<PAGE>
As filed with the Securities and Exchange Commission on January __, 1999
Registration No. 333-69143
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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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)
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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. / /
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<PAGE>
Preliminary prospectus dated January __, 1999, Subject to Completion
INTERLEAF, INC.
1,761,167 Shares of Common Stock
This prospectus relates to the resale of up to 1,761,167 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 [ ] of this prospectus. Interleaf will not receive any part of the proceeds
from the sale.
The common stock presently is traded on the Nasdaq National Market under the
symbol "LEAF". On January 21, 1999, the last reported sale price of the common
stock on the Nasdaq National Market was $ 2.031 per share.
An Investment in the common stock offered under this prospectus involves a high
degree of risk. See "Risk Factors" beginning on page 4.
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 January __ ,1999.
The information contained in this prospectus is not complete and may be
changed. 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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<PAGE>
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SUMMARY
About Interleaf
Interleaf and it 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 provides technical support and
maintenance to its customers utilizing its software products. In addition, it
provides consulting, custom application 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: 1,761,167 shares of common stock.
Use of Proceeds: Interleaf will not receive any of the proceeds of
this offering.
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."
Forward-Looking Statements
Some of the statements contained in this prospectus and in the documents
incorporated by reference, are forward-looking. The words "expects,"
"anticipates," "estimates" and similar expressions are intended to identify
forward-looking statements. They include, but are not limited to, statements
related to (a) Interleaf's plans, objectives, expectations and intentions, (b)
the timing of, availability and functionality of products under development or
recently introduced, and (c) 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.
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<PAGE>
RISK FACTORS
The common stock offered under this prospectus involves a high degree of risk.
You should carefully consider the following risk factors in addition to the
other information in this prospectus before deciding to purchase the common
stock.
Declining Revenue; Mature Market For Electronic Publishing Software.
Interleaf's revenues have declined over the last several years as a result of
both the maturation and saturation of the market for electronic publishing
software which historically was the focus of its business and the increased
popularity of low cost versions of Windows-based authoring software. Unless
Interleaf successfully develops new products and exploits new markets, revenues
can be expected to continue to decline.
Dependence on New Enterprise Content Management 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 enterprise content management products and services. There is a risk
that the enterprise content management market may not grow, that Interleaf may
not be successful in developing enterprise content management software, or that
the marketplace may not accept Interleaf's software. Interleaf's new products
are based on new technology and standards known as "XML". There are risks that
this new technology will change, and as a result the new products when released
will not meet market and customer requirements.
Uncertainty of Future Operating Results; Fluctuations in Quarterly Operating
Results.
Future operating results will depend upon many factors, including: the demand
for Interleaf's existing products; the ability of Interleaf to develop and
market new products; market acceptance of its new products; the timing of new
product and enhancement introductions by Interleaf and its competitors; the
level of product and price competition; the budget cycles of Interleaf's
customers; the length of Interleaf's sales cycle; the size and timing of
individual license transactions; any delay of customer implementation of new
software and services; the mix of products and services sold; activities of
competitors; changes in foreign currency exchange rates; and general domestic
and international economic and political conditions.
Interleaf typically ships a substantial amount of its products in the final
weeks, or even the final days, of each quarter. In addition, it is difficult to
predict when it will receive license revenue because of the length of
Interleaf's sales cycle. Because its expenses are relatively fixed, any
shortfall or delay in the recognition of revenue from even a limited number of
license transactions could cause significant variations in Interleaf's operating
results from quarter to quarter. For these reasons, 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. However, these factors do 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.
Intense Competition In Interleaf's Markets.
The market for Interleaf's existing technical documentation products is
<PAGE>
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 does not yet know who its principal
competitors in the emerging and highly fragmented enterprise content management
market will be, it is likely that the enterprise content management market will
develop characteristics similar to those described above.
Reliance on Strategic Relationships.
Interleaf is dependent on the performance of Microstar Software Ltd. in the
development of Interleaf's new enterprise content management products, and if
Microstar were sold to a competitor, went out of business or otherwise ceased to
provide contract services to Interleaf, it could have a material adverse effect
on Interleaf's business. Interleaf also needs to maintain a good working
relationship with Microsoft, Inc., since many of Interleaf's products are
designed to be accessed using Microsoft software such as Microsoft Word, Office,
SQL Server and NT.
Dependence on Proprietary Technology; Risks of Infringement.
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 and 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.
<PAGE>
In Process R&D Write-Offs.
The SEC has recently been publicly critical of several accounting practices
which it believes are being improperly used to "manage" earnings. One of the
practices which the SEC has criticized is the extent of write-offs of in process
research and development costs in connection with acquisitions. In response to
these concerns, it has issued certain guidelines on in process R&D Write-Offs.
These guidelines, if applied retroactively, could reduce Interleaf's in-process
research and development write-offs for acquisitions which took place during the
current fiscal year by approximately $990,000. A reduction in these write-offs
would result in a corresponding increase in the amount of goodwill associated
with the applicable acquisitions. Interleaf is aware that the SEC and the U.S.
accounting profession are in dialogue regarding the retroactive application of
these recent guidelines. Interleaf cannot predict the outcome of that dialogue,
but intends to comply with that outcome after it is announced.
International Operations and 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).
<PAGE>
Impact of the Year 2000.
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 most recent
quarterly report on Form 10-Q filed with the SEC. At this time, there are no
identifiable 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.
<PAGE>
Risks Associated with Acquisitions.
As part of its business strategy to acquire and develop new products and
services, Interleaf has made several acquisitions, including the acquisition of
PDR Automated Systems and Publications, Inc. and certain assets of Softquad
Inc., during the last year. There are certain risks commonly encountered in
acquisitions of businesses. With PDR and SoftQuad, such risks 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 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.
<PAGE>
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.
SELLING STOCKHOLDERS
The shares of common stock covered by this prospectus are being offered by those
selling stockholders listed below. As of the effective date of this registration
statement, Interleaf has issued 1,761,167 shares of the common stock to the
selling stockholders in connection with the private placement described below.
Between November 18, 1998 and December 15, 1998 Interleaf entered into
agreements with certain officers, directors and existing stockholders of
Interleaf under which each of them granted to Interleaf an option to require
them to purchase a specified number of shares of common stock, up to an
aggregate maximum of 1,761,167 shares, at a purchase price of $2.40 per share
upon written notice from Interleaf.
Under the terms of those agreements, the selling stockholders were not
obligated to purchase the common stock unless the shares were registered with
the SEC for resale by the selling stockholders. On January ___, 1999,
Interleaf sold an aggregate of 1,761,167 shares of common stock to the
selling stockholders.
Certain of the investors in this private placement required, as a condition of
their investment, that certain officers and directors of Interleaf demonstrate
their commitment to Interleaf by purchasing shares of Interleaf's common stock
in the private placement. Accordingly, Mr. Jaime W. Ellertson, President and
Chief Executive Officer, Peter J. Rice, Chief Financial Officer, John E. Pavlov,
Vice President of Development, Craig Newfield, Vice President and General
Counsel, Frederick B. Bamber, a director and Rory J. Cowan, Chairman of the
Board, each agreed to purchase that number of shares of common stock set forth
below under the column "Maximum Number of Shares Being Offered." In addition,
Lawrence Loeb, Alan Hoshmand, Joseph Mark and Carnegie Partners are employees,
principals or affiliates of Hambros America Securities, Inc., an investment
banking firm currently providing investment banking services to Interleaf. Other
than as just described, 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 (a) the number of shares of common stock
beneficially owned by each of the selling stockholders as of January 15, 1999
(including any shares which that selling stockholder has the right to acquire
within 60 days after January 15, 1999 by the exercise of options) after taking
into account the sale of shares of common stock in the private placement, (b)
the maximum number of shares of common stock that may be offered by the selling
stockholder under this prospectus, (c) 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 (d) the
percentage of common stock owned after the offering if all of the shares that
may be offered under this prospectus are sold.
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.
<PAGE>
<TABLE>
<CAPTION> Maximum Number of Percentage
Number of Shares Number Shares of Class
Beneficially of Shares Beneficially Owned
Name of Beneficial Owned as of Being Owned after after
Owner January 15, 1999 Offered Offering Offering
- ------------------------ ---------------- --------- ------------ ----------
<S> <C> <C> <C> <C>
GeoCapital Corporation 1,468,633 625,000 843,633 9.0%
S2 Technology 794,633 625,000 169,633 1.8%
PAW Partners 368,333 208,333 160,000 1.7%
Forus Investments, Inc. 94,000 50,000 44,000 *
Irwin Silverberg 104,950 20,000 84,950 *
Morton Seaman 30,733 20,000 10,733 *
Jerome Yavitz 72,333 66,667 5,667 *
Jaime W. Ellertson 53,742 50,000 3,742 *
Frederick B. Bamber (5) 15,200 4,167 11,033 *
Rory J. Cowan 30,417 2,083 28,333 *
John A. Lopiano 3,083 2,083 1,000 *
Peter J. Rice 4,583 2,083 2,500 *
John E. Pavlov 1,667 1,667 -- *
Craig Newfield 2,083 2,083 -- *
Lawrence Loeb 8,500 8,500 -- *
Alon Hoshmand 11,000 11,000 -- *
Joseph D. Mark 20,833 20,833 -- *
Carnegie Partners 50,000 41,667 8,333 *
</TABLE>
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* Less than one percent.
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may offer their shares of common stock from time to
time in transactions (which may include block transactions) on any exchange or
market on which the common stock is listed or quoted, in public or private
transactions, through a combination of such methods of sale, or otherwise, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices, or at negotiated prices.
The selling stockholders may sell the common stock directly to purchasers,
through broker-dealers acting as agents for them, or to broker-dealers who may
purchase common stock as principals and then sell the common stock from time to
time in transactions which may include block transactions on any exchange or
market on which securities are listed or quoted, as applicable, in negotiated
transactions, through a combination of such methods of sale, or otherwise.
Broker-dealers engaged by selling stockholders may arrange for other
broker-dealers to participate in the sales. Broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of the common stock. The
broker-dealers may act as agents for the selling stockholders or they may sell
to them as principals, or both. Particular broker-dealers may receive, as
compensation, commissions in excess of customary commissions.
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 $9,018.
The selling stockholders will pay all selling commissions, brokerage fees and
related expenses.
To comply with the securities laws of certain jurisdictions, if applicable, the
common stock offered under this prospectus will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers.
Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in a distribution of the common stock may be limited in
its ability to engage in market activities with respect to the common stock. In
addition, each selling stockholder will be subject to applicable provisions of
the Securities and Exchange Act and the rules and regulations under the
Securities and Exchange Act, which may limit the timing of purchases and sales
of any of the common stock by the selling stockholders.
<PAGE>
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, 1998;
2. Quarterly Report on Form 10-Q and the amendments thereto for the
fiscal quarters ended June 30, 1998 and September 30, 1998;
3. Current Reports on Form 8-K dated July 17, 1998, September 24, 1998
(as amended on November 12, 1998) and November 27, 1998; 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 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 consolidated financial statements of Interleaf appearing in Interleaf Annual
Report (Form 10-K) for the year ended March 31, 1998, have been audited by Ernst
& Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. The consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of PDR Automated Systems and Publications, Inc.
appearing in Interleaf's Current Report on Form 8-K as filed with the SEC on
September 24, 1998 and the amendment thereto filed on November 12, 1998, have
been audited by Dulworth, Breeding & Karns, LLP, independent public accountants,
as indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of Dulworth, Breeding & Karns,
LLP as experts in accounting and auditing.
<PAGE>
This prospectus is part of a registration statement that 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 you with different information.
We are not making an offer in any jurisdiction where the offering is not
permitted.
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Summary................................................ 3
Risk Factors........................................... 4
Use of Proceeds........................................ 9
Selling Stockholders................................... 9
Plan of Distribution................................... 11
Where You Can Find More Information.................... 12
Legal Matters.......................................... 12
Experts................................................ 12
</TABLE>
INTERLEAF, INC.
Up To 1,761,167 Shares of common stock
PROSPECTUS
January __, 1999
INTERLEAF, INC.
Up To 1,761,167 Shares of common stock
PROSPECTUS
January __, 1999
<PAGE>
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:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee. $ 1,018
Accounting Fees and Expenses $ 2,500
Legal Fees and Expenses $ 5,000
Miscellaneous $ 500
-------
Total $ 9,018
-------
</TABLE>
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.
(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.
<PAGE>
Item 16. Exhibits
<TABLE>
<CAPTION>
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 applicable exhibit to Interleaf's registration statement on Form
S-1, File No. 33-5743)*
5.1 Legal Opinion of Craig Newfield, Esq.**
23.1 Consent of Ernst & Young LLP ****
23.2 Consent of Dulworth, Breeding & Karns, LLP ***
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<C> <S>
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.
*** Previously filed.
**** To be filed by amendment.
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;
(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.
II-3
<PAGE>
(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.
II-4
<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 Pre-Effective
Amendment No. 2 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in City of Waltham, Commonwealth of
Massachusetts, on January __, 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 Pre-Effective
Amendment No. 2 to the 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, January __, 1999
- ----------------------------------- and Director
Jaime W. Ellertson (Principal Executive
Officer)
/S/ PETER J. RICE Vice President of Finance and January __, 1999
- ----------------------------------- Administration, Chief
Peter J. Rice Financial Officer and
Treasurer (Principal
Financial and Accounting
Officer)
* Director January __, 1999
- -----------------------------------
Frederick B. Bamber
* Director January __, 1999
- -----------------------------------
David A. Boucher
* Chairman of the Board of January __, 1999
- ----------------------------------- Directors
Rory J. Cowan
* Director January __, 1999
- -----------------------------------
Marcia J. Hooper
* Director January __, 1999
- -----------------------------------
John. A. Lopiano
</TABLE>
*BY: /S/ JAIME ELLERSTON
- --------------------------------
Jaime Ellerston Attorney-in Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
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 applicable exhibit to the Interleaf's registration
statement on Form S-1, File No. 33-5743)*
5.1 Legal Opinion of Craig Newfield, Esq.**
23.1 Consent of Ernst & Young LLP ****
23.2 Consent of Dulworth, Breeding & Karns, 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.
*** Previously filed.
**** To be filed by Amendment.
<PAGE>
Exhibit 5.1
EXHIBITS 5.1 & 23.3
January __, 1998
Interleaf, Inc.
62 Fourth Avenue
Waltham, MA 02154
Gentlemen:
I have assisted in the preparation of a registration statement on Form S-3 to be
filed with the Securities and Exchange Commission (the "registration
statement"), relating to 1,761,167 shares of common stock, $.01 par value per
share (the "Shares"), of Interleaf, Inc., a Massachusetts corporation (the
"Company"), pursuant to the several common stock Purchase Agreements between
Interleaf and each of certain accredited investors dated as of November 18, 1998
(collectively, the "Agreement").
I have examined (i) the Restated Articles of Organization and By-laws of
Interleaf and all amendments thereto, (ii) the Agreement, and (iii) such records
of meetings of the directors and stockholders of the company, documents and
other instruments as in my judgment are necessary or appropriate to enable me to
render the opinion expressed below.
In my examination of the foregoing documents, I have assumed the genuineness of
all signatures and the authenticity of all documents submitted to me as
originals, the conformity to original documents of all documents submitted to me
as certified or photostatic copies, and the authenticity of the originals of
such latter documents.
Based upon the foregoing, I am of the opinion that the Shares have been duly
authorized for issuance and, when issued pursuant to the terms of the Agreement,
will be legally issued, fully paid and nonassessable.
I hereby consent to the use of my name in the registration statement and consent
to the filing of this opinion with the Securities and exchange Commission as an
exhibit to the registration statement.
Very truly yours,
/S/ CRAIG NEWFIELD
- ----------------------
Craig Newfield,
General Counsel
