SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 24, 1998
TRM COPY CENTERS CORPORATION
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(Exact name of registrant as specified in its charter)
Oregon 0-19657 93-0809419
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File No.) Identification No.)
5208 NE 122nd Avenue, Portland, Oregon 97230-1074
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(Address of principal executive offices) (Zip Code)
(503) 257-8766
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(Registrant's telephone number, including area code)
No Change
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(Former name, former address and former fiscal year,
if changed since last report)
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Item 1. Change in Control of Registrant
On June 24, 1998 (the "Closing Date"), TRM Copy Centers Corporation, an
Oregon corporation ("the Company"), issued and sold to ReadyCash Investment
Limited Partners, L.P. (the "Purchaser") 1,777,778 shares of a new series of
Preferred Stock of the Company, designated the "Series A Preferred Stock", and
warrants (the "Warrants") to purchase 500,000 shares of the Company's Common
Stock at an exercise price of $15.00 a share, for an aggregate purchase price of
$20,000,000 in cash (the "Transaction"). The Company has been informed by the
Purchaser that the Purchaser obtained the funds used to purchase the Series A
Preferred Stock and Warrants from its individual limited partners in the form of
capital contributions.
Each share of Series A Preferred Stock has one vote per share and votes
together with the Common Stock on any and all matters submitted to the Company's
shareholders for a vote, except to the extent Oregon law requires otherwise. In
addition, each share of the Series A Preferred Stock is convertible at any time
at the option of the holder into .7499997 fully paid and nonassessable shares of
Common Stock and shall be automatically converted into shares of the Company's
Common Stock on the same basis if the last bid price quoted in the Nasdaq System
as of 4:00 p.m. for a share of the Company's Common Stock is at least $20.00 for
a period of 90 consecutive calendar days commencing after June 30, 1999. The
conversion ratio and the price at which the Series A Preferred Stock shall be
automatically converted shall be appropriately adjusted for any combination or
subdivision of shares, stock dividend, stock split or recapitalization.
After the closing of the Transaction, 423,281 shares of the Series A
Preferred Stock and Warrants to purchase 103,572 shares of the Company's Common
Stock were transferred from the Purchaser to FBR Financial Fund II, L.P.
In connection with the Transaction, Messrs. Edwin S. Chan, Sherman M. Coe
and Donald L. Van Maren resigned from the Company's Board of Directors (the
"Board") effective as of the Closing Date, the Company's Board of Directors was
increased to nine members, and Messrs. Daniel G. Cohen, Edward E. Cohen, Joseph
G. Denton, Kent A. Godfrey, Joel R. Mesznick and Kenneth L. Tepper were elected
to the Board. Pursuant to the terms of the Transaction, Messrs. Daniel G. Cohen
and Edward E. Cohen were designated by the Purchaser to be nominated for
election to the Board, and the nominations of Messrs. Denton, Godfrey, Mesznik
and Tepper were approved by the Purchaser. Daniel G. Cohen is the majority
shareholder and an officer and director of the general partner of the Purchaser
and Edward E. Cohen is the father of Daniel G. Cohen. Messrs. Denton, Godfrey,
Mesznik and Tepper are not affiliated with the Purchaser.
Mr. Ralph Shaw, who had been a director of the Company since 1991, resigned
from the Board on March 29, 1998.
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On the Closing Date, the Purchaser held approximately 20 percent of the
outstanding voting power of the Company's capital stock. Upon conversion of the
Series A Preferred Stock and exercise of the Warrants, the Purchaser will hold
approximately 21 percent of the outstanding shares of the Company's Common
Stock.
The Company has been informed by the Purchaser that effective as of the
Closing Date, Laifer Capital Management, Inc., which according to a Schedule 13D
filed on October 16, 1997 owns 1,052,900 shares of the Company's Common Stock,
or approximately 14.9 percent of the outstanding shares of Common Stock of the
Company, signed an irrevocable proxy to the Purchaser to vote its shares on all
matters submitted to the Company's shareholders for a vote. The irrevocable
proxy terminates on the earlier of the third anniversary of the Closing Date or
the conversion of the Series A Preferred Stock to Common Stock.
The Company believes that the completion of the Transaction, and the
execution and delivery of the foregoing irrevocable proxy, may have resulted in
a change of control of the Company within the meaning of the federal securities
laws and the rules thereunder.
Item 7. Financial Statements and Exhibits
(c) Exhibits
4.1 Investors' Rights Agreement
4.2 Amendment to the Articles of Incorporation
99.1 Press Release, dated June 29, 1998
99.2 Press Release, dated July 8, 1998
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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 hereunto duly authorized.
Dated: July 9, 1998
TRM COPY CENTERS CORPORATION
By PAUL M. BROWN
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Paul M. Brown, Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
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4.1 Investors' Rights Agreement
4.2 Amendment to the Articles of Incorporation
99.1 Press Release, dated June 29, 1998
99.2 Press Release, dated July 8, 1998
TRM COPY CENTERS CORPORATION
INVESTORS' RIGHTS AGREEMENT
June 24, 1998
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TABLE OF CONTENTS
1. Registration Rights.......................................................1
1.1 Definitions....................................................1
1.2 Request for Registration.......................................2
1.3 Company Registration...........................................3
1.4 Obligations of the Company.....................................4
1.5 Furnish Information............................................5
1.6 Expenses of Demand Registration................................5
1.7 Expenses of Company Registration...............................5
1.8 Underwriting Requirements......................................5
1.9 Delay of Registration..........................................6
1.10 Indemnification................................................6
1.11 Reports Under Securities Exchange Act of 1934..................8
1.12 Form S-3 Registration..........................................8
1.13 Termination of Registration Rights.............................9
2. Covenants of the Company..................................................9
2.1 Financial Statements and Other Information.....................9
3. Miscellaneous............................................................12
3.1 Assignment....................................................12
3.2 Governing Law.................................................12
3.3 Counterparts..................................................12
3.4 Titles and Subtitles..........................................12
3.5 Notices.......................................................13
3.6 Expenses......................................................13
3.7 Amendments and Waivers........................................13
3.8 Severability..................................................13
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INVESTORS' RIGHTS AGREEMENT
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THIS INVESTORS' RIGHTS AGREEMENT is made as of June 24, 1998, by and among
TRM COPY CENTERS CORPORATION, an Oregon corporation (the "Company"), and the
ReadyCash Investment Partners, L.P. ("Purchaser").
RECITALS
A. The Company and Purchaser are parties to the Preferred Stock and Warrant
Purchase Agreement (the "Series A Agreement") dated March 29, 1998, as amended,
pursuant to which Purchaser is acquiring shares of the Company's Series A
Preferred Stock (the "Series A Preferred") and warrants to purchase 500,000
shares of Company Common Stock (the "Warrants");
B. In order to induce the Company to enter into the Series A Agreement and
to induce Purchaser to invest funds in the Company pursuant to the Series A
Agreement, Purchaser and the Company hereby agree that this Agreement shall
govern the rights of Purchaser to cause the Company to register shares of Common
Stock issuable to Purchaser and certain other matters as set forth herein;
AGREEMENT
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
(d) The term "Holder" means any person owning or having the right
to acquire Registrable Securities.
(e) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in
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compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
(f) The term "Registrable Securities" means the Common Stock
issuable or issued upon conversion of the Series A Preferred Stock, any shares
of Common Stock issuable upon exercise of the Warrants, and any Common Stock of
the Company issued as a dividend or other distribution with respect to or in
exchange for the foregoing Registrable Securities.
(g) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
(a) If the Company shall receive at any time a written request
from Holders of 50% of the Registrable Securities outstanding that the Company
file a registration statement under the Act covering the registration of at
least fifty percent (50%) of the Registrable Securities, then the Company shall
(i) within ten days of the receipt thereof, give written notice of such request
to all Holders; and (ii) effect, as soon as practicable, and in any event within
ninety (90) days of the receipt of such request, the registration under the Act
of all Registrable Securities such holders request to be registered on such
registration form as is available (including form S-1, or similar long form
registration), subject to the limitations of subsection 1.2(b), within twenty
days of mailing of such notice by the Company.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders@) intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to subsection 1.2(a) and the Company
shall include such information in the written notice referred to in subsection
1.2(a). The underwriter will be selected by the Company and shall be reasonably
acceptable to a majority in interest of the Initiating Holders. In such event,
the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities that would otherwise be underwritten pursuant hereto, and
the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders electing to include shares in
the offering,
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including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Securities of the Company owned by each Holder;
provided, however, that the number of shares of Registrable Securities to be
included in such underwriting shall not be reduced unless all other are first
entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting registration pursuant to this Section 1.2, a certificate
signed by the Chief Executive Officer (or, if there is no Chief Executive
Officer, the President) of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such registration statement to be filed and
it is therefore essential to defer the filing of such registration statement,
the Company shall have the right to defer taking action with respect to such
filing for a period of not more than one hundred eighty (180) days after receipt
of the request of Initiating Holders; provided, however, that the Company may
not utilize this right more than once in any twelve (12) month period.
(d) In addition, the Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected three registrations
pursuant to this Section 1.2 and such registration has been declared or ordered
effective;
(ii) During the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 1.3 hereof, provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to be effective; or
(iii) If the Holders propose to dispose of shares of
Registrable Securities that may be promptly registered on Form S-3 pursuant to a
request made pursuant to Section 1.12 below and the Company promptly effects
such registration.
1.3 Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for stockholders other than Holders) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a registration on
any form that does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, at such time, promptly give Holders
written notice of such registration. Upon the written request of each Holder
given within twenty (20) days after mailing of such notice by the Company in
accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.8, include in the registration statement all of the Registrable
Securities that each Holder has requested to be registered.
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1.4 Obligations of the Company. Whenever required under this Section 1
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of Holders of
a majority of Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to two years.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as it may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by Holders; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Holders
participating in the offering shall also enter into and perform their
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities participating in
a public offering of the happening of any event as a result of which the
prospectus included in such registration statement covering the Registrable
Securities, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or nationally recognized
quotation system on which similar securities issued by the Company are then
listed.
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1.5 Furnish Information.
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities that each Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be required to effect
the registration of the Registrable Securities.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, due to the
operation of subsection 1.5(a), the number of shares of the Registrable
Securities to be included in the registration does not equal or exceed the
number of shares required to originally trigger the Company's obligation to
initiate such registration as specified in subsection 1.2(a) or subsection
1.12(b)(2), whichever is applicable.
1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, and fees and disbursements of counsel for the Company and
reasonable fees and expenses of counsel for Holders shall be borne by the
Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 if the
registration request is subsequently withdrawn at the request of Holders of a
majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses); provided, however, that if at
the time of such withdrawal, Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from that known to
Holders at the time of its request and Holders have withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then Holders shall not be required to pay any of such expenses
and shall retain their rights to demand registration pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3, including (without limitation) all registration,
filing, and qualification fees, printers and accounting fees relating or
apportionable thereto and the fees and disbursements of counsel for the Company
and reasonable fees and expenses of counsel for Holders, but excluding
underwriting discounts and commissions relating to Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it, and then
only in such quantity as the underwriters determine in
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their sole discretion will not, jeopardize the success of the offering by the
Company. If the total amount of securities, including Registrable Securities,
requested by Holders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of
Registrable Securities which the underwriters determine in their sole discretion
will not jeopardize the success of the offering (the securities so included to
be apportioned pro rata among the Holders according to the total amount of
securities entitled to be included therein owned by each Holder or in such other
proportions as shall mutually be agreed to by such Holders); provided, however,
that the Company shall be required to include all Registrable Securities
requested by Holders to be included in the offering if any securities are to be
included for the account of a security holder other than a Holder.
1.9 Delay of Registration. Holders shall have no right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 Indemnification.
(a) To the extent permitted by law, the Company will indemnify
and hold harmless Holders, any underwriter (as defined in the Act) and each
person, if any, who controls such Holder or such underwriter within the meaning
of the Act or the 1934 Act, against any losses, claims, damages, or liabilities
joint or several) to which they may become subject under the Act, or the 1934
Act or other federal or state securities law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Company will pay to such Holder, or such underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any Holder or such underwriter or controlling person.
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(b) To the extent permitted by law, each Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, any other holder selling
securities in such registration statement and any controlling person of any such
underwriter or other holder, against any losses, claims, damages, or liabilities
joint or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or other federal or state securities law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each Holder will pay, as incurred, any
legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder, which consent shall not be unreasonably withheld; provided,
that, in no event shall any indemnity under this subsection 1.10(b) exceed the
net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 1.10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.10.
(d) If the indemnification provided for herein is for any reason
held to be unenforceable by an indemnified party, the indemnifying party agrees
to contribute to the losses, claims, damages and liabilities for which such
indemnification is held
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unenforceable in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations.
(e) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a view to
making available to Holders the benefits of Rule 144 promulgated under the Act
and any other rule or regulation of the SEC that may at any time permit a Holder
to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable the Company to
utilize Form S-3 for the sale of Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144,
the Act and the 1934 Act, or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 or (ii) such other information as may be
reasonably requested in availing Holders of any rule or regulation of the SEC
that permits the selling of any such securities without registration or pursuant
to such form.
1.12 Form S-3 Registration. In case the Company shall receive from any
Holder or Holders a written request that the Company effect a registration on
Form S-3 and any related qualification or compliance with respect to all or a
part of the Registrable Securities, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request together with all or such portion of
the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within
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fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this section 1.12: (1) if
Form S-3 is not available to the Company for such offering; (2) if the Holders
propose to sell less than ten percent (10%) of the Registrable Securities; (3)
if the Company shall furnish to the Holders requesting registration a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 Registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than one hundred eighty (180) days after receipt of the request of Holders under
this Section 1.12; provided, however, that the Company shall not utilize this
right more than once in any twelve (12) month period; (4) if the Company has,
within the six (6) month period preceding the date of such request, already
effected one registration on Form S-3 for Holders pursuant to this Section 1.12;
(5) if the Company has already effected a total of six registrations on Form S-3
for Holders pursuant to this Section 1.12; or (6) in any particular jurisdiction
in which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request from Holders. All expenses incurred in connection with a registration
requested pursuant to Section 1.12, including (without limitation) all
registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the Company, but excluding any
underwriters' discounts or commissions associated with Registrable Securities,
shall be borne by the Company. Registrations effected pursuant to this Section
1.12 shall not be counted as demands for registration or registrations effected
pursuant to Sections 1.2 or 1.3, respectively.
1.13 Termination of Registration Rights. Holders shall not be entitled
to exercise any right provided for in this Section 1 with respect to any
Registrable Securities it wishes to sell that can otherwise be sold in any
three-month period without registration in compliance with Rule 144 of the Act.
2. Covenants of the Company.
2.1 Financial Statements and Other Information. The Company shall
deliver to Purchaser (so long as Purchaser holds any shares of the Series A
Preferred issued to Purchaser pursuant to the Series A Agreement):
2.1.1 Quarterly Statements. As soon as available and in any event
within 45 days after the end of each quarterly fiscal period (except the last)
of each fiscal year, if not theretofore supplied pursuant to paragraph 2.1.4
below, copies of:
9
<PAGE>
(i) a balance sheet of the Company as of the close of such
period, and
(ii) statements of income and retained earnings and cash
flow of the Company for the portion of the fiscal year ending with such period,
in each case setting forth in comparative form the figures for the corresponding
period of the preceding fiscal year and, if the Company has one or more
subsidiaries, such financial statements shall be presented on a consolidated
basis for the company and all such subsidiaries, all in reasonable detail and
certified as complete and correct, subject to changes resulting from year-end
adjustments, by an authorized financial officer of the Company;
2.1.2 Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company, if not
theretofore supplied pursuant to paragraph 2.1.4 below, copies of:
(i) a balance sheet of the Company as of the close of such
fiscal year, and
(ii) statements of income and retained earnings and cash
flow of the Company for such fiscal year,
in each case setting forth in comparative form the figures for the preceding
fiscal year and, if the Company has one or more subsidiaries such financial
statements shall be presented on a consolidated basis for the Company and all
such subsidiaries, all in reasonable detail and accompanied by an opinion
thereon of a firm of independent public accountants of recognized national
standing selected by the Company to the effect that the consolidated statements
have been prepared in accordance with generally accepted accounting principles
consistently maintained (except for changes in which such accountants concur)
and that the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly, included such tests of the accounting records and
such other auditing procedures as were considered necessary in the
circumstances;
2.1.3 Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the books of
the Company or any subsidiary; and
2.1.4 SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by the Company to stockholders generally and of each regular or
periodic report and any registration statement or prospectus filed by the
Company or any subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency, and copies of any material orders
in any proceedings to which the Company or any of its
10
<PAGE>
subsidiaries is a party issued by any governmental agency, federal or state,
having jurisdiction over the Company or any of its subsidiaries; provided,
however, that the Company shall not be required to provide copies of information
filed with the Securities and Exchange Commission or any other governmental
agency, Federal or state, which is treated as confidential under the Freedom of
Information Act or similar law.
2.1.5 Inspection of Property. The Company shall permit any
representatives designated by Purchaser (so long as Purchaser holds fifty
percent (50%) of the Preferred Stock or Common Stock issued upon conversion
thereof), upon reasonable notice and during normal business hours and at such
other times as any such holder may reasonably request, to (i) visit and inspect
any of the properties of the Company and its subsidiaries, (ii) examine the
corporate and financial records of the Company and its subsidiaries and make
copies thereof or extracts therefrom and (iii) discuss the affairs, finances and
accounts of any such corporations with the directors, executive officers and
independent accountants of the Company and its subsidiaries.
2.1.6 Confidentiality. Pursuant to this Section 2.1, the Company
may furnish Purchaser with certain information that is non-public, confidential
or proprietary in nature. As used herein, "Confidential Information" means (i)
any material, nonpublic information about the Company and its Subsidiaries and
(ii) any technical, nonfinancial information, data or know-how which is
identified in writing as confidential by the Company, in either case as
furnished by the Company to Purchaser pursuant to this paragraph but does not
include information (x) which was publicly known at the time of disclosure, (y)
which subsequently becomes publicly known through no act or omission by
Purchaser or (z) which otherwise becomes known to Purchaser, other than through
disclosure by the Company. Purchaser shall hold in confidence and not disclose
or use the Confidential Information, except (a) as may be required by law, (b)
to the officers, directors, employees, agents and professional consultants of
Purchaser or any subsidiary of Purchaser for the purposes of evaluating
Purchaser's investment in the Company. If Purchaser ceases to hold any Preferred
Stock, Purchaser will, if requested by the Company, return to the Company all
documents furnished by the Company containing Confidential Information which
have not theretofore been destroyed or returned to the Company.
2.2 Right of First Offer. If the Company proposes to offer for sale
additional shares of any class of stock (other than shares issued pursuant to a
compensation plan for employees, directors or consultants, or in connection with
the acquisition of all or a portion of another entity), the Company shall first
offer such shares to Purchaser. Purchaser shall have 30 days following receipt
of a notice of the offer to exercise the right to purchase all or a portion of
the shares the Company proposes to offer on the same price and terms as those
set forth in the notice of the offer. If Purchaser does not exercise its right
to purchase any portion of such shares within that 30-day period, then the
Company shall have 180 days thereafter to offer and sell the shares not acquired
by Purchaser, on the terms offered to Purchaser, to third parties. If all the
offered shares are not purchased by third parties within that 180-day period,
those unsold shares shall again be subject to the provisions of this
11
<PAGE>
Section 2.3. This right of first offer shall terminate as to Purchaser, or any
assignee of Purchaser, whenever it holds less than 250,000 shares of the Series
A Preferred. To the extent more than one holder of Series A Preferred has a
right of first offer pursuant to this Section 2.3 and more than all of the
shares to be offered are requested to be purchased by such holders, then the
offered shares shall be allocated among such holders in proportion to the number
of shares each holder requests to purchase.
3. Miscellaneous.
3.1 Assignment. The rights to cause the Company to register
Registrable Securities pursuant to Section 1 may be assigned (but only with all
related obligations) by a Holder to a transferee or assignee of such securities
who (i) after such assignment or transfer, holds at least 250,000 shares of
Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations), (ii) is a
partnership that is affiliated with the transferring Holder that is also a
partnership or (iii) is a majority-owned subsidiary of the transferring Holder;
provided (a) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (b) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement; and (c) such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act. For the purposes of determining the number of shares
of Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under Section 1. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities).
3.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Oregon as applied to agreements among Oregon
residents entered into and to be performed entirely within Oregon.
3.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
12
<PAGE>
3.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission or nationally recognized overnight
courier service or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
3.6 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
3.7 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Purchaser.
3.8 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement, and the balance of the Agreement shall be interpreted as if such
provision were so excluded, and shall be enforceable in accordance with its
terms.
13
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE COMPANY:
TRM COPY CENTERS CORPORATION
By: FREDERIC P. STOCKTON
-------------------------------------
Frederic P. Stockton, President
Address: 5208 NE 122nd Avenue
Portland, OR 97230-1074
PURCHASER:
READYCASH INVESTMENT PARTNERS, L.P.
By: DANIEL G. COHEN
-------------------------------------
Daniel G. Cohen, President,
ReadyCash GP, Inc.
Address: c/o ReadyCash GP, Inc.
1521 Locust Street, 10th Floor
Philadelphia, PA 19102
14
ARTICLES OF AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION
OF
TRM COPY CENTERS CORPORATION
1. The first sentence of Article III of the Restated Articles of
Incorporation is hereby amended to read in its entirety as follows:
"1. The authorized capital stock of the Corporation shall consist of
50 million shares of Common Stock, no par value, and 5 million shares of
Preferred Stock no par value."
2. The Company's Restated Articles of Incorporation is hereby amended to
add the following section at the end of Article III:
"2. Series A Preferred Stock. This Article III.2 sets forth the
designation, preferences, limitations and relative rights of a series of
Preferred Stock of the Corporation as determined by the Board of Directors of
the Corporation pursuant to its authority under ORS 60.134 and Article III.1
above. The shares of such series shall be designated Series A Preferred Stock
("Series A Preferred") and the number of shares constituting such series shall
be 1,777,778.
Section A. Dividends.
(i) When and as declared by the Corporation's Board of Directors
and to the extent permitted under the Oregon Business Corporation Act, the
Corporation will pay preferential cumulative dividends to the holders of the
Series A Preferred as provided in this Section A. Except as otherwise provided
herein, dividends on each share of Series A Preferred will accrue on a daily
basis at the rate of seven and one-half percent (7 1/2%) per annum of the
Liquidation Value thereof, determined on a quarterly basis, from and including
the date of issuance of such share of Series A Preferred to and including the
earlier of (a) the date on which the Liquidation Value of such share of Series A
Preferred plus any accrued and unpaid dividends thereon is paid to the holder
thereof upon any liquidation, dissolution or winding up of the Corporation (b)
the date on which such share of Series A Preferred is converted into Common
Stock. Such dividends will accrue whether or not they have been declared and
whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of dividends. The date on which the
Corporation initially issues any share of Series A Preferred will be deemed to
be its "date of issuance" regardless of the number of times transfer of such
share of Series A Preferred is made on the stock records maintained by or for
the Corporation and regardless of the number of certificates which may be issued
to evidence such share of Series A Preferred. To the extent not paid on March
31, June 30, September 30, and December 31 of each year beginning on September
30, 1998 (the "Dividend Payment Date"), all dividends which have accrued on each
share of Series A Preferred outstanding during the three-month period (or other
period in the case of the initial
<PAGE>
Dividend Payment Date) shall be accumulated and shall remain accumulated
dividends with respect to each such share of Series A Preferred until paid. If
at any time the Corporation pays less than the total amount of dividends then
accrued with respect to the Series A Preferred, such payment will be distributed
ratably among the holders of the Series A Preferred on the basis of the amount
of accrued and unpaid dividends with respect to the shares of Series A Preferred
owned by each such holder.
(ii) The Corporation shall not pay dividends (other than
dividends payable in shares of Common Stock) upon the Common Stock unless and
until it has paid dividends upon the Series A Preferred as set forth in Section
A(i). In the event that the Corporation declares or pays any dividends upon the
Common Stock (whether payable in cash, securities or other property) other than
dividends payable in shares of Common Stock, the Corporation shall also declare
and pay to the holders of the Series A Preferred at the same time that it
declares and pays such dividends to the holders of the Common Stock the
dividends which would have been declared and paid with respect to the Common
Stock issuable upon conversion of the Series A Preferred had all of the
outstanding Series A Preferred been converted immediately prior to the record
date for such dividend, or, if no record date is fixed, the date as of which the
record holders of Common Stock entitled to such dividends are to be determined.
Section B. Liquidation. Upon any liquidation, dissolution or winding
up of the Corporation, each holder of Series A Preferred shall be entitled to be
paid, before any distribution or payment is made upon any Junior Securities, an
amount in cash equal to the aggregate Liquidation Value of all Series A
Preferred held by such holder (plus all accrued or declared dividends unpaid
thereon), and the holders of Series A Preferred shall not be entitled to any
further payment. If, upon any such liquidation, dissolution or winding up of the
Corporation, the Corporation's assets to be distributed among the holders of the
Series A Preferred are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid hereunder, then the entire
assets to be distributed to the Corporation's stockholders shall be distributed
pro rata among such Series A Preferred holders based upon the aggregate
Liquidation Value of all Series A Preferred held by each such holder (plus all
accrued or declared dividends unpaid thereon). At least 30 days prior to any
liquidation, dissolution or winding up of the Corporation, the Corporation shall
give written notice of such event to each record holder of Series A Preferred,
specifying the amount of liquidation proceeds per share to be distributed to the
holders of the Series A Preferred and to the holders of the Common Stock.
For purposes of this Section B, a liquidation, dissolution or winding
up of this Corporation shall be deemed to be occasioned by, or to include, (A)
the acquisition of this Corporation by another entity by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation) that results in the transfer of
fifty percent (50%) or more of the outstanding voting power of this Corporation;
or (B) a sale of all or substantially all of the assets of this Corporation.
<PAGE>
In any of such events, if the consideration received by this
corporation is other than cash, the value of such consideration will be deemed
its fair market value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or other similar
restrictions on free marketability covered by (B) below:
(1) If traded on a securities exchange or through the Nasdaq
National Market, the value shall be deemed to be the average of the closing
prices of the securities on such quotation system over the thirty (30) day
period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) days prior to the
closing; and
(3) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by this Corporation and
the holders of at least a majority of the voting power of all then outstanding
shares of the Series A Preferred.
(B) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined as above in (A) (1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by this corporation and the holders
of at least a majority of the voting power of all then outstanding shares of the
Series A Preferred.
This Corporation shall give each holder of record of Series A
Preferred written notice of such impending transaction not later than twenty
(20) days prior to the shareholders' meeting called to approve such transaction,
if any, or twenty (20) days prior to the closing of such transaction, whichever
is earlier, and shall also notify such holders in writing of the final approval
of such transaction. The first of such notices shall describe the material terms
and conditions of the impending transaction and the provisions of this Section
B, and this Corporation shall thereafter give such holders prompt notice of any
material changes. The transaction shall in no event take place sooner than
twenty (20) days after this Corporation has given the first notice provided for
herein or sooner than ten (10) days after this Corporation has given notice of
any material changes provided for herein; provided, however, that such periods
may be shortened upon the written consent of the holders of Series A Preferred
that are entitled to such notice rights or similar notice rights and that
represent at least a majority of the voting power of all then outstanding shares
of such Series A Preferred.
Section C. Voting Rights.
(i) The holders of Series A Preferred shall have no right to vote
on matters to be voted on by the stockholders of the Corporation except as
provided in this
<PAGE>
Section C and as otherwise expressly required by applicable law; provided that
in any event, each holder of Series A Preferred shall be entitled to notice of
all stockholder meetings at the same time and in the same manner as notice is
given to the stockholders entitled to vote at any such meeting.
(ii) The holders of Series A Preferred shall be entitled to vote,
together as a single class with the holders of the Common Stock and the other
classes of the Corporation's capital stock voting with the Common Stock, on all
matters submitted to the stockholders for a vote with each share of Series A
Preferred having one vote and shall be entitled to notice of each stockholders
meeting in accordance with the Bylaws of the Corporation.
Section D. Conversion.
1. Right to Convert.
(i) Subject to the terms and conditions of this Section D, each
holder of Series A Preferred shall have the right, at its option, to convert
each share of the Series A Preferred held by such holder at any time into
.7499997 fully paid and nonassessable shares of Common Stock.
2. Conversion Procedure.
(i) Except as otherwise provided herein, each conversion of
Series A Preferred shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates representing the
Series A Preferred to be converted have been surrendered at the principal office
of the Corporation (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of the Series A
Preferred). At such time as such conversion has been effected, the rights of the
holder of such Series A Preferred as such holder shall cease and the Person or
Persons in whose name or names any certificate or certificates for shares of
Conversion Stock are to be issued upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby.
(ii) The conversion rights of each share of Series A Preferred
shall terminate on the date the Corporation has paid to the holder of such share
the Liquidation Value thereof (plus all accrued or declared dividends unpaid
thereon).
(iii) As soon as possible after a conversion has been effected
(but in any event within three business days in the case of subparagraph (a)
below), the Corporation shall deliver to the converting holder:
(a) a certificate or certificates representing the number of
shares of Conversion Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified;
<PAGE>
(b) payment in an amount equal to all accrued dividends
unpaid with respect to each share of Series A Preferred converted into
Conversion Stock, which have not been paid prior thereto, plus the amount
payable under subparagraph (vii) below with respect to such conversion; and
(c) a certificate representing any shares of Series A
Preferred which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion but which
were not converted.
(iv) If the Corporation is not permitted under applicable law to
pay any portion of the accrued dividends on the shares of Series A Preferred
being converted into Conversion Stock, the Corporation shall pay such dividends
to the converting holder as soon thereafter as funds of the Corporation are
legally available for such payment. At the request of any such converting
holder, the Corporation shall provide such holder with written evidence of its
obligation to such holder.
(v) The issuance of certificates for shares of Conversion Stock
upon any conversion of Series A Preferred shall be made without charge to the
holders thereof for any issuance tax in respect thereof or other cost incurred
by the Corporation in connection with such conversion and the related issuance
of shares; provided that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the holder of the
shares which are being converted.
(vi) The Corporation shall not close its transfer books against
the transfer of Conversion Stock issued or issuable upon conversion of Series A
Preferred in any manner which interferes with the timely conversion of the
Series A Preferred. The Corporation shall assist and cooperate with any holder
of Series A Preferred required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of Series A
Preferred hereunder (including, without limitation, making any filings required
to be made by the Corporation).
(vii) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be deliverable upon any
conversion of Series A Preferred, the Corporation, in lieu of delivering the
fractional share therefor, shall pay an amount to the holder thereof equal to
the Market Price of such fractional interest as of the date of conversion.
(viii) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of issuance upon the conversion of the Series A Preferred, such
number of shares of Common Stock issuable upon conversion of all outstanding
Series A Preferred. All shares of stock which are so issuable shall, when
issued, be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges. The Corporation shall take all such actions as may
be necessary to ensure that all such shares may be so issued without violation
of any applicable
<PAGE>
law or governmental regulation or any requirements of any domestic securities
exchange upon which shares of such stock may be listed (except for official
notice of issuance which shall be immediately delivered by the Corporation upon
each such issuance). The Corporation shall not take any action which would cause
the number of authorized but unissued shares of Common Stock to be less than the
required number of such shares to be reserved hereunder.
3. Conversion Adjustments.
(i) In order to prevent dilution of the conversion rights granted
hereunder, the conversion ratio provided for in Section D.1 shall be subject to
adjustment from time to time pursuant to this Section D.3.
(ii) Subdivision or Combination of Common Stock. If the Corpora
tion at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the conversion ratio provided for
in Section D.1 in effect immediately prior to such subdivision shall be
proportionately increased, and if the Corporation at any time combines (by
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the conversion ratio provided
for in Section D.1 in effect immediately prior to such combination shall be
proportionately decreased.
4. Notices.
(i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Series A
Preferred, setting forth in reasonable detail and certifying the calculation of
such adjustment.
(ii) The Corporation shall give written notice to all holders of
Series A Preferred at least 20 days prior to the date on which the Corporation
closes its books or takes a record (a) with respect to any dividend or
distribution upon Common Stock, (b) with respect to any pro rata subscription
offer to holders of Common Stock or (c) for determining rights to vote with
respect to any dissolution or liquidation.
5. Automatic Conversion. All of the outstanding Series A Preferred
shall be automatically converted into Conversion Stock upon the closing of the
date as of which the Share Price of the Common Stock for a period of 90
consecutive calendar days commencing after June 30, 1999 is at least $20.00 (as
appropriately adjusted for any combination or subdivision of shares, stock
dividend, stock split or other recapitalization).
Section E. Purchase Rights.
If at any time the Corporation grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"Purchase Rights"), then each holder of Series A Preferred shall be entitled to
acquire, upon the terms applicable to such Purchase
<PAGE>
Rights, the aggregate Purchase Rights which such holder could have acquired if
such holder had held the number of shares of Conversion Stock acquirable upon
conversion of such holder's Series A Preferred immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.
Section F. Registration of Transfer.
The Corporation shall keep at its principal office a register for the
registration of Series A Preferred. Upon the surrender of any certificate
representing shares of Series A Preferred at such place, the Corporation shall,
at the request of the record holder of such certificate, execute and deliver (at
the Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of shares of Series A
Preferred represented by the surrendered certificate. Each such new certificate
shall be registered in such name and shall represent such number of shares of
Series A Preferred as is requested by the holder of the surrendered certificate
and shall be substantially identical in form to the surrendered certificate. The
issuance of new certificates shall be made without charge to the holders of the
surrendered certificates for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such issuance (but not including
any transfer taxes).
Section G. Replacement.
Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder shall be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
shares of Series A Preferred, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of shares of Series A Preferred
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
<PAGE>
Section H. Definitions.
"Common Stock" means the Common Stock, no par value, of the
Corporation, and any capital stock of any class of the Corporation hereafter
authorized which is not limited to a fixed sum or percentage of any stated value
in respect to the rights of the holders thereof to participate in dividends or
in the distribution of assets upon any liquidation, dissolution or winding up of
the Corporation.
"Conversion Stock" means shares of Common Stock issuable upon
conversion of Series A Preferred; provided that if there is a change such that
the securities issuable upon conversion of Series A Preferred are issued by an
entity other than the Corporation or there is a change in the class of
securities so issuable, then the term "Conversion Stock" shall mean one share of
the security issuable upon conversion of the Series A Preferred if such security
is issuable in shares, or shall mean the smallest unit in which such security is
issuable if such security is not issuable in shares.
"Convertible Securities" means any stock or securities convertible
into or exchangeable for any equity securities of the Company.
"Junior Securities" means any of the Corporation's capital stock or
other equity securities other than the Series A Preferred.
"Liquidation Value" of any share of Series A Preferred as of any
particular date shall be equal to $11.25 (as such amount is equitably adjusted
for subsequent stock splits, stock combinations, stock dividends and
recapitalizations affecting the Series A Preferred).
"Market Price" of any security means the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if there has been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the day as of
which "Market Price" is being determined and the 20 consecutive business days
prior to such day. If at any time such security is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
"Market Price" shall be the fair value thereof determined jointly by the
Corporation and the holders of a majority of the Series A Preferred. If such
parties are unable to reach agreement within a reasonable period of time, such
fair value shall be determined by an independent appraiser experienced in
valuing securities jointly selected by the Corporation and the holders of a
majority of the Series A Preferred. The determination of such appraiser shall be
final and binding upon the parties, and the Corporation shall pay the fees and
expenses of such appraiser.
<PAGE>
"Options" means any rights or options to subscribe for or purchase
equity securities or Convertible Securities.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Share Price" means the closing price on a day of sales of the Common
Stock on the securities exchange on which the Common Stock may be listed, or if
on any day the Common Stock is not listed on any securities exchange, the last
bid price quoted in the NASDAQ System as of 4:00 P.M., New York time on such
day, or if on any day the Common Stock is not quoted in the NASDAQ System, the
last bid price on such day in the domestic over-the-counter market as reported
by the National Quotation Bureau, Incorporated, or any similar successor
organization.
Section I. Notices.
Except as otherwise expressly provided hereunder, all notices referred
to herein shall be in writing and shall be delivered by reputable overnight
courier service, charges prepaid, and shall be deemed to have been given when so
mailed or sent (i) to the Corporation, at its principal executive offices,
attention: Paul Brown, Chief Financial Officer and (ii) to any stockholder, at
such holder's address as it appears in the stock records of the Corporation
(unless otherwise indicated by any such holder)."
DATED: June 24, 1998
TRM Announces Selection of New Board of Directors
PORTLAND, Ore., July 8 /PRNewswire/ -- TRM Copy Centers Corporation
(Nasdaq: TRMM) announced today the election of six new members to its Board of
Directors. In addition, the Board of Directors was expanded from seven members
to nine. The slate of new Directors was elected on June 24, 1998 in a meeting of
shareholders.
TRM's new Board of Directors includes continuing directors Frederick O.
Paulsell, Michael D. Simon and Frederic P. Stockton. Mr. Edward E. Cohen was
elected Chairman and Mr. Paulsell was elected Vice-Chairman. Mr. Stockton
retains his position as President and Chief Executive Officer. The new Directors
took office immediately following the completion of the Company's transaction
with ReadyCash Investment Partners, L.P., which was previously announced.
"We are very pleased to have attracted business executives with electronic
banking, international business, finance and e-commerce expertise to our Board,"
stated Fred Stockton. "We believe the convergence of e-commerce and electronic
banking can provide a foundation for convenience ATM's to respond to consumer
demand for a whole host of financial services. Our number one focus at this time
is the successful launching of our ATM Division to provide convenience access to
cash. However, we believe that rapid changes in technology are shifting consumer
behavior patterns to expect total convenience in all of their activities. Our
new Board of Directors has the expertise and diversity needed to guide TRM in
this changing environment." Biographies of the new members of TRM's Board of
Directors follows:
Daniel G. Cohen ha been President and Chief Operating Officer of Resource
America, Inc., a specialty finance company, since May 1998, and a Director since
July 1997. Prior thereto and since 1995, Mr. Cohen has been an Executive Vice
President and a Director of ReadyCash GP, Inc. Mr. Cohen is also Chairman, Chief
Executive Officer and director of Fidelity Mortgage Funding, Inc., the
residential mortgage loan origination subsidiary of Resource America, and a
director of Jefferson Bank, of Philadelphia, Pennsylvania. Prior to joining
Resource America, Inc., Mr. Cohen was principally engaged in graduate studies at
the University of Pennsylvania. Mr. Cohen is the son of Edward E. Cohen. Mr.
Daniel G. Cohen's term will expire in 1999.
Edward E. Cohen has been the Chairman of the Board of Directors of Resource
America, Inc., since 1990, its Chief Executive and a director since 1988, and
its President from July 1995 to May 1998. He is Chairman of the Board of
Directors and a director of Brandywine Construction & Management, Inc., a real
estate construction and management company. Since 1981, Mr. Cohen has been
Chairman of the Executive Committee and a director of JeffBanks, Inc., a bank
holding company. From 1969 through 1989, Mr. Cohen was Chairman of the Board or
Chairman of the Executive Committee of State National Bank of Maryland (now
first Union Bank of Maryland). Mr. Cohen is the father of Daniel G. Cohen. Mr.
Edward E. Cohen's term will expire in 2000.
<PAGE>
Joseph B. Denton has been a principal with EDS/A.T. Kearney, an
international financial services consulting firm, where he has consulted with
banks internationally since 1994. From 1987 to 1994, Mr. Denton was a
self-employed management consultant in Dallas, Texas. From 1984 to 1987, Mr.
Denton was a partner with the accounting firm of Deloitte, Haskins and Sells
where he was responsible for financial institutions consulting. Mr. Denton has
held executive and senior officer positions in regional banks and served at the
board and policy making levels. Mr. Denton is also a former member of the Board
of Directors of Bankwire, a consortium of banks that ran an administrative wire
service between the members. Mr. Denton served as Vice President and Chairman of
the North Texas Regional Clearinghouse Operations Committee from 1976 to 1978,
and as Vice President and Chairman of the Southwestern Automated Clearinghouse
Association Marketing Committee from 1975 to 1977. Mr. Denton was a Faculty
member at Texas Tech University School of Banking from 1978 to 1979. Mr. Denton
has a B.B.A. degree with a major in finance from Texas Tech University. Mr.
Denton's term will expire in 1998.
Kent B. Godfrey was elected President and Chief Executive Officer of
Andromedia, Inc., a supplier of web activity analysis solutions, in 1996. Before
joining Andromedia, from 1994 to 1995, Mr. Godfrey served as Vice President of
Marketing/Strategic Planning for IA Corp., a computer systems integrator, and in
1992 he served in a similar role at Epoch Systems, a hierarchical data storage
management company. From 1986 to 1991, Mr. Godfrey acted as a consultant on
various projects for Sequent Computer Systems, Inc. From 1983 to 1986, Mr.
Godfrey worked at Pyramid Technology, a manufacturer of UNIX-based computers, in
the marketing organization. Mr. Godfrey holds a Master of Science degree in
Economics from the London School of Economics, and is a graduate of Babson
College, where he received a B.S. in Operations Research. Mr. Godfrey's term
will expire in 1998.
Joel R. Mesznik has been President of Mesco Ltd. since its inception in
1990. Mesco Ltd. is a financial advisory firm providing advisory services
related to international financial transactions in a variety of industries. Mr.
Mesznik was previously a managing director of Drexel Burnham Lambert from 1976
to 1986. Mr. Mesznik serves on the Board of Directors of Resource Asset
Investment Trust, a real estate investment trust, as well as on the Board of
Directors of several non-public companies. He holds a Master of Business
Administration from Columbia University. Mr. Mesznik's term will expire in 1999.
Kenneth L. Tepper has been President, Chief Executive Officer and a
Director of USABancShares, Inc., a federal bank holding company, since March
1995, and since December 1995, has also been President and Chief Executive
Officer of BankPhiladelphia, USABancShares' operating subsidiary. From January
1994 to November 1995, Mr. Tepper was Managing Director of Merchant BancShares,
In., an investment banking firm specializing in community bank mergers and loan
portfolio acquisitions. Mr. Tepper was previously a Director, Merchant Banking
Division, for Tucker Federal Savings & Loan, a savings institution from November
1991 to December 1993. Mr. Tepper holds a Bachelor of Arts Degree from Emory
2
<PAGE>
University and a Juris Doctor Degree from the Villanova University School of
Law. Mr. Tepper's term will expire in 1999.
Forward Looking Statements
The discussions in this release regarding the Company's plans and
expectations with respect to revenues and profitability are forward-looking
statements and actual results may materially differ. These statements involve
risks and uncertainties that could cause actual results to materially differ,
including the following: competitive factors, consumer demand for the Company's
services, the Company's ability to execute its plans successfully and the
factors set forth in the Company's filings with the SEC, including For 10-K for
the year ended June 30, 1997.
3
TRM Announces Shareholders Approval
of $20 Million Equity Investment in Company
Portland, Ore., June 29/PRNewswire/ -- TRM Copy Centers Corporation (Nasdaq:
TRMM - news) announced today that its shareholders voted their approval of a $20
million equity investment by ReadyCash Investment Partners, L.P. The investment
transaction was completed immediately following the special meeting of
shareholders. The investment will be used by TRM to launch its new Automated
Teller Machine (ATM) Division. TRM is the leader in providing self-service
convenience photocopy centers in retail establishments in North America and
Europe. TRM owns and operates 33,000 photocopy centers.
"We are very pleased with the support we have received from our shareholders as
we prepare to open our ATM Division," stated Fred Stockton, President and CEO.
"Providing convenience ATM services is a natural extension of our convenience
photocopying services. Over 75% of our retailers presently do not offer ATM
services to their customers. We believe that many of these retailers would be
successful ATM sites. In fact, we have received inquiries from many retailers
since we announced our intent to enter the ATM market."
"We are now in a position to aggressively build our ATM Division," stated
Stockton. "Current activities include a search for key management as well as
evaluation of potential acquisition opportunities."
TRM announced the investment by ReadyCash and its intent to enter the ATM market
on March 30, 1998. ReadyCash receives shares of preferred stock convertible to
common stock at $15 per share. ReadyCash Investment Partners, L.P. is led by
Edward and Daniel Cohen of Philadelphia.
FORWARD LOOKING STATEMENTS
The discussions in this release regarding the Company's plans and expectations
with respect to revenues and profitability are forward-looking statements and
actual results may materially differ. These statements involve risks and
uncertainties that could cause actual results to materially differ, including
the following: competitive factors, consumer demand for the Company's services,
the Company's ability to execute its plan successfully and the factors set forth
in the Company's filings with the SEC, including Form 10-K for the year ended
June 30, 1997.
