NEITHER THIS
WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR THE
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD OR
TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF THE SAID ACT AND
APPLICABLE STATE SECURITIES LAWS HAVE BEEN COMPLIED WITH OR UNLESS
COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED.
Issued: April 18, 2008 to LC
Capital Master Fund, Ltd.
10% Assigned to Cadence Special Holdings II, LLC: May 30,
2008
COMMON STOCK PURCHASE
WARRANT
Void after
April 18, 2015
This Warrant (the
“ Warrant ”) entitles Cadence Special Holdings
II, LLC (including any successors or assigns, the “
Holder ”), for value received, to purchase from TRM
Corporation, an Oregon corporation, at any time and from time to
time, subject to the terms and conditions set forth herein, during
the period starting from 5:00 a.m., Eastern Time, on the Initial
Exercise Date (as defined in Section 1 below) to 5:00 p.m.,
Eastern Time, on the Expiration Date (as defined in Section 1
below) at which time this Warrant shall expire and become void, all
or any portion of the Warrant Shares at the Exercise Price (as
defined in Section 1 below). This Warrant also is subject to
the following terms and conditions:
1.
Definitions . As used in this Warrant, the following
terms shall have the respective meanings set forth below or
elsewhere in this Warrant as referred to below:
“
Affiliate ” means any Person that, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, a Person, as such
terms are used and construed under Rule 144, and any Person
(or group of Persons) who share(s) voting or investment power or is
(are) deemed a beneficial owner(s), as such terms are used and
construed under Rule 13d-3 of the rules and regulations
promulgated under the Securities Exchange Act of 1934, as amended,
including, without limitation, any Person that serves as a general
partner and/or investment adviser or in a similar capacity of a
Person.
“ Common
Stock ” means the common stock, no par value per share,
of the Company (including any securities into which or for which
such shares may be exchanged for, or converted into, pursuant to
any stock dividend, stock split, stock combination,
recapitalization, reclassification, reorganization or other similar
event).
“
Company ” means TRM Corporation, an Oregon
corporation.
“
Exercise Price ” means $0.28 per share of Common
Stock, as applicable and as adjusted from time to time pursuant to
the terms of this Warrant.
“
Expiration Date ” means April 18,
2015.
“ Fair
Market Value ” shall mean (i) if the Common Stock is
traded on NASDAQ or any other national securities exchange, then
the last reported sale price per share of Common Stock on The
NASDAQ Stock Market or such other national securities exchange in
which such Common Stock is quoted or listed, as the case may be, on
the date immediately preceding each date the Warrant is exercised
or, if no such sale price is reported on such date, such price on
the next preceding business day in which such price was reported,
(ii) if the Common Stock is traded over-the-counter with an
average weekly trading volume as reported on the Pink Sheets of not
less than 250,000 shares for each of the four full trading weeks
ending on the trading day immediately preceding the date the
Warrant is exercised, then the average of the closing bid and asked
prices over the five (5) trading days ended on the trading day
immediately preceding each date the Warrant is exercised or
(iii) if such Common Stock is not traded, quoted or listed on
The NASDAQ Stock Market or any national securities exchange or the
over-the-counter market, then the fair market value of a share of
Common Stock, as determined in good faith by the Board of Directors
of the Company in a manner consistent with the Board of
Directors’ past valuation practices.
“
Holder ” has the meaning set forth in the preamble of
this Warrant.
“ Initial
Exercise Date ” means the date hereof.
“
Person ” (whether or not capitalized) means an
individual, entity, partnership, limited liability company,
corporation, association, trust, joint venture, unincorporated
organization, and any government, governmental department or agency
or political subdivision thereof.
“ SEC
” means the Securities and Exchange Commission
“
Securities Purchase Agreement ” means that certain
Securities Purchase Agreement dated April 18, 2008, among the
Company, the respective Purchasers party thereto and Lampe, Conway
& Co., LLC, as Administrative Agent and Collateral Agent for
the Purchasers.
“ Warrant
Shares ” means an aggregate of 1,250,000 shares of Common
Stock, which amount shall be adjusted to give effect to all
adjustments thereto provided for herein.
2.1 Method of Exercise; Payment .
(a) Cash Exercise . Subject to all of the terms
and conditions hereof, this Warrant may be exercised, in whole or
in part, with respect to any Warrant Shares, at any time and from
time to time during the period commencing on the Initial Exercise
Date and ending at 5:00 p.m., Eastern Time, on the Expiration Date,
by surrender of this Warrant to the Company at its principal
office, accompanied by a subscription substantially in the form
attached hereto, executed by the Holder and accompanied by
(a) wire transfer of immediately available
funds or
(b) certified or official bank check payable to the order of
the Company, in each case in the amount obtained by multiplying
(i) the number of Warrant Shares for which the Warrant is
being exercised, as designated in such subscription, by
(ii) the Exercise Price. Thereupon, the Holder shall be
entitled to receive the number of duly authorized, validly issued,
fully paid and nonassessable Warrant Shares determined as provided
for herein.
(b) Cashless Exercise/Conversion . Subject to
all of the terms and conditions hereof, the Holder shall have the
right to convert this Warrant, in whole or in part, with respect to
any Warrant Shares, at any time and from time to time during the
period commencing on the Initial Exercise Date and ending at 5:00
p.m., Eastern Time, on the Expiration Date, by surrender of this
Warrant to the Company at its principal office, accompanied by a
conversion notice substantially in the form attached hereto,
executed by the Holder. Thereupon, the Holder shall be entitled to
receive a number of duly authorized, validly issued, fully paid and
nonassessable Warrant Shares equal to:
(i) the
number of Warrant Shares (subject to adjustment as provided in
Section 3 hereof) which such Holder would be entitled to
receive upon exercise of such Warrant for the number of Warrant
Shares designated in such conversion notice (without giving effect
to any adjustment thereof pursuant to this subsection),
multiplied by (y) the Fair Market Value of each such
Warrant Share so receivable upon such exercise
(ii) the
number of Warrant Shares (subject to adjustment as provided in
Section 3 hereof) which such Holder would be entitled to
receive upon exercise of such Warrant for the number of Warrant
Shares designated in such conversion notice (without giving effect
to any adjustment thereof pursuant to this subsection),
multiplied by (y) the Exercise Price
(iii) the
Fair Market Value per Warrant Share.
2.2 Immediate Vesting . This Warrant shall be
exercisable with respect to Warrant Shares immediately upon its
issuance.
2.3 Delivery of Stock Certificates on Exercise . As
soon as practicable after the exercise of this Warrant, and in any
event within four (4) business days thereafter, the Company,
at its expense, and in accordance with applicable securities laws,
will cause to be issued in the name of and delivered to the Holder,
or as the Holder may direct (subject in all cases, to the
provisions of Section 8 hereof), a certificate or certificates
for the number of Warrant Shares purchased by the Holder on such
exercise, plus , in lieu of any fractional share to which
the Holder would otherwise be entitled, cash equal to such fraction
multiplied by the Fair Market Value.
2.4 Shares To Be Fully Paid and Nonassessable . All
Warrant Shares issued upon the exercise of this Warrant shall be
validly issued, fully paid and nonassessable, free of
all
liens, taxes,
charges and other encumbrances or restrictions on sale (other than
those set forth herein).
2.5 Fractional Shares . No fractional shares of
Common Stock or scrip representing fractional shares of Common
Stock shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share of Common Stock called for upon
any exercise hereof, the Company shall make a cash payment to the
Holder as set forth in Section 2.3 hereof.
2.6 Issuance of New Warrants; Company Acknowledgment
. Upon any partial exercise of this Warrant, the Company, at
its expense, will forthwith and, in any event within ten (10)
business days, issue and deliver to the Holder a new warrant or
warrants of like tenor, registered in the name of the Holder,
exercisable, in the aggregate, for the balance of the Warrant
Shares. Moreover, the Company shall, at the time of any exercise of
this Warrant, upon the request of the Holder, acknowledge in
writing its continuing obligation to afford to the Holder any
rights to which the Holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant;
provided , however , that if the Holder shall fail to
make any such request, such failure shall not affect the continuing
obligation of the Company to afford to the Holder any such
rights.
2.7 Payment of Taxes and Expenses . The Company shall
pay any recording, filing, stamp or similar tax which may be
payable in respect of any transfer involved in the issuance of, and
the preparation and delivery of certificates (if applicable)
representing, (i) any Warrant Shares purchased upon exercise
of this Warrant and/or (ii) new or replacement warrants in the
Holder’s name or the name of any transferee of all or any
portion of this Warrant.
3.
Payment of Exercise Price . The Exercise Price for the
Warrant Shares being purchased may be paid (i) in cash, by
certified check or by wire transfer to an account designated in
writing by the Company, (ii) by the Holder surrendering a
number of Warrant Shares having a Fair Market Value on the date of
exercise equal to, greater than (but only if by a fractional share)
or less than the required aggregate Exercise Price, in which case
the Holder shall receive the number of Warrant Shares to which it
would otherwise be entitled upon such exercise, less the
surrendered shares, or (iii) any combination of the methods
described in the foregoing clauses (i) and (ii).
4.
Adjustment of Exercise Price . The Exercise Price shall
be subject to adjustment from time to time upon the happening of
certain events as follows:
4.1 Subdivision or Combination of Stock . If at any
time or from time to time after the date hereof, the Company shall
subdivide (by way of stock dividend, stock split or otherwise) its
outstanding shares of Common Stock, the Exercise Price in effect
immediately prior to such subdivision shall be reduced
proportionately and the number of Warrant Shares (calculated to the
nearest whole share) shall be increased proportionately such that
the number of Warrant Shares immediately after such subdivision
shall constitute the same percentage of Common Stock (calculated on
a fully diluted basis) as the Warrant Shares had represented
immediately preceding the subdivision, and conversely, in the event
the outstanding shares of Common Stock shall be combined (whether
by stock combination, reverse stock split or otherwise) into a
smaller number of shares, the Exercise Price in effect immediately
prior to such
combination
shall be increased proportionately and the number of Warrant Shares
(calculated to the nearest whole share) shall be reduced
proportionately such that the number of Warrant Shares immediately
after such combination shall constitute the same percentage of
Common Stock (calculated on a fully diluted basis) as the Warrant
Shares had represented immediately preceding the combination. The
Exercise Price and the number of Warrant Shares, as so adjusted,
shall be readjusted in the same manner upon the happening of any
successive event or events described in this
Section 4.1.
4.2 Adjustment for Stock Dividends . If at any time
after the date hereof, the Company shall declare a dividend or make
any other distribution upon any class or series of stock of the
Company payable in shares of Common Stock or securities convertible
into shares of Common Stock, the Exercise Price and the number of
Warrant Shares to be obtained upon exercise of this Warrant shall
be adjusted proportionately to reflect the issuance of any shares
of Common Stock or convertible securities, as the case may be,
issuable in payment of such dividend or distribution. The Exercise
Price and the number of Warrant Shares, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive
event or events described in this Section 4.2.
4.3 Adjustments for Reclassifications . If the Common
Stock issuable upon the conversion of this Warrant shall be changed
into the same or a different number of shares of any class(es) or
series of stock, whether by reclassification or otherwise (other
than an adjustment under Sections 4.1 and 4.2 or a merger,
consolidation, or sale of assets provided for under Section 4.4),
then and in each such event, the Holder hereof shall have the right
thereafter to convert each Warrant Share into the kind and amount
of shares of stock and other securities and property receivable
upon such reclassification, or other change by holders of the
number of shares of Common Stock into which such Warrant Shares
would have been convertible immediately prior to such
reclassification or change, all subject to successive adjustments
thereafter from time to time pursuant to and in accordance with,
the provisions of this Section 4.
4.4 Adjustments for Merger or Consolidation . In the
event that, at any time or from time to time after the date hereof,
the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other Person,
(c) sell or transfer all or substantially all of its
properties or assets, or (d) sell or transfer more than 50% of
the voting capital stock of the Company (whether issued and
outstanding, newly issued, from treasury, or any combination
thereof) to any other person under any plan or arrangement
contemplating the consolidation or merger, sale or transfer, or
dissolution of the Company, then, in each such case, the Holder,
upon the exercise of this Warrant as provided in Section 2.1
hereof at any time o
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