Exhibit 10(d)
VIA Facsimile and U.S. Mail
November 4, 1998
To the Holders of 6% Convertible Preferred Stock
of Interleaf, Inc.
Re: 6% Convertible Preferred Stock
Gentlemen:
Reference is made to the Letter Agreement dated October 27, 1998 (the "Letter
Agreement"), sent by Interleaf, Inc. ("Interleaf") to each of you as holders of
the 6% Convertible Preferred Stock of Interleaf ("6% Preferred").
Commitments Received From 75% of the Holders
Interleaf is pleased to advise you that it has received executed counterparts to
the Letter Agreement from the holders of at least 75% of the 6% Preferred
currently outstanding. Accordingly, we are moving forward to close the
transactions contemplated by the Letter Agreement immediately.
Additional Terms
In connection with obtaining the executed counterparts to the Letter Agreement,
the Company agreed that if the Company enters into written commitment(s) to
issue equity or debt securities for cash or other consideration (other than in
connection with the exercise of currently outstanding employee options) during
the period beginning on the date hereof and ending on January 31, 1999, the
Company shall offer to all holders of 6% Preferred who returned an executed
counterpart to the Letter Agreement the opportunity to participate in such
issuance on the same terms and conditions offered to other investors
participating therein.
Participation in any such issuance by all holders of 6% Preferred who returned
an executed counterpart to the Letter Agreement shall be capped at the lesser of
100% of the aggregate portion of such issuance being offered to such other
investors or 50% of the notional value (i.e., $1,000 per share) of the aggregate
shares of 6% Preferred held by such holders as of the date of the Letter
Agreement, with each holder being offered a participation therein based on its
pro rata portion of the aggregate shares of 6% Preferred held by such holders as
of the date of the Letter Agreement.
Please note that you are not being asked to make any decision regarding your
participation in any such issuance at this time. The Company will provide you
with notice of, and information and documentation concerning any such issuance,
if any, at the time thereof, and you will be given five days from such notice to
respond.
Series D Closing Instructions
November 4, 1998
Page 2 of 3
Closing Information
1. Please sign where provided below and attached certificate(s) representing
all shares of Series D Stock held by you, accompanied by stock powers duly
endorsed in blank or duly executed instruments of transfer.
2. Within three (3) business days from the receipt by Interleaf of
certificates representing all shares of Series D Stock held by you and by
all other persons who executed a counterpart to the Letter Agreement,
Interleaf will: (a) instruct its transfer agent to issue such number of
shares of Common Stock to you as required under the Letter Agreement; and
(b) mail to you (i) a check in the dollar amount required under the Letter
Agreement, and (ii) certificate(s) representing the balance, if any, of
shares of Series D Stock still held by you.
3. The Company hereby represents and warrants to each of you that the shares
of Common Stock to be delivered to you were registered under the Securities
Act of 1933 on the Registration Statement on Form S-3 filed by the Company
on November 26, 1997.
4. Each of you hereby represents and warrants to the Company, severally and
not jointly, that:
a) you have, and upon consummation of the transactions contemplated by
this Letter Agreement the Company will acquire, good, valid and
marketable title to all of the shares of Series D Stock set forth
beside your name on the signature pages hereto, free and clear of all
liens;
b) you have reviewed all reports and proxy statements filed by the Company
with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 since March 31, 1998;
c) you have had the opportunity to make inquiry concerning the Company and
its business and personnel and the terms of this transaction;
d) the officers of the Company have made available to you any and all
written information that you have requested and have answered to your
satisfaction all inquiries made by you; and
e) you are not subject to any claim of any broker, finder, consultant or
intermediary who might, directly or indirectly, be entitled to a fee or
commission in connection with the consummation of the transactions
contemplated hereby.
5. Each of you hereby (a) withdraws all notices of conversion of Series D
Stock under the Agreement with respect to which shares of Common Stock have
not been issued and delivered by the Company prior to the date hereof, and
(b) releases the Company and its directors and officers from all manner of
claims, liabilities, obligations or suits, in law or in equity, with
respect thereto.
6. The Preferred Stock Investment Agreements dated as of September 30, 1997
between the Company and each of you, and the Series D certificate of
designation, shall remain in full force and effect; provided, however, that
notwithstanding anything to the contrary in the foregoing, from and after
the closing of the transactions contemplated by the Letter Agreement, the
Conversion Price (as defined in the Series D certificate of designation)
for all shares of Series D Stock still held by you, if any, shall be $1.40.
The Letter Agreement is terminated and of no further force or effect.
Series D Closing Instructions
November 4, 1998
Page 3 of 3
7. Each of you and the Company will pay its own costs and expenses, including
attorneys' fees and expenses incurred by you in connection with the
transactions contemplated herein or in the Letter Agreement.
If you are in agreement with the foregoing, please sign, date and return this
letter, which will constitute our agreement with respect thereto, together with
your Series D Stock certificates.
Interleaf, Inc.
By:
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Craig Newfield, General Counsel
THE INVESTOR:
Shares of Series D To be Delivered by the Company
Stock Being Converted Common Stock Bank Check
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Name of Investor
Name of Investor
By:
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X00 X00,000 $X00,000
Name:
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Title:
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No. of Series D Shares held by the
Investor after these transactions:
Date: 0
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