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Top News to Exchange Equity for Assets of Automotive Finance Corporation

January 24, 2001 Inc., a Canada-based provider of Internet and software solutions to the North American automotive industry, has signed a letter of intent with U.S.-based Automotive Finance Corporation (AFC), a division of ALLETE Corporation, to exchange a portion of its equity for AFC's Micro 21 assets, in an all-stock deal valued at US$1.8 million, subject to regulatory and Exchange approval.

Micro 21 provides AFC with a portfolio of dealer services to its 15,000 dealer-client base, including an F&I software solution designed to improve dealers' efficiency in the area of vehicle financing. As a result of this investment, CarBiz will be a primary provider of technology products to AFC.

AFC is the largest independent dealer floorplan financing company in North America, and is a wholly-owned subsidiary of ALLETE, a multi-services company based in Duluth, Minn. Over the past five years ALLETE's market presence has expanded significantly to more than $400 million in auto floorplan receivables.

"We are looking forward to a mutually beneficial relationship with," said John Fuller, CEO and president of AFC. "Many of our dealer clients currently require technology solutions and products that we do not offer; by selling Micro 21 to we will now be able to offer our 15,000 dealers comprehensive solutions that are cost effective and easily integrated."

"This transaction represents a tremendous opportunity for to introduce itself to a huge network of automobile dealers, and will enable us to bundle our solutions and products with AFC's solutions," said Carl Ritter, CEO of "Our technology and training products have excellent synergies with AFC, allowing us to aggressively grow our business with their 15,000 dealers."

The purchase price will be paid by the issuance of 2,500,000 Series A Units and 2,898,214 Series B Units of CarBiz, each at an ascribed price of $0.504 per unit. Each Series A Unit consists of one common share of CarBiz and one purchase warrant exercisable into one common share of CarBiz for a period of 12 months from closing date at a purchase price of $2.25 (Canadian). Each Series B Unit consists of one common share of CarBiz and one purchase warrant exercisable into one common share of CarBiz for a period of 24 months from closing date at a purchase price of $2.40 (Canadian).

Additonally, as part of the letter of intent, at the next annual general meeting of CarBiz, shareholders will be asked to approve the issuance of 4,601,786 purchase warrants to ALLETE exercisable into one common share of CarBiz for a period of 24 months from closing date at a purchse price of $2.40 (Canadian), subject to regulatory and Exchange approval.

A small group of shareholders who, as a collective group, hold approximately 8.55 million CarBiz shares will grant ALLETE a right of first refusal, for a period of 36 months from the closing date, to acquire additional shares.

About provides Internet and software solutions for the automotive industry. Its technology solutions offer a suite of dealer front-end management tools, and a complete e-commerce platform designed to connect financial institutions, credit bureaus, automobile dealers and consumers online.'s solutions are designed to allow consumers and dealers to establish a relationship via the Internet and other means, allowing consumers to search for dealers and vehicles, apply for vehicle financing and leasing, and access a variety of financing options.'s technology solutions are designed to increase automobile dealers' efficiency, improve their relationships with customers, expand their customer base by generating sales leads, and provide them with the tools needed to design, develop, and maintain their own Web site.'s solutions are currently in use by more than 6,000 North American automobile dealers.

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