AGREEMENT
CONCERNING THE EXCHANGE OF COMMON STOCK
BETWEEN
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
AND
AUTO NETWORK GROUP OF NORTHWEST, INC.
THIS AGREEMENT, made this 20th day of July, 1999, by
and between ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc., an Arizona corporation
("ATC"), and Auto Network Group Northwest, Inc., an Oregon
corporation ("NORTHWEST").
WHEREAS, ATC desires to acquire all of the issued and
outstanding shares of common stock of NORTHWEST in exchange
for an aggregate of 500,000 authorized but unissued shares
of the common stock, no par value, of ATC, which shares
shall be forfeitable under the terms and conditions of
attachment A; and
WHEREAS, NORTHWEST and ATC wish to enter into a
business combination which will result in the shareholders
of NORTHWEST owning together approximately .016% of the then
issued and outstanding shares of ATC's common stock and ATC
owning 100% of the issued and outstanding shares of
Northwest's common stock;
NOW, THEREFORE, in consideration of the mutual
promises, covenants, and representations contained herein,
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
1.1 ISSUANCE OF SHARES AND WARRANTS. Subject to all of the
terms and conditions of this Agreement, ATC agrees to offer
500,000 shares of its common stock in exchange for all of
the shares of NORTHWEST common stock issued and outstanding.
The ATC common stock will be issued directly to the
shareholders of NORTHWEST which accepted the Exchange Offer.
1.2 EXEMPTION FROM REGISTRATION. The parties hereto intend
that the common stock to be issued by ATC to the
shareholders of NORTHWEST shall be exempt from the
registration requirements of the Securities Act of 1933, as
amended (the "Act"), pursuant to Section 4(2) and/or 3(b) of
the Act and the rules and regulations promulgated
thereunder.
1.3 INVESTMENT INTENT. Prior to the consummation of the
Exchange Offer, the shareholders of NORTHWEST shall execute
letters of acceptance and such other documents containing,
among other things, representations and warranties relating
to investment intent and investor status, restrictions on
transferability and restrictive legends such that the
counsel for both ATC and NORTHWEST shall be satisfied that
the exchange of shares as contemplated by this Agreement
will be exempt from the registration requirements of the
Act.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF NORTHWEST
NORTHWEST hereby represents and warrants to ATC that:
2.1 ORGANIZATION. NORTHWEST is a corporation duly
organized, validly existing, and in good standing under the
laws of the state of Oregon, and has all necessary corporate
powers to own its properties and to carry on its business as
now owned and operated by it, and is duly qualified to do
business and is in good standing in each of the
jurisdictions where its business requires qualification.
2.2 CAPITAL. The authorized capital stock of NORTHWEST
consists of 10,000 shares of common stock, no par values of
which 100 shares are currently issued and outstanding. All
of the issued and outstanding shares of NORTHWEST are duly
and validly issued, fully paid, and non-assessable.
2.3 SUBSIDIARIES. As of the date hereof, NORTHWEST does not
have any subsidiaries or own any interest in any other
enterprise (whether or not such enterprise is a corporation)
except as disclosed herein.
2.4 DIRECTORS AND OFFICERS. Exhibit 2.4 to this Agreement,
the text of which is hereby incorporated herein by
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reference, contains the names and titles of all directors
and officers of NORTHWEST as of the date of this Agreement.
2.5 FINANCIAL STATEMENTS. Exhibit 2.5 to this Agreement,
the text of which is hereby incorporated herein by
reference, consists of the unaudited financial statements of
NORTHWEST as of July 15,1999, containing the unaudited
balance sheet of NORTHWEST. The financial statements have
been prepared in accordance with generally accepted
accounting principles and practices consistently followed by
NORTHWEST throughout the period indicated, and fairly
present the financial position of NORTHWEST as of the date
of the balance sheet.
2.6 ABSENCE OF CHANGES. Since the date of the balance sheet
included in Exhibit 2.5, there has not been any change in
the financial condition or operations of NORTHWEST, except
for changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of the date of
the balance sheet included in Exhibit 2.5, NORTHWEST did not
have any material debt, liability, or obligation of any
nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that is not reflected in
such balance sheet.
2.8 INVESTIGATION OF FINANCIAL CONDITION. Without in any
manner reducing or otherwise mitigating the representations
contained herein, ATC and/or its attorneys shall have the
opportunity to meet with accountants and attorneys to
discuss the financial condition of NORTHWEST. NORTHWEST
shall make available to ATC and or its attorneys all books
and records of NORTHWEST once reasonable notice of such
request has been given.
2.9 COMPLIANCE WITH LAWS. NORTHWEST has complied with, and
is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without
limitation) any applicable building, zoning or other law,
ordinance regulation) affecting its properties or the
operation of its business.
2.10 LITIGATION. NORTHWEST is not a party to any legal
action, arbitration, administrative or other proceeding, or
governmental investigation pending or, to the best knowledge
of NORTHWEST, threatened against or affecting NORTHWEST or
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its business, assets or financial condition. NORTHWEST is
not in default with respect to any order, writ, injunction
or decree of any federal, state, local or foreign court,
department, agency or instrumentality. NORTHWEST is not
engaged in any legal action to recover monies due to it.
2.11 AUTHORITY. The Board of Directors of NORTHWEST has
authorized the execution of this Agreement and the
consummation of transactions contemplated herein, and
NORTHWEST has full power and authority to execute, deliver
and perform this Agreement and this Agreement in a legal,
valid and binding obligation of NORTHWEST, and is
enforceable in accordance with its terms and conditions.
2.12 ABILITY TO CARRY OUT OBLIGATIONS. The execution and
delivery of this Agreement by NORTHWEST and the performance
by NORTHWEST of its obligations hereunder in the time and
manner contemplated will not cause, constitute or conflict
with or result in (a) any breach or violation of any of the
provisions of or constitute a default under any license,
indenture, mortgage, charter, instruments, articles of
incorporation, bylaws, or other agreement or instrument to
which NORTHWEST is a party, or by which it may be bound, nor
waive any consents or authorizations of any party other than
those hereto be required, (b) an event that would permit any
party to any agreement or instrument to terminate it or to
accelerate the maturity of any indebtedness or other
obligation of NORTHWEST, or (c) any event that would result
in the creation or imposition of any lien, charge, or
encumbrance on any asset of NORTHWEST.
2.13 FULL DISCLOSURE. None of the representations and
warranties made by NORTHWEST herein, or in any exhibit,
certificate furnished or to be furnished by NORTHWEST, or on
its behalf, contains or will contain any untrue statement of
material fact, or omit any material fact the omission of
which would be misleading.
2.14 ASSETS. NORTHWEST has good and marketable title to all
of its property free and clear of any and all liens, claims
and encumbrances of any nature, form or description.
2.15 INDEMNIFICATION. NORTHWEST agrees to defend and hold
ATC harmless against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest,
penalties, and reasonable attorney fees, that it shall incur
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or suffer, which arise out of, result from or relate to any
breach of, or failure by NORTHWEST to perform any of its
respective representations, warranties, covenants and
agreements in this Agreement or in any exhibit or other
instrument furnished or to be furnished by NORTHWEST under
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ATC
ATC hereby represents and warrants to Northwest that:
3.1 ORGANIZATION. ATC is a corporation duly organized,
validly existing, and in good standing under the laws of the
state of Arizona, has all necessary corporate powers to own
its properties and to carry on its business as now owned and
operated by it, and is duly qualified to do business and is
in good standing in each of the jurisdictions where its
business requires qualification.
3.2 CAPITAL. The authorized capital stock of ATC consists
of 100,000,000 shares of common stock. All of the issued
and outstanding shares are duly and validly issued, fully
paid and non-assessable.
3.3 SUBSIDIARIES. ATC does not have any subsidiaries or own
any interest in any other enterprise (whether or not such
enterprise is a corporation).
3.4 DIRECTORS AND OFFICERS. Exhibit 3.4, annexed hereto and
hereby incorporated herein by reference, contains the names
and title of all directors and officers of ATC as of the
date of this Agreement.
3.5 FINANCIAL STATEMENTS. Exhibit 3.5, annexed hereto and
hereby incorporated herein by reference, consists of the
unaudited financial statements of ATC as of March 31, 1999
containing the balance sheet of ATC. The financial
statements have been prepared in accordance with generally
accepted accounting principles and practices consistently
followed by ATC throughout the period indicated, and fairly
present the financial position of ATC as of the date of the
balance sheet.
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3.6 ABSENCE OF CHANGES. Since March 31, 1999, there has not
been any change in the financial condition or operations of
ATC, except for changes in the ordinary course of business,
which changes have not in the aggregate been materially
adverse.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of March 31,
1999, ATC did not have any material debt, liability, or
obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due,
that is not reflected in ATC's balance sheet as of April 1,
1999.
3.8 INVESTIGATION OF FINANCIAL CONDITION. Without in any
manner reducing or otherwise mitigating the representations
contained herein, NORTHWEST shall have the opportunity to
meet with ATC's accountants and attorneys to discuss the
financial condition of ATC. ATC shall make available to
NORTHWEST all books and records of ATC once reasonable
notice of such request has been given.
3.9 COMPLIANCE WITH LAWS. ATC has complied with, and is not
in violation of, applicable federal, state or local
statutes, laws and regulations (including, without
limitation, any applicable building, zoning, or other law,
ordinance, or regulation) affecting its properties or the
operation of its business.
3.10 LITIGATION. ATC is not a party to any legal action,
arbitration, administrative, or other proceeding, or
governmental investigation pending or, to the best knowledge
of ATC, threatened against or affecting ATC or its business,
assets, or financial condition. ATC is not in default with
respect to any order, writ, injunction, or decree of any
federal, state, local, or foreign court, department agency,
or instrumentality. ATC is not engaged in any legal action
to recover moneys due to it.
3.11 AUTHORITY. The Board of Directors of ATC has authorized
the execution of this Agreement and the transactions
contemplated herein, and ATC has full power and authority to
execute, deliver and perform this Agreement and this
Agreement is the legal, valid and binding obligation of ATC,
and is enforceable in accordance with its terms and
conditions.
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3.12 ABILITY TO CARRY OUT OBLIGATIONS. The execution and
delivery of this Agreement by ATC and the performance by ATC
of its obligations hereunder will not cause, constitute, or
conflict with or result in (a) any breach or violation of
any of the provisions of or constitute a default under any
license, indenture, mortgage, charge, instrument,
certificate of incorporation, bylaw, or other agreement or
instrument to which ATC is a party, or by which it may be
bound, nor waive any consents or authorizations of any part
other than those hereto be required, (b) an event that would
permit any party to any agreement or instrument to terminate
it or to accelerate the maturity of any indebtedness or
other obligation of ATC, or (c) an event that would result
in the creation or imposition of any lien, charge, or
encumbrance on any asset of ATC.
3.13 FULL DISCLOSURE. None of the representations and
warranties made by ATC herein, or in any exhibit,
certificate or memorandum furnished or to be furnished by
ATC, or on its behalf, contains or will contain any untrue
statement of material fact, or omit any material fact the
omission of which would be misleading.
3.14 ASSETS. ATC has good and marketable title to all of
its property free and clear of any and all liens, claims and
encumbrances.
3.15 INDEMNIFICATION. ATC agrees to indemnify, defend and
hold NORTHWEST harmless against and in respect of any and
all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including
interest, penalties, and reasonable attorney fees, that they
shall incur and suffer, which arise out of, result from or
relate to any breach of, or failure by ATC to perform any of
its representations, warranties' covenants or agreements in
this Agreement or in any schedule, certificate, exhibit or
other instrument furnished or to be furnished by ATC under
this Agreement.
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ARTICLE IV
COVENANTS
4.1 INVESTIGATIVE RIGHTS. From the date of this Agreement
until the Closing Date, each party shall provide to the
other party, and such other party's counsels, accountants,
auditors, and other authorized representatives, access
during normal business hours and upon reasonable advance
written notice to all of each party's properties, books,
contracts, commitments, and records for the purpose of
examining the same. Each party shall provide the other party
with all information concerning each party's affairs as the
other party may reasonably request.
4.2 CONDUCT OF BUSINESS. Prior to the Closing, ATC and
NORTHWEST shall each conduct its business in the normal
course, and shall not sell, pledge, or assign any assets,
without the prior approval of the other party, except in the
regular course of business. Neither ATC or NORTHWEST shall
amend its Articles of Incorporation (except as described
herein) or Bylaws, declare dividends, redeem or sell stock
or other securities, incur additional liabilities, acquire
or dispose of fixed assets, change employment terms, enter
into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any
balance sheet receivable for less than its stated amount,
pay more on any liability than its stated amount, or enter
into any other transaction other than in the regular course
of business.
4.3 REQUIRED CORPORATE ACTION BY ATC AND NORTHWEST. ATC and
NORTHWEST shall cause a meeting of their directors to be
duly called and held as soon as practicable for the purpose
of voting on the approval, subject to due diligence, of this
Agreement.
4.4 OFFICERS. Effective on the Closing Date, the officers
of Auto Network Group Northwest, Inc. will consist of the
following:
▇▇▇ ▇▇▇▇▇ - President and Chief Executive Officer, Director
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▇▇▇▇ ▇▇▇▇▇▇ - Director
▇▇▇ ▇▇▇▇▇▇ - Director and Vice President
ARTICLE V
CONDITIONS PRECEDENT TO ATC'S PERFORMANCE
5.1 CONDITIONS. ATC's obligations hereunder shall be
subject to the satisfaction, at or before the Closing, of
all the conditions set forth in this Article V. ATC may
waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by ATC of any other
condition of or any of ATC's other rights or remedies, at
law or in equity, if NORTHWEST shall be in default of any of
their representations, warranties, or covenants under this
Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise
permitted by this Agreement, all representations and
warranties by ATC in this Agreement or in any written
statement that shall be delivered to NORTHWEST by ATC under
this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
5.3 PERFORMANCE. ATC shall have performed, satisfied, end
complied with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with
by it, on or before the Closing Date.
5.4 ABSENCE OF LITIGATION. No action, suit, or proceeding
before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement
or to its consummation, shall have been instituted or
threatened against ATC on or before the Closing Date.
5.5 ACCEPTANCE BY ATC DIRECTORS. The Board of Directors of
ATC shall have voted to approve this Agreement.
5.6 FINANCIAL CONDITION OF ATC. On the Closing Date, the
assets and liabilities of ATC shall not be significantly
different than the amounts shown on its balance sheet
9
included in Exhibit 2.5 hereto except for changes in the
ordinary course of business.
ARTICLE VI
CONDITIONS PRECEDENT TO NORTHWEST'S PERFORMANCE
6.1 CONDITIONS. NORTHWEST's obligations hereunder shall be
subject to the satisfaction, at or before the Closing, of
all the conditions set forth in this Article VI. NORTHWEST
may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by NORTHWEST of any
other condition of or any of NORTHWEST's rights or remedies,
at law or in equity, if ATC shall be in default of any of
its representations, warranties, or covenants under this
Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise
permitted by this Agreement, all representations and
warranties by NORTHWEST in this Agreement or in any written
statement that shall be delivered to ATC by NORTHWEST under
this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
6.3 PERFORMANCE. NORTHWEST shall have performed, satisfied,
and complied with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with
by it, on or before the Closing Date.
6.4 ABSENCE OF LITIGATION. No action, suit or proceeding
before any court or any governmental body or authority'
pertaining to the transaction contemplated by this Agreement
or to its consummation, shall have been instituted or
threatened against ATC on or before the Closing date.
6.5 APPROVAL BY NORTHWEST SHAREHOLDERS. The approvals of the
shareholders of NORTHWEST of the matters set forth in this
Agreement shall have been obtained.
6.7 FINANCIAL CONDITION OF NORTHWEST. On the Closing Date,
the assets and liabilities of NORTHWEST shall not be
significantly different than the amounts shown on its
balance sheet included in Exhibit 2.5 hereto except for
changes in the ordinary course of business.
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6.8 EMPLOYMENT AGREEMENT. On the Closing Date, the officers
and directors of NORTHWEST shall sign an Employment
Agreement with a non-compete clause a copy of which is
attached as Exhibit 2.6 hereto.
ARTICLE VII
CLOSING
7.1 CLOSING. The Closing of this transaction shall be held
at the of offices of ATC, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or such other place as shall be
mutually agreed upon, on such date as shall be mutually
agreed upon by the parties. At the Closing, the following
documents, in form reasonably acceptable to counsel to the
parties or as set forth hereby shall be delivered:
By ATC:
A. A signed Consent and/or Minutes of the Directors of ATC
approving this Agreement and each matter to be approved by
the Directors of ATC under this Agreement
By NORTHWEST:
A. A signed Consent or Minutes of the Directors of NORTHWEST
approving this Agreement and each matter to be approved by
the Directors of NORTHWEST under this Agreement.
B. Signed letters of acceptance from the shareholders of
NORTHWEST accepting the offer to exchange their shares for
shares of ATC.
7.2 ISSUANCE OF ATC STOCK. As promptly as practicable after
the Closing Date, each holder of an outstanding certificate
or certificates representing shares of NORTHWEST common
stock shall surrender the same to ATC. ATC shall cause, in
exchange, a certificate or certificates representing the
number of shares of ATC common stock for which the shares of
NORTHWEST common stock represented by the certificate or
certificates shall have been exchanged. ATC shall hold said
certificates until such time as said shares are no longer
forfeitable in accordance with Attachment A. ATC shall
deliver to each shareholder a copy of his certificate.
ARTICLE VIII
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REMEDIES
8.l DISPUTES. Any dispute that might arise over the
enforcement, interpretation or execution of this Agreement
and which is not amicably settled will be submitted to
arbitration in Scottsdale, Arizona, before a panel of
arbitrators selected as follows:
Within ten (1O) days of demand by either party for
arbitration, each party will select one (1) arbitrator and
those two arbitrators will select a third arbitrator and
those three (3) persons shall constitute the panel of
arbitrators. The arbitrators will conduct the hearings on
continuous business days, and their decisions may be by
majority vote. All costs of the arbitrators will be shared
equally, but the arbitrators are authorized to award costs
and counsel fees to the prevailing party, if necessary. All
documents to be brought into evidence will be produced
within 10 days of notice of request for arbitration.
8.2 COSTS. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement,
or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorney's
fees and other costs incurred in that action or proceeding,
in addition to any other relief too which it or they may be
entitled.
8.3 TERMINATION. In addition to the other remedies, any of
the parties hereto may on the Closing Date terminate this
Agreement, without liability:
(i) If the either of respective Boards of Directors of ATC
and/or NORTHWEST shall consent to the termination of this
Agreement; or
(ii) If any bona fide action or proceeding shall be pending
against any of the parties hereto on the Closing Date that
could result in an unfavorable judgment, decree, or order
that would prevent or make unlawful the carrying out of this
Agreement or if any agency of the federal or of any state
government shall have objected at or before the Closing Date
to this acquisition or to any other action required by or in
connection with the Agreement.
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ARTICLE IX
MISCELLANEOUS
9.1 CAPTIONS AND HEADINGS. The Article and paragraph
headings throughout this Agreement are for convenience and
reference only, and shall in no way be deemed to define,
limit, or add to the meaning of any provision of this
Agreement.
9.2 NON-WAIVER. Except as otherwise expressly provided
herein, no waiver of any covenant, condition, or provision
of this Agreement shall be deemed to have been made unless
expressly in writing and signed by the party against whom
such waiver is charged; and (i) the failure of any party to
insist on any one or more cases upon the performance of any
of the provisions, covenants, or conditions of this
Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the
fixture of any such provisions, covenants, or conditions,
(ii) the acceptance of performance of anything required by
this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition, or provisions hereof
shall not be deemed a waiver of such breach or failure, and
(iii) no waiver by any party of one breech by another party
shall be construed as a waiver with respect to any other or
subsequent breach.
9.3 TIME OF ESSENCE. Time is of the essence of this
Agreement and of each and every provision hereof.
9.4 CHOICE OF LAW. This Agreement and its application shall
be governed by the laws of the State of Arizona.
9.5 COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.6 NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of
delivery if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given' by first class
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mail, registered or certified, postage prepaid, and properly
addressed as follows:
For ATC:
Mr. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
For NORTHWEST:
Mr. ▇▇▇ ▇▇▇▇▇
Auto Network Group Northwest, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
9.7 BINDING EFFECT. This Agreement shall inure to and be
binding upon the heirs, executors, personal representatives,
successors and assigns of each of the parties to this
Agreement.
9.8 EFFECT OF CLOSING. All representations, warranties,
covenants, and agreements of the parties contained in this
Agreement, or in any instrument, certificate, opinion, or
other writing provided for in it, shall survive the Closing
of this Agreement.
9.9 MUTUAL COOPERATION. The parties hereto shall cooperate
with each other to achieve the purpose of this Agreement,
and shall execute such other and further actions as may be
necessary or convenient to effect the transaction described
herein.
9.10 ANNOUNCEMENTS. ATC and NORTHWEST will consult and
cooperate with each other as to the timing and content of
any announcements of the transactions contemplated hereby to
the general public or to employees, customers or suppliers.
9.11 EXPENSES. Each party will pay their own legal,
accounting and any other out-of-pocket expenses reasonably
incurred in connection with this transaction, whether or not
the transaction contemplated hereby is consummated.
9.12 EXHIBITS. As of the execution hereof, the parties
hereto have provided each other with the Exhibits provided
for herein above, including any items referenced therein or
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required to be attached thereto. Any material changes to the
Exhibits shall be immediately disclosed to the other party.
9.13 This Agreement is to be deemed effective on the date
written above.
AGREED TO AND ACCEPTED as of the date first above written:
/S/ ▇▇▇ ▇▇▇▇▇ /S/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------- -------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Auto Network Group Northwest, Inc. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc.
President President
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Attachement A
VESTING SCHEDULE
Up to 83,333 shares of ATC shall no longer be forfeitable on July 1, 2000 under
the following conditions:
1. A Certified audit of Northwest shall be completed as of March 31,
2000 and shares shall be released under the following terms : If the
audited Pre-tax Earnings are less than $30,000 all 83,333 shares
shall be forfeited. If the audited Pre-tax Earnings are between
$30,000 and $50,000 a pro-rata amount of shares shall be issued and
the balance shall be forfeited. Any earnings in excess of $50,000
shall cause options to be earned on a ratio of five options for
every $1.00 of excess earnings over $50,000. These options shall be
priced at the closing bid price of the Company's common stock on
April 1 following the March 31 year end.
Up to 166,667 shares of ATC shall no longer be forfeitable on July 1, 2001 under
the following conditions:
2. A Certified audit of Northwest shall be completed as of March 31,
2000 and shares shall be released under the following terms : If the
audited Pre-tax Earnings are Pre-tax Earnings less than $50,000 all
166,667 shares shall be forfeited. If the audited Pre-tax Earnings
are between $50,000 and $100,000 a pro-rata amount of shares shall
be issued and the balance shall be forfeited. Any earnings in excess
of $100,000 shall cause options to be earned on a ratio of five
options for every $1.00 of excess earnings over $100,000. These
options shall be priced at the closing bid price of the Company's
common stock on April 1 following the March 31 year end.
Up to 250,000 shares of ATC shall no longer be forfeitable on July 1, 2002 under
the following conditions:
3. A Certified audit of Northwest shall be completed and shares as of
March 31, 2001 shall be released under the following terms : If the
audited Pre-tax Earnings are Pre-tax Earnings less than $75,000 all
250,000 shares shall be forfeited. If the audited Pre-tax Earnings
are between $75,000 and $150,000, a pro-rata amount of shares shall
be issued and the balance shall be forfeited. Any earnings in excess
of $150,000 shall cause options to be earned on a ratio of five
options for every $1.00 of excess earnings over $150,000. These
options shall be priced at the closing bid price of the Company's
common stock on April 1 following the March 31 year end.
As an example of the above terms, if in the first year Northwest has audited
Pre-tax Earnings of $29,999.00 then it shall forfeit all of the shares eligible
at March 31, 2000. If Northwest has audited Pre-tax Earnings of $40,000.00 then
eighty percent (80%) of the eligible shares shall be earned (.8 X 83,333=66,667
shares earned).
