<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 2)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INTERLINQ SOFTWARE CORPORATION
- --------------------------------------------------------------------------------
(NAME OF THE ISSUER)
COMMON STOCK
- --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
4587531000
- --------------------------------------------------------------------------------
(CUSIP NUMBER)
J.D. DELAFIELD
W.R. HAMBRECHT + CO., LLC
550 FIFTEENTH STREET
SAN FRANCISCO, CA 94103
(415) 551-8600
- --------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
DECEMBER 29, 1998
- --------------------------------------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
(Page 1 of 7 pages)
<PAGE> 2
CUSIP NO. 4587531000 13D Page 2 of 7 Pages
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
WILLIAM R. HAMBRECHT
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS
PF
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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(7) SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 372,492
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH -0-
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
372,492
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
372,492
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(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
N/A [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.27%
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(14) TYPE OF REPORTING PERSON*
IN
---------------------------------------------------------------------
- --------
* Calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended.
(Page 2 of 7 Pages)
<PAGE> 3
CUSIP NO. 4587531000 13D Page 3 of 7 Pages
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S IDENTIFICATION NOS. OF ABOVE PERSONS
IRONSTONE GROUP, INC. - 952829956
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
WC
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF DELAWARE
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(7) SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 372,492
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH -0-
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
372,492
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
372,492
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
N/A [ ]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.27%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
---------------------------------------------------------------------
- --------
* Calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended.
(Page 3 of 7 Pages)
<PAGE> 4
This Amendment No. 2 amends and restates the Schedule 13D filed by the
undersigned on December 3, 1998.
ITEM 1. SECURITY AND THE ISSUER
The reporting person is the holder of shares of the Common Stock (the "Stock")
of Interlinq Software Corporation, a Washington corporation (the "Company" or
"Interlinq"), 11255 Kirkland Way, Kirkland, Washington 98033.
ITEM 2. IDENTITY AND BACKGROUND
(a), (b) & (c) The following information is given with respect to the
persons filing this statement:
WILLIAM R. HAMBRECHT is a United States citizen whose business address is 550
Fifteenth Street, San Francisco, California 94103. His principal occupation is
President of W.R. Hambrecht + Co., LLC.
IRONSTONE GROUP, INC. ("Ironstone") is a Delaware corporation that was
incorporated in 1972. Prior to 1988 Ironstone was known as OXOCO, Inc.
Ironstone's principal office is located at One Bush Street, Suite 1240, San
Francisco, California 94104. Ironstone's shares of common stock are listed in
the "pink sheets," and Ironstone consolidates the financial statements of its
majority-owned subsidiaries Belt Perry Associates, Inc., an Arizona corporation,
Belt Perry Associates, Inc., a California corporation, Taxnet, Inc., an Arizona
corporation, and DeMoss Corporation, a California corporation.
<TABLE>
<CAPTION>
Name Position Address Principal Occupation (Business)
- ---- -------- ------- -------------------------------
<S> <C> <C> <C>
Robert W. Rembowski Chief Executive Ironstone Group, Inc. Chief Executive Officer, Treasurer and Secretary
Officer, Treasurer One Bush Street, Suite 1240 of Ironstone
and Secretary San Francisco, CA 94104
Edmund H. Shea, Jr. Director 655 Brea Canyon Road Vice President of J.F. Shea Co., Inc.
Walnut, CA 91789 (construction and venture capital)
</TABLE>
(d) & (e) To the best of the knowledge of the reporting persons,
during the last five years none of the reporting persons or their
officers, directors or controlling persons has been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) All individuals referred to above are United States citizens.
(Page 4 of 7 pages)
<PAGE> 5
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
All shares of Stock of the Company were purchased with the funds of the
reporting person as listed in Item 5.
ITEM 4. PURPOSE OF THE TRANSACTION
William R. Hambrecht and Ironstone originally acquired their shares for
general investment purposes.
William R. Hambrecht and his related investment firm, W.R. Hambrecht +
Co., LLC, previously initiated discussions with the Company regarding an
extraordinary transaction involving the Company, which was to take the form of a
merger, recapitalization or reorganization, or some combination thereof. On
December 11, 1998, W.R. Hambrecht + Co., LLC delivered a proposal letter with
respect to such transaction to the Company. A copy of such proposal letter is
attached as Exhibit B hereto. W. R. Hambrecht + Co., LLC and the Company signed
a Confidentiality/Nondisclosure Agreement dated November 11, 1998, attached
hereto as Exhibit C.
The proposal has culminated in the execution of an Agreement and Plan of
Merger dated December 29, 1998 between the Company and Terlin, Inc. (the
"Agreement"), attached hereto as Exhibit D, pursuant to which a substantial
majority of the outstanding shares of Stock of the Company would be exchanged
for cash at the rate of 9.25 per share. Mr. Hambrecht, W.R. Hambrecht + Co.,
LLC, affiliates of one or both, or some combination thereof, would hold a
majority of the outstanding shares of Stock of the Company upon consummation of
the transaction. Further, upon consummation of the transaction, certain
provisions of the Company's Articles of Incorporation and Bylaws would be
amended as set forth in the Agreement and a representative of Mr. Hambrecht and
W.R. Hambrecht + Co., LLC would be appointed to serve as a Director of the
Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Based on the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998, there were 5,122,553 shares of Stock outstanding as of
November 6, 1998. The following summarizes the shares of the Company
beneficially owned by the reporting person:
<TABLE>
<CAPTION>
Number of Shares of Stock Number of Shares of Stock Percentage of Class
Investor (but for Rule 13d-5(b)(1)) Beneficially Owned Beneficially Owned
- -------- -------------------------- ------------------------- ------------------
<S> <C> <C> <C>
William R. Hambrecht 109,292 372,492 7.27%
Ironstone Group, Inc. 263,200 372,492 7.27%
</TABLE>
Beneficial ownership of 263,200 shares of Stock otherwise beneficially owned by
Ironstone is attributed to William R. Hambrecht by virtue of Rule 13d-5(b)(1) of
the Commission and beneficial ownership of 109,292 shares of Stock otherwise
beneficially owned by William R. Hambrecht is attributed to Ironstone by virtue
of such rule. Of the 109,292 shares beneficially
(Page 5 of 7 pages)
<PAGE> 6
owned by Mr. Hambrecht, 47,942 shares are owned by The Hambrecht 1980 Revocable
Trust and 61,800 shares are owned by W. R. Hambrecht + Co., LLC.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Ironstone and William R. Hambrecht may be deemed to be acting in concert
with respect to the Company, and for such reason have jointly filed this
Schedule 13D.
Mr. Hambrecht and Mr. Rembowski, and Mr. Hambrecht and Mr. Shea, have
business relationships in matters unrelated to the Company.
W. R. Hambrecht + Co., LLC and the Company signed a Confidentiality/
Nondisclosure Agreement dated November 11, 1998 providing for certain
confidentiality provisions and providing for a standstill period of one year
with respect to any business combination, recapitalization or other
extraordinary transaction involving the Company.
The Company and Terlin, Inc. signed an Agreement and Plan of Merger
dated December 29, 1998 providing for the acquisition of a substantial number of
the outstanding shares of the Company.
Except as otherwise described herein, to the best knowledge and belief
of the reporting persons, there are no other contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 or between such persons and any person with respect to any securities of
the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
A. Joint Filing Undertaking as required by Rule 13d-1(f).
B. Letter, dated December 11, 1998, from W.R. Hambrecht + Co., LLC to the
Board of Directors of Interlinq Software Corporation.
C. Confidentiality/Nondisclosure Agreement dated November 11, 1998 by and
between W.R. Hambrecht + Co., LLC and Interlinq Software Corporation.
D Agreement and Plan of Merger dated as of December 29, 1998, by and
between the Company and Terlin, Inc. (Incorporated by reference to the
Company's current report on Form 8-K dated December 29, 1998).
(Page 6 of 7 pages)
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
December 29, 1998
-------------------------------------------
(Date)
/s/ William R. Hambrecht
-------------------------------------------
William R. Hambrecht
IRONSTONE GROUP, INC.
By: /s/ Robert W. Rembowski
-------------------------------------------
Robert W. Rembowski
Chief Executive Officer
(Page 7 of 7 pages)
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
Exhibit A Joint Filing Undertaking
Exhibit B Letter, dated December 11, 1998, from W.R. Hambrecht + Co., LLC
to the Board of Directors of Interlinq Software Corporation.
Exhibit C Confidentiality/Nondisclosure Agreement.
Exhibit D Agreement and Plan of Merger dated December 29, 1998 between
Interlinq Software Corporation and Terlin, Inc. (Incorporated
by reference to the Company's current report on Form 8-K dated
December 29, 1998).
</TABLE>
<PAGE> 9
EXHIBIT A
JOINT FILING UNDERTAKING
The undersigned being duly authorized thereunto, hereby execute this agreement
as an exhibit to Amendment No. 2 to the Schedule 13D to evidence the agreement
of the below-named parties, in accordance with rules promulgated pursuant to the
Securities Exchange Act of 1934, to file this Amendment No. 2 to Schedule 13D
jointly on behalf of each of such parties.
DATED: December 29, 1998
/s/ William R. Hambrecht
----------------------------------------
William R. Hambrecht
IRONSTONE GROUP, INC.
By: /s/ Robert W. Rembowski
----------------------------------------
Chief Executive Officer
<PAGE> 10
EXHIBIT B
December 11, 1998
Board of Directors
Interlinq Software Corporation
11980 N.E. 24th Street
Bellevue, WA 98005
Gentlemen:
The principals of W.R. Hambrecht + Co., LLC have been long term shareholders of
Interlinq Software Corporation (the "Company") since 1995. During that time, we
have been impressed by how management and the board have directed the Company.
We applaud the progress that management and the board have made in improving the
financial position and operating results of the Company. We would like to
propose a transaction that we believe will benefit all of the Company's
stakeholders - shareholders, customers, employees and management.
Our proposal does not intend to disrupt the current strategy but to build on it.
In conjunction with current shareholders, we believe we could enhance the value
of the Company through a recapitalization. Our plan offers current shareholders
a choice: (i) retain their current shareholdings in the Company or (ii) sell
their stock at a premium to the current market price for cash.
OUTLINE OF PROPOSED TRANSACTION
The transaction we are proposing is a leveraged recapitalization of the Company.
We propose to merge a company we will form ("MergerCo") into the Company (the
"Merger"). The important components of the proposal include:
1. CASH OFFER. In the Merger, all but 1,280,000 (the "Remaining Shares Number")
of the outstanding shares of Interlinq will be converted into the right to
receive $8.50 per share in cash.
2. OPTION TO TAKE CASH. A level playing field will be established for all
current shareholders. The proposal will allow shareholders, within limits,
either (i) to accept cash for their stock or (ii) to roll their existing shares
into the recapitalized Company to allow them to participate in the opportunity
for increased value potentially resulting from leverage. Should shareholders
elect to retain more than the Remaining Shares Number, the number of shares
would be reduced pro rata among the electing shareholders so that the aggregate
retained shares equal the Remaining Shares Number. Should shareholders not elect
to retain at least the Remaining Shares Number, shares would be allocated pro
rata across all non-electing shareholders to result in the Remaining Shares
Number being retained. However, at MergerCo's option, the Remaining Shares
Number could be increased, to no greater than 1,540,000, or reduced, to no less
than 525,000.
1.
<PAGE> 11
3. MANAGEMENT REMAINS IN PLACE. We believe in management. We would not pursue
this transaction if senior management did not remain with the Company. Senior
executives will be expected to confirm their support of the Company by signing
two year noncompetition agreements at the time of the signing of the definitive
agreement.
4. BOARD REPRESENTATION. The Company would be expected to retain the current
board of directors, while adding an additional seat for a nominee of W.R.
Hambrecht + Co., LLC.
5. FUNDING THROUGH LEVERAGE. The transaction would be accomplished with new
equity provided through MergerCo, some cash from the Company and leverage in the
form of additional debt undertaken by the Company.
6. FULL EMPLOYEE AND PARTIAL EXECUTIVE OPTION CASH OUT. As part of the
transaction, all optionees other than senior executives would cash out their
stock option positions entirely for the difference between the cash price per
share and their respective option exercise prices. Such cash out might take the
form of (i) a payment for the difference or (ii) an option exercise by the
optionees followed by receipt of consideration in the Merger. Senior executives
would forego 25% of the shares subject to their options. Following the Merger,
employees and management would receive new stock options in amounts comparable
to their current option levels (in terms of percentage of fully diluted equity).
7. REVERSE STOCK SPLIT. If necessary, a reverse stock split of the Company's
Common Stock would be done to cause the Company's public filing obligations
under the Securities Exchange Act of 1934 to be terminated.
8. CUSTOMARY PROVISIONS. The definitive agreement between MergerCo and the
Company would contain customary representations, warranties, covenants and
closing conditions, including closing conditions for MergerCo's benefit relating
to shareholder approval and the completion of satisfactory financing.
NON-BINDING
This letter is an expression of intent only, and does not set forth all of the
matters upon which agreement must be reached in order for the proposed
transaction to be consummated. Rights and obligations remain to be defined in
the definitive agreement and related documents, and there is no intent to be
legally bound or otherwise to incur any obligations with respect to the proposed
transaction until such time as the definitive agreement is executed and
delivered. Accordingly, this letter does not constitute a legally binding
document and does not create any legal obligations.
2.
<PAGE> 12
CONCLUSION
We view this transaction as the means to an end, not the end itself. You are
aware that we have been supportive long term shareholders of the Company and we
believe that the proposal offers the stakeholders of the Company a way to
enhance value. We hope that you concur.
Very truly yours,
W.R. Hambrecht + Co., LLC.
By: /s/ J.D. Delafield
----------------------------------------
J.D. Delafield
3.
<PAGE> 13
Cusip Number 4587531000
EXHIBIT C
CONFIDENTIALITY/NONDISCLOSURE AGREEMENT
November 11, 1998
W. R. Hambrecht + Co., LLC
550 Fifteenth Street
San Francisco, CA 94103
Ladies and Gentlemen:
In connection with your proposed assistance with a possible transaction
involving Interlinq Software Corporation and/or its subsidiaries, affiliates or
divisions (collectively, with such subsidiaries, affiliates and divisions, the
"COMPANY"), the Company is prepared to make available to you certain information
concerning the business, financial condition, operations, assets and liabilities
of the Company. As a condition to such information being furnished to you and
your directors, officers, partners, employees, agents or advisors (including,
without limitation, attorneys, accountants, consultants, and financial advisors)
(collectively, "REPRESENTATIVES"), you agree to treat any information concerning
the Company (whether prepared by the Company, its advisors or otherwise and
irrespective of the form of communication) which is furnished to you or to your
Representatives after the date hereof by or on behalf of the Company (herein
collectively referred to as the "EVALUATION MATERIAL") in accordance with the
provisions of this letter agreement, and to take or abstain from taking certain
other actions hereinafter set forth.
The term "EVALUATION MATERIAL" also shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents prepared by
you or your Representatives which contain, reflect or are based upon, in whole
or in part, the information furnished to you or your Representatives pursuant
hereto. The term "Evaluation Material" does not include information which (i) is
or becomes generally available to the public other than as a result of a
disclosure by you or your Representatives, (ii) was within your possession prior
to its being furnished to you by or on behalf of the Company pursuant hereto,
provided that the source of such information was not known by you to be bound by
a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to
such information or (iii) becomes available to you on a nonconfidential basis
from a source other than the Company or any of its Representatives, provided
that such source was not known by you to be bound by a confidentiality agreement
with, or other contractual, legal or fiduciary obligation of confidentiality to,
the Company or any other party with respect to such information.
<PAGE> 14
Cusip Number 4587531000
You hereby agree that you and your Representatives shall use the Evaluation
Material solely for the purpose of evaluating a possible transaction involving
the Company, that the Evaluation Material will be kept confidential and that you
and your Representatives will not disclose any of the Evaluation Material in any
manner whatsoever; provided, however, that (i) you may make any disclosure of
such information to which the Company gives its prior written consent and (ii)
any of such information may be disclosed to your Representatives who need to
know such information for the sole purpose of evaluating a possible transaction
involving the Company and who agree or who have a professional duty to keep such
information confidential and who are provided with a copy of this letter
agreement. In any event, you shall be responsible for any breach of this letter
agreement by any of your Representatives and you agree, at your sole expense, to
take all reasonable measures (including but not limited to court proceedings) to
restrain your Representatives from prohibited or unauthorized disclosure or use
of the Evaluation Material.
In addition, you agree that, without the prior written consent of the Company,
you and your Representatives will not disclose to any other person the fact that
the Evaluation Material has been made available to you, that discussions are
taking place concerning a possible transaction involving the Company or any of
the terms, conditions or other facts with respect thereto (including the status
thereof) provided, that you may make such disclosure if you have received the
written opinion of your outside counsel that such disclosure must be made by you
in order that you not commit a violation of law. The term "person" as used in
this letter agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity.
In the event that you or any of your Representatives are requested or required
(by oral questions, interrogatories, requests for information or documents in
legal proceedings, subpoena, civil investigative demand or other similar
process) to disclose any of the Evaluation Material, you shall provide the
Company with prompt written notice of any such request or requirement so that
the Company may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this letter agreement. If, in the absence of a
protective order or other remedy or the receipt of a waiver by the Company, you
or any of your Representatives are nonetheless legally compelled to disclose
Evaluation Material to any tribunal or else stand liable for contempt or suffer
other censure or penalty, you or you Representative may, without liability
hereunder, disclose to such tribunal only that portion of the Evaluation
Material which is legally required to be disclosed, provided that you exercise
your best efforts to preserve the confidentiality of the Evaluation Material,
including, without limitation, by cooperating with the Company to obtain, at the
Company's expense, an appropriate protective order or other reliable assurance
that confidential treatment will be accorded the Evaluation Material by such
tribunal.
If you decide that you do not wish to proceed with assisting in a transaction
involving the Company, you will promptly inform the Company of that decision. In
that case, or at any time upon the request of the Company for any reason, you
will promptly deliver to the
<PAGE> 15
Cusip Number 4587531000
Company or destroy all Evaluation Material (and all copies thereof) in the
possession of you or your Representatives. Notwithstanding the return or
destruction of the
Evaluation Material, you and your Representatives will continue to be bound by
your obligations of confidentiality and other obligations hereunder.
You understand and acknowledge that neither the Company nor any of its
Representatives (including without limitation any of the Company's directors,
officers, employees, or agents) make any representation or warranty, express or
implied, as to the accuracy or completeness of the
Evaluation Material. You agree that neither the Company nor any of its
Representatives (including without limitation any of the Company's directors,
officers, employees, or agents) shall have any liability to you or to any of
your Representatives relating to or resulting from the use of the Evaluation
Material or any errors therein or omissions therefrom. Only those
representations or warranties which are made in a final definitive agreement
regarding any transactions contemplated hereby, when, as and if executed, and
subject to such limitations and restrictions as may be specified therein, will
have any legal effect.
In consideration of the Evaluation Material being furnished to you, you hereby
agree that, for a period of one year from the date hereof, neither you nor any
of your affiliates will, for employment purposes, solicit on your behalf or on
behalf of any other prospective employer any of the current officers or
employees of the Company with whom you have had contact or who was specifically
identified to you during the period of your investigation of the Company, so
long as they are employed by the Company, without obtaining the prior written
consent of the Company.
You agree that, for a period of one year from the date of this agreement, unless
such shall have been specifically invited in writing by the Company, neither you
nor any of your affiliates (as such term is defined under the Securities
Exchange Act of 1934, as amended (the "1934 ACT") or Representatives will in any
manner, directly or indirectly, (a) effect or seek, offer or propose (whether
publicly or otherwise) to effect, or cause or participate in or in any way
assist any other person to effect or seek, offer or propose (whether publicly or
otherwise) to effect or participate in, (i) any acquisition of any securities
(or beneficial ownership thereof) or assets of the Company or any of its
affiliates; (ii) any tender or exchange offer, merger or other business
combination involving the Company or any of its affiliates; (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary
transaction with respect to the Company or any of its affiliates; or (iv) any
"SOLICITATION" of "PROXIES" (as such terms are used in the proxy rules of the
Securities and Exchange Commission) or consents to vote any voting securities of
the Company or any of its affiliates; (b) form, join or in any way participate
in a "GROUP" with respect to the Company or any of its affiliates (as defined
under the 1934 Act); (c) otherwise act, alone or in concert with others, to seek
to control or influence the management, Board of Directors or policies of the
Company or any of its affiliates; (d) take any action which might force the
Company or any of its affiliates to make a public announcement regarding any of
the types of
<PAGE> 16
Cusip Number 4587531000
matters set forth in (a) above; or (e) enter into any discussions or
arrangements with any third party with respect to any of the foregoing. For
purposes of this paragraph, the term "AFFILIATE" when used in relation to the
Company includes affiliates as defined under the 1934 Act and, whether or not so
included, any limited partnerships, real estate investment trusts or other
entities affiliated in any other way with the Company or managed by the Company.
You also agree during such period not to request the Company (or its directors,
officers, employees or agents), directly or indirectly, to amend or waive any
provision of this paragraph (including this sentence).
We each understand and agree that no contract or agreement providing for any
transaction involving the Company shall be deemed to exist between us solely by
virtue of this letter agreement. We also agree that neither the Company nor you
will be under any legal obligation of any kind whatsoever with respect to such a
transaction by virtue of this letter agreement except for the matters
specifically agreed to herein. We each further acknowledge and agree that the
Company reserves the right, in its sole discretion, to reject any and all
proposals made by you or any of your Representatives with regard to a
transaction between the Company and you, and we each reserve the right to
terminate discussions at any time. Except upon execution of a definitive
agreement, if any, you further understand that (i) the Company and its
Representatives shall be free to conduct any process for any transaction
involving the Company, if and as they in their sole discretion shall determine
(including, without limitation, negotiating with any interested parties), (ii)
any procedures relating to such process or transaction may be changed at any
time without notice to you or any other person, and (iii) you shall not have any
claims whatsoever against the Company, its Representatives or any of their
respective directors, officers, stockholders, owners, affiliates or agents
arising out of or relating to any transaction involving the Company against any
third party with whom a transaction is entered into. Neither this paragraph nor
any other provision in this agreement can be waived or amended except by written
consent of the parties.
It is understood and agreed that no failure or delay by the Company or you in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power or privilege
hereunder.
It is further understood and agreed that money damages would not be a sufficient
remedy for any breach of this letter agreement by you or any of your
Representatives and that the Company shall be entitled to equitable relief,
including injunction and specific performance, as a remedy for any such breach.
Such remedies shall not be deemed to be the exclusive remedies for a breach by
you of this letter agreement but shall be in addition to all other remedies
available at law or in equity to the Company. In the event of litigation
relating to this letter agreement, if a court of competent jurisdiction
determines that you or any of your Representatives have breached this letter
agreement, then you shall be liable and
<PAGE> 17
Cusip Number 4587531000
pay to the Company the reasonable legal fees incurred by the Company in
connection with such litigation, including any appeal therefrom.
This letter agreement is for the benefit of the parties and their directors,
officers, stockholders, owners, affiliates, and agents, and shall be governed by
and construed in accordance with the laws of the State of Washington. You also
hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Washington and of the United States
of America located in the State of Washington for any actions, suits or
proceedings arising out of or relating to this agreement and the transactions
contemplated hereby (and you agree not to commence any action, suit or
proceeding relating thereto except in such courts), and further agree that
service of any process, summons, notice or document by U.S. registered mail to
your address set forth above shall be effective service of process for any
action, suit or proceeding brought against you in any such court. You hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this agreement or the transactions
contemplated hereby, in the courts of the State of Washington or the United
States of America located in the State of Washington, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
Please confirm your agreement with the foregoing by signing and returning one
copy of this letter to the undersigned, whereupon this letter agreement shall
become a binding agreement between you and the Company.
Very truly yours,
INTERLINQ SOFTWARE CORPORATION
By /s/ Steve Yount
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Executive Vice President --
Enterprise
Technology Division, Chief Financial
Officer and Secretary
<PAGE> 18
Cusip Number 4587531000
Accepted and agreed as of
the date first written above:
W. R. HAMBRECHT + CO., LLC
By: /s/ J.D. Delafield
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Name: J.D. Delafield
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Its: Partner
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