March 31, 1998

SUMMARY

THE COMPANY

Searching for a new car is a time-consuming, frustrating experience for most customers. Make, model, and options must first be decided. Additionally the actual costs of purchasing, financing, taxes, and insurance must be determined. Working with a dealer requires the customer to evaluate dealer costs and negotiate a fair price. Since the customer is never sure he or she got the best deal, many have turned to buying services to assist in the transactions.

For many consumers, the Internet has become an alternate information source. Through the computer, the interested customer can view and research car information, thereby avoiding the stereotypical car salesman. Over 20% of consumers used the internet during 1997. However, less than 1% actually purchased their vehicles through an internet service. In our opinion, the reason for this low percentage is that few, if any, internet car purchasing services actually participate in the transaction directly or offer the final required “human” element to the buying process. After the consumer gives all of their information to a buying service, they are quoted varying prices and thrown back into the conventional buying process.

Customers are seeking a more streamlined car buying process where prices are fixed and information is readily available. According to a recent Wall Street Journal survey of 3,700 auto buyers, customers do not trust the dealer sticker price, dislike negotiating, and feel visiting a dealer is like going to the dentist. AutoMall fills customer needs by offering convenient, one-stop shopping for substantially all vehicle makes and models. The mall store layout and AutoMall sales techniques will create a no-hassle shopping environment. Fully-trained AutoMall Associates will offer impartial, exact, up-to-date information so consumers may make informed purchasing decisions. Online services (Consumer Reports, Edmund’s New Car Buying Service, and others) will be brought to the customer via free computer Kiosks placed throughout the AutoMall store. Typical information gathered by the customer will likely include performance tests, financing options, insurance ratings, trade-in values, dealers’ costs, manufacturers’ suggested retail price (“MSRP”), and actual purchase price.

Armed with this information, the customer is better able to make an informed buying decision. Highly trained AutoMall Associates will help the customer sort through the many available options faced by the new car buyer. The customer can compare these independent information sources with the low vehicle prices offered by AutoMall. The AutoMall prices are fixed; there is no negotiation. The AutoMall price is guaranteed for 30 days. All other AutoMall services are also fixed in price, including financing, refinancing, extended service, insurance, aftermarket items, and guaranteed trade-in values. The only decisions are which option(s) to select and how to structure the loan repayment schedule to fit the customer’s budget.

AutoMall Online provides pre-negotiated vehicle prices, convenience, and service available nowhere else. It is the smartest way to buy a new car or truck in less time, with low cost and highest satisfaction.

Currently the Company is located at:

AutoMall, Inc.

P.O. Box 9909

Alexandria, VA 22304

AutoMall, Inc.

Springfield Mall

6413 Springfield Mall,

Springfield, Virginia 22150

AutoMall, Inc.

Fair Oaks Mall

11768 U Fair Oaks Mall

Fairfax, Virginia 22033

PRIOR FINANCINGS

On October 1, 1998, the Company received a $200,000 loan from K&R Industries, Inc., and issued a promissory note payable on demand in the amount of $200,000 with an interest rate per annum of 9.00% to K&R Industries, Inc. (the “K&R Note”). At the time of the financing, the parties intent was to provide K&R Industries, Inc. with the option to purchase shares of Common Stock at a 33.33% discount to the initial private placement offering price in an amount up to $75,000 of the principal amount of the K&R Note. Subsequently, the Company priced the initial private placement offering at $6.41 per share of Common Stock. K&R Industries, Inc. elected to purchase 17,565 shares of Common Stock at $4.27 per share which represented a 33.33% discount to the initial private placement offering price of $6.41 per share. In addition, K&R Industries, Inc. elected to purchase an additional 19,500 shares of Common Stock at $6.41 per share. In aggregate, K&R Industries, Inc. purchased 37,065 shares of Common Stock and in exchange cancelled the K&R Note.

On December 27, 1998, the Company borrowed $150,000 from Michael. L. Field and issued a note payable on demand in the amount of $150,000 with an interest rate per annum of 8.00% to Michael L. Field. On February 12, 1999, the Company borrowed an additional $40,000 from Michael. L. Field and issued a note payable on demand in the amount of $40,000 with an interest rate per annum of 8.00% to Michael L. Field.

On March 2, 1999, the Company borrowed $50,000 from Koons of Alexandria, LLC and issued a note payable on demand in the amount of $50,000 with an interest rate per annum of 8.00% to Koons of Alexandria, LLC.

THE OFFERING

The Company is offering up to 500,000 shares of its Common Stock at the per share price of $6.41. As a condition of this Offering, each investor must execute a Subscription Agreement in the form attached hereto as Exhibit D and a Stock Restriction Agreement in the form attached hereto as Exhibit E.

The Company may, in its sole discretion, accept or reject any Subscription Agreement, in whole or in part. No Subscription Agreement will be deemed accepted by, or the binding obligation of, the Company until it is executed by a duly-authorized agent of the Company.

*Summary of Offering*
	Minimum	Maximum
Common Stock Issued and Outstanding Prior to Offering	1,637,065	1,637,065
Shares of Common Stock Offered	100,000	500,000
Offering Price Per Share	$6.41	$6.41
Common Stock Issued and Outstanding After Offering	1,737,065	2,137,065
Percentage of Common Stock to be Owned by Existing Shareholders after Offering	94.2%	76.6%
Gross Proceeds from Offering	$641,000	$3,205,000

DESCRIPTION OF SECURITIES

The Common Stock offered in this Offering consists of up to 500,000 shares of the common stock of the Company, par value $0.01 per share (the "Common Stock"). Assuming full subscription of the Offering, immediately after consummation of the offering, there will be 2,100,000 shares of Common Stock issued and outstanding, of which 1,600,000 will be owned by the existing stockholders of the Company. Holders of shares of Common Stock are not entitled to cumulative voting or to any preemptive rights.

The following may, in the future, result in dilution being experienced by investors participating in this Offering.

1. The Company may offer and sell additional shares of Common Stock in the future, either in an exempt offering without registration, or in a public offering to be registered under the Securities Act.

2. The Company may offer and deliver additional shares of Common Stock in exchange for services, goods, or other value received, as an incentive to provide value to the Corporation.

3. The Company may offer and sell shares of Preferred Stock, which may be convertible into shares of Common Stock, in an exempt offering without registration under the Securities Act at a date subsequent to the closing of this offering.

SHARE OWNERSHIP AND CAPITALIZATION

The Company's Certificate of Amendment to the Amended and Restated Certificate of Incorporation, a copy of which is attached to this Memorandum as Exhibit B, authorizes the Company to issue up to 3,000,000 shares of Common Stock, of which 1,600,000 are currently issued and outstanding.

The following table shows the manner in which the shares of the Company's Common Stock will be owned in the event of the minimum and maximum number of shares of Common Stock are sold in this Offering.

	Post- Offering Minimum	Post- Offering Minimum	Post- Offering Maximum	Post-Offering Maximum
Stockholder	Shares Owned	Ownership %	Shares Owned	Ownership %

1. New Investors	100,000	5.77%	500,000	23.84%
2. Michael L. Field	800,000	46.05%	800,000	37.43%
3. Eugene C. Hickman	800,000	46.05%	800,000	37.43%
4. K&R Industries, Inc.	37,065	2.13%	37,065	1.74%
TOTAL	1,737,065	100.00%	2,137,065	100.00%

Note: In addition to the issued and outstanding shares set forth above, the Company anticipates consummating the following future transaction, which will have a dilutive impact on the New Investors and the existing stockholders: (i) the award and exercise of options granted to officers, directors, consultants and employees to purchase shares of Common Stock.

RISK FACTORS

You should carefully consider the risks described below before buying shares in this offering. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may impair our business operations. This private placement memorandum also contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipates," "believes," "plans," "expects," "future" and "intends" and similar expressions to identify forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described below and elsewhere in this private placement memorandum. If any of the following risks actually occur, our business, results of operations and financial condition could be materially adversely affected and you might lose all or part of your investment.

We Are an Early State Company.

We were incorporated in April 1998 and we opened our prototype store in February 1999. Therefore, we have a very limited operating history upon which to base an evaluation of our current business and prospects. Moreover, our business model is evolving and depends on our ability to generate revenues from multiple sources. Before investing, you should evaluate the risks, expenses and problems frequently encountered by companies such as ours that are in the early stages of development and that are entering new and rapidly changing markets. In particular, to address these risks we face the following challenges:

· maintaining and increasing our consumer base;

· maintaining and increasing our network of member dealers;

· managing the quality of services delivered by member dealers and automotive-related vendors;

· generating continuing revenues through our prototype in-mall locations;

· competing effectively with existing and potential competitors;

· developing further our unproven business model;

· developing further AutoMall awareness and brand loyalty;

· managing expanding operations;

· broadening our service offerings and attracting and retaining additional automotive-related vendors to enable us to expand our service offerings; and

· attracting and retaining qualified personnel.

We may not successfully implement any of our strategies or successfully address these risks and uncertainties. Our quarterly financial results are subject to significant fluctuations. We expect that the results of operations will continue to vary significantly from quarter to quarter due to a number of factors, including:

· seasonal demand for the products and services of our member dealers and other automotive-related vendors;

· announcement or introduction of new or enhanced services by us or by our competitors;

· potential loss of relationships with any of our major member dealers or other major automotive-related vendors;

· potential loss of relationships with a significant number of our member dealers;

· level of traffic through our mall locations;

· our ability to retain existing and attract new consumers, member dealers, other automotive-related vendors and advertisers;

· changes in our pricing model and changes in our competitors' pricing of services;

· acceptance by our member dealers of our policies regarding service quality, response time to consumers and vehicle pricing;

· acceptance by consumers of using kiosks and AutoMall associates to address informational needs at our Mall locations;

· our ability to upgrade and develop our information technology systems and infrastructure

· costs related to acquisitions of technology or businesses;

· potential changes in state and federal government regulations and their interpretations, especially with respect to the automotive industry; and

· general economic conditions, as well as those specific to the automotive and automotive- related industries.

Our Revenue Growth Rates May Not Be Sustainable.

We expect that over time our revenues will come from a mix of fees from member dealers, automotive-related vendors and advertisers. However, we expect to be substantially dependent on member dealer fees. Therefore, our quarterly revenues and operating results are likely to be particularly affected by the level of member dealer fees in each quarter. We plan to increase our operating expenses significantly in order to expand our sales and marketing operations, broaden our consumer and member dealer capabilities, and fund a greater number of mall locations. Our operating expenses, which include sales and marketing, product development and general and administrative expenses, are based on our expectations of future revenues and are relatively fixed in the short term. We generally operate with minimal backlog, and consequently our revenues for each quarter depend on sales completed in that quarter. If revenues fall below our expectations, we will not be able to reduce our spending rapidly in response to such a shortfall. This will adversely affect our operating results.

Our Profitability May Not Be Sustainable.

It is critical to our success that we continue to expend financial and management resources to develop AutoMall brand awareness and loyalty through marketing and promotion, expansion of our member dealer network, expansion of our Mall stores and expansion of our other services. As a result, we expect that our operating expenses will increase significantly during the next several years, especially in sales and marketing. With increased expenses, we will need to generate significant additional revenues to achieve profitability. Our revenues are derived primarily from member dealer fees (see “We Rely Heavily on Member Dealers” below). If we are unable to obtain the number of member dealer fees at our price levels, we may not achieve or sustain profitability, and, if we are able to achieve profitability in any period, we may not be able to sustain or increase profitability on a quarterly or annual basis.

We May Particularly Be Affected by General Economic and Seasonal Conditions.

Purchases of new vehicles are typically discretionary for consumers and maybe particularly affected by negative trends in the general economy. Since our incorporation, sales of vehicles in the United States have been at historically high levels. There is no guarantee that sales of vehicles will stay at their current levels. The success of our operations depends to a significant extent upon a number of factors relating to discretionary consumer spending, including economic conditions (and perceptions of such conditions by consumers) affecting disposable consumer income (such as employment, wages and salaries, business conditions, interest rates, availability of credit and taxation) for the economy as a whole and in regional and local markets where we operate. In addition, because the purchase of a vehicle is a significant investment and is relatively discretionary, any reduction in disposable income in general may affect us more significantly than companies in other industries. Finally, vehicle purchasing in the U.S. is strongest in the Spring and Summer months. Due to the foregoing factors, we believe that quarter-to-quarter comparisons of our results of operations are not a good indication of our future performance.

We Have a New and Unproven Business Model.

The manner in which we conduct our business and charge for our services is new and unproven. The model depends upon our ability to generate revenue streams from multiple sources through our mall sites, including:

· fees paid by member dealers for monthly service;

· fees paid by companies in industries related to vehicles such as insurance and financing industries;

· fees paid by providers of extended service contracts; and

· fees paid by manufacturers of after-market products like navigational systems.

In order for us to be successful, we must have consumers visit our AutoMall mall sites regularly to increase the likelihood that they will use our service when they are interested in buying a vehicle or a related product or service. Therefore, we must not only develop services that directly generate revenue, but also provide information offerings that attract consumers to our Mall sites frequently. We will need to develop new offerings in each of these areas as consumer preferences change and new competitors emerge. We cannot ensure that we will be able to provide consumers with an acceptable blend of services and informational offerings. We provide information offerings without charge, and we may not be able to generate sufficient services revenue to pay for these offerings. Accordingly, we are not sure our business model will be successful or that we can sustain revenue growth or be profitable.

We Are in an Intensely Competitive Market.

The market for the purchase of vehicles and vehicle-related products and services is intensely competitive, and we expect competition to increase significantly. Barriers to entry in the retail mall space are relatively low, and thus we may face competitive pressures from numerous new entrants, like regional car dealers, who attempt to replicate our in-Mall stores. We also expect competition from non-traditional sources, like Internet web sites designed to sell cars. Currently, we believe our most significant Internet competitors are AutoWeb.com and Autobytel.com. We could face competition in the future from vehicle manufacturers, large dealer groups or traditional media companies, such as newspaper, television and radio companies, many of which currently operate a Web site. In addition to direct competitors, we also compete indirectly with vehicle brokerage firms, discount warehouse clubs and automobile clubs. We believe that the principal competitive factors in attracting consumers to our retail mall locations are:

· a positive vehicle purchasing experience for the consumer;

· brand awareness and loyalty;

· breadth of selections;

· ease of use;

· having adequate geographic coverage of member dealers;

· Kiosk information coupled with the “human touch”; and

· quality of content, other service offerings and customer service.

We believe that the principal competitive factors in attracting member dealers, other automotive-related vendors and advertisers include:

· the volume of our AutoMall mall site traffic;

· our brand awareness and loyalty;

· the demographics of our consumers; and

· the cost effectiveness of purchase inquiries, and ultimately purchasers, we deliver to our dealers.

Many existing car dealerships and other potential competitors have longer operating histories in the car sales market, greater name recognition, larger consumer bases and significantly greater financial, technical and marketing resources. These competitors may be able to undertake more extensive marketing campaigns for their brand, products and services, adopt more aggressive pricing policies or make more attractive offers to potential employees. Furthermore, our existing and potential competitors may develop a retail mall offering that equals or exceeds the quality of our retail mall offering, or that achieves greater market acceptance. We cannot assure you that we will be able to compete successfully against our current or future competitors or that competition will not have a material adverse effect on our business, results of operations and financial condition.

We Rely Heavily on Member Dealers.

We derive the majority of our revenues from member dealer fees (an annual, up-front payment from member dealers), and we expect to continue to do so for the foreseeable future. Our business plan projects that we will receive approximately 75% of our revenues in 1999 from member dealer fees. Our business plan also assumes that dealers will pay multiple member fees for multiple Mall site consumer bases. Consequently, our business is highly dependent on consumers' use of AutoMall mall sites to purchase vehicles so that member dealers will achieve a satisfactory return on their investment in the AutoMall program. The success of our business strategy depends on our member dealers' adherence to our consumer-oriented sales practices. We will devote significant efforts and resources to certifying and supporting participating member dealers in practices that are intended to increase consumer satisfaction. Our inability to certify and support member dealers effectively, or member dealers' failure to adopt such practices, respond rapidly and professionally to vehicle purchase inquiries, or sell vehicles in accordance with our marketing strategies, could result in low consumer satisfaction and materially adversely affect our business, results of operations and financial condition.

We Must Maintain Dealer Turnover within Acceptable Limits.

To maintain and increase our network of member dealers, we must ensure that the rate of turnover of our member dealers remains within acceptable limits. We believe that we must closely monitor our attrition rate over time as our member dealer network stabilizes. Nevertheless, we cannot assure you that we will be able to maintain the level of dealer attrition within acceptable limits, and our failure to do so could materially and adversely affect our business, results of operations and financial condition.

We Need to Build Strong Brand Loyalty.

We believe that establishing and maintaining our brand loyalty is critical to attract consumers, member dealers, automotive-related vendors and advertisers. Furthermore, we believe that the importance of brand loyalty will increase as low barriers to entry encourage the proliferation of competing mall sites. In order to attract and retain consumers, member dealers, advertisers and partners, and in response to competitive pressures, we intend to increase spending substantially to create and maintain brand loyalty among these groups. We plan to accomplish this by expanding our current advertising campaigns and by conducting advertising campaigns in traditional forms of media, such as newspaper, radio and television. We believe that advertising rates, including the cost of our online advertising campaigns, could increase substantially in the future. If our branding efforts are not successful, our business, results of operations and financial condition will be materially and adversely affected. Promotion and enhancement of the AutoMall brand will also depend, in part, on our success in consistently providing a high-quality consumer experience for purchasing vehicles and related products, and providing relevant and useful information and a quality "purchase experience." If consumers, member dealers, automotive-related vendors and advertisers do not perceive the AutoMall service offerings to be of high quality, or if we introduce new services or enter into new business ventures that are not favorably received by such groups, the value of our brand could be impaired or diluted. Such brand impairment or dilution could decrease the attractiveness of AutoMall to one or more of these groups, which could materially and adversely affect our business, results of operations and financial condition.

We Need to Continue to Develop Automall Service Offerings.

To remain competitive we must continue to enhance and improve the ease of use, responsiveness, functionality and features of the AutoMall sites and develop new services in addition to continuing to improve the consumer purchasing experience. These efforts may require the development or licensing of increasingly complex technologies, including new Kiosks. We may not be successful in introducing new features, functions and services, and these features, functions and services may not achieve market acceptance or enhance our brand loyalty. If we fail to develop and introduce new features, functions or services effectively, it could have a material adverse effect on our business, results of operations and financial condition.

We Need to Manage Our Growth.

To manage our potential growth, we must continue to implement and improve our operational and financial systems, and must expand, train and manage our employee base. Our ability to identify and train qualified AutoMall sales associates is critical to our success and we cannot ensure that we will be able to identify, recruit and train such individuals. Though each one of our senior executives has been in the vehicle sales business for many years, this is the first time that these executives are working together within one company. We can not assure you that we will be able to manage the expansion of our operations effectively, that our systems, procedures or controls will be adequate to support our operations or that our management will be able to fully exploit the market opportunity for our services. Any inability to manage growth effectively could have a material adverse effect on our business, results of operations and financial condition.

We Face Risks Associated with Government Regulation.

There are numerous state laws regarding the sale of vehicles. In addition, government authorities may take the position that state or federal franchise laws, vehicle brokerage laws, insurance licensing laws, motor vehicle dealer laws or related consumer protection or product liability laws apply to aspects of our business. If our relationship or written agreement with our member dealers were found to be a "franchise" under federal or state franchise laws, we could be subjected to other regulations, such as franchise disclosure, registration requirements and limitations on our ability to effect changes in our relationships with our member dealers. We believe that our service does not qualify as a vehicle brokerage activity and therefore state broker licensing requirements do not apply to us. However, in the event that a state determines that we are acting as a broker, we may be required to comply with burdensome licensing requirements or terminate our operations in that state. In each case, our business, results of operations and financial condition could be materially and adversely affected. It is unclear how the various states will interpret the laws regarding our existing business or any future changes to our business.

We Rely on Intellectual Property and Proprietary Rights.

We regard substantial elements of our Mall site as proprietary and attempt to protect them by relying on trademark, service mark, copyright and trade secret laws, restrictions on disclosure and transferring title and other methods. We also generally enter into confidentiality agreements with our employees and consultants and with third parties in connection with our license agreements. Such confidentiality agreements generally seek to control access to, and distribution of, our technology, documentation and other proprietary information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary information without authorization or to develop similar technology independently. Although we have not conducted any comprehensive searches, we are not aware that the name "AutoMall Online" is in use in any other region in the United States. We have not researched the effect of the use of the name "AutoMall" by other companies on our trademark or the impact of this use on our ability to obtain the mark in other countries. We also cannot ensure that the steps that we have taken will prevent misappropriation or infringement of our proprietary information, which could have a material adverse effect on our business, results of operations and financial condition. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or trademarks or to determine the validity and scope of the proprietary rights of others. Such litigation might result in substantial costs and diversion of resources and management attention.

We Face Year 2000 Risks.

The so called “Year 2000” issue refers to the potential for system and processing failures of date-related data resulting from computer-controlled systems using two digits rather than four to define the applicable year. For example, computer programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices or engage in similar normal business activities. We may be affected by Year 2000 issues related to non-compliant information technology ("IT") systems or non-IT systems operated by third parties.

Need for Additional Capital.

If the minimum number of shares contemplated under this Memorandum are sold, we anticipate that the proceeds raised will only last approximately three to six months and, therefore, we would expect to engage in additional financing at such time. However, if the maximum number of shares contemplated under this Memorandum are sold, we anticipate that the proceeds raised will last approximately 12 months, at which time we would expect to engage in additional financing at such time. Moreover, failure to raise the full amount of this offering may have a material adverse impact on our business. There can be no assurance that sufficient additional funds can be raised on favorable terms or that, if raised, such additional funds will be sufficient to enable us to accomplish our business goals. We may need other sources of capital but there is no assurance that such capital will be available.

No Public Market; Arbitrary Determination of Offering Price.

The shares of Common Stock issued pursuant to this offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, in reliance upon exemptions for limited offerings. Offerees will be asked to represent and warrant in their Subscription Agreements that they are acquiring the shares for their own account, and because of requirements in certain states, that they will not make any resales or other dispositions of the shares by means of any "general solicitation" or "general advertisement." No public market or established trading arrangements exists for the Common Stock. No such market or trading is anticipated to occur after this offering has been completed. Any Offeree purchasing shares of the Company's Common Stock in this offering who wants to sell its shares will have to rely on its own ability to find an interested purchaser. Moreover, because the Company is an early stage company, the offering price of the shares has been arbitrarily determined by us.

Lack of Dividends.

The Company has not paid and does not expect to pay any cash or stock dividends in the foreseeable future.

Dilution.

You will experience immediate, substantial dilution in the net tangible book value of your investment from this financing and any future financings and stock option grants.

Control.

Upon the completion of this offering, the Company's present directors and executive officers and their respective affiliates will beneficially own approximately 75% to 95% of the outstanding Common Stock depending upon the number of Units sold. As a result, these stockholders, if they act together, will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. Such concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of the Company.

Assumptions Underlying Business Plan.

The Company's Business Plan is based upon numerous assumptions that may later prove to be incorrect. The Company's ability to adhere to the Business Plan will depend upon the success of this Offering and other factors that are beyond the Company's control. Likewise, management is not bound to follow the Business Plan and may elect to adopt other strategies based upon changes in circumstances. The financial projections contained in the Business Plan are based entirely upon assumptions and should not be considered as a forecast of actual revenues. Actual operating results may be materially different.

RESTRICTIONS ON TRANSFER OF SECURITIES

The shares of Common Stock offered hereby have not been registered under the Securities Act, and are offered for sale only to a limited number of persons that represent the shares of Common Stock purchased are being acquired by each such person for his or her own account, for investment, and not with a view to, or for sale in connection with, any distribution thereof or with any present intention of selling or otherwise transferring the shares of Common Stock or any interest therein. Subscribers of shares of Common Stock will be required to agree in writing that the shares of Common Stock will not be sold, transferred, pledged or otherwise disposed of in the absence of either an effective registration statement covering such shares of Common Stock under the Securities Act, and relevant state securities laws, or an opinion of counsel acceptable to the Company that registration is not required under the Securities Act or under the securities laws of any state. The certificates representing the shares of Common Stock have not been registered under the Securities Act and refer to the restrictions on transferability and sale of such shares of Common Stock. In addition, a notation will be made in the appropriate records of the Company so that transfers of such shares of Common Stock will not be effective without compliance with those restrictions.

In view of the above restrictions, an investor must continue to bear the economic risk of his or her investment in the shares for an indefinite period of time.

FIDUCIARY RESPONSIBILITY AND INDEMNIFICATION

The officers of the Company are accountable to the stockholders as fiduciaries and consequently, must exercise good faith and integrity in handling Company affairs.

Some courts have held, in appropriate circumstances, that a stockholder may institute legal action on behalf of himself or all other similarly situated stockholders to recover damages for a breach by an officer of his or her fiduciary duties, or on behalf of the Company to recover damages from the officers or a third party, where the officers have failed or refused to take action on behalf of the Company.

The nature of the fiduciary duties of officers is a rapidly developing and changing area of law. Stockholders who believe that breaches of fiduciary duties by an officer have occurred should consult their own counsel. However, if the officers fail to perform their obligations as a fiduciary, there can be assurance that adequate remedies will be available to the stockholders.

As permitted by Delaware law, the Company's Articles of Incorporation contain a provision limiting the personal liability of a director of the Company in connection with a breach of fiduciary duty. The Company's By-Laws also contain a provision whereby the Company undertakes to indemnify its officers and director to the fullest extent permitted by law.

TO THE EXTENT THAT THESE INDEMNIFICATION PROVISIONS INCLUDE INDEMNIFICATION FOR LIABILITY ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, SUCH INDEMNIFICATION IS, IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, CONTRARY TO PUBLIC POLICY AND, THEREFORE UNENFORCEABLE.

USE OF PROCEEDS

	MINIMUM	MAXIMUM
Gross Proceeds Raised	$641,000	$3,205,000
Sales & Marketing	$100,000	$250,000
Capital Investment	$441,000	$2,705,000
Working Capital – General Corporate	$100,000	$250,000
TOTAL USE OF PROCEEDS	$641,000	$3,205,000

These estimates are based on the sale of 100,000 shares of Common Stock (Minimum) and 500,000 shares of Common Stock (Maximum), respectively. If less funds are raised, the Company will have to scale back its activities, which would result in significant changes to the above allocations. Although management believes that the net proceeds from this Offering will last approximately 12 months assuming the sale of 500,000 shares of Common Stock, the Company is unable to predict the precise length of time for which the net proceeds from this Offering, if fully subscribed, will sustain the Company's operations and product development efforts.

ANTICIPATED FUTURE FINANCING ACTIVITIES

The Company currently plans to engage in additional financing activities. Such financings may occur within the next six to nine months and may involve raising funds from one or more venture capital firms. The Company's Business Plan, dated March 1999, is predicated on the Company raising funding from a single or a related series of such financing transactions.

BY-LAWS

AUTOMALL ONLINE, INC.

ARTICLE 1 - Stockholders

1.1 Place of Meeting. All meetings of stockholders shall be held at such place within or without the State of Delaware as may be designated from time to time by the Board of Directors or the President or, if not so designated, at the registered office of the corporation.

1.2 Annual Meeting. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held at such date, time and place as may be fixed by the Board of Directors or the President. If this date shall fall upon a legal holiday at the place of the meeting, then such meeting shall be held on the next succeeding business day at the same hour. If no annual meeting is held in accordance with the foregoing provisions, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. If no annual meeting is held in accordance with the foregoing provisions, a special meeting may be held in lieu of the annual meeting, and any action taken at that special meeting shall have the same effect as if it had been taken at the annual meeting, and in such case all references in these By-Laws to the annual meeting of the stockholders shall be deemed to refer to such special meeting.

1.3 Special Meetings. Special meetings of stockholders may be called at any time by the President, the Board of Directors or the holders of a majority of the outstanding shares of the Common Stock. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4 Notice of Meetings. Except as otherwise provided by law, written notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notices of all meetings shall state the place, date and hour of the meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. The notice of any meeting of stockholders may be delivered via facsimile transmission, telegram or telex. If such notice is delivered via facsimile transmission, telegram or telex, notice shall be deemed given at the time such transmission is sent.

1.5 Voting List. The officer who has charge of the stock ledger of the corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, at a place within the city where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and may be inspected by any stockholder who is present.

1.6 Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the holders of a majority of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business.

1.7 Adjournments. Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these By-Laws by the stockholders present or represented at the meeting and entitled to vote, although less than a quorum, or, if no stockholder is present, by any officer entitled to preside at or to act as Secretary of such meeting. It shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

1.8 Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided in the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders, or to express consent or dissent to corporate action in writing without a meeting, may vote or express such consent or dissent in person or may authorize another person or persons to vote or act for him by written proxy executed by the stockholder or his authorized agent and delivered to the Secretary of the corporation. No such proxy shall be voted or acted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.

1.9 Action at Meeting. When a quorum is present at any meeting, the holders of a majority of the stock present or represented and voting on a matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority of the stock of that class present or represented and voting on a matter) shall decide any matter to be voted upon by the stockholders at such meeting, except when a different vote is required by express provision of law, the Certificate of Incorporation or these By-Laws. Any election by stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote at the election.

1.10 Action without Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders of the corporation may be taken without a meeting, without prior notice and without a vote, if an unanimous consent in writing, setting forth the action so taken, is signed by all of the holders of outstanding stock.

ARTICLE 2 - Directors

2.1 General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law, the Certificate of Incorporation, as amended from time to time, or these By-Laws. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.

2.2 Number. The number of directors which shall constitute the whole Board of Directors shall not be less than one. The number of directors may be increased or decreased at any time and from time to time either by the stockholders or by a majority of the directors then in office, pursuant to these By-Laws and the Certificate of Incorporation.

2.3 Tenure, Election and Qualification. The directors shall be elected at the annual meeting of stockholders by such stockholders as have the right to vote on such election. At each annual meeting of stockholders, directors elected to succeed those whose terms are expiring shall be elected for a term of office expiring at the annual meeting of stockholders held in the third year following their election and until their respective successors are elected and qualified, or until such director's earlier death, resignation or removal. Directors need not be stockholders of the corporation.

2.4 Enlargement of the Board. The number of directors may be increased at any time and from time to time by affirmative vote of the holders of a majority of the shares of the Corporation's capital stock entitled to vote thereon or by a majority of the directors then in office.

2.5 Vacancies. Unless and until filled by the stockholders, any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement of the Board, may be filled by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next annual meeting of stockholders and until his successor is elected and qualified, or until his earlier death, resignation or removal.

2.6 Resignation. Any director may resign by delivering his written resignation to the corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt, unless it is specified to be effective at some other time or upon the happening of some other event.

2.7 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place, either within or without the State of Delaware, as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

2.8 Special Meetings. Special meetings of the Board of Directors may be held at any time and place, within or without the State of Delaware, designated in a call by any single member of the Board of Directors or by the President of the Company.

2.9 Notice of Special Meetings. Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (i) by giving notice to such director in person or by telephone at least 48 hours in advance of the meeting, (ii) by sending a facsimile, telegram or telex, or delivering written notice by hand, to his last known business or home address at least 48 hours in advance of the meeting, or (iii) by delivering written notice to his last known business or home address at least 72 hours in advance of the meeting by a nationally recognized overnight service (receipt requested). A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.

2.10 Meetings by Telephone Conference Calls. Directors or any members of any committee designated by the directors may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

2.11 Quorum. A majority of the total number of the whole Board of Directors shall constitute a quorum at all meetings of the Board of Directors. In the event one or more of the directors shall be disqualified to vote at any meeting, then the required quorum shall be reduced by one for each such director so disqualified; provided, however, that in no case shall less than one-third (1/3) of the number so fixed constitute a quorum. In the absence of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.12 Action at Meeting. At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of those present shall be sufficient to take any action, unless a different vote is specified by law, the Certificate of Incorporation or these By-Laws.

2.13 Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee of the Board of Directors may be taken without a meeting, if all members of the Board or committee, as the case may be, consent to the action in writing, and the written consents are filed with the minutes of proceedings of the Board or committee.

2.14 Removal. Any one or more or all of the directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except that the directors elected by the holders of a particular class or series of stock may be removed without cause only by vote of the holders of a majority of the outstanding shares of such class or series.

2.15 Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of the General Corporation Law of the State of Delaware, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these By-Laws for the Board of Directors.

2.16 Compensation of Directors. Directors may be paid such compensation for their services as the Board of Directors may from time to time determine and Directors shall be reimbursed for expenses (including travel expenses) incurred to attend meetings. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary corporations in any other capacity and receiving compensation for such service.

ARTICLE 3 - Officers

3.1 Enumeration. The officers of the corporation shall consist of a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including a Chairman of the Board, a Vice-Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers, and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2 Election. The President, Treasurer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.

3.3 Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4 Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these By-Laws, each officer shall hold office until his successor is elected and qualified, unless a different term is specified in the vote choosing or appointing him, or until his earlier death, resignation or removal.

3.5 Resignation and Removal. Any officer may resign by delivering his written resignation to the corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

Any officer appointed by Board of Directors may be removed at any time, with or without cause, by vote of a majority of the entire number of directors then in office.

Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following his resignation or removal, or any right to damages on account of such removal, whether his compensation be by the month or by the year or otherwise, unless such compensation is expressly provided in a duly authorized written agreement with the corporation.

3.6 Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President, Treasurer and Secretary. Each such successor shall hold office for the unexpired term of his predecessor and until his successor is elected and qualified, or until his earlier death, resignation or removal.

3.7 Chairman of the Board and Vice-Chairman of the Board. The Board of Directors may appoint a Chairman of the Board. If the Board of Directors appoints a Chairman of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. If the Board of Directors appoints a Vice-Chairman of the Board, he shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be vested in him by the Board of Directors.

3.8 President. Unless the Board of Directors otherwise determines, the President shall be the Chief Executive Officer of the corporation. The President shall, subject to the direction of the Board of Directors, have general charge and supervision of the business of the corporation. Unless otherwise provided by the Board of Directors, he shall preside at all meetings of the stockholders, if he is a director, at all meetings of the Board of Directors. The President shall perform such other duties and shall have such other powers as the Board of Directors may from time to time prescribe.

3.9 Vice Presidents. Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President designated as the Chief Operating Officer of the Corporation shall perform the duties of the President and when so performing shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

3.10 Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board of Directors or the President may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary, (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.

In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary secretary to keep a record of the meeting.

3.11 Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned to him by the Board of Directors or the President. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these By-Laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation.

The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the President or the Treasurer may from time to time prescribe. In the event of the absence, inability, or refusal to act of the Treasurer, the Assistant Treasurer, (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.

3.12 Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

ARTICLE 4 - Capital Stock

4.1 Issuance of Stock. Unless otherwise voted by the stockholders and subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any unissued balance of the authorized capital stock of the corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine.

4.2 Certificates of Stock. Every holder of stock of the corporation shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of shares owned by him in the corporation. Each such certificate shall be signed by, or in the name of the corporation by, the Chairman or Vice-Chairman, if any, of the Board of Directors, or the President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation. Any or all of the signatures on the certificate may be a facsimile.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the By-Laws, applicable securities laws or any agreement among any number of shareholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

4.3 Transfers. Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to applicable law, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these By-Laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-Laws.

4.4 Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

4.5 Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders or to express consent (or dissent) to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

ARTICLE 5 - Indemnification

5.1 Indemnification in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation. (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such conduct was unlawful.

(b) The Corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such conduct was unlawful.

5.2 Indemnification in Actions, Suits or Proceedings by or in the Right of the Corporation. (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director of officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interest of the Corporation. No such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

(b) The Corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation. No such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

5.3 Authorization of Indemnification. Any indemnification under this Article 5 shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person or persons have met the applicable standard of conduct set forth in Sections 5.1 and 5.2 hereof. Such determination shall be made (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iii) by the stockholders.

5.4 Advancement of Expenses. The Corporation shall, if so requested by an officer or director, advance expenses (including attorneys' fees) incurred by a director or officer in advance of the final disposition of such action, suit or proceeding upon the receipt of an undertaking by or on behalf of the director of officer to repay such amount if it shall ultimately be determined that such director or officer is not entitled to indemnification.

The Corporation may advance expenses (including attorneys' fees) incurred by an employee or agent in advance of the final disposition of such action, suit or proceeding upon such terms and conditions, if any, as the Board of Directors deems appropriate.

ARTICLE 6 - General Provisions

6.1 Fiscal Year. The fiscal year of the Corporation shall be the twelve months ending on December 31 of each calendar year.

6.2 Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board of Directors.

6.3 Waiver of Notice. Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these By-Laws, a waiver of such notice either in writing signed by the person entitled to such notice or such person's duly authorized attorney, or by telegraph, cable or any other available method, whether before, at or after the time stated in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice.

6.4 Voting of Securities. Except as the directors may otherwise designate, the President or Treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at, any meeting of stockholders or shareholders of any other corporation or organization, the securities of which may be held by this corporation.

6.5 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

6.6 Certificate of Incorporation. All references in these By-Laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

6.7 Transactions with Interested Parties. All contracts or transactions between the Corporation and one or more of the directors or officers, or between the Corporation and any other corporation, partnership, association, another organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be approved by a majority of the outside directors of the Corporation before the Corporation shall be permitted to perform its obligations under such contracts or transactions.

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

6.8 Severability. Any determination that any provision of these By-Laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-Laws.

6.9 Pronouns. All pronouns used in these By-Laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

ARTICLE 7 - Amendments

7.1 By the Board of Directors. These By-Laws may be altered, amended or repealed or new by-laws may be adopted by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present.

7.2 By the Stockholders. These By-Laws may be altered, amended or repealed or new by-laws may be adopted at any regular meeting of stockholders, or at any special meeting of stockholders, provided notice of such alteration, amendment, repeal or adoption of new by-laws shall have been stated in the notice of such special meeting by an affirmative vote of the holders of a majority of the shares of the Corporation's Common Stock and the holders of a majority of the shares of the Corporation's Preferred Stock, irrespective of class or series, with the Common Stock and the Preferred Stock voting as separate class.

SUBSCRIPTION AGREEMENT

Name(s):

Address:

Telephone:

FAX:

AUTOMALL ONLINE, INC.

499 South Pickett Street

Alexandria, VA 22304

Ladies and Gentlemen:

1. Receipt of Memorandum. I hereby acknowledge receipt of the Confidential Private Placement Memorandum dated March ___, 1999, relating to the offer of _________ shares common stock, par value $0.01 per share (the "Common Stock"), of AutoMall Online, Inc. (the "Company").

2. Receipt of Business Plan. I hereby acknowledge receipt of the Company's Business Plan dated March ___, 1999.

3. Subscription and Payment. Upon the terms of this Subscription Agreement, I hereby subscribe for and agree to purchase _____ shares of the Company's Common Stock at a per share price of $___. I have enclosed with this Subscription Agreement payment in full in the form of a check, or evidence of a completed wire transfer to the Company's bank account.

4. Irrevocable: Acceptance or Rejection of Subscription. This subscription is irrevocable and may not be withdrawn. The subscription may be accepted or rejected for any reason, in the Company's sole discretion. I will be notified within 30 days whether my subscription is accepted or rejected, or if further information is needed. If my subscription is rejected, this Subscription Agreement and the enclosed check or wired funds will be returned promptly to me, without interest or deductions, and neither I nor the Company will have any obligations under this Subscription Agreement. If my subscription is accepted, this Subscription Agreement will become a binding contract between me and the Company, and the Company will issue to me a certificate evidencing my ownership of the shares of Common Stock being purchased by me.

5. Investment Representations. To induce the Company to sell shares of its Common Stock to me, and with the understanding that it is relying on the following representations and warranties, I hereby make the following representations and warranties to the Company:

a. Resident. I am a resident of the Commonwealth of ___________________.

b. Common Stock Not Registered Under Securities Laws. I understand that the offer is being made pursuant to an exemption from registration with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"), for limited and non-public offerings, and pursuant to similar exemptions under certain state securities laws. Consequently, the Confidential Private Placement Memorandum from the Company and terms of the offer have not been subject to review or comment by the SEC, the securities administrator of any state, or any other regulatory authority.

c. Common Stock Acquired for Own Account. I am acquiring shares of the Company's common stock for my own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same.

d. Restrictions on Transfer of Common Stock. I will not make any resales or other dispositions of the shares by means of any "general solicitation" or "general advertisement". I understand that I will not be able to transfer or make any other disposition of the shares unless such transfer or disposition is registered or qualified under all applicable federal or state securities laws, or unless I have first delivered to the Company written opinion of qualified counsel, satisfactory to the Company, that such registration or qualification is not required. I understand that the certificate representing my common stock will bear a legend evidencing the restrictions on transfer described herein.

e. Access to Information. I have carefully reviewed the Confidential Private Placement Memorandum. Any and all additional information requested by me has been made available to me by the Company, and I have had an opportunity to question and receive satisfactory answers from the officers of the Company in connection with my proposed purchase of Common Stock.

f. Experience: Ability to Risk Loss. I have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of this investment. I understand that an investment in the common stock involves high risk. I am capable of bearing all of the economic risks and burdens of this investment, including the possible loss of all capital contributed by me. I have no need for liquidity in this investment. I have carefully reviewed the disclosures concerning the Company and the risk factors contained in the Confidential Private Placement Memorandum, have read the Business Plan and have made detailed inquiries concerning the Company, its business and its personnel; the officers of the Company have made available to me any and all written information that I have requested and have answered to my satisfaction all inquiries made by me; and I have adequate net worth and means of providing for my current needs and contingencies to sustain a complete loss of my investment in the Company; my overall commitment to investments that are not readily marketable is not disproportionate to my net worth and my investment in the shares of Common Stock will not cause such overall commitment to become excessive.

g. Accredited Investor I am an Accredited Investor within the definition set forth in Rule 501(a) of the Securities Act, substantially as follows (check any and all that apply as to why subscriber is an Accredited Investor):

"Accredited investor" shall mean any person who comes within any of the following categories, or who the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person:

__________

(1) Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefits of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

__________

(2) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

__________	(3) Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
__________	(4) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
__________	(5) Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000;
__________	(6) Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
__________	(7) Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in §230.506(b)(2)(ii); and
__________	(8) Any entity in which all of the equity investors are accredited investors. (Excerpted from Rule 501(a) of the Securities Act)

h. No Assurances. The Company has not made any representation or other assurance to me concerning the percentage of profit or the amount or type of consideration, profit or loss (including tax deductions), if any, to be realized by me as a result of an investment in the Common Stock.

i. Capacity and Authority to Contract. The signatory hereto has full power and authority to execute, deliver and perform this Subscription Agreement. All corporate or other action necessary to authorize the execution, delivery and performance of this Subscription Agreement by the signatory hereto has been taken. This Subscription Agreement has been duly executed on behalf of the signatory hereto. I have full power and authority to enter into and to perform this Agreement in accordance with its terms. Any Subscriber that is a partnership or a corporation, represents that it has not been organized, reorganized or recapitalized specifically for the purpose of investing in the Company.

6. Miscellaneous.

(a) This Subscription Agreement may not be amended or assigned without the written agreement of both parties and compliance with applicable securities laws.

(b) This Subscription Agreement is governed by the laws of the State of Delaware.

{Signatures on following page.}

EXECUTED this day of , 1998.

Documents Required to be Enclosed

With this Subscription Agreement:

1. Check or evidence of wire transfer for full subscription amount.

2. Signed Stock Restriction Agreement.

SIGNED: ___________________________

Name:_______________________________

[Print]

Date:________________________________

ACCEPTED:

AutoMall Online, Inc.

By:__________________________________

Michael Field, Chief Executive Officer

EXECUTION COPY

STOCK RESTRICTION AGREEMENT

THIS STOCK RESTRICTION AGREEMENT (the "Agreement") is made as of the _____ day of __________, 1999 between AutoMall Online, Inc., a Delaware corporation (the "Company"), and _________________________ ("Investor").

For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Purchase of Shares. Pursuant to the terms of that certain Stock Subscription Agreement by and between the Company and Investor dated _____________, 1999, Investor was issued __________ shares of common stock of the Company, par value $0.01 per share (the "Common Stock") (such shares of Common Stock herein referred to as the "Shares"). Investor hereby agrees that the Shares shall be subject to the restrictions on transfer set forth in Section 2 of this Agreement and Investor agrees further that any additional shares of Common Stock acquired by him shall be subject to the terms, conditions and restrictions set forth in this Agreement, and such shares of Common Stock shall be deemed Shares.

2. Restrictions on Transfer. Investor shall not transfer any of the Shares, except by a transfer that meets the following requirements:

(a) Notice Requirement. If Investor proposes to transfer any Shares (the "Offered Shares"), Investor shall first give written notice of the proposed transfer (the "Transfer Notice") to the Company . The Transfer Notice shall name the proposed transferee(s) and state the number of shares to be transferred, the price per share and all other material terms and conditions of the transfer.

(b) Company's Right to Purchase. For 10 days following its receipt of such Transfer Notice, the Company shall have the right to purchase all or any lesser part of the Offered Shares at the price and upon the terms and conditions set forth in the Transfer Notice. In the event the Company elects to purchase any or all of the Offered Shares, it shall give written notice of its election to the Investor within such 10-day period, and the settlement of the sale on such Offered Shares shall be made as provided below in subsection (c).

(c) Settlement. If the Company elects to acquire any or all of the Offered Shares, the Company shall so notify Investor, and settlement shall be made at the principal office of the Company in cash within 30 days after the Company receives the Transfer Notice; provided, however, if the terms of payment set forth in Investor’s Transfer Notice were other than cash against delivery, the Company may pay for such Offered Shares on the same terms and conditions set forth in the Transfer Notice.

(d) Sales Free of Restrictions. If the Company elects not to purchase any or all of the Offered Shares, Investor may, not sooner than 11 nor later than 90 days following the Company’s receipt of the Transfer Notice, enter into an agreement with such unrelated transferee who is a bona fide purchaser for value providing for the closing of the transfer of the Offered Shares covered by the Transfer Notice within 30 days of the date of such agreement on terms and conditions not materially more favorable to Investor than those described in the Transfer Notice. Any proposed transfer on terms and conditions materially more favorable than those described in the Transfer Notice, as well as any subsequent proposed transfer of any of the Shares, shall again be subject to the right of first refusal of the Company and shall require compliance by Investor with the procedures described in this Section 2.

(e) Exempt Transactions. The following transactions shall be exempt from the provisions of this Section 2:

(i) Investor's transfer of any or all of his Shares, either during his lifetime or on death by will or by intestacy, to his immediate family or to a trust the exclusive beneficiaries of which are Investor, member(s) of the Investor's immediate family, or any combination thereof; provided, however, that no transfers made pursuant to any divorce or separation proceedings or settlements shall be exempt from this Section 2. "Immediate family" shall mean spouse, lineal descendant, father, mother, brother or sister of Investor; or

(ii) any transfer pursuant to a registration statement filed by the Company with the Securities and Exchange Commission.

Notwithstanding anything to the contrary contained elsewhere in this Section 2, except with respect to a transfer pursuant to this clause, any proposed transferee shall receive and hold such stock subject to the provisions of this Section 2, and must agree to be bound by the terms and conditions set forth herein, and there shall be no further transfer of such stock except in accordance with this Section 2.

(f) Termination of Right of Refusal. The foregoing right of first refusal shall terminate upon the closing of the first public offering of securities of the Company that is effected pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act.

3. Effect of Prohibited Transfer. The Company shall not be required to transfer on its books any of the Shares that have been sold or transferred in violation of any of the provisions set forth in this Agreement, or to treat as owner of such Shares or to pay dividends to any transferee to whom any such Shares shall have been so sold or transferred.

4. Restrictive Legend. All certificates representing Shares shall have affixed thereto a legend in substantially the following form, in addition to any other legends that may be required under federal or state securities laws:

"The shares of stock represented by this certificate are subject to restrictions on transfer, an option to purchase and a market stand-off agreement set forth in a certain Stock Restriction Agreement between the corporation and the registered owner of this certificate (or his predecessor in interest), and such Agreement is available for inspection without charge at the office of the Treasurer of the corporation."

5. Representations.

(a) Investor understands that (i) the Shares have not been registered under the Securities Act and are "restricted securities" within the meaning of Rule 144 under the Securities Act; (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are met; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

(b) A legend substantially in the following form will be placed on the certificate representing the Shares:

"The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, transferred or otherwise disposed of in the absence of an effective registration statement under such Act or an opinion of counsel satisfactory to the corporation to the effect that such registration is not required."

6. Adjustments for Stock Splits, Stock Dividends, etc.

(a) If from time to time there is any stock split-up, stock dividend, stock distribution or other reclassification of the Common Stock of the Company, any and all new, substituted or additional securities to which Investor is entitled by reason of his ownership of the Shares shall be immediately subject to the restrictions on transfer and other provisions of this Agreement in the same manner and to the same extent as the Shares.

(b) If the Shares are converted into or exchanged for, or stockholders of the Company receive by reason of any distribution in total or partial liquidation, securities of another corporation, or other property (including cash), pursuant to any merger of the Company or acquisition of its assets, then the rights of the Company under this Agreement shall inure to the benefit of the Company's successor, and this Agreement shall apply to the securities or other property received upon such conversion, exchange or distribution in the same manner and to the same extent as the Shares.

7. Market Standoff. Following the effective date of a registration statement of the Company filed under the Securities Act, for a period of time, not to exceed 180 days, specified by and to the extent requested by the Company and an underwriter of the Company's equity securities, the Subscriber shall not directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase, or otherwise transfer or dispose of (other than to a donee who agrees to be similarly bound) the shares of Common Stock purchased by the subscriber at any time during such period except Common Stock (or other securities) included in such registration.

Such agreement shall be applicable only to the first such registration statement of the Company that covers Common Stock (or other securities) to be sold on its behalf to the public in an underwritten offering.

As a condition precedent to the subscriber’s obligations under this Section 7, all officers and directors of the Company and all persons with registration rights with respect to the Company's capital stock shall enter into similar agreements.

8. Taxes. Investor acknowledges and agrees that the Company shall not pay on Investor’s behalf any federal, state or local taxes of any kind required by law and that all such taxes will be paid by Investor.

9. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.

10. Waiver. Any provision contained in this Agreement may be waived, either generally or in any particular instance, by the Board of Directors of the Company.

11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and Investor and their respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in Section 2 of this Agreement. The Company may assign its rights under this Agreement to a third party, provided such assignee agrees to be bound by all of the Company's obligations under this Agreement.

12. Notice. All notices required or permitted under this Agreement shall be in writing and shall be deemed effective upon delivery personally, by facsimile with proof of completed transmission or by overnight mail with proof of receipt, or upon deposit in the United States Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 12.

13. Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice-versa.

14. Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Investor.

15. Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Delaware.