C A N A D A

A U C T I O N P O L I C I E S

C A N A D A

Welcome to ADESA! We own and

operate a chain of auto auctions throughout

Canada and the U.S.A. Our role in the

automobile remarketing business is to bring

Buyers and Sellers together in a professional,

trustworthy, competitive and open-bidding

environment. In this way, true market forces

can dictate the best price at which to buy or

sell a Vehicle.

We want your buying and selling experience at

ADESA Auctions Canada Corporation and

ADESA Montreal Corporation (collectively the

“Auction”) to be a positive one. We have

therefore developed these Auction Policies and

Arbitration Rules to assist both Buyers and Sellers

to understand their rights and obligations to each

other and the Auction.

These Auction Policies and Arbitration Rules

govern all of your business at the Auction and

are implied terms and conditions of every

agreement that you enter into with the Auction

and with every Buyer or Seller. By doing

business at our Auction, you are agreeing to

comply with and be bound by these Auction

Policies and Arbitration Rules.

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I AUCTION POLICIES

A.OUR COMMITMENT TO YOU

1) We will be fair and impartial in our dealings with bothBuyers and Sellers.

2) We will endeavor to create an environment that inspiresconfidence in the integrity of the auction process.

3) We will maintain records to verify bid sale prices and allfees that are charged.

4) We will comply with national, provincial and local lawsthat regulate the conduct of our business.

5) We will make every effort to service our customers’needs diligently, courteously and responsibly.

6) As a member of the National Auto Auction Association,we have adopted and will comply with the NAAA Codeof Ethics.

B. OUR ROLE

1) The Auction is a service provider. We do not purchaseor sell vehicles on our own behalf. The Auction is an intermediary between the Buyer and the Seller andfacilitates the transfer of ownership between these twoparties.

2) The Auction does not take title to Vehicles.3) The Auction ensures that Sellers are paid for their

Vehicles and that Buyers receive good title to theVehicles that they purchase.

4) The Auction is paid a fee by both the Buyer and theSeller for its role.

5) The Auction offers an Arbitration service for resolvingdisputes between Buyers and Sellers.

C. YOUR OBLIGATIONS TO US AND TO YOUR FELLOW DEALERS

1) Fair Play. For the auction system to work properly, theAuction, the Buyers and the Sellers must conductthemselves with integrity. We do our part by living ourcorporate values. We expect you to do your part byconducting your business at the Auction fairly andhonestly. We will not tolerate any conduct that directlyor indirectly undermines the integrity of the auctionprocess.

2) Auction Privileges. Attending the Auction is aprivilege and not a right. The Auction reserves the rightto temporarily or permanently suspend a Customer’sAuction privileges at any time. Breach of these AuctionPolicies and Arbitration Rules could result in thesuspension of your Auction privileges.

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3) Auction Card. Upon approval by the Auction of theCustomer Registration Agreement submitted to theAuction, the Auction will open an account (“Account”)for the Customer and the Customer shall be issued a photographic identification card (“Auction Card”)authorizing the Customer to purchase and sell Vehicles atthe Auction. Registering as a Customer and subsequentuse of the Auction Card at any ADESA Customer Kioskor Customer Service Counter represents the Customer’sagreement to these Auction Policies and Arbitration Rulesand agreement to pay any amounts due to the Auctionas a result of such use of the Auction Card.

4) Compliance with Law. There are many rules, lawsand regulations that govern your business. We count onyou to know and comply with all national, provincialand local laws that regulate your right to purchase andsell motor vehicles, trucks, recreational vehicles,motorcycles, snowmobiles, boats, marine craft, golfcarts, all-terrain vehicles, machinery and equipment (collectively “Vehicles”) at our Auction.

5) Courtesy. We expect our employees to serve you professionally and courteously and in turn we believethat they are entitled to similar treatment from you.However, if you are not satisfied with the level of serviceyou receive, we would like to hear from you.

6) Dealer Registration. Except for authorized institu-tional consignors, only motor vehicle dealers registeredin the Province in which the Auction site is located orwho have a valid Out of Province Permit (whereapplicable) (collectively “Customer[s]”), may buy or sellVehicles at ADESA auctions. It is therefore veryimportant to keep your dealer registration and permitscurrent and to ensure that the information in your dealerfile at the Auction is up to date.

7) Dealers Only. Retail customers are not permitted atour auction facilities.

8) Children. We love children, but please leave them athome on sale day. For everyone’s safety, children underthe age of 16 years are not permitted in the auctionarena, even if accompanied by an adult.

9) No “Backyard Dealings”. All Vehicles consignedto the Auction must cross the auction block. Vehiclessold before reaching the block will be subject to allapplicable fees. Customers engaged in backyard dealsmay have their Auction privileges temporarily orpermanently suspended.

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10) Representatives. Please be selective when sendingsomeone to the Auction to represent you, as you will beresponsible for and bound by his or her conduct andbusiness transactions.

11) Fees. You agree to pay all customary fees and chargesof the Auction for services rendered in connection withthe purchase and sale of consigned Vehicles, including,without limitation, seller fees, buyer fees, entry fees,storage fees, NSF cheque fees, ownership fees, cleaningfees and other customary fees and charges. TheCustomer authorizes the Auction to deduct from the saleproceeds its fees and any other applicable costs andcharges. Auction fees and charges may change fromtime to time without notice. Please contact your Auctionrepresentative if you require an up to date list of all feesand charges.

12) Payment Terms. All Vehicles purchased by theCustomer must be paid for, including all Auctiontransaction fees and charges, on the day of sale. TheAuction may deduct from any amounts it owes to theCustomer, any amounts the Customer owes to theAuction. Further, the Auction may retain possession ofany Vehicles owned or controlled by the Customerand/or withhold ownership documents until all amountsowed by the Customer to the Auction have been paid.The Customer shall pay all costs, including, withoutlimitation, legal fees on a solicitor and client basis,necessary for the Auction to collect any monies owed tothe Auction by the Customer.

13) Liability. Except for losses caused by the negligenceor willful misconduct of the Auction or its employees, theAuction shall not be responsible to you for any theft,conversion, loss, damage, claim, expense (includingreasonable legal fees), suit or demand (collectively“Loss”) arising out of, based upon or resulting from thepossession, transportation, use, storage or operation ofVehicles by the Auction or its agents, including but notlimited to Loss due to or caused by or during transportation, delay, fire, storm, flood, war civildisturbance, riot, act of God, lightning, earthquake, or other similar casualty. The liability of the Auction, if any, shall be limited to thesale price and any proper and reasonable expensesincurred and supported by appropriate documentation,less 2% per month from the sale date. All liability of theAuction shall terminate on the 1st day of the fiftieth(50th) month after the sale date.

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14) Indemnity. You agree that the Auction shall not beliable for, and that you will indemnify the Auction andhold it harmless against your breach of these AuctionPolicies and Arbitration Rules. You agree that theAuction shall not be liable for, and that you willindemnify the Auction and hold it harmless against anydamage, Loss, or destruction to Vehicles left in thecustody, care or control of the Auction or its agents,unless caused by the Auction’s gross negligence.

15) Security Interest. In order to secure payment of anyindebtedness owing to the Auction by you, you herebygrant in favour of the Auction a security interest(including purchase money security interest) in allVehicles (including all additions, accessions, accessoriesand replacements and proceeds of them) and otherassets of yours held by or sold through the Auction fromtime to time, to secure any and all of your obligations tothe Auction, howsoever arising. You hereby authorizethe Auction to file a financing statement against yourassets in order to secure any indebtedness owing by youto the Auction from time to time. The Auction shall beentitled to all the rights of a secured creditor underapplicable personal property security legislation.

16) Investigations. The Auction cooperates fully with allinvestigations conducted by regulatory, government andpolice authorities (collectively “Investigative Authorities”).By doing business at the Auction, you authorize us toprovide all documents and information concerning you,your business and your purchases and sales to anyInvestigative Authorities requesting them.

17) Video/Audio. All Auction sales are video and audiorecorded. By attending an Auction sale, you areconsenting to the use of video and audio recordings forthe purposes of arbitrations and all purposes identifiedby ADESA’s Privacy Policy.

18) No Warranties by Auction. The Auction does notmake or guarantee any warranty, express or implied,including, without limitation, merchantability or fitnessfor a particular purpose, service policy, or odometerreading, with respect to any Vehicle.

19) Customer’s Representations Regarding Taxes.The Customer certifies that the Customer holds acertificate license or other permit, issued by the sales taxauthority of the province and, if necessary, the locality ofthe Customer’s automobile business or businesses whichcertificate, license or permit exempts the Customer fromthe payment of provincial sales tax with respect to the

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purchase of Vehicles and bears the number or numbersset forth in the Customer Registration Application. AnyVehicles purchased by the Customer at the Auction arepurchased for resale in the form of tangible personalproperty in the regular course of business, and are ofthe sort usually purchased by the Customer for resale.In the event that the property is used for any purposeother than for resale, the Customer will pay directly tothe proper taxing authorities such sale or use tax as maythen accrue and be due and payable.

20) Changes to Auction Terms and Conditions.These Auction Policies and Arbitration Rules are subjectto change upon notice to the Customer including,without limitation, notice of changes included inhandouts, or posted conspicuously on bulletin boards oron signs located on the Auction premises. Use of theAuction Card or completion of other business transac-tions through the Auction subsequent to delivery to theCustomer of such notice shall be evidence of theCustomer’s acceptance of any changes to these AuctionPolicies and Arbitration Rules. Further the Customer issubject to all other terms and conditions communicatedto the Customer in writing or electronically, or postedconspicuously on bulletin boards or on signs located atthe Auction premises.

D.BUYER’S OBLIGATIONS

1) Know your purchase. This is a used Vehicleauction. Most used Vehicles have defects, flaws and/orwear and tear. Please allow for this in your bidding.Check the Vehicles carefully before you bid. It is theBuyer’s responsibility to verify serial number, Vehicleyear, make, model, colour, trim codes, options, odometerreading and that the odometer is functional, prior toleaving the Auction premises. The Buyer is responsiblefor ensuring that the Vehicle meets his/her requirements.

2) Buying Mistakes. Buyers are strongly encouragedto carefully inspect potential purchases prior to theAuction sale. The Auction cannot be held responsible forbuying mistakes.

3) Insure your purchase. The Auction does notprovide insurance coverage for Vehicles. You must carryyour own insurance coverage for damages resultingfrom fire, theft, damage, vandalism, collision, acts ofGod, etc.

4) Bidding Process. Please ensure that you understandthe bidding process. Our auction sales are very fast-

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paced and energetic. If you do not understand thebidding process, please ask one of our customer servicerepresentatives to assist you.

a) Lights. In the auction lanes, there will be multiplecoloured lights above the Auctioneer’s podium. Thelights may mean different things at each Auction site.These lights can provide you with valuable informationabout the Vehicle that is at the auction block. It is yourresponsibility to understand the meaning of the lightsat the Auction site at which you are bidding.

b) Announcements. Listen carefully to theAuctioneer before the bidding begins. The Auctioneermay have important information to tell you about theVehicle that is up for sale. The Auctioneer is notresponsible for repeating vital information about aparticular Vehicle during the Auction. Please watchthe lights and listen. If in doubt, ask a customerservice representative. It is your responsibility to ask.

c) Tote Board. At most Auction sites there is anelectronic tote board behind the Auctioneer’s podiumthat displays the bid price of the Vehicle that is on theblock. As there may be a delay between when theAuctioneer accepts a bid and when it is recorded onthe tote board, you must listen to the Auctioneercarefully for the most current bid price.

d) Block. Make sure that you know which Vehicle is onthe block being auctioned. It may not be the Vehiclethat is directly in front of the Auctioneer. If unsure,please ask a Customer Service Rrepresentative.

e) Ringmen. Most of our auctions have Ringmen(male or female) who stand in the auction lane andassist the Auctioneer in identifying bids. If you wantto place a bid, catch the attention of a Ringman orthe Auctioneer.

f) Tendering a Bid. You will be deemed to havetendered a bid when you indicate, by speech,expression, the display of a badge, hand signal orotherwise, the intention to enter a bid equal to orgreater than the price being called by the Auctioneer.

g) Accepting a Bid. A bid is not binding untilaccepted by the Auctioneer. The Auctioneer will bedeemed to have accepted a bid when the Auctioneerindicates by speech, hand signal or otherwise, thatthe bid has been accepted. The Auctioneer is notobliged to accept a bid. The Auctioneer will notaccept a bid that, in the opinion of the Auctioneer, is

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only a nominal or fractional advance on the highestbid previously accepted by the Auctioneer or if theAuctioneer believes that the bid was not tendered ingood faith.

h) Reserve Prices. Many Vehicles are sold subject toa reserve price, i.e. a minimum price at which theVehicle must sell. If the Auctioneer does not receiveany bids at or above the reserve price, the Vehiclewill not be sold unless the Seller expressly authorizesthe sale.

i) Sale. Except for Confirmation Sales (phone bids), aVehicle is sold when the hammer falls and theAuctioneer announces that it has been sold. If youtendered the last bid accepted by the Auctioneerbefore the hammer fell, then you purchased theVehicle and you are required to complete the sale.

j) Confirmation Sales (Phone Bids). If theAuctioneer announces that an item has been soldsubject to confirmation or subject to a phone bid (orsimilar words) the Seller has until 5:00 p.m. on saleday after the bid is submitted to confirm the saleunless otherwise announced or stated. If the Sellerdoes not confirm the sale within the stipulated timeperiod, then it may result in a “no sale”. Where aVehicle is sold subject to confirmation or to a phonebid the last bid accepted by the Auctioneer isirrevocable until 5:00 p.m. on sale day.

k) Dispute. No bid may be withdrawn after theAuctioneer has accepted it. If you dispute havingmade a bid, you must advise the Auctioneerimmediately or you will be deemed to have made thebid. Where there is a dispute as to whether a bidwas made or which bid was last, the Auctioneer mayallow the Vehicle to be put up and resold or maydirect that the Vehicle be sold to the person whomthe Auctioneer believes made the last bid. Thedecision of the Auctioneer is final.

l) Tied Bids. Where both the Auctioneer and theRingman accept bids from two different bidders atthe same time and at the same price, the Auctioneermay break the tie in any manner that the Auctioneerconsiders appropriate in the circumstances. Thedecision of the Auctioneer is final.

5) Pay Promptly. Payment is required before the closeof business on sale day. The method of payment is at thediscretion of the Auction’s General Manager. If payment

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in full is not received within 48 hours of the Auction saleday, the Vehicle may be re-sold at the next Auction saleon an unreserved basis. You will be liable to the Auctionfor all losses incurred including the difference in saleprice (if any) plus auction fees, collection costs and legalfees. Failure to pay promptly can result in the permanentloss of your Auction privileges.

6) Repossession. The Auction has the right to repossessand re-sell without notice any Vehicle for which youhave not properly paid and that has been removed fromthe Auction premises. The Auction may resell theVehicle at such time and in such manner as the Auctionmay determine. The Auction may deduct from the saleproceeds all costs and expenses of repossession andsale including the Auction’s fees, reconditioning andrepair charges and legal fees. The Buyer shall be liableto the Auction for any deficiency plus interest at the rateof 2% per month (24% per year).

7) N.S.F. Cheques. All cheques not cleared by yourbank for non-sufficient funds (“N.S.F.”) or for any otherreason, must be settled immediately with cash orcertified funds. A charge of at least $150 will be leviedfor all N.S.F. and returned cheques.

8) Title. Regardless of the method of payment and thestatus of the ownership registration, title to a purchasedVehicle does not pass to the Buyer until payment in fullhas been made and the funds have actually beenreceived by the Auction. For example, if payment ismade by uncertified cheque, title does not pass to theBuyer until the cheque has been honoured by thedrawer’s bank.

9) Vehicle Storage Charges. Once you havepurchased and paid for your Vehicle, please remove itfrom the Auction site as soon as possible. A minimumstorage fee of $15.00 per Vehicle per day appliesstarting 48 hours after the Auction sale day, subject tothe discretion of the General Manager.

10) Transportation. If you require assistance inarranging transportation, please notify an Auctioncustomer service representative. If you request theAuction to arrange transportation of Vehicle(s), youacknowledge and agree that the Auction shall not beliable for any Loss incurred while the Vehicle(s) are inthe care, custody or control of a third party carrier.

11) Inspection. Ensure you thoroughly inspect yourVehicles before shipping or exporting long distances or

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out of the country. If you are unable to do so, you maywish to take advantage of the Auction’s Buyer ProtectionPlan (where available).

12) Exportation. The Auction does not guarantee thatany Vehicle purchased can be exported. The Buyer mustbe satisfied that the Vehicle meets all requirements forexport.

13) Arbitration. Arbitration must occur at the Auctionwhere the purchase occurred.

E. SELLER’S OBLIGATIONS

1) Announcements. Announcements are matters thatmay affect the value of the Vehicle that you are sellingand must be disclosed. Announcements will be writtenon the sale agreement and/or may be announced bythe Auctioneer on the block. You will build confidenceand goodwill by declaring all defects. You run the riskof having the sale cancelled, the purchase price reducedand/or other charges/fines incurred, if you fail to makeany of the following announcements:

i) Vehicle has:(a) Faulty odometer(b) Changed odometer(c) Odometer in miles(d) Five digit odometers over 100,000 miles or kms

ii) The true kilometers or miles are unknown, in whichcase one of the following announcements must bemade:

(a) The true distance traveled is unknown, but isbelieved to be in excess of ___ (estimate ofdistance traveled) that was recorded on___(last date a reliable odometer reading wasavailable).

(b) The true distance traveled is unknown, but isbelieved to be substantially higher than thatshown on the odometer.

iii) Sport utility vehicle has 2-wheel drive that wouldnormally be considered 4x4

(iv) Vehicle requires a government safetyinspection/certification/structural integrity (whereapplicable)

(v) Ownership registration is not available on sale day(where applicable)

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(vi) Keys are not available

(vii) Vehicle was previously used as a:(a) Taxi/limousine(b) Police car(c) Driving school car(d) Government vehicle (where applicable)(e) Daily rental vehicle (where applicable)

(viii) Vehicle suffers from any of the following defects:(a) Flood damage(b) Fire damage(c) Excessive rusting, including frame or unitized

body(d) Roof damage(e) Structural damage as determined in

accordance with NAAA structural damagepolicy

(f) Two or more adjacent panels changed(g) Air bags deployed, defective or absent(h) Defective ABS system

(ix) Cancellation of manufacturer’s warranty

(x) Major defects that would cost over $500 (accordingto standard Mitchell’s/manufacturer’s establishedwarranty standard rates) to repair on:(a) Engine(b) Transmission(c) Major power train i.e. differentials(d) Computer equipment

(xi) Major exception to original or advertised productionspecification

(xii) Vehicle cut in two or two frames welded together

(xiii) Vehicles branded as:(a) Provincial Inspection Required (where applicable)(b) Salvage(c) Irreparable(d) Rebuild(e) Accident-repaired over $2000 (where applicable)(f) Insurance Write-Offs, Total Loss, according to

insurer and/or manufacturer’s records(g) VGA(h) Non-recuperable(i) Non-repairable(j) Parts Only(k) Reconstructed

(xiv) Vehicle was stolen and has been recovered

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(xv) Vehicle is not road-worthy

(xvi) U.S. Vehicle

(xvii)Grey market vehicle

(xviii)Out of Province Vehicle (where applicableaccording to Provincial Law)

(xix) Natural Gas or Propane Fuel

(xx) VIN plate has been replaced

2) Fuel. All Vehicles consigned for sale must havesufficient fuel to run the Vehicle through the auctionprocess. A minimum $15 re-fueling fee will be chargedif a Vehicle does not have sufficient fuel.

3) Re-runs. All unsold Vehicles that remain at theAuction until the next sale day will be automaticallywashed and run on the next sale day. The Seller will beresponsible for all applicable charges.

4) Title/Ownership. When you sell a Vehicle, you areguaranteeing to the Auction and to the Buyer that youhave good title to the Vehicle and that the Vehicle is freeof all liens, charges and encumbrances. All documentsrequired to permit ownership to the Vehicle to betransferred to the Buyer must be delivered to the Auctionon the day prior to sale. After 48 hours, the Buyer mayhave the option to cancel the sale at the discretion of theGeneral Manager, if the Buyer has not received the titledocuments.

5) V.I.N. No Vehicle will be offered for sale without a visible factory identification number and/or governmentVIN replacement plates.

6) No V.G.A.’s Registration documents with a V.G.A.’sdeclaration will not be accepted. These must bemodified to show “rebuilt” in the applicable provincesand must be declared under red light - original dashplate missing.

7) Representing your Vehicle. You represent yourVehicle. You are responsible for ensuring that all an-nouncements and any other declarations that you wishto make are announced by the Auctioneer and that theodometer reading, model and year recorded on thewindshield and/or the dash ticket are accurate. You arealso responsible for ensuring that the Auctioneer isaware of the Vehicle’s reserve price, if any.

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8) Insurance. The Auction does not provide insurancecoverage for Vehicles. You must have your owninsurance coverage in place while your Vehicle is on theAuction’s premises for damages resulting from fire, theft,vandalism, collision, acts of God, etc.

9) Tampering. Odometer and parts tampering is strictlyprohibited. Anyone involved in odometer and/or partstampering, will have their Auction privileges at allADESA Auction sites automatically and permanently suspended. In addition, all applicable regulatory andlaw enforcement agencies will be notified.

10) No Shilling. Price boosting (i.e. “shilling”) is strictlyprohibited. Neither you nor any of your representatives,or agents may bid on any Vehicles consigned by you tothe Auction.

11) Extras. If a Vehicle requires towing, refueling, or itsbattery boosted on sale day, you will be charged anadditional fee for this service.

II ARBITRATION RULES

WHAT IS ARBITRATION?

Arbitration is the referral of a dispute to an impartial personfor final and binding determination. We offer an arbitrationservice to assist Buyers and Sellers in resolving disputesrespecting Vehicles purchased at our Auction. Our process isdesigned to be informal, quick, practical and economical.Our arbitration managers are trained professionals whounderstand the automotive remarketing business.

HOW DOES ARBITRATION WORK?

Step 1: Pay for the Vehicle. A claim will not bearbitrated until the Buyer has paid for the Vehicle in full. TheBuyer must have possession of the sales agreement and gatepass for the Vehicle under review. The Vehicle cannot leavethe Auction site on sale day if it is to be subject to standardarbitration. The Auction will only arbitrate the specified itemor items on the arbitration form. Any Buyer who does nothave time to thoroughly inspect the Vehicle on sale day, maywish to take advantage of the Auction’s Buyer ProtectionProgram (where available).

Step 2: Fill out the Form. A Buyer initiates arbitrationby completing and signing an arbitration form and submittingit to the Auction’s arbitration department before the close ofbusiness on sale day (unless extended arbitration is available).

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Step 3: Arbitration Fee. Buyers must pay the Auction’sStandard Arbitration Fee for the Auction’s arbitration service.However, if the Arbitrator determines that the Buyer’s claim isvalid, the Seller will be responsible for the fee.

Step 4: Investigation. The Arbitrator will review onlyissues raised in the arbitration form. Both the Buyer and theSeller will have an opportunity to explain their position to theArbitrator. Depending on the nature of the complaint, theArbitrator may, after listening to both parties, inspect theVehicle and come to a decision without further consultation.However, in certain circumstances, the Arbitrator may alsorefer the Vehicle to a specialty shop for consultation. If aspecialty shop is consulted, the party against whom thearbitration decision is made must pay all costs of the consul-tation including transportation or towing fees, if applicable.

Step 5: Decision. After completing the investigation, theArbitrator will decide whether or not the complaint was validand inform both parties of the decision. The unsuccessfulparty will be responsible for all costs of the Arbitration.Written decisions are not provided unless specificallyrequested. The party requesting a written decision may incuran extra fee. This fee is not the responsibility of the unsuc-cessful party.

Step 6: Remedy. The Arbitrator may grant any remedyor relief that the Arbitrator considers to be appropriate in thecircumstances. Remedies may include: cancellation of saleand refund of purchase price, partial rebate of purchaseprice, repair of defect at Seller’s expense, repair of defect atSeller’s partial expense, refund of expenses, etc.

Step 7: Finality. The decision of the Arbitrator and theRemedy imposed is final and binding on both parties. Bychoosing to initiate the Arbitration process, the Buyer isagreeing to be bound by the Arbitrator’s decision. Byconsigning a Vehicle for sale at the Auction, the Seller isagreeing to participate in any Arbitration process that maybe initiated, to be bound by the Arbitrator’s decision and tocomply with any Remedy imposed.

Note: If a Seller fails or refuses to comply with the decisionof the Arbitrator, the Seller will be held liable for all losses,costs and damages including legal fees and any losses on theresale of the Vehicle. In addition, the Seller’s auctionprivileges at all ADESA auctions may be temporarily orpermanently suspended at the discretion of the Auction’sGeneral Manager.

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WHAT IS SUBJECT TO ARBITRATION?

1) Except for the matters listed in (2) below, any majorundisclosed defects that would cost over $500 to repairaccording to manufacturers established warrantystandard rates and that ought to have been announced(see list of mandatory announcements under Seller’sObligations) but were not, are subject to arbitration.Any defect that was announced is not subject toarbitration.

2) The following are not subject to arbitration:a) Windshields and other glass itemsb) Upholstery, headliners, mats and trimc) Visible rustd) Visible body damagee) Axle joints, CV joints, driveshaftf) Springs, shocks, tires, brakes, suspensions, clutch

assemblies and cooling systems, heater core, powersteering, tune-ups & exhaust

g) Rack-and-pinion steeringh) Air-conditioningi) Any Vehicle sold for $3500 or less (except where

Seller failed to announce I.E(1)(i), (ii) [odometer],(viii)(e) [structural damage],(xiii) [branding], (xx)[re-VIN’d] [ Seller’s obligations])

j) Any engines smoking or blow by, noisy lifters, headgaskets and camshaft exceeding 96,000 kms.

k) Vehicles with over “160,000” kms are sold as is orsold under announcement I.E(1)(i) or (ii) [odometer]of Seller’s Obligations (except where Seller failed toannounce I.E.(1) (viii)(e) [structural damage], (xiii)[branding], (xx) [re-VIN’d] under paragraph 1 ofSeller’s Obligations)

l) Vehicles sold “as is” [except for Vehicles where theSeller failed to announce I.E.(1) (i), (ii) [odometer],(viii)(e) [structural damage],(xiii) [branding], (xx)[re-VIN’d] [ Seller’s obligations])

m) Federal stickersn) Boats, motor homes, antique vehicles, equipment,

snowmobiles, motorcycles, unless sold with aSeller’s guarantee

3) The National Auto Auction Association’s StructuralDamage Policy and applicable provincial laws governarbitrations respecting structural damage.

WHEN IS ARBITRATION AVAILABLE?

1) Two types of arbitration are available: standard andextended. Standard arbitration applies to all arbitrabledefects except for those subject to extended arbitration.

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2) Extended arbitration is available for the following itemsthat must be announced under paragraph 1 of Seller’sObligations: (ii) [odometer], (vii) [commercial use], (viii),(xii), (xiii) [branding], and (xiv) [stolen].

3) For standard arbitrations, the arbitration form must becompleted and delivered to the Auction’s arbitrationdepartment before the close of business on auction saleday. For extended arbitrations, the arbitration formmust be completed and delivered to the Auction’sarbitration department within 7 days of the sale date.Extensions may be granted at the Arbitrator’s discretion.

4) Arbitration is not available if the Buyer no longer haspossession of and title to the Vehicle. Arbitration is onlyavailable to the Auction’s Buyers and Sellers and not tothe customers of the Buyers and Sellers.

5) If arbitration is not available, the Buyer’s only remedy isagainst the Seller directly, without the involvement or in-tervention of the Auction. The Buyer and the Sellerrelease and waive all rights, remedies, claims, andcauses of action against the Auction, and its present andformer officers, directors and employees, and itssuccessors, predecessors, subsidiaries, affiliates andassigns from any claim or remedy whatsoever, whetherknown or unknown, for or by reason of using theservices and facilities of the Auction including but notlimited to the Arbitration process.

A WORD OF WARNING

The arbitration process is not a tool for price reduction or fordealing with “Buyer’s Remorse”. Buyers are cautioned toavoid impulse buying and to inspect Vehicles thoroughlybefore bidding. All used vehicles generally require repairsand Buyers should allow for this in their bidding.

Arbitrations are regularly monitored by the Auction. Sellerswho repeatedly fail to make required announcements or Buyerswho repeatedly submit questionable arbitration claims, mayhave their Auction privileges temporarily or permanentlysuspended.

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III NAAA STRUCTURAL DAMAGE POLICY

The following is the National Auto Auction’s StructuralDamage Policy which governs all Vehicles. To the extent thatthere is any inconsistency between the NAAA Policy and theAuction’s Policy, the Auction’s Policy governs.

1. Seller’s Disclosure Requirements - Seller mustdisclose structural damage, repairs or replacementas outlined in this policy prior to selling a vehicle atauction. The recommended declarations are:

• Structural Damage - The vehicle has structuraldamage and/or repairs and will not be subject toarbitration under this policy.

• Certified Structural Repairs - The vehicle hassustained damage to a specifically identifiedstructural component, which has been repaired,and the vehicle has been certified to be within theUsed Vehicle Management Standard (UVMS). Thevehicle, if properly announced, may be arbitratedonly for improper repair of the designated area,existing damage or repairs to other areas, orfailure to be within the UVMS (see par. 3)

• Structural Alteration - The vehicle has an alteredframe or unibody as specifically announced. Thevehicle can be arbitrated only for damage orrepairs to structural components other than thosedisclosed or in the event of improper alteration.Such a disclosure should be made for the followingalterations, unless they are clearly obvious by theappearance of the vehicle:- Frame lengthened or shortened.- Suspension altered.- After market accessories installed/removed.- No disclosure is required for properly installed

towing package.

2. Seller’s Disclosure Not Required - No declarationwill be required for existing insignificant damage orrepair thereof. Insignificant damage is defined as:

• Damage due to transport tie-down, improperjacking or lifting or contact with parking abutmentsand/or road debris, provided that the vehicle iswithin the UVMS.

• Damage solely to glass or bolt-on components.

3. Used Vehicle Measurement Standard - For purposes ofarbitration under this policy UVMS specifications are:

• The vehicle will measure to a tolerance of no morethan +/- 8mm of published specifications in length,width and height at all master control points; and

• Symmetrically (comparative measure from side toside and point to point) the length, width andheight must measure to a total tolerance of no more

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than 6mm. In each case the fender to door, doorto door, and/or door to quarter panel gaps mustindicate proper fit of the panels.

4. Measurement of Vehicles - Selling auction will, at itsdiscretion, have a vehicle measured at a facility ofits choice. Prior to measurement a vehicle must firstvisually indicate a physical condition to warrant themeasurement. Purchaser will agree to pay for thismeasurement if the vehicle is within the UVMS.Seller will be responsible for charges if the vehicleis found to be beyond the UVMS.

5. Undisclosed Structural Damage or Repair - Avehicle may be arbitrated if it has undisclosedexisting or repaired damage, which should havebeen disclosed under this policy, even though thevehicle is within the UVMS.

6. Arbitration Period - Buyer must arbitrate improperlydisclosed structural damage within 7 calendar daysfrom date of purchase. The vehicle must bereturned to the selling auction, or to an auction orfacility designated by the auction within 7 calendardays of arbitration.

7. Buyer’s Reimbursement by Seller - In the event ofimproperly disclosed structural damage the Sellerwill be responsible to reimburse the Buyer for:

• The actual price of the vehicle,• The Buyer’s fee,• Inspection and arbitration fees incurred at the

auction, and• Reasonable transportation costs actually incurred

transporting the vehicle to and from the Buyer’sdealership.

IMPORTANT: The Auction reserves the right tointerpret and modify these Auction Policies andArbitration Rules in order to comply with thespirit of the NAAA Code of Ethics and theintegrity of the auction process. The AuctionPolicies and Arbitration Rules are implied termsand conditions of every agreement, whetherwritten, oral, express or implied that you enterinto with the Auction or with its Customers. Youare responsible for ensuring that you are awareof any changes to these policies and rules.Please check our web site at HYPERLINKhttp://www.adesa.ca www.adesa.ca and ourAuction bulletins for any changes.

Revised February 2003

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IV PRIVACY POLICY

Commitment to Privacy ProtectionADESA Auctions Canada Corporation and ADESA MontrealCorporation (collectively “ADESA”) are committed to yourright to privacy and to keeping your personal informationprivate. ADESA has therefore developed this Privacy Policyto ensure that your rights are protected.

Limiting Collection of InformationThe collection of personal information is limited to that which isnecessary for the purposes identified by ADESA in this PrivacyPolicy. Information is collected by fair and lawful means.

ADESA collects and maintains certain personal informationabout you when you register with us or conduct business withus. The personal information you provide can identify youand your business and includes items such as driver’s licensenumber, criminal record, your birthdate, dealer registrationnumber and vehicle purchases and sales (e.g. type of vehicle,quantity, price, vehicle identification number, odometerreading, year, make, model, date of purchase and/or sale,purchase and/or sale patterns), banking information,financial information and tax information.

Purpose of Collecting the InformationWe use the information you provide us for the followingpurposes:

1. To ensure that our auction facilities are used byregistered dealers and authorized consignors only;

2. To contact you in response to any purchases, requests,complaints or comments you may have;

3. To verify the information that you provide to us;4. To verify your creditworthiness;5. To assist us in insuring compliance with our Auction

Policies and Arbitration Rules, including but not limitedto, collection of amounts owing to us, registering andenforcing security interests and clearing encumbranceson title to Vehicles.

6. To contact you to provide you with informationregarding our business and sales;

7. To help us to develop, evaluate and improve our salesand marketing strategies and techniques;

8. To assist us and third parties in evaluating the vehicleremarketing industry; and

9. To respond to reasonable inquiries from regulatory, gov-ernmental, investigative and law enforcement agencies.

We use aggregated and individual sales data including salelocation, pricing, odometer reading, vehicle condition, vehicledescription and vehicle identification number (“VIN”)

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information to assist us and third parties in evaluating markettrends, to prepare data analyses, and to prepare marketreport and valuation products. We do not provide thirdparties (other than law enforcement agencies) with buyer orseller names or other personal information. We do notconsider VIN number or other vehicle information to bepersonal information.

ADESA may share personal and/or aggregated informationthat you have provided us with other business divisions withinthe ADESA group of companies. ADESA shares creditinformation concerning you with our sister company, AFC(Auction Finance Corporation).

Limiting Use, Disclosure and RetentionPersonal information shall not be used or disclosed forpurposes other than those for which it was collected, exceptwith your consent or as required by law. Personalinformation shall be retained only as long as necessary forthe fulfillment of those purposes.

AccuracyPersonal information shall be as accurate, complete and up-to-date as is necessary for the purposes for which it is to be used.

If you would like to update information previously submittedto ADESA or request to have outdated information removed,please contact the Dealer Registration Coordinator at yournearest auction site.

SafeguardsADESA has safeguards in place through the use of firewallsand password protected access to ensure that yourinformation is appropriately protected.

OpennessADESA will make specific information about its policies andpractices relating to the management of personal informationreadily available to Customers. Upon request, Customers willbe informed of the existence, use, and disclosure of his or herpersonal information and shall be given access to thatinformation. Customers can challenge the accuracy andcompleteness of the information and have it amended asappropriate.

Amendments to PolicyADESA reserves the right to modify or amend this PrivacyPolicy at any time and for any reason. Any changes to thisPrivacy Policy will be preceded by a notice posted on ourwebsite at HYPERLINK http://www.ADESA.ca www.ADESA.caand/or by posting the changes at our auction site.

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