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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 1, 1999
REGISTRATION NO. 333-85681
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------------
INTERLEAF, INC.
(Exact name of Registrant as Specified in its Charter)
MASSACHUSETTS 04-2729042
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
62 FOURTH AVENUE
WALTHAM, MASSACHUSETTS 02451
(781) 290-0710
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-----------------------------------
CRAIG NEWFIELD, ESQ.
INTERLEAF, INC.
62 FOURTH AVENUE
WALTHAM, MASSACHUSETTS 02451
(781) 290-0710
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
-----------------------------------
COPIES TO:
DAVID MURPHREE, ESQ.
BROWN, RUDNICK, FREED & GESMER
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
TEL: (617) 856-8200
FAX: (617) 856-8201
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under Securities Act of 1933,
please check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
PRELIMINARY PROSPECTUS DATED SEPTEMBER 1, 1999, SUBJECT TO COMPLETION
The information contained in this prospectus is not complete and the securities
may not be sold until the related registration statement filed with the
Securities and Exchange Commission or any applicable state securities
commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
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INTERLEAF, INC.
1,040,333 SHARES OF COMMON STOCK
This prospectus relates to the resale of 1,040,333 shares of the common
stock of Interleaf. These shares are already outstanding and may be
offered for sale from time to time for the accounts of the selling
stockholders listed on page 5 of this prospectus.
The common stock presently is traded on the Nasdaq National Market
under the symbol "LEAF". On August 31, 1999, the last reported sale
price of the common stock on the Nasdaq National Market was $9.25 per
share.
An investment in the common stock offered under this prospectus
involves a high degree of risk. See "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
THE DATE OF THIS PROSPECTUS IS SEPTEMBER __, 1999.
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<PAGE>
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SUMMARY
ABOUT INTERLEAF
Interleaf and its subsidiaries develop and market software products used in the
creation, publication, management and distribution of information and documents
in electronic and paper form. Interleaf's software products enable customers to
compose, edit, view, print, control, manage and distribute information and
documents on a cost-effective and efficient basis.
Interleaf's core product line includes:
- electronic publishing;
- document management systems;
- intranet publishing; and
- content management software.
Interleaf also provides technical support and maintenance, consulting, custom
application development, and implementation services to its customers.
Interleaf's principal executive offices are located at 62 Fourth
Avenue, Waltham, Massachusetts 02451, and its telephone number is (781)
290-0710.
SUMMARY OF THE OFFERING
Securities Offered: 1,040,333 shares of common stock.
Plan of Distribution: The shares of common stock covered by this
prospectus may be offered from time to time
by the selling stockholders. See "Plan of
Distribution."
Trading: The common stock presently is traded on
the Nasdaq National Market under the
symbol "LEAF."
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-2-
<PAGE>
RISK FACTORS
The following risk factors should be carefully considered in
evaluating Interleaf and its business.
INTERLEAF IS DEPENDENT ON THE SUCCESS OF ITS NEW E-CONTENT PRODUCTS AND
SERVICES.
Interleaf's strategy for future growth depends upon the successful
development, introduction and customer acceptance of new and improved
products and services such as its content management products (called
BladeRunner-TM-) and related services. Content management refers to processes
and technology which enable a business enterprise to create and package
information content (such as text, graphics, documents and hyperlinks) from
throughout an organization and its business partners as part of a dynamic,
integrated web-based solution. There is a risk that the market for content
management products and services may not grow, that Interleaf may not be
successful in developing content management software, or that the marketplace
may not accept Interleaf's software. Interleaf's new products are based on
the "XML" language (eXtensible Markup Language). There are risks that this
new technology will change, and as a result the new products will not meet
market and customer requirements. There is also a risk that XML will be
supplanted as the de facto standard in the content management market, and
that BladeRunner will become obsolete or that Interleaf will be forced to
migrate the product to a new technology.
INTERLEAF'S QUARTERLY OPERATING RESULTS MAY FLUCTUATE.
Interleaf believes that period-to-period comparisons of its results of
operations are not necessarily meaningful and that investors should not rely on
them as indications of future performance because of the following factors:
- Interleaf typically ships a substantial amount of its products in the
final weeks, or even the final days, of each quarter;
- The length of Interleaf's sales cycle makes it difficult to predict
when Interleaf will receive license revenue; and
- Any shortfall or delay in the recognition of revenue from even a
limited number of software license transactions could cause
significant variations in Interleaf's operating results from
quarter to quarter because Interleaf's expenses are relatively
fixed.
These factors also increase the risk that Interleaf's results in some
quarters will be below the expectations of stock analysts or investors. Such an
"earnings surprise" frequently will result in a drop in the market price of a
company's stock.
INTERLEAF FACES INTENSE COMPETITION IN BOTH THE TECHNICAL DOCUMENTATION
AND CONTENT MANAGEMENT MARKETS FROM COMPETITORS WITH GREATER RESOURCES.
The market for Interleaf's existing technical documentation products
is very competitive, subject to rapid change and significantly affected by
activities of other industry participants. Several competitors in that market
have greater market penetration, greater name recognition, a larger installed
base of customers and significantly greater financial, technical and marketing
resources than Interleaf.
While Interleaf has identified its primary existing competitors in the
content management market, this market is still developing and subject to rapid
change. As a result, new competitors may emerge very
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<PAGE>
quickly, or very large companies such as Microsoft Corporation may decide to
enter the market, presenting significant competitive challenges and causing
confusion and turmoil in the market.
INTERLEAF NEEDS TO MAINTAIN A GOOD WORKING RELATIONSHIP WITH MICROSOFT, AND TO
DEVELOP NEW RELATIONSHIPS WITH OTHER COMPANIES.
Interleaf also needs to maintain a good working relationship with
Microsoft Corporation, since many of Interleaf's products are designed to be
accessed using Microsoft software such as Microsoft Word, Office, SQL Server
and NT. Interleaf believes that market penetration and acceptance of its new
content management products will depend significantly on developing
relationships with companies that will promote, market, re-sell and integrate
BladeRunner, including relationships with third party resellers, system
integrators and other companies. Interleaf cannot guaranty that it will be able
to develop and maintain these relationships.
INTERLEAF'S INTELLECTUAL PROPERTY HAS LIMITED PROTECTION; OTHERS COULD
MISAPPROPRIATE INTERLEAF'S INTELLECTUAL PROPERTY AND INTERLEAF MAY NOT BE ABLE
TO ENFORCE ITS RIGHTS; INTERLEAF'S INTELLECTUAL PROPERTY COULD INFRINGE ON
RIGHTS OF OTHERS.
Interleaf's success is heavily dependent upon the protection of its
proprietary technology through a combination of copyrights, trademarks,
patents, trade secrets and technical measures. There is the risk that
Interleaf's attempts to protect its rights will not be adequate or that
competitors may independently develop similar technology. Interleaf seeks to
protect its software, documentation and other written materials primarily under
trade secret and copyright laws, which afford only limited protection. The laws
of some foreign countries do not provide the same level of protection to
Interleaf's proprietary rights as do the laws of the United States. Policing
unauthorized use of Interleaf's products is difficult. While Interleaf cannot
determine the extent to which piracy of its software products exists, some
software piracy can be expected.
Interleaf is not aware that any of its products infringe the
proprietary rights of third parties. However, in the future, third parties may
claim that Interleaf's current or future products infringe on their proprietary
rights. Claims of this type could be very time-consuming, result in costly
litigation, cause product shipment delays or require Interleaf to enter into
costly royalty or licensing agreements.
INTERLEAF'S FOREIGN SALES AND FINANCIAL RESULTS MAY FLUCTUATE BECAUSE OF
CURRENCY EXCHANGE RATE FLUCTUATIONS.
Interleaf generates sales primarily in U.S. dollars, British pounds,
and Euros and incurs expenses principally in the same currencies. Fluctuations
in the value of the U.S. dollar and foreign currencies have caused, and are
likely to continue to cause, amounts translated into U.S. dollars to fluctuate
in comparison with previous periods. Interleaf generally has not attempted to
limit its foreign currency exposure through foreign currency exchange rate
hedging transactions. Exchange rate fluctuations or other risks associated with
international operations may have a material adverse affect on Interleaf's
business, financial condition and results of operations. Interleaf's worldwide
business operations also may be affected by changes in demand resulting from
these currency exchange rate fluctuations, as well as by governmental controls
and other risks associated with international sales (such as changes in various
regulatory requirements, political and economic changes and disruptions,
export/import controls, tariff regulations, difficulties in staffing and
managing foreign sales and support operations, greater difficulties in trade
accounts receivable collection, and possibly adverse tax consequences).
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YEAR 2000 PROBLEMS COULD AFFECT INTERLEAF'S BUSINESS.
Some computers, software, and other equipment include programming code
in which calendar year data is abbreviated to only two digits. As a result of
this design decision, some of the systems do not properly recognize a year that
begins with "20" instead of "19". These problems are widely expected to increase
in frequency and severity as the year 2000 approaches, and are commonly referred
to as the "Millennium Bug" or "Year 2000 problem". Interleaf has made
significant efforts to address its Year 2000 issues, as described in its Annual
Report on Form 10-K for the fiscal year ended March 31, 1999. At this time, we
have not identified any significant risks associated with its Year 2000
readiness, although there is a risk that unanticipated problems may arise. Any
costs, which are not expected to be material, that are associated with
compliance efforts are being funded out of cash flow from operations.
RECENT ACQUISITIONS HAVE RISKS.
As part of its business strategy to acquire and develop new products
and services, Interleaf acquired PDR Automated Systems and Publications, Inc.
and the remaining outstanding capital of Interleaf Italia Srl and certain assets
of Softquad and Texcel International AB during the last year. The risks related
to these acquisitions include, among others, the difficulty of assimilating the
operations, information systems and personnel of the acquired businesses;
difficulties in assimilating the acquired products into Interleaf's current and
future products, sales force and sales channels; the risk that customers of the
acquired businesses will react unfavorably to the acquisition and as a result
Interleaf will not reap the benefits that it had expected; and difficulties in
retaining and integrating employees of the acquired businesses.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus and in the documents
incorporated by reference are forward-looking. The following and similar
expressions identify forward-looking statements:
- expects
- anticipates
- estimates
Forward-looking statements include, but are not limited to, statements related
to:
- Interleaf's plans, objectives, expectations and intentions;
- the timing of, availability and functionality of products under
development or recently introduced; and
- general economic conditions.
Actual results may differ materially from those suggested by the forward-looking
statements for various reasons, including those discussed under "Risk Factors."
These forward-looking statements speak only as of the date of this prospectus,
or in the case of forward-looking statements in documents incorporated by
reference, as of the dates of those documents.
USE OF PROCEEDS
Interleaf will not receive any proceeds from the sale by the selling
stockholders listed below of the shares of common stock offered under this
prospectus.
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SELLING STOCKHOLDERS
The shares of common stock covered by this prospectus are being offered by
those selling stockholders listed below. Of the 1,040,333 shares offered
hereby, 100,000 shares are issuable upon the exercise of certain Stock
Purchase Warrants dated February 17, 1999 and April 12, 1999 by Tower Hill
Capital Group, LLC and Tower Hill Securities, Inc., and 940,333 shares were
issued in the private placement described below.
Interleaf entered into an agreement effective August 13, 1999 with certain
existing stockholders, new investors and the CEO of Interleaf under which
each of them agreed to purchase and Interleaf agreed to sell a total of
940,333 shares of common stock at a purchase price of $7.50 per share. On
September 2, 1999, Interleaf and the selling stockholders consummated the
closing of the purchase and sale of 940,333 shares of common stock pursuant
to such agreements. Interleaf issued all 940,333 shares to the selling
stockholders on the date of the closing.
As partial payment for investment banking services, Interleaf issued Stock
Purchase Warrants to Tower Hill Capital Group, LLC dated February 17, 1999
and April 12, 1999, respectively, entitling it to purchase a total of 100,000
shares of common stock. Subsequently, Tower Hill Capital Group, LLC sold to
Tower Hill Securities, Inc. warrants to purchase 50,000 shares of the common
stock, comprised of a portion of the warrant issued on February 17, 1999 and
the entire warrant issued on April 12, 1999. Under the terms of those
warrants, the Company is obligated to register the shares issuable upon
exercise of those warrants for re-sale under this registration statement.
Other than Mr. Jaime W. Ellertson, President and Chief Executive Officer of
Interleaf, who purchased 13,333 shares in the September 1999 private placement,
and Tower Hill Capital Group, none of the selling stockholders has held any
position or office or had any other material relationship with Interleaf during
the past three years.
The following table sets forth:
- the number of shares of common stock beneficially owned by each of the
selling stockholders as of September 1, 1999 (including any shares
which that selling stockholder has the right to acquire within 60
days after September 1, 1999 by the exercise of options) after taking
into account the sale of shares of common stock in the private
placement;
- the maximum number of shares of common stock that may be offered by
the selling stockholder under this prospectus;
- the number of shares of common stock that will be beneficially owned by
each selling stockholder assuming all of the shares that may be offered
under this prospectus are sold; and
- the percentage of common stock owned after the offering if all of the
shares that may be offered under this prospectus are sold.
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The information with regard to each selling stockholder provided in the table
and footnotes below is based upon information provided to Interleaf by that
selling stockholder. Straus Capital Management, S Squared Technology Corp. and
PAW Capital Partners, each of whom is an investment advisor, have informed
Interleaf that the shares listed opposite its name are owned by three, 20 and
two accounts, respectively, with respect to which it has discretionary
authority.
<TABLE>
<CAPTION>
Number of
Maximum Shares
Number of Shares Number of Beneficially Percentage of
Beneficially Owned as Shares Being Owned after Class Owned
Name of Beneficial Owner of September 1, 1999 Offered Offering after Offering
- ----------------------------- --------------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Jaime W. Ellertson 219,518 13,333 206,185 1.7%
Warburg, Pincus Trust - Small 400,000 400,000 0 *
Company Growth Portfolio
Maple Row Partners, L.P. 100,000 100,000 0 *
Straus Capital Management 100,000 100,000 0 *
Libra Fund, L.P. 65,700 50,000 15,700 *
Edward O. Thorp 50,000 50,000 0 *
Rainbow Trading Corp. 50,000 50,000 0 *
S Squared Technology Corp. 1,046,848 135,000 911,848 7.3%
PAW Capital Partners 357,000 42,000 315,000 2.6%
Tower Hill Capital Group LLC 171,479 50,000 121,479 1.0%
Tower Hill Securities, Inc. 50,000 50,000 0 *
</TABLE>
- -----------
* Less than one percent.
PLAN OF DISTRIBUTION
We are registering all of the shares on behalf of the selling
stockholders. "Selling stockholders," as used in this prospectus, includes
donees, pledgees, transferees or other successors in interest selling shares
received from a named selling stockholder after the date of this prospectus.
The selling stockholders may sell their shares from time to time. The
selling stockholders will act independently of Interleaf in making decisions
with respect to the timing, manner and size of each sale. The sales may be made
on one or more markets at prices and at terms then prevailing or at prices
related to the then current market price, or in negotiated transactions. The
selling stockholders may sell their shares by one or more of, or a combination
of, the following methods:
- purchases by a broker-dealer as principal and the resale by such
broker or dealer for its account pursuant to this prospectus,
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
- block trades in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction,
- an over-the-counter distribution in accordance with the rules of the
NASDAQ National Market,
- in privately negotiated transactions,
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- in put or call option transactions or short sales related to the
shares, and
- for shares that qualify for resale under Rule 144 of the Securities
Act, under that rule rather than this prospectus.
Selling stockholders may make sales directly to purchasers or through
broker-dealers. If making sales through broker-dealers, those broker-dealers may
in turn arrange for other broker-dealers to participate. Broker-dealers will
receive commissions or discounts from the selling stockholders in amounts to be
negotiated immediately prior to the sale. In offering the shares covered by this
prospectus, the selling stockholders and any broker-dealers who execute sales
for the selling stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with those sales. Any profits
realized by the selling stockholders and the compensation of any broker-dealer
may be deemed to be underwriting discounts and commissions.
In addition, if any selling stockholder is an affiliate of a
broker-dealer, and sells its shares prior to one year after acquiring those
shares then, in the view of the SEC staff, that selling stockholder is an
underwriter and may only sell stock under this prospectus if Interleaf is
eligible to use Form S-3 for a sale of stock by it. As of the date hereof,
Interleaf is eligible to use Form S-3 for a sale of stock by it.
In connection with sales of the shares, the selling stockholders may
enter into hedging transactions with financial institutions, including
broker-dealers. In connection with those transactions, those financial
institutions may engage in short sales of the common stock in the course of
hedging the positions they assume with selling stockholders. The selling
stockholders may also sell the common stock short and redeliver the shares to
close out their short positions. The selling stockholders may also enter into
option or other transactions with financial institutions which require the
delivery to those financial institutions of shares offered by this prospectus.
The financial institution may then resell those shares pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a financial institution, and, upon a
default, the financial institution may make sales of the pledged shares pursuant
to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may agree to indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities, including liabilities arising under the
Securities Act.
To the extent required, this prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. If Interleaf is
notified by a selling stockholder that any material arrangement has been entered
into with a broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a
broker or dealer, a supplement to this prospectus will be filed, if required
under the Securities Act, disclosing (i) the name of each selling stockholder
and of the participating broker-dealers(s), (ii) the number of shares involved,
(iii) the price at which the shares were sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealers(s), where applicable,
(v) that the broker-dealer(s) did not conduct any investigation to verity the
information set out or incorporated by reference in this prospectus and (vi)
other facts material to the transaction. In addition, upon Interleaf being
notified by a selling stockholder that a donee or pledgee intends to sell more
than 500 shares, a supplement to this prospectus will be filed.
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In order to comply with the securities law of certain states, shares
sold in those states must be sold only through registered or licensed brokers or
dealers. In addition, in certain states the shares may not be sold unless they
have been registered or qualified for sale in that state or unless the seller
complies with an exemption.
We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Securities Exchange Act may apply to sales of shares in
the market and to the activities of the selling stockholders and their
affiliates.
Except as provided herein, Interleaf has agreed to pay all expenses
incident to the offer and sale of the common stock offered by the selling
stockholders under this prospectus. Interleaf estimates such expenses to be
approximately $34,958. The selling stockholders will pay all selling
commissions, brokerage fees and related expenses.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
on the SEC's Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934.
1. Annual Report on Form 10-K for the fiscal year ended March 31,
1999;
2. Quarterly Report on Form 10-Q and the amendments thereto for the
fiscal quarter ended June 30, 1999;
3. Current Report on Form 8-K filed on August 17, 1999; and
4. The description of Interleaf's common stock contained in the
registration statement on Form 8-A filed on June 11, 1986, including all
amendments or reports filed for the purpose of updating such description.
You may request a copy of these filings at no cost, by writing or
telephoning our General Counsel at the following address:
Interleaf, Inc.
62 Fourth Avenue
Waltham, Massachusetts 02451
(781) 290-0710
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide
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you with different information. We are not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of the document.
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been passed upon
for Interleaf by Craig Newfield, Esq., General Counsel of Interleaf.
EXPERTS
The financial statements as of and for the year ended March 31, 1999
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended March 31, 1999, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Interleaf, Inc. as of and for the
two years ended March 31, 1998 appearing in Interleaf Inc.'s Annual Report
(Form 10-K) for the year ended March 31, 1999, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
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This prospectus is part of a registration INTERLEAF, INC.
statement that we filed with the SEC.
You should rely only on the information
or representations provided in this 1,040,333 SHARES OF COMMON STOCK
prospectus. We have authorized no one to
provide you with different information.
We are not making an offer in any
jurisdiction where the offering is not
permitted.
PROSPECTUS
SEPTEMBER __, 1999
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Summary................................ 2
Risk Factors........................... 3
Forward Looking Statements............. 5
Use of Proceeds........................ 5
Selling Stockholders................... 6
Plan of Distribution................... 7
Where You Can Find More Information.... 9
Legal Matters.......................... 10
Experts................................ 10
</TABLE>
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities
registered hereby. All amounts are estimated except the SEC and Nasdaq filing
fee. Costs of issuance and distribution will be borne by the Registrant as
follows:
SEC Registration Fee $ 2,458
Nasdaq Listing Fee $ 17,500
Accounting Fees and Expenses $ 2,500 *
Legal Fees and Expenses $ 7,500 *
Miscellaneous $ 5,000 *
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Total $ 34,958
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*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Section 67 of the Massachusetts Business Corporation Law permits
indemnification of present and former directors and officers to the extent
specified in or authorized by (i) the articles of organization, (ii) a by-law
adopted by the stockholders, (iii) a vote adopted by the holders of a majority
of the shares of stock entitled to vote, or (iv) in the case of officers who are
not directors, by the Board of Directors, except that no indemnification shall
be provided for any person with respect to any matter as to which he shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interests of the corporation.
Section 67 also provides that the absence of any express provision for
indemnification shall not limit any right of indemnification existing
independently of such Section.
(b) Article V of Interleaf's By-laws provides that Interleaf shall, to
the extent legally permissible, indemnify each former or present director or
officer against all liabilities and expenses imposed upon or incurred by any
such person in connection with, or arising out of, the defense or disposition of
any action, suit or other proceeding, civil or criminal, in which he may be
threatened or involved, by reason of his having been a director or officer;
provided that Interleaf shall provide no indemnification with respect to any
matter as to which any such person shall be finally adjudicated in such action,
suit or proceeding not to have acted in good faith in the reasonable belief that
his action was in the best interests of Interleaf. If any such action is
disposed of, on the merits or otherwise, without the disposition being adverse
to the director or officer and without an adjudication that such person did not
act in good faith in the reasonable belief that his action was in the best
interests of Interleaf, the director or officer is entitled to indemnification
as a matter of right. In all other cases, indemnification shall be made as of
right unless after investigation (a) by the Board of Directors by a majority
vote of a quorum of disinterested directors, or (b) by written opinion of
independent legal counsel (who may be regular counsel of Interleaf), or (c) the
holders of a majority of outstanding stock entitled to vote (exclusive of stock
owned by any interested directors or officers), it shall be determined by clear
and convincing evidence that such person did not act in good faith and in a
manner reasonably believed to be in or not opposed to the best interest of
Interleaf. Indemnification may include advancement of expenses of defending an
action upon receipt of an undertaking by the person indemnified to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification under Article V. Article V also provides that the right of
indemnification provided therein is not exclusive of and does not affect any
other rights to which any director or officer may be entitled under any
agreement, statute, vote of stockholders or otherwise. The Company's obligation
to indemnify under Article V shall be offset to the extent of any other source
of indemnification or any otherwise applicable insurance coverage.
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<PAGE>
(c) The Company has entered into an Agreement to Defend and Indemnify
with each of its officers and directors. Pursuant to these agreements, Interleaf
has agreed, to the extent legally permissible, to indemnify such person against
all losses (including, without limitation, judgments, fines and penalties) and
expenses (including, without limitation, amounts paid in settlement and counsel
fees and disbursements) incurred by such person in connection with or as a
result of any claim, action, suit or other proceeding, civil or criminal, or
appeal related thereto, in which he may be involved by reason of his having been
a director or officer or by reason of any action taken or not taken in his
capacity as director or officer; provided that no indemnification shall be
provided with respect to any matter as to which such person shall not have acted
in good faith in the reasonable belief that his action was in the best interests
of Interleaf. If any such claim, action, suit or proceeding is disposed of, on
the merits or otherwise, without the disposition being adverse to such person,
without a plea of guilty or NOLO CONTENDRE and without an adjudication that such
person did not act in good faith in the reasonable belief that his action was in
the best interests of Interleaf, the director or officer is entitled to
indemnification as a matter of right. In all other cases, indemnification shall
be made upon a determination that such person's conduct was in good faith and in
the reasonable belief that his action was in the best interests of Interleaf by
(a) a quorum of disinterested directors, or (b) independent legal counsel (who
may be regular counsel of Interleaf), or (c) the holders of a majority of
outstanding stock entitled to vote (exclusive of stock owned by an interested
directors or officer). Expenses may be advanced by Interleaf prior to any final
disposition of any such action upon receipt of an undertaking by the person
indemnified to repay such advances if it is ultimately determined that such
person is not entitled to indemnification under the Agreement. Such Agreements
provide that the right of indemnification provided therein is in addition to any
rights to which any person concerned may be entitled by other agreements or as a
matter of law, and shall inure to the benefit of the heirs, executors and
administrators of the indemnified person. The rights of indemnification provided
in such Agreements are in addition to any rights under any insurance policy in
effect, provide that to the extent any claim is covered by any such insurance
policy, Interleaf will provide coverage after the full coverage of the insurance
policy is exhausted or otherwise unavailable.
(d) Article 6D of Interleaf's Articles of Organization provides that,
to the fullest extent permitted by Chapter 156B of the Massachusetts General
Laws, a director of Interleaf shall not be personally liable to Interleaf or its
stockholders for monetary damages for breach of fiduciary duty as a director,
notwithstanding any provision of law imposing such liability. Section 13(b)
(1 1/2) of Chapter 156B of the Massachusetts General Laws permits a
corporation to include in its articles of organization a provision
eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
as a director, except for (i) any breach of the director's duty of loyalty to
the corporation and its stockholders, (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the
law, (ii) improper issuances of stock or unauthorized distributions to
stockholders, or (iv) any transaction in which the director derived an
improper personal benefit.
ITEM 16. EXHIBITS
The exhibits listed in the accompanying Exhibit Index are filed as part of this
Registration Statement on Form S-3.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information in the registration statement;
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<PAGE>
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to section 13 or section
15(d) of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(i) Not applicable.
(j) Not applicable.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Waltham, Commonwealth of Massachusetts, on
September 1, 1999.
INTERLEAF, INC.
By: /s/ JAIME W. ELLERTSON
------------------------------
Jaime W. Ellertson, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jaime W. Ellertson, Peter Rice and Craig
Newfield, and each of them (with full power to each of them to act alone), his
or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, and, in
connection with any registration of additional securities pursuant to Rule
462(b) under the Securities Act, to sign any abbreviated registration statement
and any and all amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, in each case, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or either of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ JAIME W. ELLERTSON President and Chief Executive Officer, and September 1, 1999
- -------------------------------------------- Director (Principal Executive Officer)
Jaime W. Ellertson
/s/ PETER J. RICE Vice President of Finance and September 1, 1999
- --------------------------------------------
Peter J. Rice Administration, Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)
/s/ FREDERICK B. BAMBER Director September 1, 1999
- --------------------------------------------
Frederick B. Bamber
/s/ DAVID A. BOUCHER Director September 1, 1999
- --------------------------------------------
David A. Boucher
/s/ RORY J. COWAN Chairman of the Board of Directors September 1, 1999
- --------------------------------------------
Rory J. Cowan
/s/ MARCIA J. HOOPER Director September 1, 1999
- --------------------------------------------
Marcia J. Hooper
/s/ JOHN A. LOPIANO Director September 1, 1999
- --------------------------------------------
John. A. Lopiano
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
3.1 Restated Articles of Organization of Interleaf, as amended (Filed as the applicable exhibit to Interleaf's
Report on Form 10-Q for the fiscal quarter ended September 30, 1997)*
3.2 By-Laws of Interleaf, as amended (Filed as the applicable exhibit to Interleaf's Annual Report on Form 10-K
for the fiscal year ended March 31, 1994)*
4.1 Specimen Certificate for shares of Interleaf's common stock (Filed as the Exhibit 4.01 to Interleaf's Annual
Report on Form 10-K for the fiscal year ended March 13, 1999 )*
4.2 Form of Common Stock Purchase Agreement (Filed as Exhibit 10 to Interleaf's Current Report on Form 8-K dated
August 17, 1999)*
4.3 Form of Stock Purchase Warrant issued to Tower Hill Capital Group, LLC*
5.1 Legal Opinion of Craig Newfield, Esq.*
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Craig Newfield, Esq. (contained in Exhibit 5.1)*
24 Power of Attorney (contained on Signature Page of this registration statement)**
</TABLE>
- ---------------
* Not filed herewith. In accordance with Rule 411 promulgated
pursuant to the Securities Act of 1933, as amended, reference is
made to the documents previously filed with the Commission,
which are incorporated by reference herein.
** Filed herewith.
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