Exhibit 10.(a)
August 19, 1998
Via Facsimile and Airborne Express
Xx. Xxxxxx X. Xxxxx
Xx. Vice President
Xxxxxxx Funds
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx XX 00000
Re: Redemption of Series C Preferred Stock
Dear Xx. Xxxx:
This Letter Agreement set forth the terms and conditions under which the parties
have agreed for Interleaf to redeem the Series C Preferred Stock.
Reference is made to the Series C Preferred Stock Purchase Agreement between
Xxxxxxx Investments and Interleaf, Inc. ("Interleaf" or the "Company") dated
October 14, 1996 (the "Investment Agreement") pursuant to which Interleaf issued
and sold 1,010,348 shares of Series C Preferred Stock, $.10 par value (the
"Series C Shares") to the Xxxxxxx Growth Fund (505,174 shares) and the Xxxxxxx
Dividend Fund (505,174 shares) (collectively, the "Xxxxxxx Funds").
Our agreement is as follows:
1) Redemption. Interleaf agrees to redeem and purchase, and the Xxxxxxx Funds
agree to sell, the Series C Shares at a price of $3.04 per share, or
$3,071,458 in the aggregate (the "Purchase Price").
2) Closing. The Purchase Price shall be paid to the Xxxxxxx Funds and the
Series C Shares shall be transferred to Interleaf within forty-five (45)
days following the date on which the Company's Board of Directors approves
the terms of this Agreement, but no later than October 9, 1998. The closing
of this transaction (the "Closing") may be effected via courier, wire
transfer or other means of exchange, as agreed.
3) Release: Upon delivery of the Series C Shares to Interleaf and payment of
the Purchase Price to the Xxxxxxx Funds, each of Interleaf and the Xxxxxxx
Funds agrees (i) that the Investment Agreement shall be terminated and of
no further force or effect, and (ii) to release and discharge the other
party and its respective directors, officers, employees, agents and
representatives from and against any and all liabilities, costs,
obligations, claims, damages and expenses of every kind and nature arising
under, or in connection with the transactions contemplated, by the
Investment Agreement.
Mr. Xxxxxx Xxxxx
August 19, 1998
Page 2
4) Acknowledgement. Each of the Xxxxxxx Funds acknowledges and agrees:
a) It has received or obtained and had the opportunity to review copies
of all reports and other materials which have been filed by the
Company pursuant to the Securities Exchange Act of 1934 since the date
of the Investment Agreement, including without limitation copies of
Interleaf's 1998 Annual Report to Shareholders, Annual Report on Form
10-K for the year ended March 31, 1998, Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998, and its Proxy Statement dated
July 28, 1998.
b) It has had full and adequate opportunity to investigate the condition
of the Company and its business, and they are satisfied with the
results of its inquiries. Interleaf has provided to and discussed with
the Xxxxxxx Funds such information as the Xxxxxxx Funds has requested
(to the extent available) regarding the financial results of Interleaf
for the quarter ended June 30,1998, and the current operations,
financial condition and plans of Interleaf. Each of the Xxxxxxx Funds
represents and warrants that, in selling the Series C Shares, it has
not relied on any information or representations or warranties of
Interleaf or its directors, officers or agents regarding the Company,
its officers, financial condition, business and prospects, or the
terms of its sale of the Series C Shares.
c) It is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended.
d) It has full and sufficient power and authority and has obtained all
approvals required, and has complied with all requirements and all
reporting obligations applicable under the Federal securities laws,
with respect to this transaction.
5) Miscellaneous.
a) Each party will keep the terms, conditions and existence of this
Letter Agreement strictly confidential, and not disclose such
information to any person for any reason except to such of their
respective accountants, attorneys and advisors to whom such disclosure
is necessary in order to consummate this transaction, and who have
agreed in writing to protect such confidentiality. Provided, that
Interleaf may issue a press release or otherwise disclose the terms of
this Agreement as and when Interleaf determines such disclosure is
required under applicable securities laws.
b) As part of the Closing, the parties will execute such instruments of
transfer, mutual releases and other documents and agreements as are
necessary or appropriate in connection with this transaction.
Mr. Xxxxxx Xxxxx
August 19, 1998
Page 3
c) This Letter Agreement is the legal, valid and binding obligation of
Interleaf and each of the Xxxxxxx Funds, enforceable in accordance
with its terms. Provided, however, Interleaf's obligations are subject
to approval of its Board of Directors, scheduled for August 24, 1998.
d) This Letter Agreement amends and, to the extent inconsistent with,
supercedes the Investment Agreement. In the event of any conflict
between the terms of this Letter Agreement and the terms of the
Investment Agreement, the terms of this Letter Agreement shall
control.
e) This Letter Agreement shall be governed by the laws of the
Commonwealth of Massachusetts. Each party irrevocably consents to
jurisdiction and venue in the appropriate state and federal courts
closest to the other party's principal place of business and covenants
to not assert forum non conveniens in any action between the parties.
Each party agrees that, in the event it beaches its obligations
hereunder, the other party shall be entitled to obtain specific
performance or other equitable relief, in addition to its other
remedies, and damages.
Please indicate the agreement of the Xxxxxxx Funds to the foregoing terms and
conditions by obtaining their authorized signatures where provided below.
I look forward to closing this transaction.
Very truly yours,
Interleaf, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------
Xxxxx X. Xxxxxxxxx, CEO
AGREED:
Xxxxxxx Growth Fund Xxxxxxx Dividend Fund
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxx Name: Xxxx X. Xxxxxx
Title: Senior Vice President Title: President
Date: August 21, 1998 Date: August 21, 1998
