Exhibit 10(c)
October 27, 1998
VIA Facsimile and U.S. Mail
To the Holders of
6% Convertible Preferred Stock
of Interleaf, Inc.
Re: 6% Convertible Preferred Stock
Gentlemen:
Reference is made to the Preferred Stock Investment Agreement, dated as of
September 30, 1997 (the "Investment Agreement"), between Interleaf, Inc.
("Interleaf") and you pursuant to which you acquired such number of shares of 6%
Convertible Preferred Stock of Interleaf ("6% Preferred") as set forth beside
your name below.
Interleaf and you hereby agree to consummate the transactions set forth on the
Term Sheet attached as Exhibit A hereto on the terms set forth therein.
Interleaf's obligations to consummate such transactions are contingent upon
Interleaf obtaining financing from third parties in at least the aggregate
amount required to fund the initial redemption as set forth in the Term Sheet.
However, in this regard, Interleaf represents that it has obtained financing
commitments in an aggregate amount sufficient to fund such initial redemption,
subject only to the requirement that Interleaf obtain the agreement of the
holders of at least 75% of the 6% Preferred currently outstanding to consummate
the transactions set forth on the Term Sheet.
Interleaf's and your obligations to consummate the transactions set forth on the
Term Sheet shall terminate unless (i) Interleaf receives executed counterparts
hereof from the holders of at least 75% of the 6% Preferred currently
outstanding on or before November 6, 1998, and (ii) the transactions
contemplated herein are consummated on or before the earlier to occur of (a) the
date which is ten (10) days from the day on which Interleaf receives executed
counterparts hereof from the holders of at least 75% of the 6% Preferred
currently outstanding, or (b) November 20, 1998; provided, that Interleaf has
the right to extend each of these dates one time for a period of up to three (3)
business days as necessary for ministerial purposes.
This Letter Agreement is being executed by you subject to and conditioned as
follows: (i) the final agreements and related documents will in all respects be
subject to your approval and will contain the same terms and conditions
described herein, and (ii) in the event that Interleaf offers any other holder
of 6% Preferred, whether or not a signatory to a counterpart of this letter
agreement, terms and conditions different from those contained herein, you shall
have the right, but not the obligation, to consummate the transaction upon such
other terms and conditions.
Series D Investors
October 27, 1998
Page 2
If you are in agreement with the foregoing, please sign, date and return
this letter which will constitute our agreement with respect thereto.
Very truly yours,
INTERLEAF, INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇, CFO
Agreed and accepted:
Shares of 6% Preferred
----------------------------------------
Initially Currently
Purchased Held
Name of Investor
X,000 X,000
By:
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Name:
--------------------------------
Title:
--------------------------------
Date:
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Exhibit A to Letter Agreement With Holders of 6% Convertible Preferred Stock
TERM SHEET
Amendment to
Preferred Stock Investment Agreement
for
6% Convertible Preferred Stock
of
Interleaf, Inc.
Initial Redemption: Interleaf shall initially redeem 40% of the Investor's 6%
Convertible Preferred Stock at $1,150 per share, inclusive
of dividends accrued to date.
Payment: $1,000 per share will be paid in cash.
$ 150 per share will be paid in the form of Interleaf Common
Stock, valued at $1.00 per share.
Conversion: Please indicate your preference:
/ / The Conversion Price shall be permanently fixed at $1.40 for
the remaining 60% of the Investor's 6% Convertible Preferred
Stock. Future dividends on shares of 6% Convertible
Preferred remaining outstanding after the initial
redemption, if any, shall continue to accrue at 6% under
original terms. The 6% Convertible Preferred Stock shall be
100% convertible immediately and permanently.
OR
/ / The remaining 60% of the Investor's 6% Convertible Preferred
Stock, together with dividends accrued in kind to the date
of conversion, shall be immediately converted into Common
Stock, using a Conversion Price of $1.10.
Other: The Preferred Stock Investment Agreement and the 6%
Convertible Preferred Stock certificate of designation shall
remain in full force and effect under original terms;
provided, that (as set forth above) the Conversion Price
shall be permanently fixed at $1.40 and all (100%) of the 6%
Convertible Preferred Stock that remains outstanding shall
be immediately convertible into Common Stock.