EXHIBIT 4.3
NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (I)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (II) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.
Date of No. of
Issue: [____], 1999 STOCK PURCHASE WARRANT Shares: [____]
Subscribe for and Purchase Common Stock of
INTERLEAF, INC.
THIS CERTIFIES that, for value received, TOWER HILL CAPITAL GROUP (together
with any subsequent transferees of all or any portion of this Warrant, the
"Holder"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to subscribe for and purchase from Interleaf, Inc. a Massachusetts
corporation (hereinafter called the "Company"), up to [____] fully paid and
non-assessable shares of the Company's common stock, $.01 par value per share
(the "Shares"), at the price of $ 4.80 per share (the "Warrant Purchase Price"),
subject to adjustment as provided in Section 5.
1. PURCHASE RIGHTS. The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time and from time to time
commencing on the date hereof and ending at 5:00 p.m. (EST) on [____].
2. EXERCISE OF WARRANT; NET ISSUE EXERCISE.
2.1 EXERCISE OF WARRANT. Subject to Section 1 above, the purchase rights
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the duly executed Notice of
Exercise (the form of which is attached as Exhibit A) at the principal office of
the Company and by the payment to the Company, by certified check or wire
transfer of immediately available funds, of an amount equal to the then
applicable Warrant Purchase Price per share multiplied by the number of Shares
then being purchased. Subject to Section 2.2, upon exercise, the Holder shall be
entitled to receive, within five (5) business days thereafter (or as soon
thereafter as practicable), a certificate or certificates, issued in the
Holder's name, for the number of Shares so purchased. The Shares so purchased
shall be deemed to be issued as of the close of business on the date on which
this Warrant shall have been exercised.
2.2. NET ISSUE EXERCISE.
(a) At either party's option, this Warrant may be exercised on a "net
issue" basis, as follows. The Holder shall tender this Warrant together with its
notice of Exercise but without payment of the exercise price, and receive Shares
equal to the value of this Warrant (or the portion thereof being cancelled) upon
surrender of this Warrant at the principal office of the Company together with
its Notice of Exercise, in which event the Company shall issue to the Holder a
number of Shares computed using the following formula:
X = Y(A - B)
-----
A
Where X = the number of Shares to be issued to the Holder;
Y = the number of Shares purchasable under this Warrant;
A = the fair market value of one Share; and
B = the Warrant Purchase Price (as adjusted to the date of such
calculations).
Once either party exercises its option to cause this Warrant to be
exercised on a net issue basis as provided above, the other party shall not be
able to force exercise for cash under Section 2.1.
(b) For purposes of this Section, fair market value of a Share shall mean
the volume-weighted average of the last sale price reported on the Nasdaq
National Market for the Common Stock for the 20 trading days preceding the day
the Warrant is surrendered for exercise.
3. SHARES TO BE ISSUED; RESERVATION AND REGISTRATION OF SHARES. The Company
covenants that the Shares that may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all liens and charges with respect to the issue
thereof. During the period within which the purchase rights represented by the
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issuance upon exercise of the purchase rights
represented by this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the right represented by this Warrant.
In the event that, at any time during the term of this Warrant, the Company
files with the Securities and Exchange Commission a registration statement under
which the Company seeks to register securities of the Company under the
Securities Act of 1933 (the "'33 Act") for re-sale by the holder of such
securities, and not for the Company's own account (a "Registration Statement"),
and provided that the Shares would be eligible to be included in such
Registration Statement, then the Company agrees to use reasonable efforts to
include the Shares in such Registration Statement and to effectively register
the Shares under the '33 Act for re-sale by the Holder. The Company shall
provide the Holder with 30 days notice of its intention to file a Registration
Statement, and the Holder shall have ten business days from such notice to
notify the Company that the Holder wishes to have the Shares included therein.
The Holder shall cooperate with the Company in the registration process, and the
Company shall bear such reasonable incremental expenses of including the Shares
in such Registration Statement, not to exceed $5,000. The Holder shall have no
right to participate in, and this provision shall not apply to, any registration
statement filed by the Company in connection with a merger, acquisition,
divestiture, reorganization, rights offering, exchange offering, stock option or
other benefit plan. Once such a Registration Statement is filed, the Company
shall have sole and exclusive control over the prosecution of such Registration
Statement, and nothing contained herein will restrict, prevent or delay the
Company from amending, abandoning or delaying such a Registration Statement as
the Company sees fit in the Company's sole discretion.
4. NO FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Common
Stock, as determined under Section 2.
5. ADJUSTMENT FOR MERGER, CONSOLIDATION OR SALE OF ASSETS. In the event
that at any time or from time to time after the Date of Issue the Company shall
merge or consolidate with or into another entity, or shall sell all or
substantially all of its assets, the Board of Directors of the Company shall
provide such that the Holder hereof thereafter shall have the right to receive
the kind and amount of securities, property or cash that the Holder hereof would
have received had he exercised this Warrant immediately prior thereto (less the
amount of the exercise price).
If the Company at any time or from time to time while this Warrant is
outstanding shall declare or pay, without consideration, any dividend on the
Shares payable in Shares, or shall effect a subdivision of the outstanding
Shares into a greater number of Shares (by stock split, reclassification or
otherwise than by payment of a dividend in Shares or in any right to acquire
Shares), or if the outstanding Shares shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of Shares, then the
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number of Shares issuable upon the exercise of this Warrant and the Warrant
Purchase Price shall be appropriately adjusted to such number of Shares and such
price as would have been held and paid by the Holder is this Warrant had been
issued immediately prior to the date of such dividend, subdivision, combination
or reclassification.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to
exercise of this Warrant and the payment for the Shares so purchased. Upon valid
exercise of this Warrant and payment for the Shares so purchased in accordance
with the terms of the Warrant, the Holder or the Holder's designee, as the case
may be, shall be deemed a shareholder of the Company.
7. SALE OR TRANSFER OF THE WARRANT; LEGEND. The Warrant and the Shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Securities Act of 1933 as amended, or a similar Federal
statute, and the rules and regulations of the Securities and Exchange Commission
issued thereunder, as they each may, from time to time, be in effect (the
"Act"), or (ii) the Company first shall have been furnished with an opinion of
legal counsel satisfactory to the Company to the effect that such sale or
transfer is exempt from the registration requirements of the Act, which opinion
may include the conclusion that the holding period of this Warrant may be tacked
to the holding period for the Shares for purposes of satisfying the requirements
of Rule 144 under the Act upon a net issue exercise hereunder. Each certificate
representing any Warrant shall bear the legend set out on page 1 hereof. Each
certificate representing any Shares shall bear a legend substantially in the
following form, as appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.
8. MODIFICATIONS AND WAIVERS. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.
9. NOTICES. Any notice, request or other document required or permitted to
be given or delivered to the Holder or the Company shall be delivered, or shall
be sent by certified or registered mail, postage prepaid, to the Holder at its
address shown on the books of the Company or to the Company at the address
indicated therefor on the signature page of this Warrant, or, if different, at
the principal office of the Company. Any such notice shall be deemed to have
been given (a) on the business day actually received if given by hand, (b) on
the business day immediately subsequent to mailing, if sent by U.S. express mail
service or private overnight mail service, or (c) three (3) business days
following the mailing thereof, if mailed by certified or registered mail,
postage prepaid, return receipt requested.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the
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Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of this Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate, of like tenor, in lieu
of the lost, stolen, destroyed or mutilated Warrant or stock certificate.
11. REPRESENTATIONS AND WARRANTIES OF HOLDER. By accepting this Warrant,
the Holder represents and warrants that he, she or it is acquiring this Warrant
and the Shares for his, her or its own account, for investment and not with a
view to, or for sale in connection with, any distribution thereof or any part
thereof. Holder represents and warrants that he, she or it is (a) experienced in
the evaluation of businesses similar to the Company, (b) is able to fend for
himself, herself or itself in the transactions contemplated by this Warrant, (c)
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Company, (d)
has the ability to bear the economic risks of an investment in the Company, (e)
has been furnished with or has had access to such information as is specified in
subparagraph (b)(2) of Rule 502 promulgated under the Act and (f) has been
afforded the opportunity to ask questions of and to receive answers from the
Company and to obtain any additional information necessary to make an informed
investment decision with respect to an investment in the Company.
12. SUCCESSORS AND ASSIGNS. Subject to the rules and regulations of the
National Association of Securities Dealers, Inc., this Warrant may be assigned,
in whole or in part, to any affiliate of the Holder, or any officer, director,
equity holder or employee of the Holder or any affiliate of the Holder. This
Warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets, and all of the obligations of the Company relating to the Shares
issuable upon exercise of this Warrant shall survive the exercise and
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the Holder.
13. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Interleaf, Inc. and the Holder have caused this Warrant
to be executed under seal by its officer thereunto duly authorized.
INTERLEAF, INC.
AGREED:
TOWER HILL CAPITAL GROUP
By: ___________________________
Peter Rice, CFO
By: _____________________________
Date: _________________________
Name: ___________________________
Attest: Title: __________________________
Date: ___________________________
_______________________________
Craig Newfield, Clerk
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EXHIBIT A
NOTICE OF EXERCISE
To: Interleaf, Inc.
62 Fourth Avenue
Waltham, MA 02451 (USA)
Attn: General Counsel
Re: EXERCISE OF STOCK PURCHASE WARRANT
1. The undersigned Tower Hill Capital Group (the "Holder") hereby elects to
purchase _______ shares of Common Stock of Interleaf, Inc., pursuant and subject
to the terms and conditions of the attached Warrant, as follows (check one):
/ / The Warrant is being exercised in cash, pursuant to Section 2.1, and
the Holder tenders herewith payment of the purchase price of such
shares in full; or
/ / The Warrant is being exercised on a net exercise basis pursuant to
Section 2.2.
2. Please issue a certificate or certificates representing said Shares in
the name of TOWER HILL CAPITAL GROUP and deliver such certificate(s) to the
address indicated below.
3. The Holder represents that the aforesaid shares of Common Stock are
being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
The Holder further represents that such shares shall not be sold or transferred
unless either (1) they first shall have been registered under the Securities Act
of 1933, as amended, or (ii) the Company first shall have been furnished with an
opinion of legal counsel reasonably satisfactory to the Company to the effect
that such sale or transfer is exempt from the registration requirement.
4. In the event of partial exercise, please re-issue an appropriate Warrant
exercisable into the remaining shares, in the name of the Holder and deliver
such Warrant to the address indicated below.
TOWER HILL CAPITAL GROUP
____________________________________ ______________________________________
(Signature) (Date)
____________________________________ ______________________________________
(Type or Print Name) (Address for delivery of Shares)
____________________________________ ______________________________________
(Title) (Address for delivery of Shares)
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