WELLS FARGO FOOTHILL M&A Discussion for Kuhn Capital Chicago2/12/04

Wells Fargo Foothill History n Founded 1970 F Rapid Growth in 1970s F Became NYSE Traded 1987 F 1990’s: Ability to tap Public Debt Markets which helped Foothill develop its focus of today n Acquired by Norwest October, 1995 F ~$775 million of assets at time of sale n Norwest + Wells Fargo in 1998 n Today~$9 billion of assets through 4 units

Business Units n Four Business Units u Business Finance Division: Focuses on manufacturing, distribution, SOFTWARE AND TECHNOLOGY; traditional asset based loans (plus underwriting of enterprise valuation “B” pieces. u Wells Fargo Retail Finance: Focuses on retailers only u Foothill Wholesale Finance: Focuses on lending to other lenders, or wholesale lines of credit. u Foothill Specialty Finance: Lending to non traditional asset based customers, such as hotel/casino, media,and pure cash flow businesses.

Business Finance Division n Los Angeles Headquarters - Offices Nationwide F New York, Chicago, Boston, Atlanta, Dallas, San Francisco F $500 Million Underwriting capability, $30-$50 Million Typical Hold; good syndication network. F Over 550 Accounts n Pricing Parameters F Interest Rates: Libor +1.75%…and up…and up... F Closing Fees: 0.50% to 2.00% of the Credit Line F Unused Line Fees and Collateral Service Fees F It may look like a lot… but you may get the Wells Fargo Foothill putter and other assorted gifts

What we focus on in technology lending…. n Collateral Coverage/Exit Strategy n Must Have “Running Room” at Closing n Need to Have a Reasonable Plan (Aid by third party consultants is a benefit) n Competent Management that Communicates effectively n Recurring Revenue, Install Base of Customers

Strategic Partnerships n Subordinated Debt Lenders such as Cerberus Partners, Highbridge/Zwirn, and Goldman Sachs Credit Partners n Equity Sponsors such as Windpoint, GTCR Platinum/Gores, Cypress Funds, and Deutsche Bank Private Equity Wells Fargo Partnerships (banking needs)

How do we lend to software companies? n Our financing packages leverage a Borrower’s assets to provide liquidity based on advances against: u A/R: up to 85%, u Recurring Revenue, install base, and retention rates. n We are typically effective for established operating companies facing a re-capitalization, acquisition financing, new buyout because of the leverage that we can provide.

Recent Deals n SPSS, Inc. (Database Software company) u $30MM Loan supported by the install base of customers and on-going monthly fees. n Norstan, Inc. (IP/telephony installation business) u $27.5MM Refinance Revolver supported by maintnence contracts-recurring revenue fees. n The Learning Company u $50MM Leveraged acquisition line of credit partnering with Gores Technology Partners n Palm Computing u $150MM refinance Line of Credit

Conclusion n Questions/Comments n Party Favours u Golf balls u Golf Shirts u Radio/TV u Can you get the A+ gift this holiday season? n Run a deal by us……