AMENDMENTS TO THE
RESTATED ARTICLES OF INCORPORATION
OF
TRM COPY CENTERS CORPORATION
1. Article I of the Restated Articles of Incorporation is hereby amended to
read in its entirety as follows:
"ARTICLE I
The name of this Corporation is TRM Corporation."
2. 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."
3. 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 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.
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 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;
(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 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
Corporation 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 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.
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.
"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)."
Amendment 1 dated: September 11, 1998.
Amendment 2 and 3 dated: June 24, 1998