Knowledge report

On Oct. 20, 1997 Bill Cooper and I met at the Clearwater Charter Committee in order to sort out the problems of Trade Net having used TOP Marketing's merchant account way over the originally agreed upon time and accumulating serious potential liabilities in terms of potential charge backs.

In order to halt the escalating liabilities of TOP and myself personally, I had closed the TOP (TradeNet Tools) merchant account and froze the money deposited on this account so that I was able to cover charge backs.

Bill Cooper wanted to get that money. I requested a personal guarantee (since I am liable for all charge backs personally) and a 50,000 dollar bond to cover all potential charge backs.

I also notified him that the transition CSW (see enclosed pg 1 & 2) which was included in the WISE mediation agreement included $ 5294.37 in In House Credits and 3945.77 in Refund Requests which TradeNet was supposed to honor (these two amounts were deducted from the amount TradeNet paid for the inventory). In fact however these refunds (charge backs) and requests were addressed to TOP and handled by me. Bill Cooper and Brendan Haggerty got lists of the names which constitute these refunds (in Housed credits). They however did not take care of them. Therefore I had to pay these refunds and take the money from the frozen account (total 9240.14).

In the time from August 10 to present TradeNet handled all shipments and orders regarding TOP's "TradeNet tools account". TradeNet has the proofs of shipment and the signatures on the order forms. Therefore TradeNet (Bill Cooper) promised to take care of charge backs which occurred during that time period. Whenever a charge back request was sent to TOP, I immediately faxed it to Michelle at TradeNet (per instructions given by Cooper and Haggerty). However I found out that charge backs were just simply not handled.

I got information from the now former employee of TradeNet (Michelle) that she and Sue Blackman (another employee of TradeNet) were ordered by her seniors (Cooper?) to NOT fight charge backs on the TradeNet tools account. This order causes damage to TOP marketing and me since TradeNet has all the data to fight charge backs plus TradeNet has the responsibility for this account since TradeNet sold the merchandise.

I therefore request as before a personal guarantee from Bill Cooper for all charge backs from Aug. 10, 1997 to present time. Any release of funds from the frozen account can only be made in exchange with a 50,000 dollar bond which can be used to pay charge backs in case they are not being successfully fought by TradeNet or paid.

The problem of potential charge backs is even aggravated because of a "5$ voucher rebate campaign" which seems to be causing more upsets amongst TradeNet distributors (see attached card with a complaint I received together with a T shirt). I request information on this campaign and how it can effect the TradeNet Tools account.

I have requested TradeNet to pay the $ 25,000 I had to pay to the Attorney General of Oregon. The money has not been paid to me. Since TradeNet did not negotiate the settlement for TOP (as was agreed upon), but I had to negotiate it separately, TradeNet has to reimburse my legal fees (see enclosed report from lawyer James Hugnes).

This is true.

Erwin Annau