99-053

Response May 9, 2000

REQUEST LETTER

Re: Internet Motor Vehicle Marketing Services

Dear NAME:

We are writing on behalf of our client, a national motor dealer company (the "Company"). The Company is the parent company of duly licensed motor vehicle dealerships ("Dealers") in a number of states. Through a single website owned by the Company (the "Website"), the Company has developed a mechanism whereby users of the Website can obtain general automotive information, and Dealers may market their inventory directly to users. The Website is designed and intended to provide an efficient and effective electronic means for users to communicate with Dealers, and to obtain information about a Dealer's motor vehicle inventory via the Internet. The Website will be operated and serviced by the Company, which will make it available to Dealers and Licensees (defined below). Other than certain of its subsidiary Dealers located in Utah, the Company itself has no place of business in Utah.

We respectfully request that you provide us with a written opinion of the Utah Motor Vehicle Enforcement Division (the "Division") that the Company's activities will not require licensing under Utah Code ' 41‑3‑201.5(1). That section provides that a person, "may not, for a fee, commission, or other form of compensation, arrange, offer to arrange, or broker a transaction involving the sale or lease of more than two new motor vehicles in any 12 consecutive month period, unless the person obtains a dealer license." To assist you in your analysis, we are providing an explanation of the Company's activities with the Licensees below, as well as the analysis of Utah law the Company urges you to adopt.

The Website is currently owned and operated by the Company. However, for corporate planning purposes, it is likely that the Company will at some future time transfer the Website to a wholly‑owned subsidiary of the Company.

The Company's Activities

The Company is the parent company of the Dealers. In order to provide some uniformity to the

Dealers' approach to customer relations and to promote brand recognition and loyalty, the

Company developed the technology for the Website and a proprietary lead management system

for use by its Dealers nationwide.

The Company has determined that it is in its best interest to develop the Website so that it may be utilized by as many American consumers as possible, regardless of their physical location. As the Company's brand becomes recognized throughout the country, the Website is likely to attract users wishing to purchase motor vehicles from all points within the country, without regard to whether such consumers live in the geographical vicinity of a Dealer. Therefore, in order to make access to online motor vehicle sales services available and convenient to consumers in the State of Utah ("Utah Users") who are not in the geographical vicinity of a Dealer, the Company intends to grant a license to duly licensed third party Utah motor vehicle dealers that are not affiliated with the Company ("Licensees"). Such Licensees will be permitted to market their vehicle inventory through the Website and manage leads through the Company's proprietary technology to the same extent as the Dealers.

Under the terms of a marketing and licensing agreement ("Marketing and Licensing Agreement') with the Licensees, the Company will agree to advertise the Licensee's inventory on the Website and make its proprietary technology available to Licensees. Such technology will include certain hardware that will be provided to the Licensees by the Company.

Utah Users who visit the Website will have the opportunity to research different makes and models of vehicles, and search the inventory of the Licensees. The information available to Utah Users will include vehicle pricing, specifications, stock photographs, etc. Prices for each Licensee's inventory will be supplied and controlled by the Licensee. Through the use of certain calculators on the Website, Utah Users will be able to estimate monthly payments, net equity on their trade‑ins, and cost of financing. Utah Users interested in purchasing or leasing a motor vehicle may reserve the vehicle through the Website's technology, and, if they wish, complete an online credit application for financing the vehicle. Once a Utah User reserves a vehicle on line from a Licensee's inventory, an Internet sales representative employed by the Licensee will contact the Utah User to arrange the sale.

The Company intends to be compensated by the Licensees on a volume basis. In other words, for each vehicle sold by a Licensee to a Utah User, the Licensee will pay the Company a flat dollar amount. The fee will be designed to allow the Company to recover its costs for providing the technological and marketing services it will be making available to Licensees, and earn a profit. Under no circumstances will any fee be paid by a Website user to either the Company or a Licensee.

Utah Law

Utah law provides that a Aperson, may not, for a fee, commission, or other form of compensation, arrange, offer to arrange, or broker a transaction involving the sale or lease of more than two new motor vehicles in any 12 consecutive month period, unless the person obtains a dealer license under Utah Code ' 41‑3‑202(1).@ Utah Code ' 41‑3‑201.5(1).

The Company believes that its activities with respect to its Website technology will fall outside the licensing requirement for motor vehicle dealers. The Company will not be arranging, offering to arrange, or brokering a transaction involving the sale or lease of a motor vehicle. Furthermore, inasmuch as it will have no agency relationship with the Licensees, the Company will not have the ability to do any of these things on behalf of the Licensees. The Company will merely provide e‑commerce marketing technology to the Licensees. Therefore, the Company believes that it need not obtain a Utah dealer license. The Company will not participate in the actual sale or lease of any motor vehicles, nor will it have any involvement or control over the pricing of the Licensee's inventory. It will merely provide a means for Utah Users to locate a dealer that has the vehicle he or she is seeking. The Company will not be an agent of the consumer, will not be paid by the consumer, and will not negotiate the purchase for the consumer (activities which are typically associated with brokering). From the Company's perspective, the Website will be a conduit or platform (similar to the newspaper) via which Utah Users will be permitted to access directly the vehicle inventory of the Licensees who, with respect to Utah Users, will be duly licensed Utah motor vehicle dealers.

In many respects, the Company's Website will merely be providing the same service as a newspaper advertisement for specific inventory, but in real time. And because it will provide such information on a Areal time@ basis, that information will be more accurate and of more use to consumers. While the Company will be compensated, such compensation will flow from the Licensees as consideration for their license to use the Website and related technology. Under no circumstances will any monies be paid to the Company by Utah Users.

Because all Licensees who service Utah consumers will be duly licensed Utah motor vehicle dealers and because they (not the Company) will arrange, negotiate and consummate all sales or leases, the Company believes that no public policy purpose would be served by requiring it to obtain a Utah motor vehicle dealer license in order to permit Licensees to use the Website technology to market to Utah Users. Furthermore, the Company believes that the Utah motor vehicle dealer law was not intended to regulate the delivery of third party vendor services (such

as the Company's Website technology) provided by an entity that maintains no physical presence in Utah.

We would appreciate if you could provide us with a formal written opinion that the Company's activities will not require it to be licensed as a motor vehicle dealer under Utah law, either on the basis of our analysis above or on some other independent basis. Please respond directly to me at the address above. Also, if you have any questions or if you require further information, please do not hesitate to contact me at the number above.

Thank you for your attention to this matter. I look forward to hewing from you.

Very truly yours,

NAME

RESPONSE LETTER

May 9, 2000

Re: Motor Vehicle Dealer Licensing Requirements for Internet Activities

Dear NAME,

You describe activities to be performed by a national motor dealer company (the ACompany@), which plans to provide marketing and other services to licensed Utah motor vehicle dealers (ADealers@) through an Internet website. Customers would be able to access information on the Company=s website regarding vehicle pricing and Dealers= inventories. Customers could also use the Company=s website to complete an online credit application for financing the vehicle purchased from a Dealer. Given these and the other facts supplied in your letter, you ask whether the Company is required to obtain a Utah dealer=s license under Utah Code Ann. '41-3-201.5(1).

Utah Code Ann. '41-3-201.5(1) requires that A[a] person, may not, for a fee, commission, or other form of compensation, arrange, offer to arrange, or broker a transaction involving the sale or lease of more than two new motor vehicles in any 12 consecutive month period, unless the person is licensed under Subsection 41‑3‑202(1).@ For purposes of this opinion, we presume that the Company=s website will generate the sale of more than two new motor vehicles in any 12 consecutive month period. In addition, the Company will receive compensation from the Dealers for each sale originating from the Company=s website. The only question that remains regarding the licensing requirement is whether the Company, under the circumstances described, is deemed to Aarrange, offer to arrange, or broker@ the transactions originating from its website.

A Abroker@ is defined in Black=s Law Dictionary (5th ed. 1979) to include an agent employed to make bargains and contracts for a compensation, a middleman or negotiator between parties, a person dealing with another for the sale of property, or a person whose business it is to bring buyer and seller together. Your description of activities to be conducted by the Company differ from those activities an entity in the business of advertising would perform. An entity in the business of advertising is generally compensated for placing the advertisement and does not receive any additional compensation upon the completion of a transaction. Accordingly, we deem that the Company would be in business to bring a buyer and a seller of motor vehicles together and, accordingly, is a broker. As the Company would meet all the licensing conditions required under section 41-3-201.5(1), the Company must be licensed as a dealer under section 41-3-202(1).

If you have any other questions, please contact us.

For the Commission,

Marc B. Johnson

Commissioner

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