facility. In addition, there are claimed cross-default provisions in our facility for funding the cash which is placed in our ATMs (which we refer to as “vault cash”) in the United States. We have entered into a forbearance agreement with the lender under that facility as well. For a discussion of these defaults and potential defaults, the forbearance agreements and their effect on

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us, see “Liquidity and Capital Resources – Bank of America Credit Facility” and “– United States Vault Cash Facility.”

     During the first quarter of 2006, our ATM networks had an average of 18,321 transacting machines deployed throughout the United Kingdom, United States and Canada representing a decrease of 1,944 ATMs (or 9.6%) when compared to the first quarter of 2005. The decrease in the number of ATMs was principally due to attrition of ATM contracts acquired in our acquisition of the ATM business of eFunds Corporation in November 2004. Our ATM operations produced net sales of $21.3 million during the first quarter of 2006, a decrease of $3.2 million (or 13.1%) as compared to the same period in the prior year.

     During the first quarter of 2006, we had an average of 23,420 installed photocopiers in the United States, Canada and the United Kingdom, a decrease of 1,250 photocopiers (or 5.1%) when compared to the average for the first quarter of the prior year. The decrease in the number of photocopiers was caused primarily by the elimination of low volume sites. Photocopy net sales were $7.6 million for the quarter ended March 31, 2006, down from $8.9 million during the same period in the prior year.

Consolidated Results of Operations

     The following table sets forth, for the periods indicated, statement of operations data, expressed as a percentage of sales of each item on our Consolidated Statements of Operations.

	Three months ended March 31
	2005			2006
Sales		100.0	%		100.0	%
Less discounts		43.2			45.4
Net sales		56.8			54.6
Cost of vault cash		3.5			4.2
Other cost of sales		26.3			28.2
Gross profit		27.0			22.2
Selling, general and administrative expense		18.8			21.8
Asset write-offs		.3			.3
Operating income		7.9			.1
Interest expense		4.1			4.3
Other (income) expense, net		(.5	)		(.6	)
Income (loss) before income taxes		4.3			(3.6	)
Provision (benefit) for income taxes		1.5			(.8	)
Net income (loss)		2.8	%		(2.8	)%

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Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

ATM Results of Operations

	Three months ended March 31,
			% of					% of
	2005		sales			2006		sales
	(in thousands, except operating and percentage data)
Transaction-based sales	$	43,651		90.7	%	$	39,516		90.2	%
Service and other sales		2,896		6.0			2,744		6.3
Sales of ATM equipment		1,565		3.3			1,533		3.5
Total sales		48,112		100.0			43,793		100.0
Less discounts		23,585		49.0			22,491		51.4
Net sales		24,527		51.0			21,302		48.6
Cost of sales
Cost of vault cash		2,045		4.3			2,211		5.0
Other		9,667		20.1			9,361		21.4
Gross profit	$	12,815		26.6	%	$	9,730		22.2	%
Operating Data:
Average number of transacting ATMs		20,265					18,321
Withdrawal transactions		18,588,309					17,288,166
Average withdrawals per ATM per month		306					315
Average transaction-based sales per withdrawal transaction	$	2.35				$	2.29
Average discount per withdrawal transaction	$	1.27				$	1.30
Net transaction-based sales per withdrawal transaction	$	1.08				$	.98

Photocopy Results of Operations

	Three months ended March 31,
			% of					% of
	2005		sales			2006		sales
	(in thousands, except operating and percentage data)
Sales	$	10,700		100.0	%	$	9,160		100.0	%
Less discounts		1,822		17.0			1,546		16.9
Net sales		8,878		83.0			7,614		83.1
Cost of sales		5,787		54.1			5,598		61.1	%
Gross profit	$	3,091		28.9	%	$	2,016		22.0	%
Operating Data:
Average number of photocopiers		24,670					23,420
Average photocopies per machine per month		1,749					1,367
Average sales per photocopier per month	$	144.57				$	130.37
Average sales per photocopy	$	.083				$	.095
Average discount per photocopy	$	.014				$	.016
Average net sales per photocopy	$	.069				$	.079
Average gross profit per photocopy	$	.024				$	.021

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Sales

     For the first quarter of 2006, consolidated sales decreased by $5.9 million, or 10%, to $53.0 million from $58.8 million for the first quarter of 2005. ATM sales decreased by $4.3 million due primarily to a reduction in the number of transacting ATMs in our networks, while photocopier sales decreased by $1.5 million due to a decline in installed photocopiers and in the average number of photocopies per machine.

     During the first quarter of 2006, sales and expenses were affected by the decline in value of the U.S. dollar as compared to the Canadian dollar and an increase in the value of the U.S. dollar compared to the British pound. Approximately 31% of consolidated sales for the quarter were generated in the United Kingdom and Canada by our subsidiaries in those countries. The average exchange rates during the first quarter of 2006 were U.S. $1.754 to £1.00 and U.S. $.872 to Canadian $1.00, compared to U.S. $1.902 to £1.00 and U.S. $.813 to Canadian $1.00 during the first quarter of 2005. As a result of these changes in the value of the British pound and Canadian dollar, we reported $630,000 less in sales during the first quarter of 2006 than we would have reported had the exchange rates remained constant at the averages for the first quarter of 2005. This reduction was substantially offset by corresponding exchange rate-related decreases in expenses.

     ATM sales. ATM sales were $43.8 million for the first quarter of 2006 compared to $48.1 million for the first quarter of the prior year. The $4.3 million decrease in ATM sales was primarily a result of a $4.1 million decrease in transaction-based sales.

     The $4.1 million decrease in transaction-based sales resulted from:

• A 9.6% decrease in the average number of transacting ATMs in our networks, primarily as a result of attrition of the contracts acquired from eFunds Corporation in November 2004. We expect that the number of ATMs in our networks will continue to decrease during the remainder of 2006. However, we expect the decrease to be at a lower rate than that experienced during the last twelve months.

• A 2.6% decrease in average transaction-based sales per withdrawal transaction, to $2.29 from $2.35 in the first quarter of the prior year.

     The decreases in the number of ATMs in our network and sales per withdrawal transaction were partially offset by:

• A 2.9% increase in average withdrawals per ATM per month, to 315 from 306 in the first quarter of the prior year.

     The change in the value of the British pound and Canadian dollar relative to the U.S. dollar for the first quarter of 2006 compared to same period in the prior year, resulted in a $616,000 decrease in ATM sales. This decrease was substantially offset by exchange rate-related decreases in costs.

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     Photocopier sales. Photocopier sales in the first quarter of 2006 were $9.2 million compared to $10.7 million in the first quarter of the prior year. The $1.5 million decrease resulted primarily from:

• Declining photocopy volume — Continuing a trend, photocopy volume declined by 26% for the first quarter of 2006 compared to the same period in the prior year, to 96 million copies from 129 million copies, due to a combination of:

• A decline in installed photocopiers to an average of 23,420 in the first quarter of 2006 from an average of 24,670 for the same period in the prior year, as we continued a program of eliminating lower volume sites that were either unprofitable or marginally profitable; and

• A decline in the average number of photocopies made per unit per month to 1,367 for the first quarter of 2006 from 1,749 for the same period in the prior year due to price increases that became effective in early 2006, as well as competition from alternative media and copying services.

     The declining volume was partially offset by an increase in our average sales per copy, to $.095 in the first quarter of 2006 from $.083 in the same period in the prior year due to our efforts to work with merchants to increase prices in late 2005 and early 2006.

Sales Discounts

     Sales discounts on a consolidated basis as a percentage of sales were 45.4% in the first quarter of 2006 and 43.2% in the first quarter of 2005. Sales discounts in the ATM business increased to 56.9% of transaction-based sales in the first quarter of 2006 from 54.0% in the first quarter of the prior year. ATM sales discounts in the first quarter of 2005 were lower than normal due to an accrual for recovery of overpayments to merchants credited to discounts in that quarter. ATM sales discounts in the first quarter of 2006 of 56.9% of transaction based sales are slightly lower than the comparable percentage (57.6%) for all of 2005. Sales discounts in the photocopier business decreased in the first quarter of 2006 to 16.9% of sales from 17.0% in the first quarter of the prior year, as a result of declining volumes and merchant contracts that provide percentage discounts that decrease as copy volume decreases.

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Cost of Sales

     Cost of sales on a consolidated basis increased to 32.4% of sales in the first quarter of 2006, from 29.8% in the first quarter of the prior year. Cost of sales as a percentage of sales increased in both the ATM and photocopier segments.

     ATM cost of sales. Cost of sales in our ATM operations decreased by $140,000 to $11.6 million in the first quarter of 2006 from $11.7 million for the same time period in the prior year, as a result of:

• A $305,000 decrease in the cost of ATM machines sold.

• A decrease in our ATM networks to an average of 18,321 transacting ATMs in the first quarter of 2006 compared to an average of 20,265 transacting ATMs in the same period of the prior year. This decrease in transacting units resulted in:

• a $240,000 decrease in the cost of parts, and

• a $157,000 decrease in telecommunication and processing fees.

• A $162,000 decrease in rental expense caused by the termination of an operating lease for ATM equipment.

• Exchange rate effects – The ATM segment reported $311,000 less in cost of sales in the first quarter of 2006 than it would have reported had the exchange rate for the British pound remained at the average for the first quarter of the prior year.

     The decreases in cost of ATM sales were partially offset by:

• A $346,000 increase in the cost of armored car carriers, partially as a result of a program to reduce cash balances in our ATM machines resulting in more frequent cash deliveries.

• A $320,000 increase in depreciation due primarily to depreciation on the cost of upgrading ATM equipment in the United Kingdom to meet EMV standards during 2005.

• A $166,000 increase in the cost of vault cash caused by increasing interest rates.

     However, expressed as a percentage of sales, cost of sales in our ATM operations increased to 26.4% of sales from 24.3% in the first quarter of the prior year primarily because of increases in the cost of armored car services and vault cash and the increase in depreciation expense.

     Photocopier cost of sales. Cost of sales in our photocopier operations decreased to $5.6 million in the first quarter of 2006 compared to $5.8 million for the same period in the prior year. The reduction in photocopy volume resulted in a decrease in the cost of parts and supplies by $240,000.

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     However, as a percent of sales, cost of sales in our photocopier operations increased to 61.1% of sales from 54.1% in the first quarter of the prior year. This increase as a percent of sales was due primarily to a $34,000 increase in labor costs and a $93,000 increase in auto expense due to increased fuel costs despite reduced photocopy volumes and sales.

Selling, General and Administrative Expense

     Selling, general and administrative expense increased by $438,000 to $11.5 million in the first quarter of 2006 from $11.1 million in the first quarter of the prior year. Selling, general and administrative expense as a percent of sales increased to 21.6% in the first quarter of 2006 from 18.8% in the first quarter of the prior year. Specific increases included:

• The cost of compliance with Sarbanes-Oxley increased by $573,000 due to implementation costs relating to compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

• Legal expense increased by $259,000, due primarily to increased compliance costs and other corporate matters.

• Consulting fees increased by $171,000 due primarily to the cost of improving our information systems technology.

• Business use, sales and value added tax increased by $145,000 due primarily an increase in purchases subject to VAT and a decrease in the percentage of VAT recoverable.

     The increases in selling, general and administrative expense were partially offset by:

• Labor expense decreased by $599,000. The decrease in labor cost was due in part to a $280,000 reduction in incentive compensation expense. In late 2004 and early 2005 retention bonuses were paid to our executives that were charged to expense during 2005. No such bonuses were paid at the end of 2005 or in early 2006.

• Amortization expense decreased by $168,000, primarily due to the declining amortization of intangible assets relating to ATM contracts.

• The changes in the value of the British pound and Canadian dollar caused a decrease of $137,000 in selling, general and administrative expense.

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     As required by SFAS No. 123R, effective in the first quarter of 2006 we have begun to recognize compensation expense relating to stock option grants that were not vested at the beginning of 2006. Also, in the fourth quarter of 2005, we issued shares of restricted stock to our directors. The fair value of these shares on the date of issuance is being charged to expense over the vesting period. The expense relating to our stock options and restricted stock grants is reported as non-cash compensation expense included in selling, general and administrative expense in our consolidated statement of operations.

     In April 2006 we determined to extend the termination date of certain options and accelerate the vesting of certain options granted to our former President and Chief Executive Officer. In connection with this action we will record non-cash compensation expense of $618,000 in the second quarter of 2006.

Asset Write-offs

     Asset write-offs were $187,000 in the first quarter of 2006, an increase of $35,000 from the same period in the prior year.

Interest Expense

     Interest expense decreased by $126,000 to $2.3 million in the first quarter of 2006 from $2.4 million in the first quarter of 2005. The decrease in interest expense is due primarily to a decrease in the average balance outstanding offset by an increase in our average term loan interest rate from 6.89% at March 31, 2005 to 9.78% at March 31, 2006. In the first quarter of 2006 our average interest-bearing debt was $92.2 million. In the first quarter of 2005 our average interest-bearing debt was approximately $135 million, mostly borrowings pursuant to our $150 million syndicated loan facility underwritten and arranged by Bank of America, N.A. We expect that interest expense will increase materially in the second quarter of 2006 as a result of our defaults under our credit facility with Bank of America, the resultant forbearance agreement and higher interest rates. We discuss this facility in “Liquidity and Capital Resources – Bank of America Credit Facility.”

Tax Rate

Our effective tax rate for the first quarter of 2006 was 23.0%, resulting in a tax benefit of $449,000. For the first quarter of the prior year, the effective tax rate was 34.2%, and the tax provision was $857,000. The 2006 rate differs from the United States statutory rate of 34% due to the nondeductiblity of interest in the United Kingdom and losses in Canada, for which no tax benefit can be recorded.

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Net Income (Loss)

     Net loss for the first quarter of 2006 was $1.5 million, a decrease of $3.2 million compared to the $1.7 million in net income for the same period in the prior year. Income (loss) available to common shareholders was a loss of $1.5 million in the first quarter of 2006 and income of $1.4 million in the first quarter of 2005.

Liquidity and Capital Resources

General

     Our principal ongoing funding requirements are for working capital to finance our operations, service debt and service lease obligations. Unless we receive an additional extension of time, in 2006 we will also be required to fund upgrades to our United States ATMs to comply with industry standards governing encryption of data.

     During the first three months of 2006, we used $3.8 million of cash for operating activities as compared to $798,000 used for operating activities in the same period in 2005. The decrease in cash flows from operating activities was due primarily to a reduction in accrued liabilities during the quarter. We used $1.5 million to reduce debt and $1.0 million for capital expenditures during the quarter.

     We had cash and cash equivalents of $3.2 million at March 31, 2006, compared to $9.7 million at December 31, 2005, and a net working capital deficit of $85.4 million at March 31, 2006 compared to a working capital deficit of $89.2 million at December 31, 2005.

     We believe that as of March 31, 2006, the remaining cost of upgrading the ATMs we own in the United States to comply with new industry standards known as triple DES will be approximately $3.3 million. These costs are being capitalized and depreciated over the remaining life of each asset. As of March 31, 2006, approximately 25% of our ATMs in the United States were compliant with triple DES.

     While we believe that we have sufficient liquidity and capital resources to conduct our ongoing operations, we do not have sufficient liquidity and capital resources to repay our Bank of America credit facility if immediate payment is demanded. If payment of our United States vault cash facility is demanded, we could repay the outstanding balance using our vault cash. However, we would have to find an alternate source for vault cash to continue to provide cash to our United States full placement ATMs. See “Overview”, “Liquidity and Capital Resources – Bank of America Credit Facility” and “– United States Vault Cash Facility.” Moreover, the increased rates charged under our Bank of America credit facility, and the increased rates we likely would be charged by lenders with respect to any refinancing of that facility which we may be able to obtain, will reduce our liquidity in future periods.

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Bank of America Credit Facility

     General. In connection with the acquisition of eFunds’ ATM business on November 19, 2004, we, together with our United Kingdom subsidiary, TRM (ATM) Limited, which we refer to as TRM LTD, entered into a $150 million syndicated loan facility underwritten and arranged by Bank of America, N.A. The credit facility included:

• a revolving (domestic) commitment of up to $15 million,

• an alternative (foreign) currency commitment of up to $15 million, and

• a term loan commitment of up to $120 million.

     At the time we request additional amounts, we have the right to direct whether such additional amounts are advanced under the revolving commitment as revolving loans, letter of credit obligations or swing-line loans or under the alternative currency commitment as foreign loans (in a currency other than United States dollars).

     On March 15, 2006, because of defaults in covenants requiring certain funded debt to earnings and debt coverage ratios, we entered into a Forbearance Agreement and Amendment with the lenders. We have also failed to meet the funded debt to earnings and debt coverage ratios for the first quarter of 2006. However, pursuant to the Forbearance Agreement and Amendment and subject to certain conditions, the lenders have agreed until June 15, 2006 to forbear from exercising any and all rights or remedies available to them as a result of the forgoing events of default. Under the terms of the amended agreement, the maximum amounts available under our domestic and foreign lines of credit until June 15, 2006 have been reduced to $15 million and $5 million, respectively. The amendment to our agreement also increased the interest rates on borrowings under our credit facility which we describe in “Maturity date and interest rate” below.

     We believe that it is unlikely that we will meet the financial covenants at the end of the second quarter of 2006, in which case the lenders will have the right to declare the facility in default and require payment in full of our outstanding debt unless we obtain new financing or an extension of the forbearance period. Therefore, the entire balance of the term loan and borrowings under the lines of credit is classified as a current liability on our consolidated balance sheet. If we are unable to refinance the facility by June 16, 2006 or obtain additional forbearance, we may be unable to continue as a going concern.

     For a discussion of claimed cross-defaults under our United States vault cash facility, see” – United States Vault Cash Facility.”

     Maturity date and interest rate. Subject to earlier call as a result of our defaults and the Forbearance Agreement and Amendment described above, the maturity date of any loans extended under the revolving commitment and the alternative currency commitment is November 19, 2009, while the maturity date of the loan extended under the term loan commitment is November 19, 2010.

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     The credit facility bears interest at one of two rates, elected at our option for the term loan and the revolving and alternative currency loans:

• the base rate plus the applicable rate, or

• the London Interbank Offered Rate (“LIBOR”) plus the applicable rate plus mandatory costs.

The base rate is equal to the higher of the federal funds rate, plus ¹/2 of 1%, or the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” LIBOR is the British Bankers Association LIBOR as published by Reuters. Mandatory costs reflect the costs of compliance with the requirements of the Bank of England and/or the Financial Services Authority and the requirements of the European Central Bank.

     The applicable rate for revolving loans and alternative currency loans under the credit agreement, as amended by the Forbearance Agreement and Amendment, is as follows:

• Where our consolidated leverage ratio, that is, the ratio of our debt to our earnings before interest, taxes, depreciation and amortization, or EBITDA, is less than 2.25, the applicable rate is 3.25% for LIBOR loans and letters of credit and 1.75% for base rate loans;

• Where our consolidated leverage ratio is greater than or equal to 2.25 but less than 2.75, the applicable rate is 3.5% for LIBOR loans and letters of credit and 2.0% for base rate loans;

• Where our consolidated leverage ratio is greater than or equal to 2.75 but less than 3.25, the applicable rate is 3.75% for LIBOR loans and letters of credit and 2.25% for base rate loans; and

• Where our consolidated leverage ratio is greater than or equal to 3.25, the applicable rate is 4.0% for LIBOR loans and letters of credit and 2.5% for base rate loans.

     The applicable rate for the term loan under the amended agreement is as follows:

• Where our consolidated leverage ratio is less than 2.5, the applicable rate is 4.5% for LIBOR loans and 3.0% for base rate loans; and

• Where our consolidated leverage ratio is greater than or equal to 2.5, the applicable rate is 5.0% for LIBOR loans and 3.5% for base rate loans.

     An alternative currency loan must accrue interest as a LIBOR loan.

     As of March 31, 2006, we owed $90.1 million on the facility, consisting of $80.3 million on the term loan and $9.8 million on the lines of credit. In addition, Bank of America had issued

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a letter of credit in the amount of $3.8 million to guarantee our performance under an agreement relating to our United States vault cash facility and a letter of credit totaling £750,000 (approximately $1.3 million) in connection with our effort to acquire the ATM business of Travelex, leaving a balance available under our lines of credit of $5.1 million as of March 31, 2006. As of March 31, 2006, the weighted average interest rate on the term loan was 9.78%; interest rates on the domestic and foreign lines of credit were 10.25% and 7.35%, respectively.

     We entered into a three-year interest rate cap on March 31, 2005 with a notional amount of $50 million. If the LIBOR interest rate rises above 5% any time through March 31, 2008, we will receive payments that reduce the interest rate on the $50 million notional amount to 5% plus the applicable rate and mandatory costs in accordance with the loan agreement. The objective of the interest rate cap is to ensure that we are not exposed to interest rate increases beyond 5% on $50 million of our outstanding term loan for the three-year period which began March 31, 2005.

     Collateral. The credit facility is collateralized by the pledge of the outstanding equity interests in our United States subsidiaries and by the pledge of 65% of the outstanding equity interests of each Canadian and United Kingdom subsidiary. In addition, the credit facility is collateralized by a mortgage on all property held by us, whether owned or leased, subject to certain limited exceptions.

   Prepayment. We may be required to prepay the loans under certain conditions, including the following:

• 100% of the net cash proceeds received by us as a result of certain dispositions must be applied toward the credit facility, to the extent that such net cash proceeds are not reinvested within 120 days of the date of disposition in assets useful in the same or similar lines of business to that in which we were engaged as of the closing date.

• 75% of the consolidated excess cash flow received by us for any fiscal year must be applied toward the credit facility reduced to 50% if our consolidated leverage ratio as of the last day of such fiscal year is less than 2.5.

• 100% of the net cash proceeds received by us as a result of any debt issuance must be applied toward the credit facility.

• 75% of the net cash proceeds received by us as a result of any equity issuance must be applied toward the credit facility.

In addition, we are required to pay $1.9 million in principal on the term loan quarterly. Any prepayments of principal that we make as a result of the actions listed above will be credited ratably against future repayment obligations.

     The credit agreement requires us to maintain a consolidated net worth of at least $105 million, increased on a cumulative basis as of the end of each fiscal quarter by an amount equal to 75% of consolidated net income for the fiscal quarter then ended. The credit agreement also requires us to maintain a leverage ratio, that is a ratio of consolidated debt to consolidated EBITDA, as follows (for fiscal 2005 and thereafter):

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• from January 1, 2005 through September 30, 2005: 3.50;

• from October 1, 2005 through September 30, 2006: 3.00; and

• from October 2006 through the maturity date: 2.50.

     In addition, the credit agreement requires us to maintain a fixed charge coverage ratio, defined as the ratio of EBITDA and non-cash expenses to fixed charges, including taxes paid, interest paid, scheduled debt payments, cash dividends and distributions (except those permitted under the credit agreement) as follows:

• for 2005: 1.00;

• the first three quarters of 2006: 1.10;

• for the fourth quarter of 2006 and the first three quarters of 2007: 1.15, and

• thereafter: 1.20

     The credit agreement contains covenants customary for loans of this size, including restrictions on incurring additional debt and fundamental changes. It also contains a covenant from us that we will not permit consolidated capital expenditures to exceed $17.0 million in 2005, and $15.0 million per year for any fiscal year thereafter, and permits us to pay dividends only on our preferred equity without lender consent. The events which constitute an event of default under the credit agreement are also customary for loans of this size, including payment defaults, breaches of our representations and covenants, adverse judgments against us in excess of a specified amount and a change in control.

United States Vault Cash Facility

     General. In March 2000, we established a facility for funding the cash which is placed in our ATM equipment (which we refer to as “vault cash”) for our United States ATMs. We currently have access to $150 million of vault cash under the facility of which $78.5 million was being used at March 31, 2006.

     DZ Bank has asserted, based upon a cross-default provision in the Loan and Servicing Agreement governing the facility, that defaults under our Bank of America credit facility, which we discuss in “Overview” and “Bank of America Facility,” constitute a default under the Loan and Servicing Agreement. We have entered into a forbearance agreement under which DZ Bank has agreed to forbear from asserting that default until June 15, 2006. If our United States vault cash facility were declared in default and payment demanded, we may be unable to continue as a going concern unless we are able to find another vault cash provider. See Item 1A “Risk Factors — Risk Relating to Our Default Under Our Credit Agreement” in our Annual Report on Form 10-K for the year ended December 31, 2005.

     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

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	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 1.75%. 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 an armored car carrier 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 its 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.

     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. Under the terms of the November 2004 amendment to the facility, TRM ATM is permitted to subservice certain servicing functions to eFunds Corporation pursuant to a master services agreement related to our acquisition of the eFunds ATM business.

     The Loan and Servicing Agreement contains covenants applicable to us, including a minimum tangible net worth requirement. We were in compliance with the covenant to maintain a minimum tangible net worth as of March 31, 2006.

     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

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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 1.75% plus the interest rate borne by the commercial paper that was issued to raise the funds for the loans. Interest paid during the quarter ended March 31, 2006 was $868,000.

• 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 March 31, 2006. Autobahn’s annual return is equal to 1.75% 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. Fees paid during the quarter ended March 31, 2006 were $392,000.

     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 maintain letters of credit totaling $3.8 million, or 4.1% of loans outstanding on March 31, 2006, 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.

U.K. Vault Cash Facility

     Our U.K. ATM business obtains vault cash under an agreement with a local bank. Vault cash obtained under the program remains the property of the bank, and is not included on our balance sheet. During the first quarter of 2006, we accessed amounts ranging from £17.8 million ($30.8 million based on exchange rates as of March 31, 2006) to £29.0 million ($50.1 million based on exchange rates as of March 31, 2006) under this arrangement and paid a total of $496,000 for use of the cash. Our defaults under our Bank of America credit facility may constitute an event of default under our United Kingdom vault cash facility upon termination of the forbearance period. If we are unable to refinance our debt or extend the forbearance period prior to June 15, 2006, and the lenders declare us in default with respect to our Bank of America credit facility, we may be declared to be in default with respect to this agreement as well.

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Canadian Vault Cash Facility

     Our Canadian ATM business obtains vault cash under an agreement with an armored car carrier that has a corresponding agreement with a local bank. As in our U.K. vault cash arrangement, the vault cash obtained under the Canadian program remains the property of the bank, and is not included on our balance sheet. During the first quarter of 2006, we accessed amounts ranging from Canadian $11.4 million (U.S. $9.7 million based on exchange rate as of March 31, 2006) to Canadian $19.7 million (U.S. $16.8 million based on exchange rates as of March 31, 2006) and paid a total of $286,000 for use of the cash. We believe that the default under the Bank of America credit facility does not constitute a default under our Canadian vault cash facility.

Contractual Commitments and Obligations

     Contractual commitments and obligations as of March 31, 2006 were as follows (in thousands):

	Payments Due by Period
			April 1 –
			December 31,
Contractual obligations	Total		2006		2007-2008		2009-2010		After 2010
TRM Corporation and subsidiaries
Long-term debt	$	122,407	$	12,033	$	30,155	$	80,219	$	—
Capital lease obligations		1,323		613		710		—		—
Operating leases		6,845		1,692		2,714		1,222		1,217
Purchase obligations		18,125		3,750		10,000		4,375		—
Total TRM Corporation and subsidiaries		148,700		18,088		43,579		85,816		1,217
TRM Inventory Funding Trust note payable		82,282		3,796		78,486		—		—
Total contractual cash obligations	$	230,982	$	21,884	$	122,065	$	85,816	$	1,217

     The above payments include interest where applicable, with interest on variable rate obligations assumed to remain constant at the rate in effect as of March 31, 2006. The long-term bank debt and TRM Inventory Funding Trust note payable are shown above in accordance with their contractual terms. However, because we believe it is likely that our creditors may be able to demand payment of those debts during 2006, we have classified them as current liabilities in our consolidated balance sheet. Purchase obligations consist of a master services agreement with eFunds Corporation, which involves payment totaling at least $5 million annually through November 2009.

Critical Accounting Policies and Estimates

     Our critical accounting policies and estimates as of March 31, 2006 are consistent with those discussed in our Annual Report on Form 10-K for the year ended December 31, 2005.

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New Accounting Standards and Effects on Earnings Per Share

     In December 2004, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards, or 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 Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” 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 January 1, 2006 and apply to all awards granted, modified or cancelled after that date, and to the portion of previously granted awards that have not vested by the adoption date. We adopted SFAS 123R using the modified prospective transition method. Because most of our previously granted stock options had vested prior to the end of 2005 and no new options have been issued during 2006, the effect of adopting SFAS 123R on our results of operations, loss per share and cash flow for the first quarter of 2006 was not material.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risk from changes in interest rates and foreign currency exchange rates, which could impact our results of operations and financial condition. We do not hold or issue derivative commodity instruments or other financial instruments for trading purposes.

Interest Rate Risk

     We invest our cash in money market accounts. The income earned from these money market accounts is subject to changes in interest rates. Interest income was $144,000 for the quarter ended March 31, 2006, and $108,000 for the same period in 2005. If the interest rate we earned on the $3.2 million cash we had available for investment at March 31, 2006 increased or decreased by 1%, our interest income would not change materially.

     Interest on borrowings pursuant to our syndicated loan facility is at variable rates. As of March 31, 2006 the weighted average interest rate on our $80.3 million term loan was 9.78%, the interest rate on the $6.3 million outstanding under the domestic line of credit was 10.25%, and the weighted average interest rate on the $3.5 million outstanding under the foreign line of credit was 7.35%. If the interest rate for our borrowings under the syndicated loan facility increased by 1%, our interest cost would increase by $901,000 per year. However, a 1% increase in the

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LIBOR rate would result in the LIBOR interest rate exceeding 5%, and we would benefit from our interest rate cap on $50 million of our term loan. The net increase in our interest cost would be $524,000 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 $76.8 million at March 31, 2006 and $75.4 million at March 31, 2005 under this arrangement. The weighted average interest rate on these borrowings at March 31, 2006 was 6.59%. Interest and fees relating to the Trust’s borrowings, which are included in cost of sales in our consolidated financial statements, totaled $1.4 million and $982,000 for the quarters ended March 31, 2006 and 2005, respectively. If the interest rate for the Trust’s borrowings at March 31, 2006 increased by 1%, to a weighted average of 7.59%, our cost of sales would increase by $768,000 per year.

     Our United Kingdom ATM business obtains vault cash under an agreement with a local bank. Vault cash obtained under the program remains the property of the bank, and the cash is not included on our consolidated balance sheet. During the first three months of 2006 we accessed amounts ranging from £17.8 million ($30.8 million based upon exchange rates as of March 31, 2006) to £29.0 million ($50.1 million based upon exchange rates as of March 31, 2006). During the first three months of 2005 we accessed amounts ranging from £22.3 million ($42.1 million based upon exchange rates as of March 31, 2005) to £38.1 million ($72.0 million based upon exchange rates as of March 31, 2005). Fees that we pay for use of the cash are related to the bank’s interest rates. Based on the £29.0 million balance being used at March 31, 2006, if the cost of the cash increased by 1%, our cost of sales would increase by £290,000 ($501,000 based upon exchange rates as of March 31, 2006) per year.

     Our Canadian ATM business obtains vault cash under an agreement with an armored car carrier that has a corresponding agreement with a local bank. As with our U.K. vault cash arrangement, the vault cash obtained under the Canadian program remains the property of the bank, and is not included on our balance sheet. During the first quarter of 2006, we accessed amounts ranging from Canadian $11.4 million (U.S. $9.7 million based on exchange rates as of March 31, 2006) to Canadian $19.7 million (U.S. $16.8 million based on exchange rates as of March 31, 2006) and paid a total of $286,000 for use of the cash. Fees that we pay are related to the bank’s interest rates. Based on the Canadian $14.8 million balance being used at March 31, 2006, if the cost of cash increased by 1% our cost of sales would increase by Canadian $148,000 ($126,000 based on exchange rates as of March 31, 2006) per year.

Foreign Currency Risk

     We have international subsidiaries subject to foreign currency exchange rate exposure. We realize sales from, and pay the expenses of our international operations in British pounds and Canadian dollars. Accordingly, we are exposed to the risk of foreign exchange rate fluctuations.

     Foreign exchange rate transaction gains, net of losses, were $44,000 for the three months ended March 31, 2006. Foreign exchange transactions resulted in gains, net of losses, of $66,000 for the three months ended March 31, 2005. If foreign currency rates were to fluctuate from

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rates at March 31, 2006 our financial position might be materially affected. Assuming a 10% appreciation in foreign currency values versus the U.S. dollar from the quoted foreign currency exchange rates at March 31, 2006, the potential increase in the fair value of foreign currency-denominated assets and liabilities would have been an aggregate of approximately $6.2 million. Assuming a 10% appreciation in foreign currency values versus the U.S. dollar from the average for the quarter ended March 31, 2006, the impact on sales would have been an aggregate increase of approximately $1.6 million, or 2.9%. The impact on net income for the three months ended March 31, 2006 would have been an aggregate increase of approximately $56,000, or .5%. Assuming a 10% depreciation in foreign currency values versus the U.S. dollar from the quoted foreign currency exchange rates at March 31, 2006, the potential decrease in the fair value of foreign currency-denominated assets and liabilities would have been an aggregate of approximately $6.2 million. Assuming a 10% depreciation in foreign currency values versus the U.S. dollar from the average quoted foreign currency exchanges rates for the quarter ended March 31, 2006, the impact on sales would have been an aggregate decrease of $1.6 million, or 2.9%. The impact on net income for the three months ended March 31, 2006 would have been an aggregate decrease of approximately $56,000, or .5%.

ITEM 4. CONTROLS AND PROCEDURES

     We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities and Exchange Act of 1934 reports is recorded, processed, summarized and reported within the periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

     Under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our disclosure committee appointed by such officers, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level.

     Subsequent to the end of 2005, we have taken steps to remediate the material weaknesses in our internal control over financial reporting that we identified as of December 31, 2005.

• We have hired a controller, director of accounting and a senior tax accountant to augment our accounting, financial reporting and financial control function in our accounting department.

• At the end of the first quarter of 2006, our management has performed a review of our accounts receivable agings in connection with our analysis of the allowance for doubtful accounts, and we believe that our accounts receivable are fairly stated at the end of the quarter.

• We have modified our reporting structure so that the Director of Finance for our United Kingdom subsidiaries now reports to our Chief Financial Officer rather than to local management in the United Kingdom. We have not had any major capital projects in the United Kingdom during the first quarter of 2006 that would warrant review by our Chief Financial Officer, Principal Accounting Officer or Corporate Controller.

• Also at the end of the first quarter of 2006, our Director of Finance in the United Kingdom has reviewed all significant accrued liability accounts of our United Kingdom subsidiaries to ensure that such accounts are fairly stated at the end of the quarter.

     However, as of May 5, 2005, the testing of the effectiveness of our remediation plan as well as hiring one or more internal auditors, have not been completed.

     Other than as described in the two previous paragraphs, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during our most recent fiscal quarter.

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PART II — OTHER INFORMATION

ITEM 5. OTHER INFORMATION

     On May 3, 2006 we entered into an employment agreement with Jeffrey F. Brotman as President and Chief Executive Officer and a retainer agreement with Amy B. Krallman as Senior Vice President and Corporate Counsel. Mr. Brotman’s contract provides a term through March 12, 2009 to be automatically renewed for one-year periods unless either party gives notice of non-renewal, an initial salary of $475,000, with bonuses as provided by the compensation committee of our Board of Directors, and termination payments (as provided in the employment agreement) in the event of termination of the agreement other than for cause (as defined in the employment agreement). Ms. Krallman’s agreement is for a rolling 90 day term, at a prorated annual salary of $250,000, with bonuses as provided by the compensation committee of our Board of Directors, and termination payments (as provided in the retainer agreement) in the event of termination of the agreement other than for cause (as defined in the retainer agreement).

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ITEM 6. EXHIBITS

(a) Exhibits

2.1	(a)	Purchase Agreement by and among eFunds Corporation, eFunds (Canada) Corporation, TRM ATM Corporation and TRM (Canada) Corporation dated as of September 30, 2004 (incorporated herein by reference to Exhibit 10.3 of Form 10-Q filed for the quarter ended September 30, 2004)
2.1	(b)	Amendment No. 1 to the Purchase Agreement by and among eFunds Corporation, eFunds (Canada) Corporation, TRM ATM Corporation and TRM (Canada) Corporation dated November 19, 2004 (incorporated herein by reference to Exhibit 2.2 of Form 8-K dated November 19, 2004)
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)
3.1	(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		Investors’ Rights Agreement (incorporated herein by reference to Exhibit 4.1 of Form 8-K dated July 9, 1998)
4.3		Articles V, VI and VII of the Restated Articles of Incorporation, as amended (See Exhibit 3.1)
4.4		Articles I, II, V, VII and X of the Restated Bylaws (See Exhibit 3.2)
10.7	(i)	Employment Agreement dated May 3, 2006 by and between TRM Corporation and Jeffrey F. Brotman
10.7	(j)	Retainer Agreement dated May 3, 2006 by and between TRM Corporation and Amy B. Krallman
10.8	(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.

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		(incorporated herein by reference to Exhibit 10.1 of Form 8-K filed March 20, 2006)
10.9	(f)	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 to Form 8-K filed March 29, 2006)
31.1		Certification of Chief Executive Officer of TRM Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer of TRM Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3		Certification of Principal Accounting Officer of TRM Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer of TRM Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2		Certification of Chief Financial Officer of TRM Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.3		Certification of Principal Accounting Officer of TRM Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

SIGNATURE

Pursuant to the requirements 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.

	TRM CORPORATION
Date: May 5, 2006	By:	Jon S. Pitcher Jon S. Pitcher
		Principal Accounting Officer

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EX-10.7(I)

Exhibit 10.7(i)

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made this 3^rd day of May 2006, by and between TRM Corporation., an Oregon corporation (hereinafter called “Company”), and Jeffrey F. Brotman, an individual residing in Pennsylvania (hereinafter called “Executive”).

W I T N E S S E T H:

     Company wishes to continue to employ Executive and Executive wishes to continue to be in the employ of Company on the terms and conditions contained in this Agreement.

     WHEREAS, due to Company’s desire to continue to employ Executive as President and Chief Executive Officer and to gain the protections and benefits contained in this Employment Agreement, Company and Executive agree to the covenants and restrictions contained herein;

     WHEREAS, due to Executive’s desire to continue to serve as President and Chief Executive Officer and the protections and new and expanded benefits contained in this Employment Agreement (“Agreement”), Executive agrees to the covenants and restrictions contained herein;

     NOW, THEREFORE, in consideration of the facts, mutual promises and covenants contained herein and intending to be legally bound hereby, Company and Executive agree as follows:

     1. Definitions. As used herein, the following terms shall have the meanings set forth below unless the context otherwise requires.

          “Affiliate” shall mean a person or entity who or which (i) with respect to any entity, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such entity; or (ii) with respect to Executive, is a parent, spouse, child or issue of Executive, including persons in an adopted or step relationship.

          “Annual Bonus” shall mean the bonus payment(s) available to Executive at the sole discretion of the majority of the Board of Directors or the Compensation Committee, as set forth in Section 5(b), as such amount may be adjusted from time to time.

          “Base Salary” shall mean the annual rate of compensation set forth in Section 5(a), as such amount may be adjusted from time to time.

          “Board” shall mean the Board of Directors of Company.

          “Business” shall mean the business conducted by Company or any Subsidiary or corporate parent thereof or entity sharing a common corporate parent with the Company on the date of execution of this Agreement, including business activities in developmental stages,

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business activities which may be developed by the Company, or by any Subsidiary or corporate parent thereof or entity sharing a common corporate parent with the Company, during the period of Executive’s employment by Company, and all other business activities which flow from a reasonable expansion of any of the foregoing during Executive’s employment with the Company and about which Executive had or has constructive or actual knowledge.

          “Cause” shall include any one or more of the following:

          (a) Executive breaches or neglects the material and substantial duties that Executive is required to perform under the terms of this Agreement, including if Executive performs his duties in an incompetent manner, after written notice of the breach or neglect and thirty (30) days to cure such breach or neglect;

          (b) The reasonable belief of a majority of the Board of Directors that Executive has committed a crime of moral turpitude or has entered a plea of nolo contendere (or similar plea) to a charge of such an offense;

          (c) Executive uses alcohol in an inappropriate manner or any unlawful controlled substance while performing his duties under this Agreement and such use materially interferes with the material performance of Executive’s duties under this Agreement;

          (d) Executive commits any act of criminal fraud, material dishonesty or misappropriation relating to or involving the Company;

          (e) Executive materially violates a rule(s), regulation(s), policy(ies) or plan(s) governing Executive performance or express direction(s) of the Board;

          (f) Executive engages in the unauthorized disclosure of Confidential Information; or

          (g) Executive acts in a manner that is materially contrary to the best interest of the Company after he is given written notice of his actions, as well as 30 days to cure.

          “Change of Control” shall be deemed to have occurred upon the earliest to occur of the following events:

          (h) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (including in the Company’s subsidiaries) of the Company and its subsidiaries taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act);

          (i) the adoption of a plan relating to the liquidation or dissolution of the Company;

          (j) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “Person” (as that term is used in Section 13(d)(3) of the Exchange Act), becomes the “Beneficial Owner” (as that term is used in Section

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13(d)(3) of the Exchange Act), directly or indirectly, of more than 35% of the Voting Stock of the Company;

          (k) the Company consolidates or merges with or into another Person or any Person consolidates or merges with or into the Company, in either case under this clause (D), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons Beneficially Owning, directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Company immediately prior to such consummation do not Beneficially Own, directly or indirectly, Voting Stock representing a majority of the total voting power of the Voting Stock of the Company or the surviving or transferee Person; or

          (l) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.

          “Commencement Date” shall have the meaning specified in Section 4 hereof.

          “Confidential Information” shall have the meaning specified in Section 12(b) hereof.

          “Disability” shall mean Executive’s inability, for a period of thirteen (13) consecutive weeks, or a cumulative period of 120 business days (i.e., Mondays through Fridays, exclusive of days on which Company is generally closed for a holiday) out of a consecutive period of twelve (12) months, to perform the essential duties of Executive’s position, due to a disability as that term is defined in the American With Disabilities Act.

          “Restricted Area” shall have the meaning specified in Section 12(a)(i) hereof.

          “Restricted Period A” shall have the meaning specified in Section 12(a) hereof.

          “Restricted Period B” shall have the meaning specified in Section 12(b) hereof.

          “Subsidiary” shall mean any company in which Company owns directly or indirectly 50% or more of the Voting Stock or 50% or more of the equity; or any other venture in which it owns either 50% or more of the voting rights or 50% or more of the equity.

          “Term of Employment” shall mean the period specified in Section 4 hereof as the same may be terminated in accordance with this Agreement.

     2. Employment. Company hereby employs Executive as Chief Executive Officer and Executive hereby accepts employment by Company for the period and upon the terms and conditions specified in this Agreement.

     3. Office and Duties.

          (a) Executive shall continue to serve as the President and Chief Executive Officer of Company. In such capacity, Executive shall render such services as are necessary and desirable to protect and advance the best interests of Company, acting, in all instances, under the

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supervision of and in accordance with the policies set by the Board. As President and Chief Executive Officer, Executive shall be responsible for managing the day-to-day operations of the business and shall have the responsibility and authority, subject to policies set by and with the approval of the Board, to employ and terminate Executives, sign agreements and otherwise to implement the policies and directives of the Board, all subject to the provisions of any operating budget or budgets as may be approved from time to time by the Board and subject to the By-Laws of the Company. Executive shall perform any other duties reasonably required by the Board and reasonably related to his responsibilities as President and Chief Executive Officer.

          (b) Executive may engage in charitable, civic, fraternal, trade and professional activities that do not interfere with Executive’s obligations to the Company.

     4. Term. Executive shall be employed by Company for a Term of Employment (the “Initial Term”), commencing March 13, 2006 (the “Commencement Date”), and ending on March 12, 2009, unless sooner terminated as hereinafter provided. However, at the end of the Initial Term on March 12, 2009, the Term of Employment and this Employment Agreement will be automatically extended for consecutive one (1) year terms (“Additional Term”) unless not later than thirty (30) days prior to March 12, 2009, or thirty (30) days prior to any successive anniversary of that date, either party gives written notice that it does not wish to extend this Employment Agreement. During any Additional Term, this Agreement and Executive’s employment can be terminated in accordance with Sections 7 – 10 below.

     5. Compensation and Benefits.

          (a) For all of the service rendered by Executive to Company, Executive shall receive Base Compensation at the gross annual rate of $475,000, payable in installments in accordance with Company’s regular payroll practices in effect from time to time. The Base Compensation shall be reviewed annually, on or around the anniversary date of the Commencement Date of this Agreement to ascertain, in the sole discretion of the Board or the Compensation Committee, the amount, if at all, the Executive’s Base Compensation should be increased, but it shall not be decreased.

          (b) In addition to the foregoing compensation, Executive is eligible to receive an Annual Bonus each fiscal year in an amount, as shall be determined by a majority of the Board of Directors or the Compensation Committee, in their sole discretion. The Annual Bonus shall be payable in the Company’s sole discretion, either in a single lump-sum payment, or in equal monthly installments beginning no later than ninety (90) days after the end of the relevant fiscal year. To be eligible for the Annual Bonus, Executive must be actively employed by the Company on the last day of the relevant fiscal year.

          (c) Executive agrees and acknowledges that his employment and the other protections and benefits of this Agreement are full, adequate and sufficient consideration for the restrictions and obligations set forth in Sections 11 and 12 of this Agreement.

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     6. Fringe Benefits. As an inducement to Executive to continue employment hereunder, and in consideration of Executive’s covenants under this Agreement, Executive shall be eligible to the benefits set forth below (the “Fringe Benefits”) during the Term of Employment:

          (a) Executive shall be eligible to participate in any health, life, accident or disability insurance, sick leave or other benefit plans or programs made available to other similarly situated Executives of Company on terms at least equal to those available to other similarly situated Executives of Company as long as the plans and programs are kept in force by Company and provided that Executive meets the eligibility requirements and other terms, conditions and restrictions of the respective plans and programs, with the understanding that the Company will keep in force throughout the Term of this Agreement health, life, accident and disability insurance and sick leave benefits equal to or greater than those in effect at the Commencement Date.

          (b) Executive shall be entitled to four (4) weeks paid vacation during each year, subject to Company’s generally applicable policies relating to vacations, and excluding standard Company holidays.

          (c) Executive shall be entitled to an automobile leased by the Company on his behalf or an automobile allowance, consistent with Company policy and practice. Company shall pay the automobile insurance for one vehicle used by Executive in connection with his employment by Company.

     7. Disability. If Executive suffers a Disability as that term is defined in Section 1 herein, the Company may terminate Executive’s employment relationship with Company at any time thereafter (after the expiration of time periods described in the definition of “Disability” in Section 1) by giving Executive thirty (30) days written notice of termination. Thereafter, Company shall have no obligation to Executive for Base Compensation, Annual Bonus, Fringe Benefits or any other form of compensation or benefit to Executive, except as otherwise required by law or by benefit plans provided at Company expense, other than (a) amounts of Base Compensation accrued through the date of termination, (b) vested Stock and Stock Options, and (c) reimbursement of appropriately documented expenses incurred by Executive before the termination of employment, to the extent that Executive would have been entitled to such reimbursement but for the termination of employment.

     8. Death. If Executive dies during the Term of Employment, the Term of Employment and Executive’s employment with Company shall terminate as of the date of Executive’s death. Company shall have no obligation to Executive or Executive’s estate for Base Compensation, Annual Bonus, Fringe Benefits or any other form of compensation or benefit, except as otherwise required by law or by benefit plans provided at Company expense, other than (a) amounts of Base Compensation that have accrued through the date of Executive’s death, (b) vested Stock and Stock Options, and (c) reimbursement of appropriately documented expenses incurred by Executive before the termination of employment, to the extent that Executive would have been entitled to such reimbursement but for the termination of employment.

     9. Termination for Cause. Company may terminate Executive’s employment relationship with Company at any time for Cause as that term is defined in Section 1 herein,

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effective not less than ten (10) days after written notice of such termination. Upon the effective date of termination of Executive under this Section 9, Company shall have no obligation to Executive for Base Compensation, Annual Bonus, Fringe Benefits, or any other form of compensation or benefits other than (a) amounts of Base Compensation, and vested Stock and Stock Options accrued through the effective date of termination, and (b) reimbursement of appropriately documented expenses incurred by Executive before the written notice of termination of employment, to the extent that Executive would have been entitled to such reimbursement but for the termination of employment. In such event, Executive will be entitled to elect to continue participation in any health, life, accident or disability insurance plans of the Company at Executive’s expense if plans allow for continuation at no cost to the Company.

     10. Termination without Cause; Termination by Executive upon Change of Control.

          (a) Company may terminate Executive’s employment relationship with Company at any time without Cause upon ninety (90) days written notice., in which case Company shall pay Executive an amount equal to the average of Executive’s highest three (3) years of Base and Annual Bonus Compensation multiplied by 2.99, and Executive shall be entitled to receive all vested Stock and Stock Options (all of which will fully vest upon such termination), so long as Executive executes and does not revoke a Separation Agreement and General Release Agreement acceptable to Company which will be substantially in the terms and form attached hereto as Exhibit “A”. In addition, Executive may terminate his employment relationship with Company within one (1) year after a Change of Control, in which case Company shall pay Executive an amount equal to the average of Executive’s highest three (3) years of Base and Annual Bonus Compensation multiplied by 2.99, and Executive shall be entitled to receive all vested Stock and Stock Options (all of which will fully vest upon such termination), so long as Executive executes and does not revoke a Separation Agreement and General Release Agreement acceptable to Company which will be substantially in the terms and form attached hereto as Exhibit “A”. If Executive’s employment is terminated by the Company at any time within three months before, or twelve months after the occurrence of a Change in Control (except for cause), (i) all Stock Options and Restricted Stock granted to Executive by Company, which pursuant to the terms of the applicable plan vest upon a Change in Control, shall vest upon the date of Executive’s employment termination, and shall be exercisable to Executive for ten (10) years thereafter and (ii) Company shall pay Executive an amount equal to the average of Executive’s highest three (3) years of Base and Annual Bonus Compensation multiplied by 2.99, so long as Executive executes and does not revoke a Separation Agreement and General Release Agreement acceptable to Company which will be substantially in the terms and form attached hereto as Exhibit “A”.

          (b) Executive may terminate his employment with Company for any or no reason, upon ninety (90) days written notice. If such notice is provided by Executive, Employer, in its sole discretion, may waive the notice period or any portion thereof, with pay (Base Compensation, only) to Executive for the remaining notice period. Upon termination by Executive of his employment under the provisions of this Subsection 10(b), the Company shall have no obligation to Executive for Base Compensation, Annual Bonus, Fringe Benefits or any other form of compensation or benefits other than (a) amounts of Base Compensation, vested Stock and Stock Options accrued through the effective date of termination, and (b)

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reimbursement of appropriately documented expenses incurred by Executive before the termination of employment, to the extent that Executive would have been entitled to such reimbursement but for his termination of his employment.

          (c) Termination of Executive’s employment pursuant to Sections 7 through 10 shall release the Company of all its liabilities and obligations under this Agreement, except as expressly provided in Sections 7 through 10. Termination of Executive’s employment pursuant to this Section shall not, however, release Executive from Executive’s obligations and restrictions as stated in Sections 11 and 12 of this Agreement.

          (d) Executive shall not be entitled to any payment or benefit under any Company severance plan other than as reflected herein under Section 10, practice or policy, if any, in effect at or after the time of Executive’s termination since this Agreement supersedes all such plans, practices and policies.

          (e) In the event any amounts payable under this Agreement (and/or under any other plan, agreement or arrangement by which you are to receive payments in the nature of compensation from the Company) would constitute “excess parachute payments,” as that term is defined for purposes of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and Treasury Regulations promulgated pursuant thereto, you will receive additional cash payments such that, after payment of all federal, state and local income taxes and federal excise taxes on the excess parachute payments and on the additional cash payments made under this paragraph, you will have a net amount equal to the amount you would have received under the terms of this Agreement [and/or under any other plan, agreement or arrangement pursuant to which you are entitled to receive payments in the nature of compensation from the Company] (but not including the excess parachute gross-up payments payable to you pursuant to this paragraph) if no portion of such payments and/or benefits were treated as excess parachute payments for purposes of Code Section 280G.

     11. Company Property. All advertising, sales, manufacturers’ and other materials or articles or information, including without limitation data processing reports, computer programs, software, customer information and records, business records, price lists or information, samples, or any other materials or data of any kind physically furnished to Executive by Company or developed by Executive on behalf of Company or at Company’s direction or for Company’s use or otherwise in connection with Executive’s employment hereunder, are and shall remain the sole property of Company, including in each case all copies thereof in any medium, including computer tapes and other forms of information storage. If Company requests the return of such materials at any time during or at or after the termination of Executive’s employment, Executive shall deliver all copies of the same to Company immediately.

     12. Noncompetition, Trade Secrets, Etc. Executive hereby acknowledges that, during and solely as a result of his employment by Company, Executive has had and will have access to Confidential Information as that term is defined herein. In consideration of such special and unique opportunities afforded by Company to Executive as a result of Executive’s employment and the other benefits referred to within this Agreement, the Executive hereby agrees as follows:

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          (a) From the date hereof until twenty-four (24) months following the termination of Executive’s employment with Company, for any or no reason, whether initiated by Executive or Company, (“Restricted Period A”);

               (i) Executive shall not, for his own benefit or the benefit of any third party, directly or indirectly engage in (as a principal, shareholder, partner, director, officer, agent, Executive, consultant or otherwise) or be financially interested in any business operating within the United States or Canada (the “Restricted Area”), which provides consumer convenience services materially the same as the services Company provides to third parties, or any other business activities which are materially the same as and which are in direct competition with the Business, or with any business activities carried on by Company or being planned by Company, at the time of the termination of Executive’s employment, or any other business activities which are materially the same as the Business for any of the Company’s past, present or prospective clients, customers or accounts; provided however, nothing contained in this Section 12 shall prevent Executive from holding for investment less than five percent (5%) of any class of equity securities of a company whose securities are publicly traded on a national securities exchange or in a national market system.

               (ii) Induce or attempt to influence any Executive, customer, independent contractor or supplier of Company to terminate employment or any other relationship with Company. During the Restricted Period, while Executive is still employed by the Company, Executive shall not, directly or indirectly, disclose or otherwise communicate to any of the clients, customers or accounts of Company, its Affiliates or any Subsidiary thereof that he has been terminated, is considering terminating or has decided to terminate employment with Company.

          (b) From the date hereof until twenty-four (24) months following the termination of Executive’s employment with the Company, for any or no reason, whether initiated by Executive or Company (“Restricted Period B”), Executive shall not use for Executive’s personal benefit, or disclose, communicate or divulge to, or use for the direct or indirect benefit of any person, firm, association, or company other than Company, any “Confidential Information” which term shall mean any information regarding the business methods, business policies, policies, procedures, techniques, research or development projects or results, historical or projected financial information, budgets, trade secrets, or other knowledge or processes of or developed by Company or any names and addresses of customers or clients or any data on or relating to past, present or prospective Company customers or clients or any other confidential information relating to or dealing with the business operations or activities of Company, made known to Executive or learned or acquired by Executive while in the employ of Company. Confidential Information shall not include (1) information unrelated to the Company which was lawfully received by Executive free of restriction from another source having the right to so furnish such Confidential Information; or (2) information after it has become generally available to the public or to industry competitors without breach of this Agreement by the Executive; or (3) information which at the time of disclosure to the Executive was known to the Executive to be free of restriction as evidenced by documentation from the Company which the Executive possesses, or (4) information which Company agrees in writing is free of such restrictions. All memoranda, notes, lists, records, files, documents and other papers and other

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like items (and all copies, extracts and summaries thereof) made or compiled by Executive or made available to Executive concerning the business of Company shall be Company’s property and shall be delivered to Company promptly upon the termination of Executive’s employment with Company or at any other time on request. The foregoing provisions of this Subsection 12(b) shall apply during and for a period of two (2) years after Executive is an Executive of Company and shall be in addition to (and not a limitation of) any legally applicable protections of Company’s interest in confidential information, trade secrets and the like. At the termination of Executive’s employment with Company, Executive shall return to Company all copies of Confidential Information in any medium, including computer tapes and other forms of data storage.

          (c) Any and all writings, inventions, improvements, processes, procedures and/or techniques which Executive may make, conceive, discover or develop, either solely or jointly with any other person or persons, at any time when Executive is an Executive of Company, whether or not during working hours and whether or not at the request or upon the suggestion of Company, which relate to or are useful in connection with the Business or with any business now or hereafter carried on or contemplated by Company, including developments or expansions of its present fields of operations, shall be the sole and exclusive property of Company. Executive shall make full disclosure to Company of all such writings, inventions, improvements, processes, procedures and techniques, and shall do everything necessary or desirable to vest the absolute title thereto in Company. Executive shall write and prepare all specifications and procedures regarding such inventions, improvements, processes, procedures and techniques and otherwise aid and assist Company so that Company can prepare and present applications for copyright or Letters Patent therefor and can secure such copyright or Letters Patent wherever possible, as well as reissues, renewals, and extensions thereof, and can obtain the record title to such copyright or patents so that Company shall be the sole and absolute owner thereof in all countries in which it may desire to have copyright or patent protection. Executive shall not be entitled to any additional or special compensation or reimbursement regarding any and all such writings, inventions, improvements, processes, procedures and techniques.

          (d) Executive acknowledges that the restrictions contained in the foregoing Subsections in view of the nature of the business in which Company is engaged, are reasonable and necessary in order to protect the legitimate interests of Company, that their enforcement will not impose a hardship on Executive or significantly impair Executive’s ability to earn a livelihood, and that any violation thereof would result in irreparable injuries to Company. Executive and Company acknowledge that, in the event either party believes the other party has violated any of the terms of this Agreement, the other party shall be entitled to seek from any court of competent jurisdiction, without attempting arbitration, preliminary and permanent injunctive relief.

          (e) If the Restricted Periods or the Restricted Area specified above should be adjudged unreasonable in any proceeding, then the period of time shall be reduced by such amount or the area shall be reduced by the elimination of such portion or both such reductions shall be made so that such restrictions may be enforced for such time and in such area as is adjudged to be reasonable. If Executive violates any of the restrictions contained in the foregoing Subsections, the relevant Restricted Period shall be extended by a period equal to the length of time from the commencement of any such violation until such time as such violation shall be cured by Executive to the satisfaction of Company. Executive hereby expressly

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consents to the jurisdiction of any court within the Eastern District of Pennsylvania for the purpose of seeking a preliminary or permanent injunction as described above in Section 12(d), and agrees to accept service of process by certified mail return receipt requested relating to any such proceeding. Company may supply a copy of Section 12 of this Agreement to any future or prospective employer of Executive or to any person to whom Executive has supplied information if Company determines in good faith that there is a reasonable likelihood that Executive has violated or will violate such Section.

     13. Prior Agreements. Executive represents to Company that there are no restrictions, agreements or understandings, oral or written, to which Executive is a party or by which Executive is bound that prevent or make unlawful Executive’s execution or performance of this Agreement.

     14. Miscellaneous.

          (a) Indulgences, Etc. Neither the failure nor any delay on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

          (b) Controlling Law. This Agreement and all questions relating to its validity, interpretation, performance and enforcement (including, without limitation, provisions concerning limitations of actions), shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, notwithstanding any conflict-of-laws doctrines of such jurisdiction to the contrary, and without the aid of any canon, custom or rule of law requiring construction against the draftsman.

          (c) Notices. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received only when personally delivered, on the day specified for delivery when deposited with a recognized national or regional courier service for delivery to the intended addressee or two (2) days following the day when deposited in the United States mails, first class postage prepaid, addressed as set forth below:

(i) If to Executive:
Jeffrey F. Brotman
President & CEO
TRM Corporation
1521 Locust Street, Second Floor
Philadelphia, PA 19102

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(ii) If to Company:
Amy B. Krallman, Esq.
Senior Vice President
TRM Corporation
5208 N.E. 122d Avenue
Portland, OR 97230

     In addition, notice by mail shall be by air mail if posted outside of the continental United States. Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section for the giving of notice.

          (d) Binding Nature of Agreement. This Agreement shall be binding upon Company and shall inure to the benefit of Company, its present and future Subsidiaries, Affiliates, successors and assigns including any transferee of the business operation, as a going concern, in which Executive is employed and shall be binding upon Executive, Executive’s heirs and personal representatives. None of the rights or obligations of Executive hereunder may be assigned or delegated, except that in the event of Executive’s death or Disability, any rights of Executive hereunder shall be transferred to Executive’s estate or personal representative, as the case may be. Company may assign its rights and obligations under this Agreement in whole or in part to any one or more Affiliates or successors, but no such assignment shall relieve Company of its obligations to Executive if any such assignee fails to perform such obligations.

          (e) Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

          (f) Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

          (g) Entire Agreement. This Agreement contains the entire understanding among the parties hereto with respect to the employment of Executive by Company, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, except as herein contained. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent

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with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. Notwithstanding the foregoing, nothing herein shall limit the application of any generally applicable Company policy, practice, plan or the terms of any manual or handbook applicable to Company’s Executives generally, except to the extent the foregoing directly conflict with this Agreement, in which case the terms of this Agreement shall prevail.

          (h) Section Headings. The Section headings in this Agreement are for convenience only; they form no part of this Agreement and shall not affect its interpretation.

          (i) Number of Days. Except as otherwise provided herein, for example, in the context of vacation days, in computing the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which federal banks are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.

          (j) Gender, Etc. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.

          (k) Dispute Resolution. In the event of any disagreement of any nature whatsoever between the parties to this Employment Agreement in any way relating to this Employment Agreement, except for the ability of the parties to seek a preliminary or permanent injunction as described above, which need not be discussed between the parties or arbitrated, the parties shall meet to attempt to resolve such disagreement. In the event of their failure to do so within fifteen (15) days or such longer period of time as shall be mutually agreed upon by the parties, either party may serve notice in writing upon the other party requesting arbitration, which notice shall specify in reasonable detail the nature of the dispute. Any arbitration under this Section shall be held in Philadelphia, Pennsylvania or such other place as shall be mutually agreed to by the parties, and conducted in accordance with the procedures set forth hereafter and, to the extent not inconsistent with this Section, in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association in effect on the date of this Agreement. Company shall have the right and remedy to ask the arbitrator to require Executive to account for any pay over to Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of any transactions constituting a breach of Section 12, and Executive shall account for and pay over such amounts to Company upon the arbitrator’s determination thereof.

               (i) Any arbitration under this Section shall be before an arbitrator who shall be experienced in the area of employment law. The arbitrator shall be selected by the parties from lists provided by the American Arbitration Association. The parties agree to exchange all relevant documents prior to any hearing, and further agree that any dispute over such exchange may be submitted to the arbitrator for decision, which decision shall be binding on the parties. The parties further agree to exchange hearing exhibits and designations of witnesses to be called at the hearing at least ten (10) calendar days before any hearing as a party may not offer at the hearing as part of its direct case any witness, evidence or document not so disclosed, unless such witness(es), evidence or document(s) became available and/or known to the party who wishes to introduce such witness(es), evidence and/or document(s) within the ten

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(10) calendar days prior to the arbitration, and such witness(es), evidence or document(s) is immediately provided to the arbitrator and the other party, or unless the evidence is for rebuttal or impeachment purposes and its need was not anticipated or foreseen before the hearing.

               (ii) Within 60 days of the production of all documents, evidence and witness list as outlined in the preceding section, the arbitrator shall conduct the arbitration hearing. Each party will have one day to present its case, unless, upon request the arbitrator determines that more or less time is appropriate. Within 30 days of the arbitration hearing, the arbitrator shall render a decision in writing to each party.

               (iii) Any arbitration award must (i) be rendered in accordance with applicable law as described in this Employment Agreement and (ii) be set forth in a written decision which sets forth the reasons (including, without limitation, the conclusions of fact and/or law) upon which such award is rendered. Judgment upon an arbitration award may be rendered in any court of competent jurisdiction or application may be made to any such state or federal court of competent jurisdiction for judicial acceptance of an order to enforcement of an arbitration award, as the case may be. Any arbitration award shall be final and binding on the parties. Once an issue has been arbitrated pursuant hereto, the decision of the arbitrator shall be res judicata with respect to such issue.

               (iv) The arbitrator shall have the power to issue subpoenas compelling testimony and/or the production of documents from any person whether or not a party hereto, which subpoenas shall be enforceable in all courts of competent jurisdiction in the Eastern District of Pennsylvania. In addition, the arbitrator and attorney-of-record shall have the power to request through the above-mentioned courts of competent jurisdiction the taking of depositions from any person, not a party or a director, officer, executive, employee or agent of a party, who cannot be subpoenaed or is unable to attend the arbitration, whose testimony the arbitrator deems both important and relevant to the resolution of the issues presented for arbitration.

               (v) The cost of the arbitration and all attorney fees shall be borne by the parties in such proportion as the arbitrator shall direct, with such arbitrator to give due consideration to the fault of the parties.

               (vi) Notwithstanding the foregoing, the parties need not arbitrate any request for preliminary or permanent injunctive relief, such relief may be brought by either party in any state or federal court in the Eastern District of Pennsylvania. Such litigation will toll the Restricted Periods beginning on the alleged date of Executive’s violation until the date the dispute is resolved.

          (l) Jurisdiction of Courts. Any legal suit, action, claim, proceeding or investigation arising out of or relating to Sections 11 or 12 of this Agreement may be instituted in any state or federal court in the Eastern District of Pennsylvania, and each of the parties hereto waives any objection which party may now or hereafter have to such venue of any such suit, action, claim, proceeding or investigation, and irrevocably submits to the jurisdiction of any such court. Any and all service of process and any other notice in any such suit, action, claim, proceeding or investigation shall be effective against any party if given by registered or certified mail, return receipt requested, or by any other means of mail which requires a signed receipt,

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postage prepaid, mailed to such party as herein provided. If for any reason such service of process by mail is ineffective, then Company shall be deemed to have appointed Jodi T. Plavner, Esquire, Wolf, Block, Schorr and Solis-Cohen LLP, 1650 Arch Street, 22nd Floor, Philadelphia, Pennsylvania 19103, as the authorized agent of Company to accept and acknowledge, on behalf of Company, service of any and all process which may be served in any such suit, action, claim, proceeding or investigation. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any jurisdiction other than Pennsylvania.

          (m) Survival. All provisions of this agreement which by their terms survive the termination of Executive’s employment with Company, including without limitation the covenants of Executive set forth in Sections 11 and 12 and the obligations of Company to make any post-termination payments under this Agreement, shall survive termination of Executive’s employment by Company and shall remain in full force and effect thereafter in accordance with their terms.

     IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement in Philadelphia, Pennsylvania as of the date first above written.

TRM Corporation
By:	/s/ Alan D. Schreiber
	Name:	Alan D. Schreiber
	Title:	Chairman of the Compensation Committee
Executive
/s/ Jeffrey F. Brotman
Jeffrey F. Brotman

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ATTACHMENT “A”
SAMPLE RELEASE AGREEMENT

     1. In consideration for your General Release and the covenants and agreements expressed herein and in the Employment Agreement, the Company, intending to be legally bound, agrees to pay you                      (___) months of severance and the other severance payments, less taxes and other deductions required by law, as stated in Section ___ of the attached Employment Agreement.

     2. In consideration of the receipt of the Company’s payments set forth in Section ___ of the attached Employment Agreement, you, intending to be legally bound, agree to release and forever discharge the Company and its related or affiliated companies and Subsidiaries, and each of their past, present and future officers, directors, attorneys, employees, executives, owners and agents, and their respective successors and assigns (collectively, the “Releasees”), jointly and severally, from any and all actions, complaints, charges, causes of action, lawsuits or claims of any kind (collectively, “Claims”), known or unknown, which you, your heirs, agents, successors or assigns ever had, now have or hereafter may have against the Releasees arising heretofore out of any matter, occurrence or event existing or occurring prior to the execution hereof, including, without limitation: any claims relating to or arising out of your employment with and/or termination of employment by the Company and/or any of its related and/or affiliated companies or Subsidiaries; any claims for unpaid or withheld wages, severance, benefits, bonuses, commissions and/or other compensation of any kind; any claims for attorneys’ fees, costs or expenses; any claims of discrimination and/or harassment based on age, sex, race, religion, color, creed, disability, handicap, citizenship, national origin, ancestry, sexual preference or orientation, or any other factor prohibited by Federal, State or Local law (such as the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the Pennsylvania Human Relations Act) any claims for retaliation and/or any whistleblower claims; and/or any other statutory or common law claims, now existing or hereinafter recognized, including, but not limited to, breach of contract, libel, slander, fraud, wrongful discharge, promissory estoppel, equitable estoppel and misrepresentation.

     3. The General Release does not apply to any claims to enforce this Release Agreement or to any claims arising out of any matter, occurrence or event occurring after the execution of this Release Agreement.

     4. You acknowledge and agree that the Company’s payment under Section 1 above is not required by any policy or plan and constitutes adequate consideration to support this Release Agreement, as well as your covenants and agreements within the Employment Agreement.

     5. You agree and represent that:

          (a) You have read carefully the terms of this Release Agreement;

          (b) You have had an opportunity to and have been encouraged to review this Release Agreement with an attorney;

Page15 of 16

          (c) You understand the meaning and effect of the terms of this Release Agreement;

          (d) You were given as much time as you needed to determine whether you wished to enter into this Release Agreement;

          (e) The entry into and execution of this Release Agreement is your own free and voluntary act without compulsion of any kind;

          (f) No promise or inducement not expressed herein has been made to you; and

          (g) You have adequate information to make a knowing and voluntary waiver.

     6. After delivering a signed copy of this Release Agreement to the Company, attention of the undersigned, you may revoke such acceptance by delivering a letter of revocation to the Company, attention of the undersigned, within seven (7) days thereafter (the “Revocation Period”). This Release Agreement shall become effective on the day following the expiration of the Revocation Period if you have not exercised the revocation right as indicated in the preceding sentence. If you exercise the revocation right, neither you nor the Company shall have any obligation hereunder.

*       *      *

     If you agree with the terms set forth above, please sign this Agreement indicating that you understand, agree with and intend to be bound by such terms.

     We wish you the best in the future.

Sincerely,

By:

Dated:

UNDERSTOOD AND AGREED,

INTENDING TO BE LEGALLY BOUND:

Date

Witness

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EX-10.7(J)

Exhibit 10.7(j)

Ms. Amy B. Krallman
1400 E. Ocean Boulevard, #2104
Long Beach, CA 90802

3 May 2006

Re: Retainer Agreement

Dear Amy,

This Retainer Agreement (the “Agreement”) sets forth the terms of employment by and between TRM Corporation (the “Company”) and Amy B. Krallman (“you”, the “Executive”) as of March 20, 2006 (the “Effective Date”).

1. Employment Agreement

1.1

Employment

(a)

You will hold the position of Senior Vice President and Corporate Counsel of the Company and perform those duties as are generally associated with such position. You will report to the President & Chief Executive Officer. You also agree to perform such acts and duties as the President & Chief Executive Officer may reasonably direct, to comply with all applicable policies and procedures of the Company, and to devote such time, energy and skill to your assignment as the President & Chief Executive Officer considers reasonably necessary for the performance of your duties. Your employment hereunder with the Company shall constitute approximately 60% of your employment. It is acknowledged that you are the Partner and Principle of Buyer Team Realty and Team Home Loans, and that your responsibilities to these organizations shall not be considered competition with the Company nor a violation of this Agreement. You and the Company understand and agree that circumstances may arise in which you and the Company may mutually agree to change, in whole or in part, the scope of your responsibilities and the title of your position. Notwithstanding anything herein to the contrary, you shall not be precluded from (a) engaging in charitable activities and community affairs or (b) managing your personal investments and affairs, provided that such activities do not materially interfere with the proper performance of your duties and responsibilities under this Agreement or compete with the business of the Company.

Ms. Amy B. Krallman
May 3, 2006
Page 2 of 6

(b)	Your employment with the Company will continue under this Agreement until terminated by you or the Company as provided in paragraphs 1.5 or 2.1, below. Notwithstanding the designation of a term for this Agreement, your employment with the Company will be on an “at will” basis with both you and the Company retaining the right to terminate the employment relationship at any time and for any reason, without liability on the part of the Company or any affiliated or related corporation for the termination, except as expressly provided in this Agreement. Your last day of employment with the Company is referred to herein as your Separation Date.
1.2	Salary. During the first term of this Agreement, you will be paid the annualized equivalent of $250,000 as base salary pro rated based upon approximately 60% of your time being dedicated to the Company, payable in installments on regular Company paydays. The first term shall end on June 27, 2006. After the first twelve months of employment, your base salary shall be set annually by the Compensation Committee of the Board of Directors.
1.3	Benefits. You will be given an opportunity to earn incentive compensation in each calendar year during the term of this Agreement upon the achievement of performance criteria to be established by the Compensation Committee of the Board of Directors. You will also be eligible to participate in any benefit plans or programs generally available to the Company’s management as the Board of Directors shall from time-to-time approve, which shall include at least four weeks of paid time off (PTO) per year. Additionally, all options that have been granted to you and that have vested, shall be exercisable through January 1, 2008.
1.4	Term. The term of your employment under this Agreement shall commence on the Effective Date and shall continue for ninety (90) days from the Effective Date (the “Initial Term”). Following the Initial Term, this Agreement shall automatically renew for successive ninety (90) day periods unless either the Company or you, as the case may be, provides written notice to the other party at least thirty (30) days prior to the termination of the initial Term or any renewal period, stating its or her desire to terminate or modify this Agreement, or terminates the Agreement as provided herein below.

Ms. Amy B. Krallman
May 3, 2006
Page 3 of 6

2. Termination of Agreement

2.1	Termination. This Agreement may be terminated as follows:
(a)	This Agreement may be terminated by you for any reason upon 30 days’ written notice to the Company, including notice of your intent not to renew the Agreement as set forth above in Section 1.5.
(b)	This Agreement may be terminated by the Company for any reason at any time with 30 days’ written notice to you, (including notice of its intent not to renew the Agreement as set forth above in Section 1.5), subject only to the obligation of the Company, if you are terminated for reasons other than those specified in paragraph 2.2, to pay severance pay according to the following formula:

(i)	For termination other than through a change of control of the Company, ninety (90) days pay, plus all incentive compensation earned but unpaid on or prior to the Separation Date, plus immediate vesting of all stock options or restricted stock.
(ii)	For termination through change of control of the Company, one (1) year pay, plus all incentive compensation earned but unpaid on or prior to the Separation Date, plus immediate vesting of all stock options or restricted stock.
	Severance pay may be paid to you at your option in a lump sum or in regular payroll period installments.

(c)

This Agreement shall automatically terminate in the event of your death or disability. For purposes of this Agreement, “disability” shall mean inability to perform the essential functions of your position, with or without reasonable accommodation, for a period of more than six (6) months in a twelve (12) month period by reason of physical or mental illness or incapacity as determined by a physician jointly chosen by the Company and Executive or his legal representative.

(d)

Eligibility for severance pay is conditioned upon your execution of a Release of Claims in a form provided by the Company at the time of termination.

Ms. Amy B. Krallman
May 3, 2006
Page 4 of 6

2.2 Ineligibility for Severance Pay. With respect to subparagraph 2.1(b), you will not be eligible for severance pay under this Agreement if:

(a)	you voluntarily resign or retire from your employment at any time and for any reason except because of an involuntary reduction in your base salary or a change of control of the Company;
(b)	the Company terminates your employment for cause (as defined in paragraph 2.3, below) or your employment terminates due to your death or disability;
(c)	you breach the terms of paragraph 3; or
(d)	you fail or refuse to sign the Release of Claims form provided by the Company at the time of termination.

2.3 Definition of Cause. For purposes of this Agreement, “cause” for termination shall be defined as (i) any misappropriation of funds or property of the Company by you; (ii) the conviction of or plea of guilty or nolo contendere by you of a felony or of any crime involving moral turpitude; (iii) your engagement in illegal, immoral or similar conduct tending to place you or the Company, by association with you, in disrepute; (iv) abuse of alcohol or drugs to an extent that renders you unable or unfit to perform his duties hereunder; or (v) your gross dereliction of duty.

3. Confidentiality

3.1Preservation and Non-Use of Confidential Information. You acknowledge that you have a fiduciary duty as an officer and employee of the Company not to discuss Confidential Information obtained during your employment with the Company. For purposes of this Agreement, “Confidential Information” means any and all confidential or proprietary information concerning the Company or its affiliates, joint venturers or other related entities (“The Company Group”), the disclosure of which could disadvantage The Company Group. Confidential Information shall not include (i) any information which is in the public domain, (ii) which becomes known in the industry through no wrongful act on the part of you or (iii) which relates to general knowledge about the industry, possessed by you by virtue of your prior experience in the Business. Confidential Information includes trades secrets as defined under the Uniform Trades Secrets Act.

Except pursuant to your employment by the Company and as directed by the President & Chief Executive Officer, you agree not to use Confidential Information, during the term of this Agreement or after its

Ms. Amy B. Krallman
May 3, 2006
Page 5 of 6

	termination for a period of five years, for any personal or business purpose, either for your own benefit or that of any other person, corporation, government or other entity.
	You also agree that, except pursuant to your employment by the Company as directed by the President & Chief Executive Officer, you will not disclose or disseminate any Confidential Information, directly or indirectly, at any time during the term of this Agreement or after its termination, to any person, agency, or court unless compelled to do so pursuant to legal process ( e.g., a summons or subpoena) or otherwise required by law and then only after providing the Company with prior notice and a copy of the legal process.
3.2	Covenant not to Compete. You also agree that while employed by the Company, and for a period of six months after the termination of employment, you shall not compete with the Company, either directly or indirectly, in the geographical areas where the Company does business, and you shall not perform services for or own an interest in any business that does so. Your work with Buyer Team Realty and Team Home Loans will not be considered to be a violation of this paragraph 3.2.

4.	Return of Property
	On or before your Separation Date, except as agreed to by the Company, you will return all property belonging to the Company, including, but not limited to, all documents, business machines, computers, computer hardware and software programs, computer data, telephones (cellular, mobile or otherwise), pagers, keys, card keys, credit cards, company vehicle and other Company-owned property.
5.	Right To Consult with Attorney
	You have the right to consult with an attorney or financial advisor at your own expense regarding this Agreement.
6.	Dispute Resolution
	You agree that any dispute (1) concerning the interpretation or construction of this Agreement, (2) arising from your employment with or termination of employment from the Company, (3) relating to any compensation or benefits you may claim, or (4) relating in any way to any claim by you for reinstatement or reemployment by the Company after execution of this Agreement shall be submitted to final and binding confidential arbitration. Except as specifically provided herein, the arbitration shall be governed by the rules of the American Arbitration Association or such other rules as agreed to by the parties. Each party shall be responsible for its or his own

Ms. Amy B. Krallman
May 3, 2006
Page 6 of 6

	costs and attorneys’ fees relating to mediation and arbitration. Both parties agree that the procedures outlined in this paragraph are the exclusive methods of dispute resolution.
7.	Entire Agreement
	This Agreement contains the entire agreement between you and the Company concerning the subject matters discussed herein and supersedes any other discussions, agreements, representations or warranties of any kind. Any modification of this Agreement shall be effective only if in writing and signed by each party or its duly authorized representative. This Agreement supersedes all prior employment agreements between you and the Company or any corporation affiliated with or related to the Company. The terms of this Agreement are contractual and not mere recitals. If for any reason any provision of this Agreement shall be held invalid in whole or in part, such invalidity shall not affect the remainder of this Agreement.
	This Agreement shall be construed in accordance with the laws of the state of Oregon (without regard to the conflicts of laws provisions thereof).
	In order to reflect your voluntary acceptance and agreement with these terms, please sign and return the enclosed copy of this letter.

Sincerely,
TRM CORPORATION
By:	/s/ Jeffrey F. Brotman
	Jeffrey F. Brotman
	President & CEO

ACKNOWLEDGMENT AND AGREEMENT:

I have read this Agreement and voluntarily enter into this Agreement after careful consideration and the opportunity to review it with financial or legal counsel of my choice.

/s/ Amy B. Krallman

Amy B. Krallman

Executive

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, Jeffrey F. Brotman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q 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

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(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: May 5, 2006	By:	/s/ Jeffrey F. Brotman
		Jeffrey F. Brotman
		Chief Executive Officer

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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, Daniel E. O’Brien, certify that:

1.	I have reviewed this quarterly report on Form 10-Q 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

37

(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: May 5, 2006	By:	/s/ Daniel E. O’Brien
		Daniel E. O’Brien
		Chief Financial Officer

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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 quarterly report on Form 10-Q 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

39

(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: May 5, 2006	By:	/s/ Jon S. Pitcher
		Jon S. Pitcher
		Principal Accounting Officer

40

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, Jeffrey F. Brotman, Chief Executive Officer of TRM Corporation (the “Company”), hereby certify that the accompanying Quarterly Report of the Company on Form 10-Q for the quarter ended March 31, 2006 (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: May 5, 2006	/s/ Jeffrey F. Brotman
	Jeffrey F. Brotman
	Chief Executive Officer

41

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, Daniel E. O’Brien, Chief Financial Officer of TRM Corporation (the “Company”), hereby certify that the accompanying Quarterly Report of the Company on Form 10-Q for the quarter ended March 31, 2006 (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.

Date: May 5, 2006	/s/ Daniel E. O’Brien
	Daniel E. O’Brien
	Chief Financial Officer

42

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 Quarterly Report of the Company on Form 10-Q for the quarter ended March 31, 2006 (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: May 5, 2006	/s/ Jon S. Pitcher
	Jon S. Pitcher
	Principal Accounting Officer

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