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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): July 23, 1999
NAVIDEC, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<CAPTION>
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<S> <C> <C>
COLORADO 0-29098 33-0502730
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
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14 INVERNESS DRIVE, SUITE F-116, ENGLEWOOD, CO 80112
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (303) 790-7565.
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ITEM 5. OTHER EVENTS.
On July 23, 1999, Wells Fargo committed to make a strategic investment
of $25 million in Navidec, Inc. and its wholly owned subsidiary, DriveOff.com,
Inc. Closing of the transactions is subject to customary closing conditions,
including execution of certain co-marketing and long term consulting agreements
described below. The parties expect to close both transactions in the first
half of August 1999.
For its $10 million investment in Navidec, Wells Fargo will receive (i)
380,000 shares of Navidec's common stock, representing approximately 4.9% of its
outstanding common stock and (ii) a $6,200,000 promissory note convertible into
620,000 shares of non-voting common stock of Navidec. The interest rate on the
Navidec note is 3% per annum, accrued semi-annually and payable at maturity of
December 31, 2004. The Navidec note can be voluntarily converted by Wells Fargo
at any time, and conversion is mandatory upon the amendment of Navidec's
Articles of Incorporation to allow for the issuance of non-voting common stock.
However, if the Articles of Incorporation are not amended by December
31, 2000, then Wells Fargo may either require prepayment of the note, including
accrued interest calculated at 7% per annum, or put the note to Navidec at a
price equal to the product of (i) the number of shares into which the note is
convertible and (ii) the average closing price of Navidec's common stock for the
ten (10) trading days ending on the day immediately before Wells Fargo delivers
notice of its election to put the note to Navidec.
In addition, Wells Fargo has committed to invest $15 million in
DriveOff.com, Navidec's next generation automotive e-commerce company. Wells
Fargo will receive a $15 million note convertible into 20% of DriveOff.com's
capital stock outstanding as of the closing of the transaction. The credit
agreement under which the note will be issued contains certain affirmative and
negative covenants that are customary for lending transactions.
The debt to be issued by DriveOff.com to Wells Fargo will carry a 3%
annual interest rate, accrued semi-annually and payable at maturity on January
1, 2005. The DriveOff.com note is voluntarily convertible at any time by Wells
Fargo, and there is mandatory conversion (i) immediately prior to the
consummation of an initial public offering by DriveOff.com with gross proceeds
to DriveOff.com of at least $15 million or (ii) on December 31, 2004. However,
if, among other events, the initial public offering is not completed by October
31, 2001, Wells Fargo may require prepayment of the note, including all accrued
interest. DriveOff.com's obligations under this note are guaranteed by Navidec.
In connection with its DriveOff.com investment, at closing, Wells Fargo
will also receive a 5-year warrant exercisable one year after the closing for an
additional 1% of DriveOff.com at a per share exercise price equal to 140% of the
effective per share price for the initial $15 million investment. In addition,
Wells Fargo will receive certain registration rights for the common stock it
will acquire in each company.
Navidec, DriveOff.com and Wells Fargo are currently negotiating the
terms of a co-marketing agreement and a long term consulting agreement under
which Navidec and DriveOff.com would provide additional services to Wells Fargo.
For so long as Wells Fargo is subject to the Bank Holding Company Act
of 1956, it has agreed not to exchange any of its non-voting stock for, or
convert any of its convertible debt securities into, voting Navidec or
DriveOff.com stock, as applicable, if after giving effect to such exchange or
conversion, it would hold more than 5% of any class of voting securities of
Navidec or DriveOff.com, as applicable.
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Item 7(c). Exhibits
99.1 Stock and Note Purchase Agreement dated as of July 23, 1999 by
and between Navidec, Inc. and WFC Holdings Corporation.
99.2 Credit Agreement dated as of July 23, 1999 by and among
DriveOff.com, Inc., Navidec, Inc. and WFC Holdings
Corporation.
99.3 Form of Note of Navidec, Inc. payable to the order of WFC
Holdings Corporation.
99.4 Form of Term Note of DriveOff.com, Inc. payable to the order
of WFC Holdings Corporation.
99.5 Form of Guarantee of Navidec, Inc. in favor of WFC Holdings
Corporation.
99.6 Form of Registration Rights Agreement by and between Navidec,
Inc. and WFC Holdings Corporation.
99.7 Press Release dated July 26, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NAVIDEC, INC.
Date: July 28, 1999 By: /s/ Patrick Mawhinney
------------------------
Patrick Mawhinney
Chief Financial Officer
<PAGE> 1
Exhibit 99.1
NAVIDEC, INC.
STOCK AND NOTE PURCHASE AGREEMENT
JULY 23, 1999
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TABLE OF CONTENTS
(CONTINUED)
PAGE
TABLE OF CONTENTS
PAGE
----
1. Purchase and Sale of Stock and Note 1
1.1 Sale and Issuance of the Shares and the Note 1
1.2 Closing 1
1.3 Sale of Additional Note(s) 2
2. Representations and Warranties of the Company 2
2.1 Organization, Good Standing and Qualification 2
2.2 Capitalization and Voting Rights 3
2.3 Authorization 3
2.4 Valid Issuance of Shares, Note Shares, and the Note 3
2.5 Consents 4
2.6 Litigation 4
2.7 Patents and Trademarks 4
2.8 Legal Compliance 4
2.9 Compliance with Other Instruments 5
2.10 Agreements; Action 5
2.11 Permits 5
2.12 Disclosure 5
2.13 Registration Rights 6
2.14 Corporate Documents 6
2.15 SEC Filings; Company Financial Statements 6
2.16 Changes in Conditions 6
2.17 Minute Books 7
3. Representations and Warranties of WFC 7
3.1 Authorization 7
3.2 Purchase Entirely for Own Account 7
3.3 Disclosure of Information 7
3.4 Investment Experience 8
3.5 Accredited Investor 8
3.6 Restricted Securities 8
3.7 Further Limitations on Disposition 8
3.8 Legends 9
4. Conditions of WFC's Obligations at Closing 9
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.1 Representations and Warranties 9
4.2 Performance 9
4.3 Compliance Certificate 9
4.4 Qualifications 9
4.5 Proceedings and Documents 9
4.6 Registration Rights Agreement 10
4.7 Opinion of Company Counsel 10
4.8 Marketing Agreement and Pricing Commitment 10
5. Conditions of the Company's Obligations at Closing 10
5.1 Representations and Warranties 10
5.2 Qualifications 10
6. Other Agreements 10
6.1 Approval of Articles Amendment 10
6.2 Public Disclosure 10
6.3 Nasdaq Listing 11
6.4 Further Assurances 11
6.5 Expenses 11
7. Miscellaneous 11
7.1 Successors and Assigns 11
7.2 Governing Law 11
7.3 Counterparts 11
7.4 Titles and Subtitles 11
7.5 Notices 11
7.6 Finder's Fee 12
7.7 Survival of Warranties 12
7.8 Amendment and Waivers 12
7.9 Severability 12
7.10 Entire Agreement 12
EXHIBITS:
Exhibit A - Form of Navidec Note
Exhibit B - Schedule of Exceptions
Exhibit C - Form of Registration Rights Agreement
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STOCK AND NOTE PURCHASE AGREEMENT
---------------------------------
THIS STOCK AND NOTE PURCHASE AGREEMENT (this "AGREEMENT") is made as of
the 23rd day of July 1999 by and among Navidec, Inc., a Colorado corporation
(the "COMPANY"), and WFC Holdings Corporation, a Delaware corporation ("WFC" or
"INVESTOR").
RECITALS
WHEREAS, WFC desires to purchase from the Company 380,000 shares of the
Company's common stock ("COMMON STOCK") representing approximately 4.9% of the
Company's outstanding capital stock on the closing date (after giving effect to
the purchase hereunder) (the "SHARES") at a price of $10.00 per share, and the
Company desires to issue and sell to WFC the Shares, on the terms and subject to
the conditions set forth herein.
WHEREAS, WFC currently wishes to acquire, and the Company wishes to
sell, an additional 620,000 shares of the Company's non-voting Common Stock,
except that the Company's Articles of Incorporation ("ARTICLES") do not provide
for the issuance of non-voting Common Stock.
WHEREAS, WFC has agreed to lend, and the Company has agreed to borrow,
$6,200,000 represented by a note in the form attached hereto as EXHIBIT A (the
"NOTE") convertible initially into 620,000 shares of the Company's non-voting
Common Stock (the "NOTE SHARES").
WHEREAS, the conversion of the Note and the transfer of the Shares and
the Note Shares are subject to the restrictions of a Transfer and Conversion
Restriction Agreement (the "CONVERSION AGREEMENT") of even date herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Company and WFC hereby agree as follows:
1. PURCHASE AND SALE OF STOCK AND NOTE
1.1 SALE AND ISSUANCE OF THE SHARES AND THE NOTE
. Subject to the terms and conditions of this Agreement, WFC agrees to purchase
at the Closing and the Company agrees to sell and issue to WFC at the Closing,
(a) the Shares at a per share price of $10.00, and (b) the Note in the principal
amount of Six Million Two Hundred Thousand Dollars ($6,200,000).
1.2 CLOSING
. The purchase and sale of the Shares and the Note shall take place at the
offices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto,
California, at 9:00 a.m., August 5, 1999 or at such other time and place as the
Company and WFC mutually agree (which time and place are designated as the
"CLOSING"). At the Closing, the Company will deliver to WFC a certificate
representing the Shares and the Note, and WFC will deliver to the Company
consideration for such
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Shares and the Note, consisting of a check or wire transfer payable to the order
of the Company in the amount of $10,000,000.
1.3 SALE OF ADDITIONAL NOTE(S)
.
(a) If after the Company's proposed public offering of the Company's
Common Stock (including any exercise(s) of the underwriter's option
(collectively the "PUBLIC OFFERING")), Investor owns less than 9.9% of the
Company's Fully Diluted capital stock (on an as converted basis and after giving
effect to the Public Offering price-based adjustment contained in the Note),
within 10 business days of the related closing Investor may make, in its sole
discretion, an additional loan hereunder pursuant to an irrevocable notice
(subject to customary closing conditions) in such amount so that Investor, upon
conversion of the initial Note and the additional loan, will own 9.9% of the
Company's Fully Diluted capital stock (after giving effect to the Public
Offering price based adjustment contained in the initial Note). Such 10-business
day period shall be extended to the extent reasonably necessary or practicable
to permit the closing of such loan(s). "FULLY DILUTED" means all shares of
Company Common Stock outstanding or issuable upon exercise of all outstanding
and reserved options, warrants or other convertible, exercisable or exchangeable
securities convertible, exercisable or exchangeable into shares of the Company
capital stock (on an as converted to Common Stock basis).
(b) Upon the funding of each additional loan hereunder, the Company
shall issue to the Investor an additional note substantially the same as the
initial Note, except that (i) the number of shares Company Common Stock into
which any additional Note(s) may be converted shall be based on the lower of
$10.00 per share of Common Stock or the per share price received by the Company
in the Public Offering and (ii) the additional note(s) shall not contain the
Public Offering price-based adjustment contained in the initial Note.
(c) Unless context requires otherwise, reference herein to the "NOTE"
shall be a collective reference to the initial and any subsequent notes issued
pursuant to the terms of this Section 1.3.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
. Unless context indicates otherwise, reference to the "COMPANY" shall be deemed
to be reference the Company and any of its subsidiaries. The Company hereby
represents and warrants to WFC that, except as set forth on the Schedule of
Exceptions attached as EXHIBIT B (the "SCHEDULE OF EXCEPTIONS"):
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION
. The Company is duly organized, validly existing and in good standing under the
laws of its state of incorporation and has all requisite corporate power and
authority to own and operate its property and assets and to carry on its
business as proposed to be conducted, to execute and deliver this Agreement, the
Note and the Registration Rights Agreement attached hereto as EXHIBIT C (the
"RIGHTS AGREEMENT") and the Conversion Agreement (collectively, the "ANCILLARY
AGREEMENTS"), to issue and sell the Shares, to issue the Note and the Common
Stock issuable upon conversion
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thereof, and to carry out the provisions of this Agreement and each Ancillary
Agreement (subject to amendment of its Articles of Incorporation (the
"ARTICLES") as amended). The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure so to qualify
would have a material adverse effect on its business, properties, prospects or
financial condition.
2.2 CAPITALIZATION AND VOTING RIGHTS
. The authorized capital of the Company consists of twenty million (20,000,000)
shares of Common Stock, of which as of June 30, 1999 Seven Million Three Hundred
Ninety-Three Thousand Six Hundred Fourteen (7,393,614) shares are issued and
outstanding. The outstanding shares of Common Stock are all duly and validly
authorized and issued, fully paid and nonassessable, and were issued in
compliance with the registration or qualification provisions of the Securities
Act of 1933, as amended (the "ACT") and any relevant state securities laws or
pursuant to valid exemptions therefrom. The Company has reserved Two Million
(2,000,000) shares of its Common Stock for issuance under its stock option plans
(collectively, the "COMPANY STOCK PLANS").
(iii) Except under the Company Stock Plans or as set forth on the
Schedule of Exceptions, there are not outstanding any options, notes, rights
(including conversion or preemptive rights or rights of first refusal) or
obligations for the purchase or acquisition from the Company of any shares of
its capital stock. Except as set forth on the Schedule of Exceptions, the
Company is not a party or subject to any agreement or understanding and, to the
best of the Company's knowledge, there is no agreement or understanding between
any other persons or entities which affects or relates to the voting or giving
of written consents with respect to any security or by a director of the
Company.
2.3 AUTHORIZATION
. Subject to stockholder approval of an amendment to the Company's Articles to
allow for the issuance of non-voting Common Stock in connection with the
conversion of the Note and for free convertibility of non-voting Common Stock
into voting Common Stock (the "ARTICLES APPROVAL"), all corporate action on the
part of the Company and its officers, directors and stockholders necessary for
the authorization, execution and delivery of this Agreement and the Ancillary
Agreements, the performance of all obligations of the Company hereunder and
thereunder, and the authorization, issuance (or reservation for issuance), sale
and delivery of the Shares and the Note being sold hereunder and the Note Shares
issuable upon conversion of the Note has been taken or will be taken prior to
the Closing, and this Agreement and the Ancillary Agreements constitute valid
and legally binding obligations of the Company, enforceable in accordance with
their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in Rights Agreement may be limited by applicable federal or state
securities laws. The Company's Board of Directors has unanimously approved the
Articles Approval.
2.4 VALID ISSUANCE OF SHARES, NOTE SHARES, AND THE NOTE
. The Shares and the Note being purchased by WFC hereunder, when issued, sold
and delivered in
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accordance with the terms of this Agreement for the consideration expressed
herein, will be validly issued, fully paid and nonassessable (in the case of the
Shares) and will be free of restrictions on transfer other than restrictions on
transfer under this Agreement, the Conversion Agreement or the Bank Holding
Company Act (the "BHC ACT") and applicable securities laws and, based in part
upon the representations of WFC in this Agreement, will be issued in compliance
with the registration and qualification provisions of all applicable federal and
state securities laws. Subject to the Articles Approval, the Note Shares
issuable upon conversion of the Note have been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Note, will be
validly issued, fully paid and nonassessable and will be free of restrictions on
transfer other than restrictions on transfer under this Agreement, the BHC Act
and applicable securities laws.
2.5 CONSENTS
. Except as set forth on the Schedule of Exceptions, no consent, approval, order
or authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of a
company or any other person or entity not a party to this Agreement is required
in connection with the consummation of the transactions contemplated by this
Agreement, except for the filing pursuant to Section 25102(f) of the California
Corporate Securities Law of 1968, as amended, and the rules thereunder, which
filings will be effected within 15 days of the sale of the Shares or within 15
days of the issuance of the Note Shares and the Note hereunder or within 15 days
of the issuance of the Note Shares.
2.6 LITIGATION
. There is no action, suit, proceeding or investigation pending or currently
threatened against the Company that questions the validity of this Agreement or
the Ancillary Agreements, or the right of the Company, as applicable, to enter
into any such agreement, or to consummate the transactions contemplated hereby
or thereby, or that might have, either individually or in the aggregate, a
material adverse effect on the assets or condition of the Company and
financially or otherwise (a "MATERIAL ADVERSE EFFECT").
2.7 PATENTS AND TRADEMARKS
. To the best of its knowledge, the Company owns or possesses sufficient legal
rights to all patents, trademarks, servicemarks, trade names, copyrights, trade
secrets, licenses, information, proprietary rights and processes necessary for
its business as now conducted without any conflict with or infringement of the
rights of others, except for any failure that individually or in the aggregate
would not have a Material Adverse Effect on the Company. The Company has not
received any oral or written communications alleging that it has violated or
that its business as currently conducted would violate any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity, except for any such violation
that individually or in the aggregate would not have a Material Adverse Effect
on the Company.
2.8 LEGAL COMPLIANCE
. The Company has complied in all material respects with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, regional, local,
and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or
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commenced against it alleging any failure so to comply, except for any such case
that would individually or in the aggregate would not result in a Material
Adverse Effect.
2.9 COMPLIANCE WITH OTHER INSTRUMENTS
. The Company is not in violation or default of any provision of its Articles or
Bylaws, or, except as provided in the Schedule of Exceptions, in any material
respect of any instrument, judgment, order, writ, decree or contract to which it
is a party or by which it is bound, or, to the best of its knowledge, of any
provision of any federal or state statute, rule or regulation applicable to it.
The execution, delivery and performance by the Company of this Agreement and the
Ancillary Agreements, and the consummation of the transactions contemplated
hereby and thereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument, judgment, order, writ, decree or
contract or an event that results in the creation of any lien, charge or
encumbrance upon any assets of the Company or the suspension, revocation,
impairment, forfeiture, or nonrenewal of any material permit, license,
authorization, or approval applicable to the Company, its business or operations
or any of its assets or properties.
2.10 AGREEMENTS; ACTION
.
(a) The Company is not a party to and is not bound by any
contract, agreement or instrument, or subject to any restriction under its
Articles or Bylaws, that adversely affects its business as now conducted, its
properties or its financial condition (including exclusive licensing or
distribution agreements and non-compete agreements).
(b) The Company is not party to any agreement with any financial
institution which provides for delivery of a Drive-Off solution prior to, or on
terms more favorable than, the solution proposed to be delivered to Wells Fargo
& Co. under the agreements between it and the Company (relative to the
co-branded site).
(c) The Company has no current plans to (i) consolidate with or
merge into any other corporation, (ii) sell, convey or dispose of all or
substantially all of the assets of the Company or engage in a series of related
transactions in which more than fifty percent (50%) of the voting power of the
Company would be disposed of with any corporation, partnership, association or
other business entity or individual, in connection with a change of control or
(iii) engage in any other form of acquisition, liquidation, dissolution or
winding up the Company.
2.11 PERMITS
. The Company has all franchises, permits, licenses, and any similar authority
necessary for the conduct of its business as now being conducted by it, the lack
of which could have a Material Adverse Effect on the Company, and the Company
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted. The Company is not
in default in any material respect under any of such franchises, permits,
licenses, or other similar authority.
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2.12 DISCLOSURE
. The Company has fully provided WFC with all the information that WFC has
requested for deciding whether to purchase the Shares and the Note and all
information which the Company believes is reasonably necessary to enable a
reasonable WFC to make such decision. Neither this Agreement nor any other
statements or certificates made or delivered in connection herewith contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements herein or therein not misleading.
2.13 REGISTRATION RIGHTS
. Except as provided in the Rights Agreement or in the Schedule of Exceptions,
the Company has not granted or agreed to grant any registration rights pursuant
to any agreement currently still in effect, including piggyback rights, to any
person or entity.
2.14 CORPORATE DOCUMENTS
. The Articles and Bylaws of the Company are in the form previously provided to
counsel for WFC.
2.15 SEC FILINGS; COMPANY FINANCIAL STATEMENTS
.
(a) The Company has filed all forms, reports and documents
required to be filed by it with the Securities and Exchange Commission (the
"SEC") since January 1, 1996, and has made available to WFC such forms, reports
and documents in the form filed with the SEC. All such required forms, reports
and documents (including those that the Company may file subsequent to the date
hereof) are referred to herein as the "COMPANY SEC REPORTS." As of their
respective dates, Company SEC Reports (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such the Company
SEC Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. None of the Company's subsidiaries is required to file any
forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Reports,
including any Company SEC Reports filed after the date hereof until the Closing,
(i) complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the Note thereto or, in the case of unaudited interim
financial statements, as may be permitted by the SEC on Form 10-Q under the
Securities Exchange Act of 1934) and (iii) fairly presented the consolidated
financial position of the Company and its subsidiaries as at the respective
dates thereof and the consolidated results of the Company's operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements may not contain footnotes and were or are subject to normal and
recurring year-end adjustments.
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2.16 CHANGES IN CONDITIONS
. Since December 31, 1998, there has not been:
(a) any material sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets owned by the
Company or sale of a material amount of other assets (other than any transfer to
its subsidiary DriveOff.com, Inc.) ;
(b) any resignation or termination of employment of any key
officer of the Company;
(c) any declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any of such stock by the
Company; or
(d) to the Company's knowledge, any other event or condition
of any character which might have a Material Adverse Effect on the Company.
2.17 MINUTE BOOKS
. The minute books of the Company provided to counsel to WFC contain a complete
summary of all meetings of directors and stockholders (prior to becoming a
public company) and all actions by written consent without a meeting by the
directors and stockholders since the time of incorporation and reflect all
actions by the directors (and any committee of the directors) and stockholders
referred to in such minutes accurately in all material respects.
3. REPRESENTATIONS AND WARRANTIES OF WFC
. WFC hereby represents and warrants that:
3.1 AUTHORIZATION
. WFC has full power and authority to enter into this Agreement, and the
Ancillary Agreements, and each such agreement constitutes its valid and legally
binding obligation to which it is a party, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
Registration Rights Agreement may be limited by applicable federal or state
securities laws.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT
. This Agreement is made with WFC in reliance upon its representation to the
Company, which by its execution of this Agreement it hereby confirms, that the
Shares and Note to be received by WFC and, the Note Shares issuable upon
conversion of the Note (collectively, the "SECURITIES") will be acquired for
investment for WFC's own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and that WFC has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, WFC further represents that it does not
have any contract, undertaking, agreement or arrangement
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with any person to sell, transfer or grant participation to such person or to
any third person, with respect to any of the Securities.
3.3 DISCLOSURE OF INFORMATION
. WFC believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Shares and the Note. WFC
further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
such Shares and the Note and the business, properties and financial condition of
the Company. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of WFC to rely thereon.
3.4 INVESTMENT EXPERIENCE
. WFC is an investor in securities of companies in the development stage and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Shares and the Note. WFC also represents it has not been organized solely
for the purpose of acquiring the Shares and the Note.
3.5 ACCREDITED INVESTOR
. WFC is an "ACCREDITED INVESTOR" within the meaning of SEC Rule 501 of
Regulation D, as presently in effect.
3.6 RESTRICTED SECURITIES
. WFC understands that the Securities it is purchasing are characterized as
"RESTRICTED SECURITIES" under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act of 1933, as amended (the
"ACT"), only in certain limited circumstances. In addition, WFC represents that
it is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Act.
3.7 FURTHER LIMITATIONS ON DISPOSITION
. Without in any way limiting the above, WFC further agrees not to make any
disposition of all or any portion of the Securities unless, and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and Section 6 of this Agreement, and:
(a) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) WFC shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, WFC shall have furnished the Company with an opinion
of counsel, reasonably satisfactory to the Company that such disposition will
not require registration of such shares under the Act. It is agreed that the
Company
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<PAGE> 12
will not require opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such Registration Statement or opinion of counsel shall be necessary
for a transfer by a partnership to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to the estate
of any such partner or retired partner or the transfer by gift, will or
intestate succession of any partner to his or her spouse or to the siblings,
lineal descendants or ancestors of such partner or his or her spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he or she were an original investor hereunder.
3.8 LEGENDS
. It is understood that the certificates evidencing the Securities shall bear
the following legend:
"The securities represented by this certificate have been
acquired for investment and have not been registered under the
Securities Act of 1933, as amended. Such securities may not be sold or
transferred in the absence of such registration or unless the
Corporation receives an opinion of counsel reasonably acceptable to it
stating that such sale or transfer is exempt from the registration and
prospectus delivery requirements of said Act. Copies of the agreements
covering the purchase of these shares and restricting their transfer
may be obtained at no cost by written request made by the holder of
record of this Certificate to the Secretary of the Corporation at the
principal executive offices of the Corporation."
4. CONDITIONS OF WFC'S OBLIGATIONS AT CLOSING
. The obligations of WFC to purchase the Shares and the Note at the Closing are
subject to the fulfillment of each of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES
. The representations and warranties of the Company contained in Section 2 shall
be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.
4.2 PERFORMANCE
. The Company shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
COMPLIANCE CERTIFICATE. The President of the Company shall deliver to WFC at the
Closing a certificate stating that the conditions specified in Sections 4.1 and
4.2 have been fulfilled.
QUALIFICATIONS. All prior authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing.
PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection
with the
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<PAGE> 13
transactions contemplated at the Closing and all documents incident thereto
shall be reasonably satisfactory in form and substance to WFC's counsel, and
they shall have received all such counterpart original and certified or other
copies of such documents as they may reasonably request.
4.6 REGISTRATION RIGHTS AGREEMENT
. The Company and WFC shall have entered into the Registration Rights Agreement
in the form attached hereto as EXHIBIT C.
OPINION OF COMPANY COUNSEL. WFC shall have received from Benesch, Friedlander,
Coplan & Aronoff LLP, counsel to the Company, an opinion in form and substance
reasonably satisfactory to WFC's dated as of the Closing.
4.8 MARKETING AGREEMENT AND PRICING COMMITMENT
. Wells Fargo & Co. and the Company shall have prior to or simultaneously to the
Closing entered into the Marketing Agreement and Pricing Commitment.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING
. The obligations of the Company to WFC under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
WFC:
5.1 REPRESENTATIONS AND WARRANTIES
. The representations and warranties of WFC contained in Section 3 shall be true
on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
5.2 QUALIFICATIONS
. All authorizations, approvals, or permits, if any, of any governmental
authority or regulatory body of the United States or of any state that are
required in connection with the lawful issuance and sale of the Securities
pursuant to this Agreement shall be duly obtained and effective as of the
Closing.
6. OTHER AGREEMENTS
.
6.1 APPROVAL OF ARTICLES AMENDMENT
. In connection with each Company stockholders meeting after the date hereof
(annual or special), the Company will take all action necessary in accordance
with the Colorado law and its Articles of Incorporation and Bylaws to effect the
Articles Amendment until such amendment is adopted. The Company will use its
commercially reasonable efforts to solicit from its stockholders proxies in
favor of the adoption and approval of the Articles Amendment and will take all
other action necessary or advisable to secure the vote or consent of its
stockholders required by the rules of Nasdaq or Colorado law to obtain such
approvals. In each proxy statement with respect to each such stockholders
meeting the Company's Board of Directors shall recommend that the Company
stockholders approve the Articles Amendment. WFC agrees to vote all of its
shares of Common Stock in favor of the Articles Amendment.
6.2 PUBLIC DISCLOSURE
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<PAGE> 14
. WFC and the Company will consult with each other, and to the extent
practicable, agree, before issuing any press release or otherwise making any
public statement with respect to the transaction contemplated hereby (including
any statement contained in a document filed by the Company with the SEC) and
will not issue any such press release or make any such public statement prior to
such consultation, except as may be required by law or any listing agreement
with a national securities exchange.
6.3 NASDAQ LISTING
. The Company agrees to authorize for listing on Nasdaq the shares of Company
Common Stock issuable, and those required to be reserved for issuance, in
connection with this Agreement and the Note.
6.4 FURTHER ASSURANCES
. Upon the terms and subject to the conditions set forth in this Agreement, each
of the parties agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
6.5 EXPENSES
. The Company shall pay all costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement. The
Company shall reimburse WFC for all reasonable fees and expenses (including
without limitation all accounting, consulting, travel and other third party fees
and expenses) up to $40,000.
7. MISCELLANEOUS
.
7.1 SUCCESSORS AND ASSIGNS
. Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any Securities).
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
7.2 GOVERNING LAW
. This Agreement shall be governed by and construed under the laws of the State
of Delaware as applied to agreements among California residents entered into and
to be performed entirely within Delaware.
7.3 COUNTERPARTS
. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
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<PAGE> 15
7.4 TITLES AND SUBTITLES
. The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.
7.5 NOTICES
. All notices and other communications required or permitted hereunder shall be
in writing, shall be effective when given, and shall in any event be deemed to
be given upon receipt or, if earlier, (a) five (5) days after deposit with the
U.S. Postal Service or other applicable postal service, if delivered by first
class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one
(1) business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid or (d) one (1) business day after the
business day of facsimile transmission, if delivered by facsimile transmission
with copy by first class mail, postage prepaid, and shall be addressed (i) if to
any WFC, at WFC's address as set forth beneath WFC's signature to this
Agreement, and (ii) if to the Company, at the address of its principal corporate
offices (attention: Secretary), or at such other address as a party may
designate by ten days' advance written notice to the other party pursuant to the
provisions above.
7.6 FINDER'S FEE
. Except for any fee payable to First Security Van Kasper in connection with the
transactions contemplated by this Agreement (which must be acceptable to WFC),
each party represents that it neither is nor will be obligated for any finders'
fee or commission in connection with this transaction. WFC agrees to indemnify
and hold harmless the Company from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which WFC or any of
its officers, partners, employees, or representatives is responsible. The
Company agrees to indemnify and hold harmless WFC from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its directors, officers, employees or representatives is
responsible.
7.7 SURVIVAL OF WARRANTIES
. The warranties, representations and covenants of the Company and Investor
contained in or made pursuant to this Agreement shall not survive.
7.8 AMENDMENT AND WAIVERS
. Any term of this Agreement may be amended and any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and the holders
of a majority of the Common Stock issued hereunder and issuable upon conversion
of the Note. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and the
Company.
7.9 SEVERABILITY
. If one or more provisions of this Agreement are held to be unenforceable under
applicable law,
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<PAGE> 16
such provision shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
7.10 ENTIRE AGREEMENT
. This Agreement and the documents referred to herein constitute the entire
agreement among the parties and no party shall be liable or bound to any other
party in any manner by any Warranties, representations, or covenants except as
specifically set forth herein or therein.
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<PAGE> 17
[NAVIDEC STOCK AND NOTE PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Stock and Note
Purchase Agreement as of the date first above written.
COMPANY: NAVIDEC, INC.
By: /s/ Ralph Armijo
------------------------------
Ralph Armijo, President
Address: 14 Inverness Drive, Suite F-116
Englewood, Colorado 80112
Tel: (303) 790-7565
Fax: (303) 790-8845
with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
2300 BP Tower
200 Public Square
Cleveland, Ohio 44114
Attention: Michael Wager
Tel: (216) 363-4500
Fax: (216) 363-4588
WFB: WELLS FARGO HOLDINGS CORPORATION
By: /s/ George Fehlhaber
-------------------------------
George Fehlhaber
By: /s/ Paul D. Ardleigh
-------------------------------
Paul D. Ardleigh,
Senior Vice President
Address: 444 Market Street
San Francisco, California 94111
Tel: (415) 396-6264
Fax: (415) 986-4598
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Kurt Berney
Tel: (650) 493-9300
Fax: (650) 493-6811
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<PAGE> 1
Exhibit 99.2
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE CREDIT AND LENDER WARRANT 1
SECTION 1.1 TERM LOAN 1
SECTION 1.2 INTEREST 2
SECTION 1.3 CONVERTIBILITY 2
SECTION 1.4 LENDER WARRANT 2
ARTICLE II BORROWER REPRESENTATIONS AND WARRANTIES 3
SECTION 2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION 3
SECTION 2.2 CAPITALIZATION AND VOTING RIGHTS 3
SECTION 2.3 SUBSIDIARIES 4
SECTION 2.4 AUTHORIZATION 4
SECTION 2.5 VALID ISSUANCE OF TERM NOTE, LENDER WARRANT,
PREFERRED STOCK AND COMMON STOCK 5
SECTION 2.6 CONSENTS 5
SECTION 2.7 LITIGATION 5
SECTION 2.8 PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENTS 6
SECTION 2.9 PATENTS AND TRADEMARKS 6
SECTION 2.10 LEGAL COMPLIANCE 6
SECTION 2.11 COMPLIANCE WITH OTHER INSTRUMENTS 7
SECTION 2.12 AGREEMENTS; ACTION 7
SECTION 2.13 RELATED-PARTY TRANSACTIONS 9
SECTION 2.14 PERMITS 9
SECTION 2.15 DISCLOSURE 9
SECTION 2.16 REGISTRATION RIGHTS 9
SECTION 2.17 CORPORATE DOCUMENTS 9
SECTION 2.18 TITLE TO PROPERTY AND ASSETS 9
SECTION 2.19 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES;
PROJECTIONS 10
SECTION 2.20 CHANGES IN CONDITIONS 10
SECTION 2.21 INSURANCE 11
SECTION 2.22 MINUTE BOOKS 11
SECTION 2.23 TAX RETURNS, PAYMENTS AND ELECTIONS 11
SECTION 2.24 ENVIRONMENTAL LAWS 12
SECTION 2.25 EMPLOYEES; EMPLOYEE COMPENSATION 12
SECTION 2.26 EMPLOYEE BENEFIT PLANS 12
ARTICLE III LENDER REPRESENTATIONS AND WARRANTIES 12
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<PAGE> 2
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
SECTION 3.1 AUTHORIZATION 12
SECTION 3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT 12
SECTION 3.3 DISCLOSURE OF INFORMATION 13
SECTION 3.4 INVESTMENT EXPERIENCE 13
SECTION 3.5 ACCREDITED LENDER 13
SECTION 3.6 RESTRICTED SECURITIES 13
SECTION 3.7 FURTHER LIMITATIONS ON DISPOSITION 13
SECTION 3.8 LEGENDS 14
ARTICLE IV CONDITIONS 15
SECTION 4.1 LENDER CONDITIONS OF EXTENSION OF CREDIT 15
SECTION 4.2 BORROWER CONDITION 16
ARTICLE V AFFIRMATIVE COVENANTS 16
SECTION 5.1 PUNCTUAL PAYMENTS 17
SECTION 5.2 ACCOUNTING RECORDS 17
SECTION 5.3 COMPLIANCE 17
SECTION 5.4 INSURANCE 17
SECTION 5.5 FACILITIES 17
SECTION 5.6 TAXES AND OTHER LIABILITIES 17
SECTION 5.7 NOTICE TO LENDER 17
ARTICLE VI NEGATIVE COVENANTS 18
SECTION 6.1 OTHER INDEBTEDNESS 18
SECTION 6.2 DIVIDENDS, DISTRIBUTIONS 18
SECTION 6.3 RELATED PARTY TRANSACTION 18
SECTION 6.4 STOCK OPTION PLAN 18
SECTION 6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS 19
ARTICLE VII EVENTS OF DEFAULT 19
SECTION 7.1 EVENTS OF DEFAULT 19
SECTION 7.2 REMEDIES 20
ARTICLE VIII MISCELLANEOUS 20
SECTION 8.1 NO WAIVER 20
SECTION 8.2 SUCCESSORS, ASSIGNMENT 20
SECTION 8.3 SURVIVAL OF WARRANTIES 20
SECTION 8.4 GOVERNING LAW; CONSENT TO JURISDICTION 20
SECTION 8.5 COUNTERPARTS 20
SECTION 8.6 TITLES AND SUBTITLES 21
SECTION 8.7 FINDER'S FEE 21
SECTION 8.8 SUBORDINATION 21
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
SECTION 8.9 EXPENSES 21
SECTION 8.10 AMENDMENT AND WAIVERS 21
SECTION 8.11 SEVERABILITY 21
SECTION 8.12 ENTIRE AGREEMENT 21
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
EXHIBIT A - Form of Term Sheet
EXHIBIT B - Form of Lender Warrant
EXHIBIT C - Schedule of Exceptions
EXHIBIT D - DriveOff.com, Inc. Amended and Restated Certificate of Incorporation
EXHIBIT E - Borrower's Stock Option Plan
EXHIBIT F - Schedule of Borrower Stock Option Grants
EXHIBIT G - Investor Rights Agreement
EXHIBIT H - Parent Guarantee
EXHIBIT I - Opinion of Benesch Friedlander Coplan & Aronoff LLP
</TABLE>
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<PAGE> 4
CREDIT AGREEMENT
THIS AGREEMENT is entered into as of July 23, 1999 by and between
DriveOff.com, Inc., a Delaware Corporation ("BORROWER"), Navidec, Inc., a
Colorado corporation ("PARENT"), and WFC Holdings Corporation, a Delaware
corporation ("LENDER" or "WFC").
RECITAL
-------
Borrower has requested from Lender the credit accommodation described
below, and Lender has agreed to provide said credit accommodation to Borrower on
the terms and conditions contained herein.
Prior to or simultaneous with the issuance of the Term Note and the
Lender Warrant (each, as defined below), Parent is transferring to Borrower all
its assets (including all related intellectual property and agreements) used in
the conduct of the DriveOff.com business (the "DRIVEOFF.COM BUSINESS"). Unless
otherwise indicated or the context requires otherwise, references to the
"BORROWER" shall be deemed to be references to the Borrower including the
DriveOff.com Business after giving effect to such transfer.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Lender and Borrower hereby agree as follows:
ARTICLE I
THE CREDIT AND LENDER WARRANT
-----------------------------
SECTION 1.1 TERM LOAN
.
(a) Term Loan. Subject to the terms and conditions of this
Agreement, Lender hereby agrees to make a loan to Borrower in the principal
amount of Fifteen Million dollars ($15,000,000) (the "TERM LOAN"). Borrower's
obligation to repay the Term Loan shall be evidenced by a promissory note
substantially in the form of EXHIBIT A attached hereto ("TERM NOTE"), all terms
of which are incorporated herein by this reference. The date upon which the Term
Loan is funded hereunder is referred to as the "CLOSING DATE."
(b) Repayment. Subject to the terms hereof and those contained in
the Term Note, the principal amount of the Term Loan and all accrued interest
thereon shall be repaid on December 31, 2004 (the "MATURITY DATE").
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<PAGE> 5
(c) MANDATORY PREPAYMENT. Lender can require mandatory prepayment of
the Term Note (including all interest accrued thereon) if:
(i) Borrower shall have not consummated a underwritten public
offering of Borrower's common stock having gross proceeds to the Borrower in
excess of $15 million by October 31, 2001;
(ii) if, in one or more transactions, the assets primarily used
or necessary to the DriveOff.com Business are sold or transferred by Borrower or
if Parent fails to transfer any such asset owned by it within 10 days of request
therefor by Borrower or Lender; or
(iii) (A) J. Ralph Armijo shall cease to be a director of
Borrower or a working active executive officer of Parent or (B) Michael Kranitz
shall cease to be a working active executive officer of Borrower (in either
case, other than as a result of death or reasonably as a result of physical or
mental incapacity).
(d) VOLUNTARY PREPAYMENT. Borrower may not prepay principal or
interest on the Term Loan.
SECTION 1.2 INTEREST
.
The outstanding principal balance of the Term Note, and accrued
interest thereon, shall bear interest at the rate of three percent (3%) per
annum; accrued semiannually and payable on the Maturity Date. The interest rate
reflects the benefit of the Lender Warrant.
SECTION 1.3 CONVERTIBILITY
.
Subject to restrictions under the Bank Holding Company Act (the "BHC
ACT") and the terms of the Transfer and Conversion Restriction Agreement of even
date herewith (the "CONVERSION AGREEMENT"), the Term Loan is convertible in
accordance with the terms of the Term Note.
SECTION 1.4 LENDER WARRANT
.
LENDER WARRANT. In consideration of the credit accommodation hereunder
by Lender to Borrower, and for other good and valuable consideration, Borrower
has issued to Lender a warrant in the form of EXHIBIT B attached hereto (the
"LENDER WARRANT"). The shares of Borrower common stock ("COMMON STOCK") acquired
upon exercise of the Lender Warrant are referred to as "WARRANT SHARES."
ARTICLE II
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<PAGE> 6
BORROWER REPRESENTATIONS AND WARRANTIES
The Parent and the Borrower hereby, jointly and severally, represent
and warrant to the Lender that, except as set forth on the Schedule of
Exceptions attached as EXHIBIT C (the "SCHEDULE OF EXCEPTIONS"):
SECTION 2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION
. The Borrower is a corporation established for the purpose of
conducting the DriveOff.com Business. The Parent is duly organized, validly
existing and in good standing under the laws of the State of Colorado and has
all requisite corporate power and authority to own and operate the DriveOff.com
Business and to execute and deliver this Agreement, the Investor Rights
Agreement, attached hereto as EXHIBIT G (the "RIGHTS AGREEMENT"), and the Parent
Guarantee, attached hereto as EXHIBIT H (the "PARENT GUARANTEE"). The Borrower
is duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own and
operate its property and assets (including the DriveOff.com Business) and to
carry on its business as proposed to be conducted, to execute and deliver this
Agreement, and the Term Note, the Lender Warrant, the Investor Rights Agreement,
the Parent Guarantee and the Conversion Agreement (collectively, the "ANCILLARY
AGREEMENTS"), to issue and sell the Series A Preferred Stock issuable upon
conversion of the Term Note, to issue and sell the Common Stock issuable upon
conversion of the Series A Preferred Stock, to issue and sell the Common Stock
issuable upon exercise of the Lender Warrant, and to carry out the provisions of
this Agreement and each Ancillary Agreement. Each of the Parent (as it relates
to the DriveOff.com Business) and the Borrower is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse effect on the DriveOff.com Business (in
the case of Parent) or its business, properties or financial condition (in the
case of the Borrower).
SECTION 2.2 CAPITALIZATION AND VOTING RIGHTS
. The authorized capital of the Borrower consists, or will consist
immediately prior to the Closing, of:
(a) PREFERRED STOCK. Six Million Four Hundred Thousand (6,400,000)
shares of Series A Preferred Stock (the "SERIES A PREFERRED STOCK"), of which
(A) Three Million Two Hundred Thousand (3,200,000) shares have been designated
Series A-1 Voting Preferred Stock (the "SERIES A-1 PREFERRED STOCK"), none of
which are outstanding prior to the Closing and all of which have been reserved
for potential issuance under the Term Note and (B) Three Million Two Hundred
Thousand (3,200,000) have been designated Series A-2 Non-Voting Preferred Stock
(the "SERIES A-2 PREFERRED STOCK") none of which are outstanding prior to the
Closing and all of which have been reserved for potential issuance under the
Term Note. The rights, privileges and preferences of the Series A Preferred
Stock will be as stated in the Borrower's Amended and Restated Certificate of
Incorporation in the form of EXHIBIT D attached hereto (the "CERTIFICATE").
(b) COMMON STOCK. Twenty Eight Million Six Hundred Thousand
(28,600,000) shares of Common Stock (the "COMMON STOCK"), of which (A)
Twenty-Three Million Six Hundred Thousand
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<PAGE> 7
(23,600,000) have been designated voting Common Stock of which Twelve Million
Eight Hundred Thousand (12,800,000) shares are issued and outstanding and (B)
Five Million (5,000,000) shares have been designated non-voting Common Stock of
which no shares are issued and outstanding. All outstanding shares of Common
Stock are voting Common Stock owned by Parent. The outstanding shares of Common
Stock are all duly and validly authorized and issued, fully paid and
nonassessable, and were issued in compliance with the registration or
qualification provisions of the Securities Act of 1933, as amended (the "ACT")
and any relevant state securities laws or pursuant to valid exemptions
therefrom. The Borrower has reserved Two Million (2,000,000) shares of its
Common Stock for issuance under its 1999 Stock Option Plan (the "BORROWER'S
STOCK OPTION PLAN") in the form attached hereto as EXHIBIT E. The options
outstanding under Borrower's Stock Option are owned by the individuals in the
numbers specified in EXHIBIT F. All such options vest as described in the
Schedule of Exceptions.
(c) Except for (A) the conversion privileges of the Term Note and
the exercise privileges under the Lender Warrant, (B) the rights provided in the
Investor Rights Agreement and (C) as set forth on the Schedule of Exceptions,
there are not outstanding any options, warrants, rights (including conversion or
preemptive rights or rights of first refusal) or obligations for the purchase or
acquisition from Parent or the Borrower of any shares of the Borrower's capital
stock. Except as set forth on the Schedule of Exceptions, neither the Parent nor
the Borrower is a party or subject to any agreement or understanding and, to the
best of the Borrower's knowledge, there is no agreement or understanding between
any other persons or entities which affects or relates to the voting or giving
of written consents with respect to any Borrower security or by a director of
the Borrower.
SECTION 2.3 SUBSIDIARIES
. Except as set forth in the Schedule of Exceptions, the Borrower does
not presently own or control, directly or indirectly, any interest in any other
corporation, association, or other business entity. The Borrower is not a
participant in any joint venture, partnership, or similar arrangement.
SECTION 2.4 AUTHORIZATION
. All corporate action on the part of the Parent, the Borrower and
their respective officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Ancillary
Agreements to which it is a party, the performance of all obligations, as
applicable, of the Parent and the Borrower hereunder and thereunder, and the
authorization, issuance (or reservation for issuance), sale and delivery of the
Term Note and the Lender Warrant being sold hereunder, the Borrower Common Stock
issuable upon the exercise of the Lender Warrant, the Series A Preferred Stock
issuable upon the conversion of the Term Note, and the Common Stock issuable
upon the conversion of the Series A Preferred Stock has been taken or will be
taken prior to the Closing, and this Agreement and the Ancillary Agreements,
constitute valid and legally binding obligations, as applicable, of the Parent
and the Borrower, enforceable in accordance with their respective terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the
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<PAGE> 8
Rights Agreement may be limited by applicable federal or state securities laws.
SECTION 2.5 VALID ISSUANCE OF TERM NOTE, LENDER WARRANT, PREFERRED
STOCK AND COMMON STOCK
. The Term Note and the Lender Warrant when issued, sold and delivered
in accordance with the terms of this Agreement for the consideration expressed
herein, will be validly issued and fully paid and will be free of restrictions
on transfer other than restrictions on transfer under this Agreement, the Rights
Agreement, the Conversion Agreement, and the BHC Act and, based in part upon the
representations of the Lender in this Agreement, will be issued in compliance
with the registration and qualification provisions of all applicable federal and
state securities laws. The Common Stock issuable upon exercise of the Lender
Warrant has been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Lender Warrant, will be validly issued, fully
paid and nonassessable and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement and the Rights Agreement and under
applicable securities laws and the BHC Act. The Series A Preferred Stock
issuable upon conversion of the Term Note (the "NOTE SHARES") and the Common
Stock issuable upon conversion of the Series A Preferred Stock (the "CONVERSION
SHARES") have been duly and validly reserved for issuance and, upon issuance in
accordance with the applicable terms of the Term Note or the Certificate, as the
case may be, will be validly issued, fully paid and nonassessable and will be
free of restrictions on transfer other than restrictions on transfer under this
Agreement, the Rights Agreement and the Conversion Agreement and under
applicable securities laws and the BHC Act.
SECTION 2.6 CONSENTS
. Except as set forth on the Schedule of Exceptions, no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Borrower or any other person or entity
not a party to this Agreement is required in connection with the consummation of
the transactions contemplated by this Agreement (including the transfer of the
DriveOff.com Business to Borrower), except for (i) the filing pursuant to
Section 25102(f) of the California Corporate Securities Law of 1968, as amended,
and the rules thereunder, which filing will be effected within 15 days of
Closing or within 15 days of the issuance of the Note Shares or Conversion
Shares, as the case may be, and (ii) such consents as shall have been obtained
prior to the Closing and are described in reasonable detail in Section 2.6 of
the Schedule of Exceptions hereunder.
SECTION 2.7 LITIGATION
. There is no action, suit, proceeding or investigation pending or to
Borrower's knowledge currently threatened against the Parent or the Borrower
that questions the validity of this Agreement or the Ancillary Agreements, or
the right of the Parent or the Borrower, as applicable, to enter into any such
agreement, or to consummate the transactions contemplated hereby or thereby
(including the transfer of the DriveOff.com Business to the Borrower), or that
might result, either individually or in the aggregate, in any material adverse
changes in the assets, condition or affairs of the Borrower (including the
DriveOff.com Business), financially or otherwise, or any change in the
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current equity ownership of the Borrower. There is no action, suit, proceeding
or investigation by the Parent relating to the DriveOff.com Business or the
Borrower currently pending or that the Parent or the Borrower intends to
initiate.
SECTION 2.8 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS
. Each employee, officer and consultant of the DriveOff.com Business
and the Borrower has executed a Proprietary Information and Inventions Agreement
in the form provided to counsel to Lender. Neither the Parent nor the Borrower
is aware that any of the DriveOff.com Business' employees or the Borrower's
employees, officers or consultants are in violation thereof, and the Borrower
will use its best efforts to prevent any such violation. Neither the Parent nor
the Borrower is aware that any officer or key employee related to the
DriveOff.com Business or the Borrower intends to terminate employment with the
Parent or the Borrower, nor does the Parent or the Borrower have a present
intention to terminate the employment of any of the foregoing. Subject to
general principles relating to wrongful termination of employees, the employment
of each officer and employee of the Borrower or Parent (related to the
DriveOff.com Business) is terminable at the will of the Parent or the Borrower.
SECTION 2.9 PATENTS AND TRADEMARKS
. To the best of its knowledge, at the Closing, the Borrower owns or
possesses sufficient legal rights to all patents, trademarks, servicemarks,
trade names, copyrights, trade secrets, licenses, information, proprietary
rights and processes necessary for its business as now conducted and as proposed
to be conducted without any conflict with or infringement of the rights of
others. The Schedule of Exceptions contains a complete list of patents and
pending patent applications of the Parent (related to the DriveOff.com Business)
and the Borrower. Neither the Parent (as related to the DriveOff.com Business)
nor the Borrower has received any oral or written communications alleging that
it has violated or that its business as currently conducted or proposed to be
conducted would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity. Neither Parent (as related to the DriveOff.com Business) nor
the Borrower is aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of his or her best efforts to promote
the interests of the Borrower (including the DriveOff.com Business) or that
would conflict with the Borrower's business as proposed to be conducted. Neither
the execution nor delivery of this Agreement nor any of the Ancillary
Agreements, nor the carrying on of the Parent's or the Borrower's business by
the employees of the Parent (related to the DriveOff.com Business) or the
Borrower, nor the conduct of the Borrower's business as proposed, will, to the
best of the Parent's or the Borrower's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any contract, covenant or instrument under which any of such employees is now
obligated. Neither the Parent nor the Borrower believes it is or will be
necessary to utilize any inventions of any of DriveOff.com Business employees
(or people it currently intends to hire) made prior to their employment by the
Parent or the Borrower.
SECTION 2.10 LEGAL COMPLIANCE
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. Each of the Parent (as it relates to the DriveOff.com Business) and
the Borrower has complied in all material respects with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, regional, local,
and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against any of them alleging any failure so to
comply.
SECTION 2.11 COMPLIANCE WITH OTHER INSTRUMENTS
. Neither the Borrower nor Parent is in violation or default of any
provision of its Certificate or Bylaws, or in any material respect of any
instrument, judgment, order, writ, decree or contract to which it is a party or
by which it is bound, or, to the best of its knowledge, of any provision of any
federal or state statute, rule or regulation applicable to it. The execution,
delivery and performance by Parent and the Borrower, as applicable, of this
Agreement, and the Ancillary Agreements to which it is party and the
consummation of the transactions contemplated hereby and thereby (including
Parent's transfer of the DriveOff.com Business to the Borrower) will not result
in any such violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event that results
in the creation of any lien, charge or encumbrance upon any assets of the Parent
related to the DriveOff.com Business or the Borrower or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization, or approval applicable to the DriveOff.com Business or
the Borrower, its business or operations or any of its assets or properties.
SECTION 2.12 AGREEMENTS; ACTION
.
(a) Except for agreements set forth on the Schedule of Exceptions,
or except as explicitly contemplated by this Agreement and the Ancillary
Agreements, there are no agreements, understandings or proposed transactions
between the Borrower and any of its officers, directors, affiliates, or any
affiliate thereof.
(b) Borrower is not party to any agreement with any financial
institution which provides for delivery of a DriveOff solution prior to, or on
terms more favorable than, the solution proposed to be delivered to Wells Fargo
& Co. under the agreements between it and the Company.
(c) Except as expressly contemplated by this Agreement or as set
forth on the Schedule of Exceptions, there are no agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which the DriveOff.com Business or the Borrower is a party or by
which it is bound that may involve (i) obligations (contingent or otherwise) of,
or payments to the DriveOff.com Business or the Borrower in excess of, ten
thousand dollars ($10,000), or (ii) the license of any patent, copyright, trade
secret or other proprietary right to or from the DriveOff.com Business or the
Borrower, or (iii) provisions restricting, affecting or providing preferential
terms with respect to the development, manufacture or distribution of the
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Borrower's products or services (including the DriveOff.com Business' products
and services), or (iv) indemnification by the Parent (as it relates to the
DriveOff.com Business) or the Borrower with respect to infringements of
proprietary rights.
(d) With respect to the Borrower's obligations thereunder and, to
the Borrower's and Parent's knowledge, with respect to the obligations of the
other parties thereto, all of the contracts, agreements and instruments set
forth or required to be set forth on the attached Schedule of Exceptions are
valid, binding and enforceable in accordance with their respective terms,
subject to laws of general application relating to bankruptcy, insolvency, and
the relief of debtors and other laws of general application effecting
enforcement of creditors' rights generally, rules of law governing specific
performance, injunctive relief or other equitable remedies, and limitations of
public policy. Each of the Parent (as it relates to the DriveOff.com Business)
and the Borrower has performed all material obligations required to be performed
by it under the contracts, agreements and instruments listed or required to be
listed on the attached Schedule of Exceptions and is not in default under or in
breach of nor in receipt of any claim of default or breach under any such
contract, agreement or instrument; no event has occurred which with the passage
of time or the giving of notice or both would result in a default, breach or
event of noncompliance by the Parent (as it relates to the DriveOff.com
Business) or the Borrower under any contract, agreement or instrument listed or
required to be listed on the attached Schedule of Exceptions; and neither the
Parent nor the Borrower has knowledge of any breach or anticipated breach by the
other parties to any contract, agreement, instrument or commitment listed or
required to be listed on the attached Schedule of Exceptions.
(e) A true and correct copy of each of the written instruments,
plans, contracts and agreements and an accurate description of each of the oral
arrangements, contracts and agreements which are referred to on the attached
Schedule of Exceptions have been made available to the Lender's counsel.
(f) The Borrower has not declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital stock. The Borrower (including the DriveOff.com Business) has not
(i) except as set forth on the Schedule of Exceptions, incurred or been
transferred by Parent any indebtedness for money borrowed or any other
liabilities in excess of five thousand dollars ($5,000) in the aggregate, (ii)
made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iii) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.
(g) The Borrower (including the DriveOff.com Business) is not a
party to and is not bound by any contract, agreement or instrument, or subject
to any restriction under its Certificate or Bylaws, that adversely affects its
business as now conducted or as proposed to be conducted, its properties or its
financial condition (including exclusive licensing, services or distribution
agreements and non-compete agreements).
(h) The Borrower has no current plans to (i) consolidate with or
merge into any other corporation, (ii) sell, convey or dispose of all or
substantially all of the assets of the Borrower or engage in a series of related
transactions in which more than fifty percent (50%) of the voting power of the
Borrower would be disposed of with any corporation, partnership, association or
other
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business entity or individual, or (iii) engage in any other form of acquisition,
liquidation, dissolution or winding up the Borrower (other than the acquisition
of the DriveOff.com Business).
SECTION 2.13 RELATED-PARTY TRANSACTIONS
. None of Parent, any employee, officer, or director of the Parent or
the Borrower or member of any such individual's immediate family is indebted to
the Borrower (including the DriveOff.com Business), nor is the Borrower indebted
(or committed to make loans or extend or guarantee credit) to any of them.
Except as a result of their ownership of Parent or Borrower securities or
options, none of such persons has any direct or indirect ownership interest in
any firm or corporation with which the Borrower (including the DriveOff.com
Business) is affiliated or with which it has a business relationship, or, to the
best of the Parent's or the Borrower's knowledge, any firm or corporation that
competes with the Borrower (including the DriveOff.com Business), except that
such individuals or entities may own nominal amounts (up to one percent (1%)) of
stock in publicly traded companies that may compete with the Borrower. Except as
a result of their ownership of Parent or Borrower securities or options, no
officer, director or member of the immediate family of any officer or director
of the Parent or the Borrower is directly or indirectly interested in any
material contract with the Borrower.
SECTION 2.14 PERMITS
. The Borrower (including the DriveOff.com Business) has all
franchises, permits, licenses, and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties or financial condition
of the Borrower, and the Borrower believes it can obtain, without undue burden
or expense, any similar authority for the conduct of its business as planned to
be conducted. The Borrower (including the DriveOff.com Business) is not in
default in any material respect under any of such franchises, permits, licenses,
or other similar authority.
SECTION 2.15 DISCLOSURE
. Parent and the Borrower have fully provided Lender with all the
information that Lender has requested for deciding whether to lend hereunder and
all information which the Borrower believes is reasonably necessary to enable a
reasonable Lender to make such decision. Neither this Agreement nor any other
statements or certificates made or delivered in connection herewith contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements herein or therein not misleading.
SECTION 2.16 REGISTRATION RIGHTS
. Except as provided in the Rights Agreement, the Borrower has not
granted or agreed to grant any registration rights, including piggyback rights,
to any person or entity.
SECTION 2.17 CORPORATE DOCUMENTS
. Except for amendments necessary to satisfy representations and
warranties or conditions
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contained herein, the Certificate and Bylaws of the Borrower are in the form
previously provided to counsel for the Lender.
SECTION 2.18 TITLE TO PROPERTY AND ASSETS
. At Closing, the Borrower owns its property and assets (including the
DriveOff.com Business) free and clear of all mortgages, liens, loans and
encumbrances, except such encumbrances and liens that arise in the ordinary
course of business and do not materially impair its ownership or use of such
property or assets. The assets acquired at or prior to Closing in connection
with Parent's transfer to the Borrower of the DriveOff.com Business constitute
substantially all the assets, properties and right necessary to conduct the
DriveOff.com Business, which immediately prior to such Closing are used in
connection with the conduct of the DriveOff.com Business as conducted by Parent.
With respect to the property and assets it leases, the Borrower (including the
DriveOff.com Business) is in compliance with such leases and, to the best of its
knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances.
SECTION 2.19 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES;
PROJECTIONS
.
(a) The Borrower has delivered to Lender its initial unaudited
balance sheet (giving effect to the acquisition of the DriveOff.com Business)
(the "INITIAL BALANCE SHEET"). The Borrower (including the DriveOff.com
Business) is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation. The Borrower maintains a standard system of
accounting established and administered in accordance with GAAP. Except for
obligations incurred in the ordinary course of business which are not material,
the Borrower does not have any liability, indebtedness, obligation, expense,
claim, deficiency, guaranty or endorsement of any type, whether accrued,
absolute, contingent, matured, unmatured or other (whether or not required to be
reflected in financial statements in accordance with GAAP), which individually
or in the aggregate, (i) has not been reflected in the Initial Balance Sheet, or
(ii) have not been specifically described in this Agreement or in the Schedule
of Exceptions and specifically identified herein or therein as not being
included in the Initial Balance Sheet.
(b) The Borrower has provided to the Lender projected financial
information for the three year period ended December 31, 2001 (the "PROJECTED
FINANCIAL STATEMENTS"). The Projected Financial Information was prepared by
Parent and the Borrower in good faith and based on assumptions deemed reasonable
by the Parent and the Borrower.
SECTION 2.20 CHANGES IN CONDITIONS
. Since December 31, 1998 or in the case of the Borrower the date of
its incorporation, there has not been:
(a) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets owned by the Parent (as it
relates to the DriveOff.com Business other than the transfer of the DriveOff.com
Business to Borrower) or the Borrower or sale of material amount
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of assets;
(b) any resignation or termination of employment of any key officer
of the Borrower or the DriveOff.com Business;
(c) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Borrower or Parent, with respect to any of the Borrower's
or the DriveOff.com Business' material properties or assets, except liens for
taxes not yet due or payable;
(d) any loans or guarantees made by the Parent (as it relates to the
DriveOff.com Business) or the Borrower to or for the benefit of its employees,
officers or directors, or any members of their immediate families, other than
travel advances and other advances made in the ordinary course of its business;
(e) any declaration, setting aside or payment or other distribution
in respect of any of the Borrower's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock by the Borrower;
or
(f) to Parent's or Borrower's knowledge, any other event or
condition of any character which might materially and adversely affect the
assets, financial condition, properties, operating results or business of the
DriveOff.com Business or the Borrower.
SECTION 2.21 INSURANCE
. The Borrower (including the DriveOff.com Business) has in full force
and effect fire and casualty insurance policies, with extended coverage,
sufficient in amount (subject to reasonable deductibles) to allow it to replace
any of its properties that might be damaged or destroyed.
SECTION 2.22 MINUTE BOOKS
. The minute books of the Borrower provided to counsel to WFC contain a
complete summary of all meetings of directors and stockholders and all actions
by written consent without a meeting by the directors and stockholders since the
time of incorporation and reflect all actions by the directors (and any
committee of the directors) and stockholders referred to in such minutes
accurately in all material respects.
SECTION 2.23 TAX RETURNS, PAYMENTS AND ELECTIONS
. Each of the Parent (as it may impact the DriveOff.com Business) and
the Borrower has filed all tax returns and reports as required by law. These
returns and reports are true and correct in all material respects. Each of the
Parent (as it may impact the DriveOff.com Business) and the Borrower has paid
all taxes and other assessments due, except those contested by it in good faith.
The provision for taxes, if any, of the Borrower as shown in the Initial Balance
Sheet is adequate for taxes due or accrued as of the date thereof. The Borrower
has not elected pursuant to the Internal Revenue Code of 1986, as amended (the
"CODE"), to be treated as an S corporation or a collapsible corporation pursuant
to Section 341(f) of Section 1362(a) of the Code. Neither the Parent (as it may
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impact the DriveOff.com Business) nor the Borrower has ever had any tax
deficiency proposed or assessed against it or executed any waiver of any statute
of limitations on the assessment or collection of any tax or governmental
charge. To the Parent's and Borrower's knowledge, as they relate to the
DriveOff.com Business, none of the Parent's federal income tax returns and none
of its state income or franchise tax or sales or use tax returns has ever been
audited by governmental authorities. Since its incorporation, the Borrower has
made adequate provisions on its books of account for all taxes, assessments and
governmental charges with respect to its business, properties and operations for
such period. Each of the Parent (as it relates to the DriveOff.com Business and
its employees) and the Borrower has withheld or collected from each payment made
to each of its employees, the amount of all taxes (including, but not limited
to, federal income taxes, Federal Insurance Contribution Act taxes and Federal
Unemployment Tax Act taxes) required to be withheld or collected therefrom, and
has paid the same to the proper tax receiving officers or authorized
depositaries.
SECTION 2.24 ENVIRONMENTAL LAWS
. To the best of its knowledge, the Borrower (including the
DriveOff.com Business) is not in violation of and has no liability or potential
liability under any applicable statute, law, or regulation relating to the
environment or occupational health and safety, and to the best of its and
Parent's knowledge, with respect to the DriveOff.com Business, no material
expenditures are or will be required in order to comply with any such existing
statute, law, or regulation.
SECTION 2.25 EMPLOYEES; EMPLOYEE COMPENSATION
. To its knowledge, each of the Parent (as related to the DriveOff.com
Business) and the Borrower has complied in all material respects with all
applicable state and federal equal employment opportunity and other laws related
to employment. To the Parent's and the Borrower's knowledge, no employee of the
DriveOff.com Business or the Borrower is or will be in violation of any
judgment, decree or order, or any term of any employment contract, patent
disclosure agreement or other contract or agreement relating to the relationship
of any such employee with the Borrower or any other party because of the nature
of the business conducted or to be conducted by the Borrower or to the
utilization by the employee of his best efforts with respect to such business.
The Borrower is not party to or bound by any currently effective employment
contract, deferred compensation agreement, bonus plan, incentive plan, profit
sharing plan, retirement agreement, or other employee compensation agreement,
except the Borrower's Stock Option Plan and offer letters in the ordinary course
of business.
SECTION 2.26 EMPLOYEE BENEFIT PLANS
. Other than the Borrower Stock Option, the Borrower does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974, as amended.
ARTICLE III
LENDER REPRESENTATIONS AND WARRANTIES
-------------------------------------
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Lender hereby represents and warrants that:
SECTION 3.1 AUTHORIZATION
. Lender has full power and authority to enter into this Agreement and
the Ancillary Agreements to which it is party, and each such agreement
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Investor Rights Agreement may be limited by applicable federal or state
securities laws.
SECTION 3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT
. This Agreement is made with the Lender in reliance upon its
representation to the Borrower, which by Lender's execution of this Agreement
Lender hereby confirms, the Term Note and the Lender Warrant to be received by
Lender, the shares of Common Stock to be received upon exercise of the Lender
Warrant, the shares of Series A Preferred Stock issuable upon the conversion of
the Term Note, and the shares of Common Stock issuable upon the conversion of
the Series A Preferred Stock (collectively, the "SECURITIES") will be acquired
for investment for Lender's own account, not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof, and that Lender has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, Lender further represents
that it does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to any of the Securities.
SECTION 3.3 DISCLOSURE OF INFORMATION
. Lender believes it has received all the information it considers
necessary or appropriate for deciding whether to make the Term Loan hereunder
and to purchase the Lender Warrant. Lender further represents that it has had an
opportunity to ask questions and receive answers from the Borrower regarding the
terms and conditions of the Term Loan and the Lender Warrant and the business,
properties and financial condition of the Borrower. The foregoing, however, does
not limit or modify the representations and warranties of the Borrower or Parent
in Section 2 of this Agreement or the right of Lender to rely thereon.
3.4 INVESTMENT EXPERIENCE
. The Lender is an Lender in securities of companies in the development
stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment, and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
Term Loan and the Lender Warrant. Lender has not been organized solely for the
purpose of acquiring the Term Loan and the Lender Warrant.
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SECTION 3.5 ACCREDITED LENDER
. Lender is an "ACCREDITED LENDER" within the meaning of Securities and
Exchange Commission ("SEC") Rule 501 of Regulation D, as presently in effect.
SECTION 3.6 RESTRICTED SECURITIES
. Lender understands that the Securities it is purchasing are
characterized as "RESTRICTED SECURITIES" under the federal securities laws
inasmuch as they are being acquired from the Borrower in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Act, only in
certain limited circumstances. In addition, Lender represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act. Lender understands that no public
market presently exists for the Term Note, the Lender Warrant, the Warrant
Shares or Common Stock of the Borrower, and there can be no assurance that any
such market will be created.
SECTION 3.7 FURTHER LIMITATIONS ON DISPOSITION
. Without in any way limiting the above, Lender further agrees not to
make any disposition of all or any portion of the Securities unless, and until
the transferee has agreed in writing for the benefit of the Borrower to be bound
by this Section 3 and Section 6 of this Agreement and the Rights Agreement, and:
(a) There is then in effect a Registration Statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement; or
(b) Lender shall have notified the Borrower of the proposed
disposition and shall have furnished the Borrower with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Borrower, Lender shall have furnished the Borrower with an
opinion of counsel, reasonably satisfactory to the Borrower that such
disposition will not require registration of such shares under the Act. It is
agreed that the Borrower will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above,
no such Registration Statement or opinion of counsel shall be necessary for a
transfer by a partnership to a partner of such partnership or a retired partner
of such partnership who retires after the date hereof, or to the estate of any
such partner or retired partner or the transfer by gift, will or intestate
succession of any partner to his or her spouse or to the siblings, lineal
descendants or ancestors of such partner or his or her spouse, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as
Lender.
SECTION 3.8 LEGENDS
. It is understood that the certificates evidencing the Securities
(other than the Term Note)
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shall bear the following legend:
"The securities represented hereby have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended. Such securities may not be sold or transferred in the
absence of such registration or unless the Corporation receives an
opinion of counsel reasonably acceptable to it stating that such sale
or transfer is exempt from the registration and prospectus delivery
requirements of said Act. Copies of the agreements covering the
purchase of these shares and restricting their transfer may be obtained
at no cost by written request made by the holder of record of this
Certificate to the Secretary of the Corporation at the principal
executive offices of the Corporation."
"The securities represented by this Certificate are subject to
the terms and conditions of the Corporation's Investor Rights Agreement
dated August ___, 1999. A copy of such agreement may be obtained
without charge upon written request to the Corporation at its principal
place of business."
ARTICLE IV
CONDITIONS
----------
SECTION 4.1 LENDER CONDITIONS OF EXTENSION OF CREDIT
. The obligation of Lender to extend the credit contemplated by this
Agreement is subject to the fulfillment to Lender's satisfaction of all of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Parent and the Borrower contained in Article II shall be true
on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
(b) PERFORMANCE. The Parent and the Borrower shall have performed
and complied with all agreements, obligations and conditions contained in this
Credit Agreement that are required to be performed or complied with by it on or
before the Closing.
(c) DRIVEOFF.COM BUSINESS TRANSFER AND CONSENTS. Simultaneous with
or prior to the Closing, Parent shall have transferred the DriveOff.com Business
to the Borrower [and in connection therewith shall have acquired the consents
set forth in Section 2.6 of the Schedule of Exceptions].
(d) COMPLIANCE CERTIFICATE. The President of the Parent and the
Borrower shall deliver to Lender at the Closing a certificate stating that the
conditions specified in Paragraphs (a) and (b) have been fulfilled.
(e) AMENDED AND RESTATED CERTIFICATE. Borrower shall have filed the
amended Certificate in the form attached hereto as EXHIBIT D with the Delaware
Secretary of State.
(f) QUALIFICATIONS. All prior authorizations, approvals, or permits,
if any, of any
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<PAGE> 19
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Term
Note and the other Securities pursuant to this Credit Agreement shall be duly
obtained and effective as of the Closing.
(g) PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
in connection with the transactions contemplated at the Closing (including the
transfer of the DriveOff.com Business to the Borrower) and all documents
incident thereto shall be reasonably satisfactory in form and substance to
Lender's counsel, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request. The
documentation related to the transfer of the DriveOff.com Business shall contain
for the benefit of the Borrower appropriate representations and warranties of
Parent, indemnification provisions from Parent in favor of the Borrower and
mutual further assurance provisions in form and substance satisfactory to
Lender's counsel.
(h) PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each of J.
Ralph Armijo, Michael Kranitz, Patrick Mawhinney and Harold Anderson and the
Borrower shall have entered into a Proprietary Information and Inventions
Agreement in the form previously provided to special counsel for the Lenders.
(i) INVESTOR RIGHTS AGREEMENT. The Borrower, Lender and the other
parties thereto shall have entered into the Rights Agreement.
(j) PARENT GUARANTEE. Each of the Parent and the Borrower shall have
entered into the Parent Guarantee.
(k) OPINION OF COMPANY COUNSEL. Lender shall have received from
Benesch Friedlander Coplan & Aronoff LLP, counsel to Parent and the Borrower, an
opinion, dated as of the Closing, in the form and substance reasonably
satisfactory to WFC's counsel.
(l) PARENT SHARES. WFC shall have consummated prior to or
simultaneous with the Closing its acquisition of Parent shares from Parent
pursuant to the Stock and Note Purchase Agreement of even date herewith by and
between Parent and WFC.
SECTION 4.2 BORROWER CONDITION
. The obligations of the Borrower to Lender under this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions by that Lender:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Lender contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
(b) QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
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<PAGE> 20
(c) INVESTOR RIGHTS AGREEMENT. The Borrower and each of the Lenders
shall have entered into the Rights Agreement.
(d) PARENT SHARES. WFC shall have consummated prior to or
simultaneous with the Closing its acquisition of Parent shares from Parent.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
Borrower covenants that so long as any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Lender under this
Agreement or the Term Loan remain outstanding, and until payment in full of all
obligations of Borrower subject hereto and thereto, Borrower shall, unless
Lender otherwise consents in writing:
SECTION 5.1 PUNCTUAL PAYMENTS
. Punctually pay all principal, interest, fees or other liabilities due
under this Agreement or the Term Loan at the times and place and in the manner
specified therein.
SECTION 5.2 ACCOUNTING RECORDS
. Maintain adequate books and records in accordance with generally
accepted accounting principles consistently applied, and permit any
representative of Lender, at any reasonable time, to inspect, audit and examine
such books and records, to make reasonable numbers of copies of the same, and to
inspect the properties of Borrower.
SECTION 5.3 COMPLIANCE
. Preserve and maintain in all material respects all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.
SECTION 5.4 INSURANCE
. Maintain and keep in force insurance of the types and in amounts
customarily carried in lines of business similar to that of Borrower, including
but not limited to fire, extended coverage, public liability, flood, property
damage and workers' compensation, with all such insurance carried with companies
and in amounts reasonably satisfactory to Lender, and deliver to Lender from
time to time at Lender's request schedules setting forth all insurance then in
effect.
SECTION 5.5 FACILITIES
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<PAGE> 21
. Keep all properties useful or necessary to Borrower's business in
good repair and condition, and from time to time make necessary repairs,
renewals and replacements thereto so that such properties shall be reasonably
preserved and maintained.
SECTION 5.6 TAXES AND OTHER LIABILITIES
. Pay and discharge when due any and all indebtedness, obligations,
assessments and taxes, both real or personal, including without limitation
federal and state income taxes and state and local property taxes and
assessments, except such (a) as Borrower may in good faith contest or as to
which a bona fide dispute may arise, and (b) for which Borrower has made
provision, to Lender's reasonable satisfaction, for eventual payment thereof in
the event Borrower is obligated to make such payment.
SECTION 5.7 NOTICE TO LENDER
. Promptly (but in no event more than five (5) days after the
occurrence of each such event or matter) give written notice to Lender in
reasonable detail of: (a) the occurrence of any Event of Default (as defined in
Article VII), or any condition, event or act which with the giving of notice or
the passage of time or both would constitute an Event of Default; (b) any change
in the name of Borrower.
ARTICLE VI
NEGATIVE COVENANTS
------------------
Borrower further covenants that so long as any liabilities (whether
direct or contingent, liquidated or unliquidated) of Borrower to Lender under
this Agreement or the Term Note remain outstanding, and until payment in full of
all obligations of Borrower subject hereto and thereto, Borrower will not
without Lender's prior written consent:
SECTION 6.1 OTHER INDEBTEDNESS
. Create, incur, assume or permit to exist any indebtedness or
liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several,
except (a) the liabilities of Borrower to Lender, and (b) any other liabilities
of Borrower existing as of, and disclosed to Lender prior to, the date hereof
and (c) liabilities for borrowed money not in excess of Thirty Million Dollars
($30,000,000).
SECTION 6.2 DIVIDENDS, DISTRIBUTIONS
. Pay or declare any dividend or redeem, repurchase or acquire any
share of its capital stock (except for dividends payable in Common Stock, for
shares repurchased at cost in accordance with restricted stock purchase
agreements with employees, officers, directors and consultants and redemptions
of Series A Preferred Stock contemplated by the Certificate).
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<PAGE> 22
SECTION 6.3 RELATED PARTY TRANSACTION
.
(a) Engage in any loans, leases, contracts or other transactions
with any director, officer, key employee or greater than ten percent (10%)
stockholder of Borrower or any member of any such person's immediate family,
including the parents, spouse, children and other relatives of any such person;
PROVIDED, HOWEVER, that the foregoing shall not prohibit (i) any transaction
which prior entering into with a third party, such transaction, the Borrower's
Board of Directors shall in good faith determined that such transaction is as
favorable to Borrower as could be obtained in an arm's-length transaction (ii)
option grants to directors, officers and employees pursuant to Borrower's Stock
Option Plan.
(b) Enter into any severance agreement with any senior level
employee or executive officer of the Borrower providing for severance payments
in excess of twelve (12) months.
SECTION 6.4 STOCK OPTION PLAN
. Increase the aggregate number of shares reserved for issuance
pursuant to Borrower's Stock Option Plan or any other plan (including any
amendment thereto) providing for the issuance of capital stock or options to
purchase capital stock to any employee, officer, director or consultant in
excess of an aggregate of 2,600,000 shares of Common Stock (adjusted to reflect
subsequent stock dividends, stock splits, combinations or recapitalizations).
SECTION 6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS
. Effect (i) a consolidation, merger or other business combination with
one or more persons that would result after giving cumulative effect to such
transactions in the holder's of the Borrower's capital stock prior to such
transaction(s) owning less than 50% of the surviving or combined company or
business or (ii) sell all or substantially all its assets in one or more
transactions to one or more other persons, unless the aggregate consideration
per share of Common Stock (on an as converted basis and without regard to any
liquidation preference contained in the Series A Preferred Stock or any other
class of preferred stock) exceeds Twelve Dollars and Fifty Cents ($12.50) share.
ARTICLE VII
EVENTS OF DEFAULT
-----------------
SECTION 7.1 EVENTS OF DEFAULT
. The occurrence of any of the following shall constitute an "EVENT OF
DEFAULT" under this Agreement:
(a) Borrower shall fail to pay when due any principal, interest,
fees or other amounts payable hereunder or under the Term Loan.
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<PAGE> 23
(b) Any certificate furnished to Lender in connection with, or any
representation or warranty made by Borrower or any other party under this
Agreement or any other Ancillary Agreement shall prove to be incorrect, false or
misleading in any material respect when furnished or made.
(c) Any default in the performance of or compliance with any
material obligation, agreement or other provision contained herein or in the
Term Note (other than those referred to in subsections (a) and (b) above), and
with respect to any such default which by its nature can be cured, such default
shall continue for a period of twenty (20) days from its occurrence.
(d) Borrower or Parent shall become insolvent, or shall suffer or
consent to or apply for the appointment of a receiver, trustee, custodian or
liquidator of itself or any of its property, or shall generally fail to pay its
debts as they become due, or shall make a general assignment for the benefit of
creditors; Borrower or Parent shall file a voluntary petition in bankruptcy, or
seeking reorganization, in order to effect a plan or other arrangement with
creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the
United States Code, as amended or recodified from time to time ("BANKRUPTCY
CODE"), or under any state or federal law granting relief to debtors, whether
now or hereafter in effect; or any involuntary petition or proceeding pursuant
to the Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors is filed or commenced
against Borrower or Parent, which is unstayed within 45 days thereof, or
Borrower or Parent shall file an answer admitting the jurisdiction of the court
and the material allegations of any involuntary petition; or Borrower or Parent
shall be adjudicated a bankrupt, or an order for relief shall be entered against
Borrower or Parent by any court of competent jurisdiction under the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors.
SECTION 7.2 REMEDIES
. Upon the occurrence of any Event of Default the indebtedness of
Borrower under the Term Note, any term thereof to the contrary notwithstanding,
shall at Lender's option and without notice become immediately due and payable
without presentment, demand, protest or notice of dishonor, all of which are
hereby expressly waived by Borrower. All rights, powers and remedies of Lender
may be exercised at any time by Lender and from time to time after the
occurrence of an Event of Default, are cumulative and not exclusive, and shall
be in addition to any other rights, powers or remedies provided by law or
equity.
ARTICLE VIII
MISCELLANEOUS
-------------
SECTION 8.1 NO WAIVER
. No delay, failure or discontinuance of Lender in exercising any
right, power or remedy hereunder or under the Term Note shall affect or operate
as a waiver of such right, power or remedy; nor shall any single or partial
exercise of any such right, power or remedy preclude, waive or
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<PAGE> 24
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Lender of any breach of or default under this Agreement and the Term
Note must be in writing and shall be effective only to the extent set forth in
such writing.
SECTION 8.2 SUCCESSORS, ASSIGNMENT
. This Agreement shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties; provided however, that Borrower may not assign or transfer its
interest hereunder without Lender's prior written consent. Subject to the BHC
Act and the Conversion Agreement, Lender reserves the right to sell, assign,
transfer, negotiate or grant participations in all or any part of, or any
interest in, Lender's rights and benefits under this Agreement and the Term
Loan.
SECTION 8.3 SURVIVAL OF WARRANTIES
. The warranties, representations and covenants of Parent, Borrower and
Lender contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of the other parties. All representations and warranties shall survive for a
period of two years except that the intellectual property and tax
representations and warranties which shall survive for three years or the
lapsing of the applicable statute of limitations, respectively.
SECTION 8.4 GOVERNING LAW; CONSENT TO JURISDICTION
. This Agreement shall be governed by and construed under the laws of
the State of Delaware as applied to agreements among California residents
entered into and to be performed entirely within Delaware.
SECTION 8.5 COUNTERPARTS
. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 8.6 TITLES AND SUBTITLES
. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
SECTION 8.7 FINDER'S FEE
. Except for any fee payable by Borrower to First Security Van Kasper
in connection with the transactions contemplated by this Agreement (which must
be acceptable to WFC), each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. Lender agrees to indemnify and hold harmless Borrower from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which Lender or any of its officers, partners,
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<PAGE> 25
employees, or representatives is responsible. Parent and Borrower agree to
indemnify and hold harmless Lender from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which Parent or
Borrower or any of its directors, officers, employees or representatives is
responsible.
SECTION 8.8 SUBORDINATION
. Lender agrees that amounts owed under the Term Note shall be
subordinate to up to Fifteen Million ($15,000,000) of indebtedness for borrowed
money (including interest thereon) owed to a bank, lender, financial institution
or the like. At Borrower's expense, Lender agrees to enter into a subordination
agreement with Borrower's creditors in form and substance reasonably acceptable
to Lender and its counsel.
SECTION 8.9 EXPENSES
. The Borrower shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement. The Borrower shall reimburse Lender for all reasonable fees and
expenses (including without limitation all accounting, consulting, travel and
other third party fees and expenses) up to a maximum of $40,000 (collectively
"EXPENSES").
SECTION 8.10 AMENDMENT AND WAIVERS
. Any term of this Agreement may be amended and any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Borrower,
Parent and Lender. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each party to this Agreement and any holder of
the Term Note and each future holder of the Term Note and the Borrower.
SECTION 8.11 SEVERABILITY
. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
SECTION 8.12 ENTIRE AGREEMENT
. This Agreement and the documents referred to herein constitute the
entire agreement among the parties and no party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
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<PAGE> 26
IN WITNESS WHEREOF, the parties have executed this Credit Agreement as
of the date first above written.
PARENT: NAVIDEC, INC.
By: /s/ J. Ralph Armijo
------------------------------
J. Ralph Armijo, President
Address: 14 Inverness Drive
Englewood, Colorado 80112
Attention: Ralph Armijo
(T) (303) 790-7565
(F)
with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
2300 BP Tower
200 Public Square
Cleveland, Ohio 44114
Attention: Michael Wager
(T) (216) 363-4500
(F) (216) 363-4588
BORROWER: DRIVEOFF.COM, INC.
By: /s/ Michael S. Kranitz
---------------------------------
Michael S. Kranitz, President
Address: 14 Inverness Drive
Englewood, Colorado 80112
Attention: Michael Kranitz
(T) (303) 790-7565
(F) (303) 790-8845
with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
as provided above
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<PAGE> 27
LENDER: WFC HOLDINGS CORPORATION
By: /s/ George Fehlhaber
----------------------------------
George Fehlhaber, Senior Vice
President & Treasurer
By: /s/ Paul Ardleigh
----------------------------------
Paul Ardleigh, Senior Vice
President
Address: 444 Market Street
San Francisco, California 94111
Attention: George Fehlhaber
(T) (415) 396-6264
(F) (415) 986-4598
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attention: Kurt Berney
(T) (650) 493-9300
(F) (650) 493-6811
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<PAGE> 1
Exhibit 99.3
NOTE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
$6,200,000 Palo Alto, California
August __, 1999
FOR VALUE RECEIVED, the undersigned NAVIDEC, INC. (the "COMPANY")
promises to pay to the order of WFC HOLDINGS CORPORATION ("INVESTOR") at its
office at 444 Market Street, San Francisco, California, or at such other place
as the holder hereof (the "HOLDER") may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of Six
Million Two Hundred Thousand Dollars ($6,200,000), with interest thereon as set
forth herein.
This Note is made pursuant to and is subject to the terms and
conditions of that certain Stock and Note Purchase Agreement between the Company
and Investor dated as of July 23, 1999, as amended from time to time (the "STOCK
AND NOTE PURCHASE AGREEMENT"). Capitalized terms used in this Note but not
defined herein shall have the meanings assigned thereto in the Stock and Note
Purchase Agreement.
INTEREST:
(a) INTEREST. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum of three percent (3%) except as provided below; accrued
semiannually and payable on the Maturity Date (defined below).
REPAYMENT AND PREPAYMENT:
(a) REPAYMENT. The principal amount of this Note and all accrued
interest thereon shall be repaid on December 31, 2004 (the "MATURITY DATE").
(b) MANDATORY PREPAYMENT. If by December 31, 2000 the Company shall not
have obtained the Articles Approval and properly effected the related amendment
to its Articles of Incorporation,
-1-
<PAGE> 2
Holder can require mandatory prepayment of this Note (including all interest
accrued thereon calculated at seven percent (7%) per annum).
(c) VOLUNTARY PREPAYMENT. The Company may not prepay principal or
interest on this Note.
PUT:
(a) PUT. If by December 31, 2000 the Company shall not have obtained
the Articles Approval and properly effected the related amendment to its
Articles of Incorporation, Holder may put this Note to the Company and the
Company shall pay to the Holder in cash or by wire transfer within fifteen (15)
days of the delivery of the put notice delivered pursuant to paragraph (c) below
(the "PUT NOTICE"), the Put Price (defined below).
(b) PUT PRICE. The "PUT PRICE" shall equal the product of (i) the
number of shares into which this Note is convertible and (ii) the ten (10) day
average closing price of the Company's Common Stock on the Nasdaq market for the
ten (10) trading days ending on the day immediately preceding the delivery date
of the Put Notice.
(c) MECHANICS OF PUT. Upon put of this Note pursuant hereto, the Holder
shall surrender this Note, duly endorsed, at the principal offices of the
Company or any transfer agent of the Company and shall give written notice by
registered or certified mail, postage prepaid, (or by fax) to the Company at its
principal corporate office, of the election to put the same pursuant hereto and
shall specify the means by which Holder will receive payment of the Put Price.
EVENTS OF DEFAULT:
(a) EVENT OF DEFAULT. The occurrence of any of the following shall
constitute an "EVENT OF DEFAULT" under this Note:
(i) The Company shall fail to pay when due any principal, interest,
fees or other amounts payable hereunder.
(ii) Any default in the performance of or compliance with any
obligation, agreement or other provision contained herein or in Section 6.1 of
the Stock and Note Purchase Agreement (relating to the Articles Amendment), and
with respect to any such default which by its nature can be cured, such default
shall continue for a period of ten (10) days from its occurrence.
(iii) The Company shall become insolvent, or shall suffer or consent
to or apply for the appointment of a receiver, trustee, custodian or liquidator
of itself or any of its property, or shall generally fail to pay its debts as
they become due, or shall make a general assignment for the benefit of
creditors; the Company shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("BANKRUPTCY CODE"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors
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<PAGE> 3
is filed or commenced against the Company, or the Company shall file an answer
admitting the jurisdiction of the court and the material allegations of any
involuntary petition; or the Company shall be adjudicated a bankrupt, or an
order for relief shall be entered against the Company by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors.
CONVERSION:
(a) OPTIONAL CONVERSION. The Holder of this Note has the right, at its
option, at any time, to convert this Note and interest thereon, in accordance
with the provisions hereof, in whole or in part into shares of the Company's
Common Stock. Any such conversion shall be subject to and made in accordance
with the Bank Holding Company Act (the "BHC ACT") and the Conversion Agreement.
(b) MANDATORY CONVERSION. This Note, including interest thereon, shall
automatically convert in full into shares of the Company's Common Stock once the
Company has obtained the Articles Approval and properly effected the related
amendment to its Articles of Incorporation.
(c) NUMBER OF SHARES; NATURE OF COMMON STOCK RECEIVED. Subject to
adjustment pursuant to (e) below, the number of shares of Common Stock into
which this Note may be converted shall be equal to the product of (i) that
portion of the Six Million Two Hundred Thousand ($6,200,000) initial principal
amount of this Note (expressed as a percentage) being converted and (ii) Six
Hundred Twenty Thousand (620,000) shares of Common Stock. In connection with any
conversion pursuant to (a) or (b) above, Investor shall designate whether the
shares to be received shall be comprised of voting Common Stock, non-voting
Common Stock or a combination thereof and in what amounts.
(d) MECHANICS AND EFFECT OF CONVERSION. No fractional shares of the
Company's capital stock will be issued upon conversion of this Note. In lieu of
any fractional share to which the Holder would otherwise be entitled, the
Company will pay to the Holder in cash the amount of the unconverted principal
and interest balance of this Note that would otherwise be converted into such
fractional share. Upon conversion of this Note pursuant hereto, the Holder shall
surrender this Note, duly endorsed, at the principal offices of the Company or
any transfer agent of the Company and shall give written notice by registered or
certified mail, postage prepaid, to the Company at its principal corporate
office, of the election to convert the same pursuant hereto, and shall state
therein the amount of the unpaid principal amount of this Note to be converted
and the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. At its expense, the Company will, as soon as
practicable thereafter, issue and deliver to such Holder, at such principal
office, a certificate or certificates for the number of shares to which such
Holder is entitled upon such conversion, together with any other securities and
property to which the Holder is entitled upon such conversion under the terms of
this Note, including a check payable to the holder for any cash amounts payable
as described herein and a replacement Note in respect of that portion of this
Note which is not so converted. Upon conversion of this Note, the Company will
be forever released from all of its obligations and liabilities under this Note
with regard to that portion of the principal amount and accrued interest being
converted including without limitation the obligation to pay such portion of the
principal amount and accrued interest. The conversion shall be deemed to have
been made
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<PAGE> 4
immediately prior to the close of business on the date of the surrender of this
Note, and the Person or Persons entitled to receive the shares of Common Stock
upon such conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of such date.
(e) CONVERSION ADJUSTMENTS.
(i) PUBLIC OFFERING PRICE BASED ADJUSTMENT. If the per share price
paid in the Company's proposed underwritten public offering of Common Stock (the
"PUBLIC OFFERING") shall be less than $10 per share, the number of shares of the
Company's Common Stock into which this Note may be converted shall be
automatically adjusted to equal:
($10,000,000 divided by X) minus Y
where X = the per share price in the Public
Offering; and
Y = the number of shares of Common Stock
acquired by Investor upon the closing
of the Stock and Note Purchase
Agreement.
(ii) FAILURE TO OBTAIN ARTICLES APPROVAL. If the Company shall fail
to obtain the Articles Approval and properly file the related amendment to the
Articles on or prior to December 31, 2000, the number of shares which may be
acquired upon conversion of this Note shall increase by five percent (5%)
compounded for each full or partial month after December 31, 2000 that shall
pass prior to receipt of the Articles Approval and filing of the related
articles.
(iii) ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the event
the Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of holders of the Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of the Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of the Common Stock (hereinafter referred to as the "COMMON STOCK
EQUIVALENTS") without payment of any consideration by such holder for the
additional shares of the Common Stock or the Common Stock Equivalents (including
the additional shares of the Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the number of
shares of Common Stock issuable upon the conversion of this Note shall be
appropriately increased in proportion to such increase of outstanding shares.
(iv) ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the number of shares
of the Common Stock outstanding at any time after the date hereof is decreased
by a combination of the outstanding shares of the Common Stock, then, following
the record date of such combination, the number of shares of the Common Stock
issuable on conversion of this Note shall be decreased in proportion to such
decrease in outstanding shares.
(v) NOTICES OF RECORD DATE, ETC. In the event of:
(1) Any taking by the Company of a record of the holders of any
class of
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<PAGE> 5
securities of the Company for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend payable out of
earned surplus at the same rate as that of the last such cash dividend
theretofore paid) or other distribution or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or
(2) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to any other
Person or any consolidation or merger involving the Company; or
(3) Any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail to the Holder of this Note at least ten (10) days prior to
the earliest date specified therein, a notice specifying (A) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right and the amount and character of such dividend, distribution or right; and
(B) the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective and the record date for determining shareholders entitled to
vote thereon.
(vi) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. For purposes of
conversion of this Note, the Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock sufficient
numbers of such shares.
MISCELLANEOUS:
(a) REMEDIES. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by the Company. the
Company shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and all allocated costs of the holder's
in-house counsel), expended or incurred by the holder in connection with the
enforcement of the holder's rights and/or the collection of any amounts which
become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Investor or any
other person) relating to the Company or any other person or entity.
(b) GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware.
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<PAGE> 6
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.
NAVIDEC, INC.
-------------------------------
By: J. Ralph Armijo, President
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<PAGE> 1
Exhibit 99.4
TERM NOTE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933, AS AMENDED.
$15,000,000 Palo Alto, California
August ___, 1999
FOR VALUE RECEIVED, the undersigned DRIVEOFF.COM, INC. ("BORROWER")
promises to pay to the order of WFC HOLDINGS CORPORATION ("LENDER") at its
office at 444 Market Street, San Francisco, California, or at such other place
as the holder hereof (the "HOLDER") may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of
Fifteen Million Dollars ($15,000,000), with interest thereon as set forth
herein.
This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Lender dated as
of July __, 1999, as amended from time to time (the "CREDIT AGREEMENT").
Capitalized terms used in this Note but not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
INTEREST:
(a) INTEREST. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum three percent (3%); accrued semiannually and payable on the
Maturity Date (defined below).
REPAYMENT AND PREPAYMENT:
(a) REPAYMENT. The principal amount of this Note and all accrued
interest thereon shall be repaid on January 1, 2005 (the "MATURITY DATE").
(b) MANDATORY PREPAYMENT. Holder may require mandatory prepayment of
this Note (including all interest accrued thereon) if:
(i) Borrower shall have not consummated a firm commitment
underwritten public offering of Borrower's common stock having gross proceeds to
Borrower of $15 million by
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<PAGE> 2
October 31, 2001;
(ii) in one or more transactions the assets primarily used or
necessary to the DriveOff.com Business are sold or transferred by Borrower or if
Navidec, Inc., a Colorado corporation, fails to transfer any such asset owned by
it within 10 days of request therefor by Borrower or Lender; or
(iii) (A) J. Ralph Armijo shall cease to be a director of
Borrower or a working active executive officer of Navidec or (B) Michael Kranitz
shall cease to be a working active executive officer of Borrower, (in either
case, other than as a result of death or reasonably as a result of physical or
mental incapacity).
(c) VOLUNTARY PREPAYMENT. Borrower may not prepay principal or
interest on this Term Note.
EVENTS OF DEFAULT:
Any default in the payment or performance of any obligation under this
Note, or any defined event of default under the Credit Agreement, shall
constitute an "EVENT OF DEFAULT" under this Note.
CONVERSION:
(a) OPTIONAL CONVERSION. The Holder of this Note has the right, at its
option, at any time, to convert this Note and interest thereon, in accordance
with the provisions hereof, in whole or in part into shares of Borrower's Series
A-1 Preferred Stock or Series A-2 Preferred Stock. Any such conversion shall be
subject to and made in accordance with the Bank Holding Company Act (the "BHC
ACT") and the Conversion Agreement.
(b) MANDATORY CONVERSION. Subject to the BHC Act and the Conversion
Agreement, this Note, including interest thereon, shall automatically convert in
full into shares of Series A Preferred Stock (i) immediately prior to
consummation of a Qualified IPO as defined in Borrower's Amended and Restated
Certificate of Incorporation (the "CERTIFICATE") or (ii) on December 31, 2004.
(c) NUMBER OF SHARES; NATURE OF SERIES A PREFERRED STOCK RECEIVED.
Subject to adjustment pursuant to (e) below, the number of shares of Series A
Preferred Stock into which this Note may be converted shall be equal to the
product of (i) that portion of the $15,000,000 initial principal amount of this
Note (expressed as a percentage) being converted and (ii) 3,200,000 shares of
Series A Preferred Stock. In connection with any conversion, Lender shall
designate whether the shares to be received shall be comprised of Series A-1
Preferred, Series A-2 Preferred or a combination thereof and in what amounts.
(d) MECHANICS AND EFFECT OF CONVERSION. The Borrower shall give the
Holder at least twenty (20) days prior written notice of its initial public
offering and shall indicate in such notice if Borrower in good faith believes
that such offering will constitute a Qualified IPO. No fractional shares of
Borrower's capital stock will be issued upon conversion of this Note. In lieu of
any fractional share to which the Holder would otherwise be entitled, Borrower
will pay to the Holder in
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<PAGE> 3
cash the amount of the unconverted principal and interest balance of this Note
that would otherwise be converted into such fractional share. Upon conversion of
this Note pursuant hereto, the Holder shall surrender this Note, duly endorsed,
at the principal offices of Borrower or any transfer agent of Borrower and shall
give written notice by registered or certified mail, postage prepaid, to Company
at its principal corporate office, of the election to convert the same pursuant
hereto, and shall state therein the amount of the unpaid principal amount of
this Note to be converted and the name or names in which the certificate or
certificates for shares of Series A Preferred Stock are to be issued. At its
expense, Borrower will, as soon as practicable thereafter, issue and deliver to
such Holder, at such principal office, a certificate or certificates for the
number of shares to which such Holder is entitled upon such conversion, together
with any other securities and property to which the Holder is entitled upon such
conversion under the terms of this Note, including a check payable to the holder
for any cash amounts payable as described herein and a replacement Note in
respect of that portion of this Note which is not so converted. Upon conversion
of this Note, Borrower will be forever released from all of its obligations and
liabilities under this Note with regard to that portion of the principal amount
and accrued interest being converted including without limitation the obligation
to pay such portion of the principal amount and accrued interest. The conversion
shall be deemed to have been made immediately prior to the close of business on
the date of the surrender of this Note, and the Person or Persons entitled to
receive the shares of Series A Preferred Stock upon such conversion shall be
treated for all purposes as the record holder or holders of such Series A
Preferred Stock as of such date.
(e) CONVERSION ADJUSTMENTS.
(i) ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the
event Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Series A Preferred Stock or the determination of holders
of the Series A Preferred Stock entitled to receive a dividend or other
distribution payable in additional shares of the Series A Preferred Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of the Series A Preferred
Stock (hereinafter referred to as the "SERIES A PREFERRED STOCK EQUIVALENTS")
without payment of any consideration by such holder for the additional shares of
the Series A Preferred Stock or the Series A Preferred Stock Equivalents
(including the additional shares of the Series A Preferred Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the number of shares of Series A Preferred Stock issuable upon the conversion of
this Note shall be appropriately increased in proportion to such increase of
outstanding shares.
(ii) ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the number of
shares of the Series A Preferred Stock outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of the Series A
Preferred Stock, then, following the record date of such combination, the number
of shares of the Series A Preferred Stock issuable on conversion of this Note
shall be decreased in proportion to such decrease in outstanding shares.
(iii) CONVERSION OR REDEMPTION OF SERIES A PREFERRED STOCK.
Should all of the Series A Preferred Stock be, or if outstanding would be, at
any time prior to full payment of this Note,
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<PAGE> 4
redeemed or converted into shares of the Borrower's Common Stock in
accordance with the Borrower's Certificate, then this Note shall
immediately become convertible into that number of shares of Borrower's
Common Stock equal to the number of shares of the Common Stock that
would have been received if this Note had been converted in full and
the Series A Preferred Stock received thereupon had been simultaneously
converted immediately prior to such event.
(iv) NOTICES OF RECORD DATE, ETC. In the event of:
(1) Any taking by Borrower of a record of the holders of any class of
securities of Borrower for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend payable out of
earned surplus at the same rate as that of the last such cash dividend
theretofore paid) or other distribution or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or
(2) Any capital reorganization of Borrower, any reclassification or
recapitalization of the capital stock of Borrower or any transfer of all or
substantially all of the assets of Borrower to any other Person or any
consolidation or merger involving Borrower; or
(3) Any voluntary or involuntary dissolution, liquidation or winding-up
of Borrower,
Borrower will mail to the Holder of this Note at least ten (10) days prior to
the earliest date specified therein, a notice specifying (A) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right and the amount and character of such dividend, distribution or right; and
(B) the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective and the record date for determining shareholders entitled to
vote thereon.
(v) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. For purposes of
conversion of this Note and the Lender Warrant, Borrower shall at all times
reserve and keep available out if its authorized but unissued shares of Series A
Preferred Stock (voting and non-voting) and Common Stock (voting and non-voting)
sufficient numbers of such shares; and if at any time the number of authorized
but unissued shares of Series A Preferred Stock (voting and non-voting) and
Common Stock (voting and non-voting) shall not be sufficient to permit the
conversion of the principal amount of this Note or the exercise of the Lender
Warrant, Borrower will use its best efforts to take such corporate action as may
be, in the opinion of counsel, necessary to increase the authorized but unissued
number of shares of Series A Preferred Stock (voting and non-voting) and Common
Stock (voting and non-voting) to such number as shall be sufficient for such
purposes.
MISCELLANEOUS:
(a) REMEDIES. Upon the occurrence of any Event of Default, the holder of this
Note, at
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<PAGE> 5
the holder's option, may declare all sums of principal and interest outstanding
hereunder to be immediately due and payable without presentment, demand, notice
of nonperformance, notice of protest, protest or notice of dishonor, all of
which are expressly waived by Borrower. Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Lender or any other person) relating to
any Borrower or any other person or entity.
(b) GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.
DRIVEOFF.COM, INC.
- -------------------------
By: Michael Kranitz, President
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<PAGE> 1
Exhibit 99.5
GUARANTEE
---------
THIS GUARANTEE, dated as of August ___, 1999 is executed by the
undersigned ("GUARANTOR") in favor of WFC Holdings Corporation, a Delaware
corporation ("WFC").
RECITALS
--------
WHEREAS, DriveOff.com, Inc., a Delaware corporation ("OBLIGOR"), is a
wholly owned subsidiary of Guarantor and has issued to WFC a $15,000,000 Term
Note dated as of the date hereof (the "TERM NOTE"); and the Term Note is
convertible into the Obligor's Series A Preferred Stock (the "SERIES A").
WHEREAS, the Term Note and the Series A are each subject to mandatory
prepayment or redemption under certain circumstances.
WHEREAS, WFC's willingness to enter into these transactions is subject
to receipt by it of this Guarantee duly executed by Guarantor.
AGREEMENT
---------
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, and intending to be legally bound, Guarantor hereby
agrees with WFC as follows:
(a) GUARANTEE. Guarantor unconditionally guarantees and promises (i) to
pay to WFC, or order, at WFC's office located at the address set forth in
Section 3(a) hereof, on demand after the default (after any applicable cure
period) by Obligor in the performance of its Obligations, in lawful money of the
United States, any and all Obligations (as hereinafter defined) consisting of
payments due to WFC, and, (ii) at WFC's option and not in substitution for
Guarantor's payment obligations hereunder, to perform on demand any and all
other Obligations in the place of Obligor. For purposes of this Guarantee the
term "OBLIGATIONS" shall mean and include all payments, liabilities and
obligations, howsoever arising, owed by Obligor to WFC of every kind and
description, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising pursuant to the terms of (i) the "Repayment
and Prepayment" section of the Term Note and (ii) if WFC converts all or a
portion of the Term Note into shares of Series A, Article IV Section 3 of
Obligor's Amended and Restated Certificate of Incorporation.
(b) This Guarantee is absolute, unconditional, continuing and
irrevocable and constitutes an independent guarantee of payment and not of
collectibility, and is in no way conditioned on or contingent upon any attempt
to enforce in whole or in part any of Obligor's Obligations to WFC, the
existence or continuance of Obligor as a legal entity, the consolidation or
merger of Obligor with or into any other entity, the sale, lease or disposition
by Obligor of all or substantially all of its assets to any other entity, or the
bankruptcy or insolvency of Obligor, the admission by Obligor of its inability
to pay its debts as they mature, or the making by Obligor of a general
assignment for the benefit of, or entering into a composition or arrangement
with, creditors. If Obligor shall fail to pay or perform any Obligations to WFC
which are subject to this Guarantee as and when they are due, Guarantor
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<PAGE> 2
shall forthwith pay to WFC all such liabilities or obligations in immediately
available funds. Each failure by Obligor to pay or perform any such liabilities
or obligations shall give rise to a separate cause of action, and separate suits
may be brought hereunder as each cause of action arises.
(c) WFC, may at any time and from time to time, without the consent of
or notice to Guarantor, except such notice as may be required by applicable
statute which cannot be waived, without incurring responsibility to Guarantor,
and without impairing or releasing the obligations of Guarantor hereunder, (i)
change the manner, place and terms of payment or change or extend the time of
payment of, renew, or alter any Obligation hereby guaranteed, or in any manner
modify, amend or supplement the terms of the Contract or any documents,
instruments or agreements executed in connection therewith, (ii) exercise or
refrain from exercising any rights against Obligor or others (including
Guarantor) or otherwise act or refrain from acting, (iii) settle or compromise
any Obligations hereby guaranteed and/or any obligations and liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any obligations and liabilities which may be due to WFC or
others, (iv) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner or in any order any property pledged or mortgaged by anyone
to secure or in any manner securing the Obligations hereby guaranteed, (v) take
and hold security or additional security for any or all of the obligations or
liabilities covered by this Guarantee, and (vi) assign its rights and interests
under this Guarantee, in whole or in part.
(d) No invalidity, irregularity or unenforceability of the Obligations
hereby guaranteed shall affect, impair, or be a defense to this Guarantee.
Guarantor agrees that Guarantor shall be liable even if Obligor had no liability
at the time of Term Note or thereafter ceased or ceases to be liable and agrees
that by so doing Guarantor's liability may be larger in amount and more
burdensome than that of Obligor.
(e) This is a continuing Guarantee for which Guarantor receives
continuing consideration and all obligations to which it applies or may apply
under the terms hereof shall be conclusively presumed to have been created in
reliance hereon and this Guarantee is therefore irrevocable without the prior
written consent of WFC.
2. WAIVERS. (a) Guarantor, to the extent permitted under applicable law,
hereby waives any right to require WFC to (i) proceed against Obligor or any
other guarantor of Obligor's Obligations, (ii) proceed against or exhaust any
security received from Obligor or any other guarantor of Obligor's Obligations,
or (iii) pursue any other right or remedy in the WFC's power whatsoever.
(b) Guarantor further waives, to the extent permitted by applicable
law, (i) any defense resulting from the absence, impairment or loss of any right
of reimbursement, subrogation, contribution or other right or remedy of
Guarantor against Obligor, any other guarantor of the Obligations or any
security; (ii) any setoff or counterclaim of Obligor or any defense which
results from any disability or other defense of Obligor or the cessation or stay
of enforcement from any cause whatsoever of the liability of Obligor (including,
without limitation, the lack of validity or enforceability of the Contract);
(iii) any right to exoneration of sureties which would otherwise be applicable;
(iv) any right of subrogation or reimbursement and, if there are any other
guarantors of the Obligations, any right of contribution, and right to enforce
any remedy which WFC now has or may hereafter have against Obligor, and any
benefit of, and any right to participate in, any security
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<PAGE> 3
now or hereafter received by WFC; (v) all presentments, demands for performance,
notices of non-performance, notices delivered under the Contract, protests,
notice of dishonor, and notices of acceptance of this Guarantee and of the
existence, creation or incurring of new or additional Obligations and notices of
any public or private foreclosure sale; (vi) the benefit of any statute of
limitations; (vii) any appraisement, valuation, stay, extension, moratorium
redemption or similar law or similar rights for marshalling; and (viii) any
right to be informed by WFC of the financial condition of Obligor or any other
guarantor of the Obligations or any change therein or any other circumstances
bearing upon the risk of nonpayment or nonperformance of the Obligations.
Guarantor has the ability to and assumes the responsibility for keeping informed
of the financial condition of Obligor and any other guarantors of the
Obligations and of other circumstances affecting such nonpayment and
nonperformance risks.
3. MISCELLANEOUS.
(a) NOTICES. Except as otherwise provided herein, all notices or other
communications to or upon WFC or Guarantor under this Guarantee shall be by
telecopy or in writing and telecopied, mailed or delivered to each party at
telecopier number or its address set forth below with respect to WFC and at the
telecopier number or address set forth on the signature page hereof with respect
to Guarantor. All such notices and communications: when sent by Federal Express
or other overnight service, shall be effective on the business day following the
deposit with such service; when mailed, first class postage prepaid and
addressed as aforesaid in the mails, shall be effective upon receipt; when
delivered by hand, shall be effective upon delivery; and when telecopied, shall
be effective upon confirmation of receipt.
WFC: WFC Holdings Corporation
---- 444 Market Street,
San Francisco, CA 94111
Attn: George Fehlhaber
Telephone: 415 396-6264
Telecopier: 415 986-4598
(b) NONWAIVER. No failure or delay on WFC's part in exercising any
right hereunder shall operate as a waiver thereof or of any other right nor
shall any single or partial exercise of any such right preclude any other
further exercise thereof or of any other right.
(c) AMENDMENTS AND WAIVERS. This Guarantee may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by Guarantor and WFC. Each waiver or consent under any provision hereof
shall be effective only in the specific instances for the purpose for which
given.
(d) ASSIGNMENTS. This Guarantee shall be binding upon and inure to the
benefit of WFC and Guarantor and their respective successors and assigns;
PROVIDED, HOWEVER, that without the prior written consent of WFC (not to be
unreasonably withheld), Guarantor may not assign its rights and obligations
hereunder.
(e) CUMULATIVE RIGHTS, ETC. The rights, powers and remedies of WFC
under this Guarantee shall be in addition to all rights, powers and remedies
given to WFC by virtue of any
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<PAGE> 4
applicable law, rule or regulation, the Term Note and the related Credit
Agreement or any other agreement, all of which rights, powers, and remedies
shall be cumulative and may be exercised successively or concurrently without
impairing WFC's rights hereunder.
(f) PARTIAL INVALIDITY. If at any time any provision of this Guarantee
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Guarantee nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
(g) GOVERNING LAW; JURISDICTION. This Guarantee shall be governed by
and construed in accordance with the laws of the State of Delaware without
reference to conflicts of law rules. Any such process or summons in connection
with any such action or proceeding may be served by mailing a copy thereof by
certified or registered mail, or any substantially similar form of mail,
addressed to Guarantor as provided for notices hereunder.
(h) JURY TRIAL. EACH OF GUARANTOR AND WFC, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS GUARANTEE.
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<PAGE> 5
IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be executed
as of the day and year first above written.
NAVIDEC, INC.
By:
---------------------------------------
Name: J. Ralph Armijo
Title: President
Address: 14 Inverness Dr, Suite F-116
Englewood, Colorado 80112
Tel: (303) 790-7565
Fax: (303) 790-8845
with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
2300 BP Tower
200 Public Square
Cleveland, Ohio 44114
Attention: Michael Wager
Tel: (216) 363-4500
Fax: (216) 363-4588
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<PAGE> 1
Exhibit 99.6
NAVIDEC, INC.
REGISTRATION RIGHTS AGREEMENT
JULY 23, 1999
<PAGE> 2
TABLE OF CONTENTS
(CONTINUED)
PAGE
TABLE OF CONTENTS
PAGE
----
1. Registration Rights 1
1.1 Definitions 1
1.2 Demand Registration 2
1.3 Company Registration 4
1.4 Form S-3 Registration 4
1.5 Obligations of the Company 5
1.6 Furnish Information 7
1.7 Expenses of Demand or S-3 Registration 7
1.8 Expenses of Company Registration 7
1.9 No Delay of Registration 7
1.10 Indemnification 8
1.11 Reports under Securities Exchange Act of 1934 10
1.12 Assignment of Registration Rights 10
1.13 Limitations on Subsequent Registration Rights 11
1.14 Termination of Registration Rights 11
2. Miscellaneous 11
2.1 Successors and Assigns 11
2.2 Governing Law 11
2.3 Counterparts 12
2.4 Titles and Subtitles 12
2.5 Notices 12
2.6 Expenses 12
2.7 Amendments and Waivers 12
2.8 Aggregation of Stock 12
2.9 Severability 12
2.10 Entire Agreement 12
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<PAGE> 3
NAVIDEC, INC.
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of the
23rd day of July, 1999, by and between Navidec, Inc., a Colorado corporation
(the "COMPANY"), and WFC Holdings Corporation (the "INVESTOR").
RECITALS
--------
WHEREAS, the Company and the Investor are entering into a Stock and
Note Purchase Agreement (the "STOCK AND NOTE PURCHASE AGREEMENT") of even date
herewith;
WHEREAS, in order to induce the Investor to purchase shares of common
stock and acquire the note (the "NOTE") pursuant to the Stock and Note Purchase
Agreement, the Company desires to grant to the Investor the registration and
other rights set forth herein; and
WHEREAS, the Investor desire that this Agreement shall govern the
registration rights of Investor.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. REGISTRATION RIGHTS
. The Company covenants and agrees as follows:
1.1 DEFINITIONS
. For purposes of this Agreement:
(a) The term "ACT" means the Securities Act of 1933, as amended.
(b) The term "FORM S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "HOLDER" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance with
Section 1.12 hereof.
(d) The term "1934 ACT" shall mean the Securities Exchange Act of
1934, as amended.
(e) The terms "REGISTER", "REGISTERED" and "REGISTRATION" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
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<PAGE> 4
(f) The term "REGISTRABLE SECURITIES" means (i) the Common Stock
currently held by Investor, (ii) Common Stock issuable or issued upon conversion
of the Note currently held by Investor, and (iii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of the shares referenced
in (i) or (ii) above, excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which his rights under this
Section 1 are not assigned.
(g) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(h) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 DEMAND REGISTRATION
. If the Company shall receive at any time a written request from Holders
of at least thirty-five percent (35%) of the Registrable Securities then
outstanding ("INITIATING HOLDERS"), requesting that the Company file a
registration statement under the Act covering the registration of a portion of
the Registrable Securities then outstanding, then the Company shall:
(i) within ten (10) days of the receipt thereof, give written
notice of such request to all Holders; and
(ii) effect as soon as practicable, and in any event within
sixty (60) days of the receipt of such request, the registration under the Act
of all Registrable Securities which the Holders request to be registered,
subject to the limitations of subsection 1.2(b), within fifteen (15) days of the
mailing of such notice by the Company in accordance with Section 2.5.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
subsection 1.2(a) and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter will be selected by the
Company and shall be reasonably acceptable to a majority of the Initiating
Holders. In such event, the right of any Holder or other holder of securities of
the Company to include securities in such registration shall be conditioned upon
such Holder's or holders' participation in such underwriting and the inclusion
of such Holder's or holders' securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder or holder) to the extent provided herein. All Holders and other holders
of securities of the Company proposing to distribute their securities through
such underwriting shall (together with the Company as provided in subsection
1.5(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding any
other provision of this section 1.2, if the underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise all
Holders of Registrable
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Securities and other holders of registration rights which would otherwise be
underwritten pursuant hereto, and the number of shares of securities that may be
included in the underwriting on behalf of each Holder or other holder shall be
allocated: (i) first, to the Registrable Securities requested to be included in
such registration by the Holders of Registrable Securities; (ii) second, to
shares of Common Stock held by other holders requested to be included in such
registration, provided that such amount shall be allocated among such other
holders on a pro rata basis based upon their respective percentage of ownership
of the total number of shares of Common Stock then outstanding and (iii) third,
to shares of Common Stock to be offered by the Company in such registration. For
purposes of allocation securities to be included in any offering, for any
selling stockholder which is a partnership or corporation, the partners, retired
partners and stockholders of such holder (and in the case of a partnership, any
affiliated partnerships), or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single "selling stockholder," and any pro-rata
reduction with respect to such "selling stockholder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "selling stockholder," as defined in this
sentence.
(c) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the Chief Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than ninety (90) days after
receipt of the request of the Initiating Holders; PROVIDED, HOWEVER, that the
Company may not utilize this right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected one (1) registration
pursuant to this Section 1.2 and such registration has been declared or ordered
effective (or two (2) such registrations if the Company is not S-3 eligible and
the Articles Approval (each as defined in the Purchase Agreement) is not
obtained prior to the expiration of the underwriters lock-up in the Company's
Public Offering; and
(ii) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3 pursuant
to a request made pursuant to Section 1.4 below.
1.3 COMPANY REGISTRATION
.
(a) If (but, without any obligation to do so), the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or other
securities under the Act in connection with the public offering of
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<PAGE> 6
such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, a registration
on any form which does not include substantially the same information as would
be required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within fifteen (15) days after mailing of such notice by the
Company in accordance with Section 2.5, the Company shall, subject to the
provisions of paragraph (b) below, cause to be registered under the Act all of
the Registrable Securities that each such Holder has requested to be registered.
(b) UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under this Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters). If the total amount of
securities, including Registrable Securities requested by stockholders to be
included in such offering, exceeds the amount of securities that the
underwriters determine in their sole discretion is compatible with the success
of the offering in view of market conditions, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering, but in no event
shall the amount of securities of the selling Holders included in the offering
be reduced below thirty-five percent (35%) of the total amount of securities
included in such offering except that the Holders may be excluded entirely if
the underwriters make the determination described above and no other
stockholder's securities are included. Allocation of securities to be sold in
any such offering shall be made pro-rata amongst the selling stockholders
according to the total number of securities held by each such selling
stockholder and entitled to inclusion therein on the basis of a registration
rights agreement with the Company. For purposes of allocation securities to be
included in any offering, for any selling stockholders which is a partnership or
corporation, the partners, retired partners and stockholders of such holder (and
in the case of a partnership, any affiliated partnerships), or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
1.4 FORM S-3 REGISTRATION
. In case the Company shall receive from one or more of the Holders a
written request or requests that the Company effect a registration on Form S-3
and any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
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(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
PROVIDED, HOWEVER, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.4: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than Two Million Dollars
($2,000,000); (3) if the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more than
ninety (90) days after receipt of the request of the Holder or Holders under
this Section 1.4; PROVIDED, HOWEVER, that the Company shall not utilize this
right more than once in any twelve month period; (4) if the Company has, within
the twelve (12) month period preceding the date of such request, already
effected two (2) registrations on Form S-3 for the Holders pursuant to this
Section 1.4; or (5) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. Registrations effected pursuant to this Section 1.4 shall not be
counted as demands for registration or registrations effected pursuant to
Sections 1.2 or 1.3, respectively.
1.5 OBLIGATIONS OF THE COMPANY
. Whenever required under this Section 1 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for a period ending upon the earlier of (i) one
hundred eighty (180) days or (ii) until the distribution contemplated in the
Registration Statement has been completed; PROVIDED, HOWEVER, that such 180-day
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the Company.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may
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<PAGE> 8
be necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, (i) an opinion, dated such date,
of the counsel representing the Company for the purposes of such registration,
in substantially the form as may be given to the underwriters in such public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in substantially
the form as may be given by independent certified public accountants to
underwriters in such public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities; provided in
any such case, the Company is required to provide such opinion or letter, as the
case may be, to the underwriters in such offering.
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<PAGE> 9
1.6 FURNISH INFORMATION
.
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.4 if, due to the
operation of subsection 1.6(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in subsection 1.2(a) or subsection
1.4(b)(2), whichever is applicable.
1.7 EXPENSES OF DEMAND OR S-3 REGISTRATION
. All expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Section
1.2 or 1.4, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company and the reasonable fees and disbursements of one counsel
for the selling Holders shall be borne by the Company; PROVIDED, HOWEVER, that
the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 or 1.4 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating Holders
shall bear such expenses), unless (i) the registration is withdrawn following
any deferral of the registration by the Company pursuant to Section 1.2(c) or
1.4(b)(3); (ii) the registration is withdrawn due to a material adverse change
in the Company's business or financial condition; or (iii) in the case of a
demand registration pursuant to Section 1.2, the Holders of a majority of the
Registrable Securities agree to forfeit their right to one demand registration
pursuant to Section 1.2.
1.8 EXPENSES OF COMPANY REGISTRATION
. The Company shall bear and pay all expenses incurred in connection with
any registration, filing or qualification of Registrable Securities with respect
to the registrations pursuant to Section 1.3 for each Holder (which right may be
assigned as provided in Section 1.12), including (without limitation) all
registration, filing, and qualification fees, printers and accounting fees
relating or apportionable thereto and the fees and disbursements of counsel for
the Company and one counsel for the selling Holders selected by them, but
excluding underwriting discounts and commissions relating to Registrable
Securities.
1.9 NO DELAY OF REGISTRATION
. No Holder shall have any right to obtain or seek an injunction
restraining or otherwise
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<PAGE> 10
delaying any such registration as the result of any controversy that might arise
with respect to the interpretation or implementation of this Section 1.
1.10 INDEMNIFICATION
. In the event any Registrable Securities are included in a
registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the officers, directors and constituent general
partners of such Holder, any underwriter (as defined in the Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "VIOLATION"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and the Company will pay, as incurred, to each such Holder, the
officers, directors and constituent general partners of such Holder, each such
underwriter or controlling person any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action, as such expenses are incurred; PROVIDED,
HOWEVER, that the indemnity agreement contained in this Section 1.10(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and the officers,
directors and constituent general partners of such Holder and any controlling
person of any such underwriter or other Holder, severally but not jointly,
against any losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
Section 1.10(b), in connection with investigating
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or defending any such loss, claim, damage, liability, or action; PROVIDED,
HOWEVER, that the indemnity agreement contained in this Section 1.10(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; PROVIDED, FURTHER,
that in no event shall any Holder's cumulative, aggregate liability under this
Section 1.10(b), under Section 1.10(d), or under such sections together, exceed
the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with one counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 1.10 unless the failure to deliver notice
is materially prejudicial to its ability to defend such action. Any omission to
so deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; PROVIDED, HOWEVER, that (A) in no event shall any Holder's
cumulative, aggregate liability under this Section 1.10(d), or under Section
1.10(b), or under such sections together, exceed the net proceeds from the
offering received by such Holder. Notwithstanding anything to the contrary
herein, no party shall be liable for contribution under this Section 1.10(d),
except to the extent and under the circumstances as such party would have been
liable to indemnity under Section 1.10(a) or Section 1.10(b), as the case may
be, if such indemnification were enforceable under applicable law. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
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<PAGE> 12
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control with respect to the parties to such agreement.
(f) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
. With a view to making available to the Holders the benefits of Rule
144 promulgated under the Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 ASSIGNMENT OF REGISTRATION RIGHTS
. The rights to cause the Company to register Registrable Securities
pursuant to this Section 1 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such securities who,
after such assignment or transfer, holds at least One Hundred Thousand (100,000)
shares of Registrable Securities (subject to appropriate adjustment for stock
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splits, stock dividends, combinations and other recapitalizations), provided:
(a) the Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
(b) such transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement, including without limitation the
provisions of Section 1.14 below; and (c) such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act. For the
purposes of determining the number of shares of Registrable Securities held by a
transferee or assignee of a holder of Registrable Securities, (i) the holdings
of affiliated partnerships, limited liability companies and other entities, and
their constituent or retired partners or members (collectively, "AFFILIATED
PERSONS"), and (ii) the holdings of spouses, ancestors, lineal descendants and
siblings who acquire Registrable Securities by gift, will or intestate
succession (collectively, "FAMILY MEMBERS"), shall in each case be aggregated
together, provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall designate in writing to
the Company from time to time a single attorney-in-fact on behalf of the entire
group of Affiliated Persons or Family Members, as the case may be, for the
purpose of exercising any rights, receiving notices or taking any action under
this Section 1.
1.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS
. From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Holders of a majority of the
outstanding Registrable Securities which shall not be unreasonably withheld,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would allow such holder or prospective holder to include
such securities in any registration filed under Sections 1.2, 1.3 or 1.4 hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of the Holders that is included.
1.14 TERMINATION OF REGISTRATION RIGHTS
. The right of any Holder to request registration or inclusion in any
registration pursuant to Section 1.3 shall terminate upon the earlier of (i)
five (5) years after the date hereof and (ii) the date on which all shares of
Registrable Securities beneficially owned or subject to Rule 144 aggregation by
such Holder may immediately be sold under Rule 144 (without regard to Rule
144(k)) during any 90-day period.
2. Miscellaneous
.
2.1 SUCCESSORS AND ASSIGNS
. Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of
Registrable Securities). Nothing in this Agreement, express or implied,
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<PAGE> 14
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
2.2 GOVERNING LAW
. This Agreement shall be governed by and construed under the laws of
the State of Delaware as applied to agreements among Delaware residents entered
into and to be performed entirely within Delaware.
2.3 COUNTERPARTS
. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
2.4 TITLES AND SUBTITLES
. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
2.5 NOTICES
. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be
deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit
with the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c)
one (1) business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid or (d) one (1) business day after the
business day of facsimile transmission, if delivered by facsimile transmission
with copy by class mail, postage prepaid, and shall be addressed (i) if to a
Holder, at the Holder's address as set forth on EXHIBIT A hereto and (ii) if to
the Company, at the address of its principal corporate offices (attention:
Secretary), or at such other address as a party may designate by ten (10) days'
advance written notice to the other party pursuant to the provisions above.
2.6 EXPENSES
. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
2.7 AMENDMENTS AND WAIVERS
. Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and at least two holders of Registrable Securities
holding at least two thirds (66-2/3%) of the Registrable Securities then
outstanding (or the sale holder of Registrable Securities). Any amendment or
waiver effected in accordance with this
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paragraph shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company.
2.8 AGGREGATION OF STOCK
. All shares of Preferred Stock of the Company held or acquired or
issuable upon exercise of the Note (or Common Stock issuable upon conversion
thereof) by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability or discharge of any rights under this
Agreement.
2.9 SEVERABILITY
. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
2.10 ENTIRE AGREEMENT
. This Agreement (including the Exhibits hereto, if any) constitutes
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof, and supersedes all prior agreements and
understandings with respect to the subject matter hereof.
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<PAGE> 16
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
COMPANY: NAVIDEC, INC.
By:
-------------------------------------
J. Ralph Armijo, President
Address: 14 Inverness Drive
Englewood, Colorado 80112
Attention: Ralph Armijo
(T) (303) 790-7565
(F) (303) 790-8845
with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLC
2300 BP Tower
200 Public Square
Cleveland, Ohio 44114
Attention: Michael Wager
(T) (216) 363-4500
(F) (216) 363-4588
INVESTOR: WFC HOLDINGS CORPORATION
By:
-------------------------------------
George Fehlhaber,
Senior Vice President and Treasurer
Address: 444 Market Street, MAC 0195-171
San Francisco, CA 94111
(T) (415) 396-6264
(F) (415) 986-4598
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<PAGE> 17
with a copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, California 94114
Attention: Kurt Berney
(T) (650) 493-9300
(F) (650) 493-6811
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<PAGE> 1
Exhibit 99.7
MONDAY JULY 26, 7:05 AM EASTERN TIME
COMPANY PRESS RELEASE
SOURCE: Navidec Inc.
WELLS FARGO COMMITS TO $25 MILLION
STRATEGIC INVESTMENT IN NAVIDEC AND
DRIVEOFF.COM
INVESTMENTS OF $10 MILLION IN NAVIDEC AND $15 MILLION IN DRIVEOFF.COM TO FUND
GROWTH OF BOTH COMPANIES
DENVER and SAN FRANCISCO, July 26 /PRNewswire/ -- Wells Fargo & Company (NYSE:
WFC-NEWS), today announced that it made a strategic investment of $25 million in
Navidec, Inc. (Nasdaq: NVDC - NEWS) and its wholly owned subsidiary,
DriveOff.com, Inc.
"Wells Fargo's commitment will help Navidec continue expanding its business of
consulting, building and managing leading-edge e-business solutions," said Ralph
Armijo, president and CEO of Navidec."Our goal is to incubate new e-commerce
businesses and help other companies transform their business with Internet
technology."
For its $10 million investment in Navidec, Wells Fargo will receive 380,000
shares of Navidec's common stock, approximately 4.9 percent of its outstanding
common stock, and a $6,200,000 promissory note convertible into 620,000 shares
of non-voting common stock of Navidec. For its $15 million investment in
DriveOff.com, Wells Fargo will receive a note convertible into 20 percent
of DriveOff.com's capital stock outstanding as of the closing of the
transaction. Wells Fargo will also receive a five-year warrant for an
additional one-percent of DriveOff.com, exercisable one year after the
transaction's closing at a premium of the initial per-share price. The parties
expect to close both transactions in early August.
"The strategic alliance with Navidec supports Wells Fargo's vision of providing
our online customers with a "trusted online gateway" that brings together all of
the tools, financial products, and related goods and services that our customers
need to realize their financial goals and make their lives easier," said Sharon
Osberg, executive vice president, Wells Fargo Online Financial Services. "These
alliances will provide new features and value-added services to our customers."
Navidec, DriveOff.com and Wells Fargo are also discussing co-marketing and long
term consulting agreements under which Navidec and DriveOff.com would provide
additional services to Wells Fargo.
<PAGE> 2
Wells Fargo's $15 million investment in DriveOff.com will help fund the growth
and expansion of the automotive e-commerce company's next-generation auto buying
service slated to launch later in the third quarter of this year. DriveOff.com
will allow consumers to obtain binding online price and monthly payment quotes
while completing the entire purchase transaction, including financing, by
visiting the site.
"DriveOff.com is changing the way vehicles are bought and sold," said Michael
Kranitz, president of DriveOff.com Inc. "Wells Fargo is a progressive and
trusted institution and the investment further validates our innovative business
model. DriveOff.com differentiates itself from the pack of Internet auto buying
services by infusing true e-commerce technology into the auto buying process."
According to Wells Fargo executive vice president and Auto Finance Group head
Dick Schliesmann, "Internet automotive sales channel alternatives are realizing
explosive growth. As one of the nation's largest auto lenders, Wells Fargo Auto
Finance must take a leadership position. We believe that DriveOff's full-service
dealer solution will serve our dealer clients better than other currently
available Internet referral programs. Wells Fargo wants to be sure that our
dealership clients gain priority in installing this new sales system."
About Navidec, Inc.
Navidec, Inc. (Nasdaq: NVDC - NEWS) is a leading provider and incubator of
innovative e-business solutions and services. Using its proprietary NPACT
process, Navidec defines, builds and manages Internet, intranet and extranet
solutions that enable its clients to transform their traditional business into
e-business. In addition, NaVidec incubates reusable software modules, packaged
Internet solutions and complete e-business models, including DriveOff.com, Inc.
DriveOff.com empowers consumers to complete their entire auto purchase
transaction through a network of retail and co-branded web sites. The company's
corporate web site is http://www.navidec.com.
About DriveOff.com, Inc.
DriveOff.com, Inc. provides world-class auto buying and information web sites
including DriveOff.com, USWheels.com, CarWizard.com and LeaseSource.com. The
company is developing its premier web site, DriveOff.com, which will provide
consumers with binding price and monthly payment quotes online, allowing them
to complete their entire vehicle transaction by visiting the site. DriveOff.com,
Inc., based in Englewood, Colorado, is a wholly owned subsidiary of e-business
solutions provider, Navidec, Inc. (Nasdaq NVDC - NEWS). Its corporate web site
is located at http://www.DriveOff.com.
About Wells Fargo & Company
The Wells Fargo Auto Finance Group, with assets of $10 billion, provides
financing to more than 7,000 auto dealers in 38 states serving 600,000
customers. It has served auto dealership owners since 1970 with indirect
automotive loans and leases, banking and Fleet Management Services.
Wells Fargo Online launched its PC banking service in 1989 and was the first
major bank to offer online banking through the Internet (www.wellsfargo.com) in
May 1995. In addition to banking and trading online, customers can apply for new
accounts and products, find the nearest ATM or branch and order foreign currency
and new checks through Wells Fargo Online. The internet site features planners
and calculators designed to help visitors plan for their financial future.
Wells Fargo & Company is a $205 billion financial services company providing
banking, insurance,
<PAGE> 3
investments, mortgage and consumer finance through almost 6,000 stores and other
distribution channels across North America, including all 50 states, and
elsewhere internationally. Wells Fargo may be accessed at www.wellsfargo.com.
All statements in this press release, other than historical facts, are forward
looking statements. These statements are based on certain assumptions and
analyses made by Navidec in light of its experience and its perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate under the circumstances. Such statements are
subject to a number of risks and uncertainties, including general and economic
business conditions, demand for automobiles, competition from other automotive
online services, market acceptance of its online automotive solutions, the
ability of Navidec to reach agreements with local media partners and other risk
factors indicated from time to time in Navidec's filings with the Securities and
Exchange Commission. Those filings are available online at www.freeedgar.com.
