Exhibit 10.15.2
FLEET LEASING RECEIVABLES TRUST
(the “Trust”)
and
PHH VEHICLE MANAGEMENT SERVICES INC.
(the “Originator”)
and
PHH FLEET LEASE RECEIVABLES L.P.
(the “Seller”)
and
MERRILL LYNCH CANADA INC. and BANC OF AMERICA SECURITIES LLC
(the “Agents”)
 

AGENCY AGREEMENT
January 25, 2010
 
Stikeman Elliott LLP

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
AND EXCHANGE ACT OF 1934, AS AMENDED

 

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AGENCY AGREEMENT
     THIS AGENCY AGREEMENT (this “Agency Agreement”) dated as of January 25,
2010, among BNY TRUST COMPANY OF CANADA, in its capacity as trustee of FLEET
LEASING RECEIVABLES TRUST (in such capacity, the “Trust”), by PHH VEHICLE
MANAGEMENT SERVICES INC., in its capacity as financial services agent of the
Trust , PHH VEHICLE MANAGEMENT SERVICES INC., in its capacity as originator (the
“Originator”) of certain leases that will be transferred to the Trust as
security for the Notes (as defined herein), PHH FLEET LEASE RECEIVABLES L.P.
(the “Seller”) and MERRILL LYNCH CANADA INC. and BANC OF AMERICA SECURITIES LLC
(collectively, the “Agents”).
     WHEREAS the Agents understand that the Trust wishes to sell the principal
amount of CAD40,000,000 of Series 2010-1 Class A-1a Asset-Backed Notes (the
“Class A-1a Notes”), USD81,585,066.16 of Series 2010-1 Class A-1b Asset-Backed
Notes (the “Class A-1b Notes”), CAD145,900,000 of Series 2010-1 Class A-2b
Asset-Backed Notes (the “Class A-2b Notes”) and the principal amount of
CAD16,952,000 of Series 2010-1 Class B Asset-Backed Notes (the “Class B Notes”,
and together with the Class A-1a Notes, the Class A-1b Notes and the Class A-2b
Notes, the “Notes”).
     AND WHEREAS the Agents understand that the Class A-1b Notes are to be
issued and sold in the United States and the Class A-1a Notes, Class A-2b Notes
and Class B Notes are to be issued and sold in Canada, in each case on a private
placement basis to one or more purchasers.
     AND WHEREAS the Agents, subject to the terms and conditions hereof, agree
to act, and the Trust agrees to appoint the Agents as the agents of the Trust to
solicit, on a “best efforts” basis (and without underwriting liability), offers
to purchase the Class A-1a Notes, Class A-2b Notes and Class B Notes on the
Closing Date on a private placement basis to investors in Canada pursuant to the
exemption contained in Section 2.3 of NI 45-106 (as defined herein), and the
Class A-1b Notes on a private placement basis to Permitted Accredited Investors
(as defined herein) in the United States. The Agents will be under no obligation
to purchase the Notes.
     NOW THEREFORE in consideration for their services hereunder, and for other
good and valuable consideration, the parties hereto agree as follows:

Section 1   DEFINITIONS

(1)   In this Agency Agreement, unless stated elsewhere in this Agency
Agreement, the following terms have the following meanings:       “Agents’
counsel” means Stikeman Elliott LLP;       “Applicable Securities Laws” means
all applicable securities laws and rules, regulations, instruments, notices,
orders and written policies in the Jurisdictions to the offering and sale of the
Notes, including but not limited to the securities legislation of the Selling
Provinces, and the rules, instruments and policies of the Securities Commissions
and/or the U.S. Securities Act, as applicable;

 

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    “Business Day” means a day which is not Saturday or Sunday or a legal
holiday in Toronto, Ontario;       “Closing” means the closing of the purchase
and sale of the Notes contemplated by this Agency Agreement;       “Closing
Date” means January 27, 2010, or such other date as the Agents and the Trust may
determine, acting reasonably;       “Closing Time” means 10:00 a.m. (Toronto
time) or such other time, on the Closing Date, as the parties may agree;      
“Condition” in respect of a person, means the assets, liabilities (contingent or
otherwise), financial condition, properties, business, affairs, operations,
results of operations, income, cash flow or capital of such person;       “DBRS”
means DBRS Limited and its successors;       “Declaration of Trust” means the
declaration of trust of the Trust dated November 2, 2009, as amended and
restated on November 16, 2009;       “Directed Selling Efforts” means “directed
selling efforts” as that term is defined in Regulation S. Without limiting the
foregoing, but for greater clarity in this Agency Agreement, it means, subject
to the exclusions from the definition of directed selling efforts contained in
Regulation S, any activity undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for any of the Class A-1b Notes and includes the placement of any
advertisement in a publication with a general circulation in the United States
that refers to the offering of the Class A-1b Notes;       “distribution” means
“distribution” or “distribution to the public”, as the case may be, as defined
under the Applicable Securities Laws of the Jurisdictions and “distribute” has a
corresponding meaning;       “General Solicitation” and “General Advertising”
means “general solicitation or general advertising”, as used in Rule 502(c)
under the U.S. Securities Act, including advertisements, articles, notices or
other communications published in any newspaper, magazine or similar media or
broadcast over radio, television or the Internet, or any seminar or meeting
whose attendees had been invited by general solicitation or general advertising;
      “Governmental Authority” means any federal, provincial, state, municipal,
county or regional governmental or quasi-governmental authority, domestic or
foreign, and includes any ministry, department, court, tribunal, arbitral body,
commission, bureau, board, administrative or other agency or regulatory body or
instrumentality thereof, any quasi-governmental body or private body exercising
regulatory, expropriation or taxing authority under or for the account, if any,
of the foregoing

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    and any stock exchange or self-regulatory authority and, for greater
certainty, includes the Regulatory Authorities;       “Indenture” means the
Trust Indenture made as of November 16, 2009 between Computershare Trust Company
of Canada as indenture trustee, and BNY Trust Company of Canada, as issuer
trustee, as supplemented by the 2010-1 Supplemental Indenture made as of
January 27, 2010 among such parties, as amended, supplemented, modified,
restated or replaced from time to time;       “Issuer Trustee” has the meaning
assigned in the Indenture;       “Jurisdictions” means, collectively, Canada and
the United States;       “laws” means any and all applicable (i) laws,
constitutions, treaties, statutes, codes, ordinances, principles of common and
civil law and equity, orders, decrees, rules, regulations and municipal by-laws
whether domestic, foreign or international, (ii) judicial, arbitral,
administrative, ministerial, departmental and regulatory judgments, orders,
writs, injunctions, decisions, and awards of any Governmental Authority, and
(iii) policies, practices and guidelines of, or contracts with, any Governmental
Authority which, although not actually having the force of law, are considered
by such Governmental Authority as requiring compliance as if having the force of
law, in each case binding on or affecting the Person referred to in the context
in which the word is used;       “material change” means a material change
within the meaning of any of the Applicable Securities Laws;       “material
fact” means a material fact within the meaning of any one or more of the
Applicable Securities Laws;       “misrepresentation” means a misrepresentation
within the meaning of the Applicable Securities Laws;       “Moody’s” means
Moody’s Investors Service, Inc. and its successors;       “NI 45-106” means
National Instrument 45-106 — Prospectus and Registration Exemptions, as amended;
      “Offering Memorandum” means the (final) offering memorandum of the Trust
dated January 25, 2010, prepared for use in connection with the offer and sale
of the Class A-1a, Class A-2b Notes and Class B Notes in Canada, in the form
agreed by the Trust and the Agents;       “Preliminary Offering Memoranda” means
the preliminary offering memoranda of the Trust prepared for use in connection
with the offer and sale of the Class A-1a, Class A-2b Notes and Class B Notes in
Canada, in the form agreed by the Trust and the Agents;

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    “Preliminary Private Placement Memoranda” means the preliminary private
placement memoranda of the Trust prepared for use in connection with the offer
and sale of the Class A-1b Notes in the United States, in the form agreed by the
Trust and the Agents;       “Private Placement Memorandum” means the
(final) private placement memorandum of the Trust dated January 25, 2010,
prepared for use in connection with the offer and sale of the Class A-1b Notes
in the United States, in the form agreed by the Trust and the Agents;      
“Purchase Agreement” means the purchase agreement dated as of January 27, 2010
made among the Trust, the Seller, PHH Vehicle Services Inc. as servicer and PHH
Corporation as performance guarantor, as the same may be amended, restated,
modified or supplemented from time to time;       “Rating Agencies” shall have
the meaning assigned in the Indenture;       “Regulation D” means Regulation D
adopted by the SEC under the U.S. Securities Act;       “Regulation S” means
Regulation S adopted by the SEC under the U.S. Securities Act;       “Related
Collateral” shall have the meaning assigned in the Indenture;       “SEC” means
the U.S. Securities and Exchange Commission;       “Securities Commissions”
means the securities commissions or similar securities regulatory authorities in
the Jurisdictions;       “Selling Provinces” means the Provinces of Alberta and
Ontario;       “Sub-Agents” means any other investment dealer and broker that
the Agents may have retained, appointed or engaged pursuant to Section 2(d);    
  “Subscriber” means any entity subscribing for Class A-1a Notes, Class A-1b
Notes, Class A-2b Notes or Class B Notes that is accepted by the Trust;      
“Subscription Agreement” means, in respect of a Subscriber, the agreement
between the Trust and the Subscriber pursuant to which Class A-1a Notes,
Class A-1b Notes, Class A-2b Notes or Class B Notes, as applicable, are issued
to that Subscriber;       “Substantial U.S. Market Interest” means “substantial
U.S. market interest” as that term is defined in Regulation S;      
“Transaction Documents” means this Agency Agreement, the Purchase Agreement, the
Indenture, the Notes, the Preliminary Private Placement Memoranda, the Private
Placement Memorandum, the Preliminary Offering Memoranda, the Offering

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    Memorandum, the Subscription Agreements and any other document entered into
from time to time by one or more of the parties hereto in connection with the
issuance and sale of the Notes, in each case, as amended, supplemented,
modified, restated or replaced from time to time;       “Trust’s auditors” means
Deloitte LLP;       “Trust’s counsel” means Blake, Cassels & Graydon LLP, or
such other counsel engaged by the Trust;       “United States” means the United
States of America, its territories and possessions, including any State and the
District of Columbia;       “U.S. Exchange Act” means the United States
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder;       “U.S. Investment Company Act” means the United
States Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder;       “U.S. Person” means a U.S. Person as that term is
defined in Regulation S;       “U.S. Securities Act” means the United States
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder; and       “USD” means the lawful currency of the United States.

(2)   Gender and Number

     Words importing the singular number include the plural, and vice versa;
words importing the masculine gender include the feminine gender; and words
importing individuals include partnerships, associations, bodies corporate,
trustees, executors and legal representatives, and vice versa.

(3)   Recitals

     Terms defined in the recitals to this Agency Agreement and used herein have
the meanings assigned in the recitals.

Section 2   THE OFFERING

  (a)   Sale of the Notes.

  (i)   Subject to the terms and conditions of this Agency Agreement, the Trust
hereby appoints the Agents, and the Agents hereby agree to act as agents for the
Trust, severally and not jointly, to offer the Notes for sale in the relevant
Jurisdictions on behalf of the Trust. The Agents will use their best efforts to
arrange for one or more Subscribers to purchase the aggregate principal amount
of the Notes in the relevant Jurisdictions.

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  (ii)   The Trust will create, issue and sell the Notes, as applicable, at the
Closing Time, in accordance with and subject to the provisions of this Agency
Agreement, the Indenture and all applicable laws. It is understood and agreed by
the parties that the Agents will act as agents only and at no time will the
Agents have any obligation whatsoever to purchase, in whole or in part, the
Notes.     (iii)   The Agents will not offer the Notes in any jurisdiction other
than the Jurisdictions, and for greater certainty, the Agents will offer the
Notes only to such Subscribers and in such manner, that pursuant to Applicable
Securities Laws, no prospectus or registration statement need be delivered or
filed in connection therewith, nor will the Trust be required to register in any
jurisdiction.     (iv)   The sale of the Class A-1a Notes, Class A-2b Notes and
Class B Notes to Subscribers in Canada will be effected in a manner exempt from
the prospectus requirements of the Applicable Securities Laws in the Selling
Provinces on the basis of the exemption available under Sections 2.3 of NI
45-106.     (v)   The sale of the Class A-1b Notes to Subscribers in the United
States will be effected pursuant to Section 4(2) of the U.S. Securities Act and
only to subscribers who are Permitted Accredited Investors (as defined below).

  (b)   Offering Procedures.

  (i)   Subscribers will purchase the Notes under exemptions from applicable
prospectus and registration requirements under the laws of the jurisdiction of
residence of the Subscriber.     (ii)   The Trust will file or cause to be filed
all documents required to be filed by the Trust in connection with the purchase
and sale of the Notes so that the distribution of the Notes may lawfully occur
without the necessity of filing a prospectus in Canada.

  (c)   Compensation. The Seller agrees to pay the Agents an aggregate cash
commission of [***] per $1,000 principal amount of Notes sold, representing
[***] of the aggregate principal amount of Notes (other than the Class B Notes)
sold (collectively, the “Agency Fee”), payable by the Seller, or the Originator
on behalf of the Seller, in cash at the Closing (provided that the Agency Fee
will be recalculated and/or amounts reimbursed to the Seller if

 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
AND EXCHANGE ACT OF 1934, AS AMENDED.

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      the Seller or an affiliate of the Seller purchases any of the Notes
(either at Closing or during the statutory withdrawal period) such that the
aggregate amount of agency fees which shall be payable in respect of all
Series 2010-1 Notes sold to persons other than the Seller or an affiliate of the
Seller (the “Fee Earning Notes”) shall equal the amount equal to the sum of (1)
[***] of the first [***] of the aggregate principal amount of the Fee Earning
Notes and (2) [***]of the aggregate principal amount of the Fee Earning Notes
above the first [***]), in consideration for the Agents, among other things:

  (i)   acting as Agents to solicit, on a best efforts basis, offers to purchase
the Notes;     (ii)   advising the Trust with respect to the issuance and sale
of the Notes;     (iii)   acting as the registered dealer and executing the
trades in connection with the sale of Notes;     (iv)   assisting in the
preparation of the offering materials, including the Preliminary Private
Placement Memoranda, the Private Placement Memorandum, the Preliminary Offering
Memoranda and the Offering Memorandum; and     (v)   performing administrative
services in connection with the sale of Notes.

      The Agents shall be under no obligation to provide any service not
specifically enumerated herein.

      For greater certainty, the Agency Fee in respect of the Class A-1b Notes
will be denominated in Canadian dollars, based on the exchange rate specified in
an ISDA Master Agreement to be dated January 27, 2009 between the Trust and
Merrill Lynch Capital Services Inc., together with the schedule thereto and the
confirmation thereon.

  (d)   Appointment of Sub-Agent. The Trust agrees that the Agents may engage,
appoint and retain such additional Sub-Agents in each of the Jurisdictions as
the Agents may deem necessary to conduct or assist in the sale of the Notes. The
Agents agree that such Sub-Agents must be acceptable to the Trust, acting
reasonably, and that such additional Sub-Agents shall agree to sell the Notes on
the same terms and conditions as the Agents. The Agents agree that they will
ensure that any Sub-Agents offer the Notes for sale only in accordance with the
terms of this Agency Agreement. The remuneration

 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
AND EXCHANGE ACT OF 1934, AS AMENDED.

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      payable to such Sub-Agents will be paid by the Agents from the Agents’
compensation under this Agency Agreement.     (e)   No Advertisement. The
private placement of the Notes will not be advertised in any newspaper,
magazine, printed media or similar medium of general and regular paid
circulation, broadcast over radio or television or by means of the Internet
(including but not limited to the Trust’s web sites, if any) and no seminar or
meeting relating to the private placement whose attendees have been invited by
general solicitation or advertising will be conducted.

Section 3   COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE AGENTS

     Each of the Agents, severally and not jointly or jointly and severally,
covenant, represent and warrant to the Trust that:

  (a)   it has complied and it will comply with all Applicable Securities Laws
of the Jurisdictions in which it solicits offers to purchase Notes or procures
subscriptions from Subscribers in connection with the private placement of the
Notes;     (b)   it will not solicit or procure subscriptions for the Notes in
any jurisdictions other than the relevant Jurisdictions or in any way which may
result in a requirement of the Trust to register or file a prospectus or similar
document with respect thereto in any jurisdiction;     (c)   the Agent and its
representatives have not engaged in or authorized, and will not engage in or
authorize, any form of General Solicitation or General Advertising in connection
with or in respect of the Notes in any newspaper, magazine, printed media of
general and regular paid circulation or any similar medium, or broadcast over
radio or television or by means of the Internet or otherwise or conducted any
seminar or meeting concerning the offer or sale of the Notes whose attendees
have been invited by any General Solicitation or General Advertising;     (d)  
it, or its Sub-Agent, is duly qualified as an investment dealer or broker-dealer
in each of the Jurisdictions in which it solicits or procures subscriptions for
the Notes in connection with the private placement;     (e)   it will only sell
to or offer to sell the Class A-1a Notes, Class A-2b Notes and Class B Notes to
Subscribers in Canada who pay cash consideration of at least $150,000, who are
resident in one of the Selling Provinces, and who have acknowledged that they
are purchasing as “principal” or “deemed principal” as defined in NI 45-106 and
Applicable Securities Laws and that they have not been created or used solely
for the purpose of relying on the exemption contained in Section 2.3 of NI
45-106, and will obtain from each Subscriber a Subscription Agreement and any
other applicable forms, reports, undertakings and documentation required under
the Applicable Securities

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      Laws in case in a form acceptable to the Trust and its respective counsel,
acting reasonably;     (f)   it will only sell to or offer to sell the
Class A-1b Notes to Subscribers in the United States who are both (i) an
“accredited investor”, as defined in paragraphs (1), (2), (3) or (7) of Rule
501(a) under Regulation D, that is also a “qualified institutional buyer” within
the meaning of Rule 144A under the U.S. Securities Act, who are aware that the
sale or transfer to it is being made in reliance on Section 4(2) of the U.S.
Securities Act, and (ii) qualified purchasers within the meaning of
Section 3(c)(7) of the United States Investment Company Act (Subscribers meeting
all of these requirements referred to as “Permitted Accredited Investors”), and
will obtain from each Subscriber a Subscription Agreement in a form as already
agreed or such forms as may be acceptable to the Trust and its counsel, acting
reasonably;     (g)   it will provide on a timely basis all information and
documentation required by the Trust to fulfil its obligations under the
Applicable Securities Laws with such information and documents to be in a form
acceptable to the Trust and the Trust’s counsel, acting reasonably;     (h)  
this Agency Agreement has been duly authorized, executed and delivered by it and
is a valid and binding agreement of it, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, winding-up, moratorium or
reorganization, or other similar laws affecting creditors’ rights generally and
to the availability of equitable remedies;     (i)   it acknowledges that the
Notes have not been and will not be registered under the U.S. Securities Act and
may be offered and sold only in transactions exempt from or not subject to the
registration requirements of the U.S. Securities Act and state securities laws;
    (j)   except with respect to offers and sales of Class A-1b Notes to
Permitted Accredited Investors in reliance upon an exemption from the
registration requirements under the U.S. Securities Act, in the manner described
in this Agency Agreement, neither the Agent nor any of its affiliates, nor any
person acting on its or their behalf, has made or will make, in connection with
offers and sales of the Notes pursuant to this Agency Agreement: (A) any offer
to sell, or any solicitation of an offer to buy, any Notes to a person in the
United States; or (B) any sale of Notes unless, at the time the buy order was or
will have been originated, either (i) the purchaser is outside the United States
and not a U.S. Person or (ii) the Trust, its affiliates, and any person acting
on their behalf reasonably believe that the purchaser is outside the United
States and not a U.S. Person;     (k)   neither the Agent or any of its
affiliates, or any person acting on its or their behalf, has made or will make
any Directed Selling Efforts in the United States with respect to the Notes, or
has taken or will take any action that would cause the exemption afforded by
Section 4(2) of the U.S. Securities Act

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      or Regulation S, to be unavailable for offers and sales of the Notes
pursuant to this Agency Agreement;     (l)   it is in compliance with the dealer
registration requirements of Applicable Securities Laws for purposes of the sale
of the Notes in each of the Selling Provinces;     (m)   it will not make any
representation or warranty with respect to the Trust, the Originator, the
Related Collateral or the Notes other than as set forth in the Private Placement
Memorandum and Offering Memorandum; and     (n)   if either the Private
Placement Memorandum or the Offering Memorandum is amended, it will promptly
send a copy of any such amendment to all persons who have previously received
the Private Placement Memorandum or Offering Memorandum, as applicable, from it
and will include such amendment in all further deliveries of the Private
Placement Memorandum or Offering Memorandum, as applicable.

Section 4   REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR

     The Originator represents and warrants to and agrees with the Agents that:

  (a)   the Originator is a corporation amalgamated and validly existing under
the laws of Canada;     (b)   the Originator has all requisite corporate power
and authority to enter into, deliver and perform its obligations under this
Agency Agreement, the other Transaction Documents to which the Originator is or
on the Closing Date will be a party and all necessary action has been or will be
taken on or before the Closing Date to authorize the execution, delivery and
performance of this Agency Agreement, the other Transaction Documents to which
the Originator is or on the Closing Date will be a party, in each case, by the
Originator;     (c)   assuming the due authorization, execution and delivery of
this Agency Agreement by the parties hereto other than the Originator, and the
enforceability of this Agency Agreement against such parties, this Agency
Agreement has been duly executed and delivered by the Originator and constitutes
a legal, valid and binding obligation of the Originator, enforceable against the
Originator in accordance with its terms, subject to applicable bankruptcy,
insolvency, winding-up, moratorium or reorganization, or other similar laws
affecting creditors’ rights generally and to the availability of equitable
remedies;     (d)   the execution and delivery by the Originator of, and the
performance by the Originator of its obligations under, the Transaction
Documents to which it is a party will not result in any violation of the
articles of amalgamation or by-laws of the Originator or any material violation
of any agreement or other instrument binding upon the Originator or any of its
assets or undertakings,

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      will not result in any material violation of any statute or any order,
rule or regulation of any governmental body, agency or court having jurisdiction
over the Originator or of any law applicable to the Originator or any of its
assets or undertakings;     (e)   neither the Preliminary Private Placement
Memoranda, the Private Placement Memorandum, the Preliminary Offering Memoranda,
the Offering Memorandum nor any document incorporated by reference therein or
supplementary thereto, including without limitation any investor presentation,
marketing teaser, cashflows, prepay data, Bloomberg cashflows (if posted) or
other material prepared for and disseminated to investors, contains any
misrepresentation or untrue statement or alleged misrepresentation or alleged
untrue statement, or omission or alleged omission to state any material fact or
any other fact or information required to be stated or necessary to make any
statement therein not misleading in light of the circumstances in which it was
made, excluding any statement or omission that pertains to the Agents and/or was
provided by the Agents;     (f)   assuming the accuracy of the representations
and warranties of the Agents contained in Section 3 and their compliance with
the agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Notes to the Subscribers in the manner contemplated by
this Agreement, the Preliminary Private Placement Memoranda, the Private
Placement Memorandum, the Preliminary Offering Memoranda and the Offering
Memorandum, to register the Notes under the U.S. Securities Act or to qualify
the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”);     (g)   no consent, approval, authorization or order of, or
qualification with, any governmental body or agency having jurisdiction over the
Originator or the Trust is required for the performance by the Originator or the
Trust of their respective obligations under any Transaction Document;     (h)  
there are no legal or governmental proceedings ongoing or, to the Originator’s
knowledge, pending or threatened, to which the Originator, the Trust or any of
the Originator’s subsidiaries is a party or to which any of the property of the
Originator or the Trust is subject, which could have a material adverse effect
on the execution, delivery or performance of the Transaction Documents;     (i)
  the Transaction Documents to which the Originator or the Trust is or on the
Closing Date will be a party, when executed and delivered by the Originator or
the Trust, as applicable, will be duly authorized by all necessary action and,
assuming the due authorization, execution and delivery of the Transaction
Documents to which the Originator or the Trust, as applicable, is or on the
Closing Date will be a party by the parties thereto other than the Originator or
the Trust, as applicable, and the enforceability of such Transaction Documents
against such parties, will constitute legal, valid and

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      binding obligations of the Originator or the Trust, as applicable,
enforceable against the Originator or the Trust, as applicable, in accordance
with their terms, subject to applicable bankruptcy, insolvency, winding-up,
moratorium or reorganization, or other similar laws affecting creditors’ rights
generally and to the availability of equitable remedies;     (j)   the
representations and warranties of the Originator and the Trust contained in the
Transaction Documents to which the Originator or the Trust, as applicable, is or
on the Closing Date will be a party that are made or to be made on or with
effect as of the Closing Date will be true and correct on or as of such date;  
  (k)   none of the Originator, the Trust or any of the Originator’s affiliates
or, assuming the representations, warranties and covenants of the Agents are
true and accurate, any person acting on its or their behalf, has made or will
make any Directed Selling Efforts in the United States with respect to the
Notes, or has taken or will take any action that would cause the exemption
afforded by Section 4(2) of the U.S. Securities Act or Regulation S, to be
unavailable for offers and sales of the Notes pursuant to this Agency Agreement;
    (l)   none of the Originator, the Trust or any of the Originator’s
affiliates or, assuming the representations, warranties and covenants of the
Agents are true and accurate, any person acting on its or their behalf has
engaged or will engage in any form of General Solicitation or General
Advertising or any manner involving a public offering within the meaning of
Section 4(2) of the Applicable Securities Laws, with respect to offers or sales
of the Notes in the United States;     (m)   none of the Originator, the Trust
or any of the Originator’s affiliates or, assuming the representations,
warranties and covenants of the Agents are true and accurate, any person acting
on any of their behalf has taken or will take any action in violation of
Regulation M under the U.S. Exchange Act in connection with the offer and sale
of the Notes;     (n)   the Notes issued under the Indenture, and any Notes to
be issued, are when executed, duly executed and duly authorized by the Trust and
when delivered and paid for by a Subscriber in accordance with the terms of the
Subscription Agreement and the Indenture, will be valid and legally binding
obligations of the Trust, enforceable in accordance with their terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally, and to the availability of equitable remedies;    
(o)   the Trust is not, and as a result of the sale of the Notes contemplated
hereby will not be, registered or required to be registered as an “investment
company” under the U.S. Investment Company Act; and

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  (p)   on and immediately after the Closing Date, the Trust (after giving
effect to the issuance of the Notes and to the other transactions related
thereto as described in the Private Placement Memorandum and Offering
Memorandum) will be Solvent. As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (A) the present fair
market value (or present fair saleable value of the assets of the Trust is not
less than the total amount required to pay the probable liabilities of the Trust
on its total existing debts and liabilities (including contingent liabilities)
as they become absolute and matured, (B) the Trust is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business,
(C) assuming the sale of the notes as contemplated by this Agreement, the
Private Placement Memorandum and the Offering Memorandum, the Trust is not
incurring debts or liabilities beyond its ability to pay as such debts and
liabilities mature, and (D) the Trust is not engaged in any business or
transaction, and is not about to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Trust is
engaged. In computing the amount of such contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount that, in light
of all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.

Section 5   REPRESENTATIONS AND WARRANTIES OF THE TRUST

     The Trust represents and warrants to and agrees with the Agents that:

(a)   the Trust has been constituted as a trust under the laws of the Province
of Ontario;   (b)   the Trust has all requisite power and authority to enter
into, deliver and perform its obligations under this Agency Agreement, the
Transaction Documents to which the Trust is or on the Closing Date will be a
party and the Notes and all necessary action has been or will be taken on or
before the Closing Date to authorize the execution, delivery and performance of
this Agency Agreement, the Transaction Documents to which the Trust is or on the
Closing Date will be a party and the Notes, in each case, by the Trust;   (c)  
assuming the due authorization, execution and delivery of this Agency Agreement
by the parties hereto other than the Trust, and the enforceability of this
Agency Agreement against such parties, this Agency Agreement has been duly
executed and delivered by the Trust and constitutes a legal, valid and binding
obligation of the Trust, enforceable against the Trust in accordance with its
terms, subject to applicable bankruptcy, insolvency, winding-up, moratorium or
reorganization, or other similar laws affecting creditors’ rights generally and
to the availability of equitable remedies;

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(d)   the Notes issued under the Indenture, and any Notes to be issued, are when
executed, duly executed and duly authorized by the Trust and when delivered and
paid for by a Subscriber in accordance with the terms of the Subscription
Agreement and the Indenture, will be valid and legally binding obligations of
the Trust, enforceable in accordance with their terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors’ rights
generally, and to the availability of equitable remedies;   (e)   the execution
and delivery by the Trust of, and the performance by the Trust of its
obligations under, the Transaction Documents will not result in any violation of
the Declaration of Trust or any material violation of any agreement or other
instrument binding upon the Trust or any of its assets or undertakings, will not
result in any material violation of any statute or any order, rule or regulation
of any governmental body, agency or court having jurisdiction over the Trust or
of any law applicable to the Trust or any of its assets or undertakings;   (f)  
neither the Preliminary Private Placement Memoranda, the Private Placement
Memorandum, the Preliminary Offering Memoranda, the Offering Memorandum nor any
document incorporated by reference therein or supplementary thereto, including
without limitation any investor presentation, marketing teaser, cashflows,
prepay data, Bloomberg cashflows (if posted) or other material prepared for and
disseminated to investors, contains any misrepresentation or untrue statement or
alleged misrepresentation or alleged untrue statement, or omission or alleged
omission to state any material fact or any other fact or information required to
be stated or necessary to make any statement therein not misleading in light of
the circumstances in which it was made, excluding any statement or omission that
pertains to the Agents and/or was provided by the Agents;   (g)   assuming the
accuracy of the representations and warranties of the Agents contained in
Section 3 and their compliance with the agreements set forth therein, it is not
necessary, in connection with the issuance and sale of the Notes to the
Subscribers in the manner contemplated by this Agreement, the Preliminary
Private Placement Memoranda, the Private Placement Memorandum, the Preliminary
Offering Memoranda and the Offering Memorandum, to register the Notes under the
U.S. Securities Act or to qualify the Indenture under the Trust Indenture Act;  
(h)   no consent, approval, authorization or order of, or qualification with,
any governmental body or agency having jurisdiction over the Trust is required
for the performance by the Trust of its obligations under any Transaction
Document;   (i)   there are no legal or governmental proceedings ongoing or, to
the Trust’s knowledge, pending or threatened, to which the Trust or any of its
subsidiaries is a party or to which any of the property of the Trust is subject,

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    which could have a material adverse effect on the execution, delivery or
performance of the Transaction Documents;   (j)   the Transaction Documents to
which the Trust is or on the Closing Date will be a party, when executed and
delivered by the Trust, will be duly authorized by all necessary action and,
assuming the due authorization, execution and delivery of the Transaction
Documents to which the Trust is or on the Closing Date will be a party by the
parties thereto other than the Trust, and the enforceability of such Transaction
Documents against such parties, will constitute legal, valid and binding
obligations of the Trust, enforceable against the Trust in accordance with their
terms, subject to applicable bankruptcy, insolvency, winding-up, moratorium or
reorganization, or other similar laws affecting creditors’ rights generally and
to the availability of equitable remedies;   (k)   the Trust is a reporting
issuer not in default of any requirement under the Applicable Securities Laws;  
(l)   there are no reports or information that in accordance with the Applicable
Securities Laws or the requirements of the Canadian Securities Regulators must
be made publicly available or filed in connection with the offering of the Notes
that have not been or will be made publicly available or filed as required;  
(m)   the representations and warranties of the Trust contained in the
Transaction Documents to which the Trust is or on the Closing Date will be a
party that are made or to be made on or with effect as of the Closing Date will
be true and correct in all material respects on or as of such date;   (n)   the
Trust is, and at the closing will be, a “foreign issuer” (as such term is
defined in Regulation S) and reasonably believes that there is no Substantial
U.S. Market Interest in the Notes;   (o)   the Trust is not, and as a result of
the sale of the Notes contemplated hereby will not be, registered or required to
be registered as an “investment company” under the U.S. Investment Company Act;
  (p)   except with respect to offers and sales of Class A-1b Notes to Permitted
Accredited Investors in reliance upon an exemption from the registration
requirements under the U.S. Securities Act, in the manner described in this
Agency Agreement, neither the Trust nor any of its affiliates, and assuming the
representations, warranties and covenants of the Agents are true and accurate,
nor any person acting on its or their behalf, has made or will make, in
connection with offers and sales of the Notes pursuant to this Agency Agreement:
(A) any offer to sell, or any solicitation of an offer to buy, any Notes to a
person in the United States; or (B) any sale of Notes unless, at the time the
buy order was or will have been originated, either (i) the purchaser is outside
the United States and not a U.S. Person or (ii) the Trust, its

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    affiliates, and any person acting on their behalf reasonably believe that
the purchaser is outside the United States and not a U.S. Person;   (q)   none
of the Trust or any of its affiliates or, assuming the representations,
warranties and covenants of the Agents are true and accurate, any person acting
on its or their behalf, has made or will make any Directed Selling Efforts in
the United States with respect to the Notes, or has taken or will take any
action that would cause the exemption afforded by Section 4(2) of the U.S.
Securities Act or Regulation S, to be unavailable for offers and sales of the
Notes pursuant to this Agency Agreement;   (r)   none of the Trust, any of its
affiliates or, assuming the representations, warranties and covenants of the
Agents are true and accurate, any person acting on its or their behalf has
engaged or will engage in any form of General Solicitation or General
Advertising or any manner involving a public offering within the meaning of
Section 4(2) of the Applicable Securities Laws, with respect to offers or sales
of the Notes in the United States;   (s)   the Trust has not offered or sold,
and will not offer or sell, any of its securities in a manner that would be
integrated with offers and sales of the Notes in the United States pursuant to
this Agency Agreement and that would cause such sales of such Notes to be
ineligible for the exemption from registration provided by Regulation D or
Section 4(2) of the U.S. Securities Act; and   (t)   none of the Trust, any of
its affiliates or, assuming the representations, warranties and covenants of the
Agents are true and accurate, any person acting on any of their behalf has taken
or will take any action in violation of Regulation M under the U.S. Exchange Act
in connection with the offer and sale of the Notes.

Section 6   COVENANTS OF THE TRUST

     The Trust hereby covenants to the Agents that it will endeavour to fulfil
all legal requirements to permit the offering and sale of the Notes as
contemplated in this Agency Agreement (including, without limitation, filing or
causing to be filed, all forms or undertakings required in connection with the
private placement of the Notes with the Securities Commissions so that the
distribution of such notes may be conducted without a prospectus in the
Jurisdictions).

Section 7   MATERIAL CHANGE

(1)   The Trust will promptly inform the Agents during the period prior to
Closing of the full particulars of:

  (a)   any material change (whether actual, anticipated, contemplated or
threatened) in the Condition of the Trust;     (b)   any occurrence of a
material fact or the discovery of an existing material fact which, in any such
case, is, or may be, of such nature as to (i) render the

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      Preliminary Private Placement Memoranda, the Private Placement Memorandum,
the Preliminary Offering Memoranda or the Offering Memorandum untrue, false or
misleading in a material respect, (ii) result in a misrepresentation contained
in the Preliminary Private Placement Memoranda, the Private Placement
Memorandum, the Preliminary Offering Memoranda or the Offering Memorandum, or
(iii) result in the Preliminary Private Placement Memoranda, the Private
Placement Memorandum, the Preliminary Offering Memoranda or the Offering
Memorandum not complying with Applicable Securities Laws;     (c)   any change
in any material fact contained in or referred to in any part of the Preliminary
Private Placement Memoranda, the Private Placement Memorandum, the Preliminary
Offering Memoranda or the Offering Memorandum; or     (d)   any other event,
state of facts or circumstance which is, or may be, or has occurred after the
date of this Agency Agreement, of such nature as to render the Preliminary
Private Placement Memoranda, the Private Placement Memorandum, the Preliminary
Offering Memoranda or the Offering Memorandum untrue or misleading in any
material respect or which would result in any misrepresentation in the
Preliminary Private Placement Memoranda, the Private Placement Memorandum, the
Preliminary Offering Memoranda or the Offering Memorandum.

(2)   In addition to discharging its obligations under Section 7(1), the Trust
will, in good faith, discuss with the Agents any change, event, circumstance or
fact contemplated in Section 7(1) which is of such nature that there may be
reasonable doubt as to whether notice should be given to the Agents under
Section 7(1).

(3)   During the period prior to the completion of the sale of the Notes the
Trust will notify the Agents of any notice or other correspondence received by
it from any Securities Commission, Governmental Authority or person requesting
any information, meeting or hearing relating to any event or state of affairs
that the Trust reasonably believes may be material to the Agents.

(4)   The Trust shall promptly comply with all applicable filing and other
requirements under the Applicable Securities Laws arising as a result of any
change, fact, event or circumstance referred to in Section 7(1).

Section 8   CONDITIONS OF CLOSING

     The obligations of the Trust to sell the Notes to purchasers, and for the
purchasers to purchase the Notes from the Trust, will be subject to the
following conditions, which conditions may be waived in writing in whole or in
part by the party entitled to the benefit thereto:

  (a)  the Trust and the Agents shall have complied fully with all Applicable
Securities Laws, prior to the Closing Time;

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(b)   all conditions precedent to the issuance of the Notes under the Indenture
shall have been satisfied;   (c)   the Agents shall have received a legal
opinion from the Trust’s counsel, in form and content satisfactory to the Agents
and their counsel, acting reasonably, addressed to the Agents and, with respect
to item (iv) any Subscriber located in the United States, as to (i) the
establishment and existence of the Trust and the Seller; (ii) the due
authorization, execution and delivery, and the enforceability of this Agency
Agreement and the Subscription Agreements; (iii) the enforceability of the Notes
against the Trust; (iv) (A) the offer and sale of the Class A-1b Notes to
purchasers in the United States being exempt from the registration requirements
of the U.S. Securities Act, (B) the Indenture not being required to be qualified
under the Trust Indenture Act of 1939, and (C) the Trust not being, and after
giving effect to the offer and sale of the Notes and the application of the
proceeds thereof as described in the Private Placement Memorandum and the
Offering Memorandum, required to register as an “investment company” under the
U.S. Investment Company Act; (v) the offer and sale of the Class A-1a,
Class A-2b and Class B Notes in Canada being exempt from the prospectus
requirements of the Applicable Securities Laws of the Selling Provinces, and
(vi) true sale matters with respect to the transactions contemplated by the
Purchase Agreement;   (d)   the Trust and the Agents shall have received from
the Rating Agencies on or prior to the Closing Date confirmation in writing that
(i) the Class A-1a Notes and Class A-1b Notes will each receive a rating of
“P-1” from Moody’s and a rating of “R-1(high)” from DBRS, (ii) the Class A-2b
Notes will receive a rating of “Aaa” from Moody’s and “AAA” from DBRS, and
(iii) the Class B Notes will receive a rating of “A2” from Moody’s and a rating
of “A” from DBRS;   (e)   the Agents shall have received a copy of the Agreed
Upon Procedures letter;   (f)   the Agents shall have received such
certificates, opinions and other documents as may reasonably be requested by the
Agents and their counsel;   (g)   with respect to the Class A-1b Notes, the
related Subscriber shall not have exercised its Termination Right (as defined in
the related Subscription Agreement);   (h)   the closing for the issuance and
sale of the Series 2010-1 Class A-2a Asset Backed Notes of the Trust shall occur
contemporaneously with the Closing; and   (i)   the Agents shall have received
irrevocable Subscription Agreements to purchase the aggregate principal amount
of the Class A-1a Notes, Class A-1b Notes, Class A-2b Notes and Class B Notes
being offered by the Trust.

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Section 9   CLOSING

     The Closing will be completed at the offices of Blake, Cassels & Graydon
LLP, 2800 Commerce Court West, 199 Bay Street, Toronto, Ontario or at such other
place as the parties may agree, at the Closing Time.
     Subject to conditions set forth in Section 8, (i) the Agents, at the
Closing Time, will deliver a wire transfer of immediately available funds
payable to the Trust in an amount equal to the gross proceeds of all sales of
the Notes (or effect payment in such other manner as the Trust and the Agents
may agree), and (ii) the Seller, or the Originator on behalf of the Seller, will
deliver a wire transfer of immediately available funds to the Agents in
accordance with the Agents’ instructions equal to the amount of the Agency Fee
payable in accordance with Section 2(c) hereof. Upon receipt by the Trust of the
payment described in part (i), above, the Trust will deliver the Notes
registered as instructed by the Agents.

Section 10   FEES AND EXPENSES

  (a)   Fees. In consideration for the services of the Agents hereunder, the
Seller, or the Originator on behalf of the Seller, agrees to pay to the Agents
the fees set forth in Section 2(c) above.     (b)   Expenses. The Seller, or the
Originator on behalf of the Seller, will pay all reasonable expenses and fees in
connection with the sale of the Notes, including, without limitation, the fees
set forth in Section 2(c) above, all expenses of or incidental to the sale of
the Notes; the fees and expenses of the Trust’s counsel; all costs incurred in
the Jurisdictions in connection with the preparation of documents or
certificates relating to the offering of the Notes; all out-of-pocket expenses
and fees reasonably incurred by the Agents, including the fees and expenses of
Agents’ counsel, road show expenses and marketing fees; and except for the fees
set forth in Section 2(c) above, the foregoing fees and expenses incurred by the
Agents or on its behalf will be payable by the Seller, or the Originator on
behalf of the Seller, immediately upon receiving an invoice therefore from the
Agents, and will be payable whether or not the sale of the Notes is completed.

Section 11   INDEMNITIES

(1)   Each of the Originator and the Trust, jointly and severally (each, for the
purposes of this Section 11, an “Indemnitor”) will indemnify and save harmless
the Agents and any Sub-Agents, each person, if any, who controls the Agents or
any Sub-Agents within the meaning of Section 15 of the U.S. Securities Act or
Section 20(a) of the U.S. Exchange Act, and each of their respective directors,
officers, employees, agents and affiliates (each, an “Indemnified Person”) from
and against all actual or threatened claims, actions, suits, investigations and
proceedings (collectively “Proceedings”) and all losses (including, without
limitation, any loss, claim, damage, liability or action relating to purchases
and sales), expenses, fees, damages, obligations, payments and liabilities
(collectively “Liabilities”), including without limitation, all legal fees and
disbursements actually and reasonably incurred in connection with defending or
investigating such Proceeding, which now or any time hereafter exist by reason
of:

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  (a)   any misrepresentation or untrue statement or alleged misrepresentation
or alleged untrue statement, or omission of or alleged omission to state any
material fact or any other fact or information required to be stated or
necessary to make any statement therein not misleading in light of the
circumstances in which it was made, in the Preliminary Private Placement
Memoranda, the Private Placement Memorandum, the Preliminary Offering Memoranda
or the Offering Memorandum or in any document incorporated by reference therein
or supplementary thereto, including without limitation any investor
presentation, marketing teaser, cashflows, prepay data, Bloomberg cashflows (if
posted) or other material prepared for and disseminated to investors by or with
the authorization of the Originator, its affiliates or the Trust, or otherwise
made or alleged to have been made by an Indemnitor to the purchaser or
Subscriber or any prospective purchaser or Subscriber;     (b)   the breach by
an Indemnitor of any of the representations, warranties or covenants set out in
any Transaction Document; and     (c)   any breach or violation or any alleged
breach or violation of any applicable law or statute or any rule, regulation,
policy, order or ruling made thereunder, whether in force in Canada or
elsewhere, resulting from any action taken or omitted to be taken by an
Indemnitor or any of its directors, officers or employees acting as such in
connection with the sale of the Notes,

    provided, however, that this indemnity shall not apply in respect of an
Indemnified Person to the extent such Liabilities arise out of or are based upon
an untrue statement or alleged untrue statement in or omission or alleged
omission from any such documents in reliance upon and in conformity with any
written information relating to such Indemnified Person furnished to the Issuer
by or on behalf of the Indemnified Person specifically for use therein.

(2)   If any Proceeding is brought against an Indemnified Person in respect of
which indemnity may be sought from an Indemnitor pursuant to the indemnities set
forth in this Section 11, the Indemnified Person will promptly notify the
Indemnitor in writing, and the Indemnitor will assume the defence of the action
or claim, including the employment of counsel acceptable to the Indemnified
Person (acting reasonably) and the payment of all reasonable expenses. The
Indemnified Person will have the right to employ separate counsel in any
Proceeding if:

  (a)   the Indemnified Person has been advised by counsel that there may be
legal defences available to the Indemnified Person which are in conflict with
defences available to the Indemnitor (in which case the Indemnitor will not have
the right to assume the defence of such proceedings on the Indemnified Person’s
behalf);     (b)   the Indemnitor will not have assumed the defence of such
proceedings and employed counsel within a reasonable time after notice of
commencement of proceedings; or

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  (c)   the employment of such counsel has been authorized by the Indemnitor in
connection with the defence of any proceedings;

    and the Indemnitor will pay the reasonable fees and expenses of the
Indemnified Person’s counsel during the course of the investigation or defence,
promptly as such expense, loss, damage or liability is incurred; provided that
the Indemnitor will not in any event be required to pay more than one set of
counsel fees for all Indemnified Persons. The Indemnitor shall not be liable for
any settlement of any proceeding effected without its written consent, acting
reasonably, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnitor agrees to indemnify the Indemnified Persons from
and against any loss or liability by reason of such settlement or judgment. The
Indemnitor shall not, without the prior written consent of the Indemnified
Persons, make an admission of liability or effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Persons are or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Persons, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.

(3)   The right to indemnity herein provided will be in addition to and not in
derogation of any other right to indemnity or contribution which any Indemnified
Person may have by statute or otherwise at law.

(4)   The indemnities provided herein will remain in full force and effect until
all possible liability of the Indemnified Persons arising out of the
transactions contemplated by this Agency Agreement is extinguished by the
operation of law and will not be limited to or affected by any other indemnity
obtained by the Indemnified Persons from any other person.

Section 12   RIGHTS OF TERMINATION

(1)   If prior to the Closing Date any inquiry, action, suit, investigation or
other proceeding whether formal or informal is instituted, announced or
threatened or any order is made by any federal, provincial or other governmental
agency or body in relation to the Trust (other than an inquiry, action, suit,
investigation or other proceeding based solely on the activities or alleged
activities of the Agents) or any law or regulation (or the interpretation
thereof) is promulgated, changed or announced, which, in the sole opinion of any
Agent, acting reasonably, operates to prevent or materially adversely affect the
distribution of the Notes or which, in the sole opinion of any Agent, acting
reasonably, materially adversely affects the value, market price, ratings or the
marketability of the Notes, such Agent shall be entitled, at its sole option, in
accordance with Section 12(5), to terminate its obligations under this Agency
Agreement by written notice to that effect given to the Trust at any time prior
to the Closing Date.

(2)   If prior to the Closing Date (i) there should develop, occur or come into
effect or existence, any event, action, state, condition or occurrence of
national or international consequence, acts of hostilities or escalation thereof
or other calamity or

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    crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, or any
law, action, regulation or other occurrence of any nature whatsoever which, in
the sole opinion of any Agent, acting reasonably, materially adversely affects
or involves or may materially adversely affect or involve the Canadian, U.S. or
international financial markets or the business, affairs or operations of the
Trust, or (ii) the state of the Canadian, U.S. or international financial
markets is such that, in the sole opinion of any Agent, acting reasonably, the
Notes cannot be profitably marketed; then, in any one or more of the foregoing
cases, such Agent shall be entitled, at its sole option, in accordance with
Section 12(5), to terminate its obligations under this Agency Agreement by
written notice to that effect given to the Trust at any time prior to the
Closing Date.

(3)   If prior to the Closing Date there should occur or be announced any
material adverse change which, in the sole opinion of any Agent, acting
reasonably, might reasonably be expected to have a material adverse effect on
the value, market price, ratings or the marketability of the Notes, such Agent
shall be entitled, at its sole option, in accordance with Section 12(5), to
terminate its obligations under this Agency Agreement by written notice to that
effect given to the Trust at any time prior to the Closing Date.

(4)   The Trust agrees that all terms and conditions in this Agency Agreement
shall be construed as conditions to be complied with so far as they relate to
acts to be performed or caused to be performed by it, that it will use its best
efforts to cause such conditions to be complied with and that any failure by it
to comply with, or any breach of, or failure to satisfy, any such conditions
shall entitle any of the Agents to terminate its obligations to offer the Notes
for sale by notice to that effect given to the Trust at or prior to the Closing
Date, unless otherwise expressly provided in this Agency Agreement. The Agents
may waive, in whole or in part, or extend the time for compliance with, any
terms and conditions without prejudice to their rights in respect of any other
terms and conditions or any other or subsequent breach or non-compliance,
provided that any such waiver or extension shall be binding upon the Agents only
if such waiver or extension is in writing and signed by all of the Agents,
provided, further, that in no event shall the Closing Date occur with respect to
the Class A-1b Notes following the exercise by the related Subscriber of its
Termination Right under its Subscription Agreement and no replacement Subscriber
has executed a Subscription Agreement in respect of the Class A-1b Notes.

(5)   The rights of termination contained in Section 12(1), (2), (3) and (4) may
be exercised by any of the Agents and are in addition to any other rights or
remedies any of the Agents may have in respect of any default, act or failure to
act or non-compliance by Trust in respect of any of the matters contemplated by
this Agency Agreement or otherwise. In the event of any such termination, there
shall be no further liability on the part of the terminating Agent to the Trust
hereunder or on the part of the Trust, the Seller or the Originator to the
terminating Agent except in respect of any liability under Section 10 and
Section 11. A notice of termination given by an Agent under any of
Section 12(1), (2), (3) and (4) shall not be binding upon any other Agent. The

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    parties hereto agree that if either of the Agents terminates its obligations
hereunder with respect to the Class A-1b Notes in accordance with the terms of
this Agency Agreement, each of the Agents shall be deemed to have terminated its
obligations hereunder and the obligations of any purchaser or Subscriber to
purchase or subscribe for the Class A-1bNotes shall be terminated without any
further act or formality.

(6)   No act of the Agents in offering the Notes for sale or in assisting in the
preparation of, or joining in the execution of, the Preliminary Private
Placement Memoranda, the Private Placement Memorandum, the Preliminary Offering
Memoranda or the Offering Memorandum shall constitute a waiver by or estoppel
against the Agents.

Section 13   SEVERAL OBLIGATIONS

     The Trust and the Originator agree that the obligations of the Agents
hereunder are several and not joint or joint and several.

Section 14   NOTICES

     Any notice under this Agency Agreement will be given in writing and either
delivered or faxed to the party to receive such notice at the address or fax
numbers indicated below:

              To the Trust:  
 
      Fleet Leasing Receivables Trust
 
      c/o PHH Vehicle Management Services Inc.
 
      as financial services agent
 
      2233 Argentia Road
 
      Mississauga, Ontario
 
      L5N 2X7
 
       
 
      Attention: Mark Johnson
 
       
 
      Facsimile No.: 905-286-5363
 
       
 
            To the Originator:  
 
      PHH Vehicle Management Services Inc.
 
      2233 Argentia Road
 
      Mississauga, Ontario
 
      L5N 2X7
 
       
 
      Attention: Mark Johnson
 
       
 
      Facsimile No.: 905-286-5363
 
       
 
            To the Seller:  
 
      Fleet Lease Receivables L.P.
 
      2233 Argentia Road, Suite 400, Room 4
 
      Mississauga, Ontario
 
      L5N 2X7

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      Attention: Mark Johnson
 
       
 
      Facsimile No.: 905-286-5363
 
       
 
            To the Agents:  
 
      Merrill Lynch Canada Inc.
 
      Brookfield Place, 181 Bay Street, Suite 400
 
      Toronto, Ontario M5J 2V8 Canada
 
       
 
      Attention: Office of the General Counsel
 
       
 
      Facsimile No.: (416) 369-2004
 
       
 
       
 
      Banc of America Securities LLC
 
      One Bryant Park
 
      New York, NY 10036
 
      U.S.A.
 
       
 
      Attention: William Heskett
 
       
 
      Facsimile No.: (646) 855-5044

or such other address or telecopy number as such party may hereafter designate
by notice in writing, to the other party. If a notice is delivered, it will be
effective from the date of delivery if delivered within normal business hours;
and if such notice is faxed (with receipt confirmed), it will be effective on
the Business Day following the date such notice is telecopied.

Section 15   SURVIVAL

     The representations and warranties of the Agents, the Originator and the
Trust, the indemnities provided for in Section 11 hereof, and covenants to be
fulfilled by each party after the Closing Time, contained in this Agency
Agreement will survive the Closing Date and notwithstanding such closing, will
continue in full force and effect for a period of one year from the Closing
Date. For greater certainty, nothing herein limits the time in which any action
in respect hereof may be commenced.

Section 16   SEVERABILITY

     If one or more provisions contained herein will, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability will not affect any other provision of this Agency
Agreement, but this Agency Agreement will be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained
herein.

Section 17   ENTIRE AGREEMENT

     The provisions herein contained constitute the entire agreement between the
parties hereto and supersede all previous communications, representations,
understandings and

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agreements between the parties with respect to the subject matter hereof,
whether verbal or written.

Section 18   COUNTERPARTS

     This Agency Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered will be deemed an original, but all such counterparts
together will constitute but one and the same instrument; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agency Agreement will become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the parties of
written or telephonic notification of authorization of delivery hereof. Delivery
of an executed copy of this Agency Agreement by facsimile or e-mail shall be as
effective as delivery of a manually executed counterpart of this Agency
Agreement.

Section 19   GOVERNING LAW

     This Agency Agreement shall be governed by, and construed in accordance
with, the laws of the Province of Ontario and the laws of Canada applicable
therein.
     Each party irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the courts of the Province of
Ontario, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agency Agreement or for recognition or
enforcement of any judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such court. Each of the parties hereto
agrees that a final, non-appealable judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by applicable laws.
     Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of venue of any action or proceeding arising out of
or relating to this Agency Agreement in any court of the Province of Ontario.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, the defence of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

Section 20   TIME OF THE ESSENCE

     Time will be of the essence of this Agency Agreement.

Section 21   LANGUAGE

     At the request of the parties hereto, this Agency Agreement as well as all
documents relating thereto, including notices, have been and will be drafted in
English; à la demande des parties aux présentes, cette convention, de même que
toutes conventions s’y rapportant, y compris les avis, ont été et seront rédigés
en anglais.

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Section 22   INTERPRETATION

     For the purposes of this Agency Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

  (a)   any reference in this Agency Agreement to a designated “Section”,
“Subsection”, “Paragraph” or other subdivision refers to the designated section,
subsection, paragraph or other subdivision of this Agency Agreement;     (b)  
the words “herein” and “hereunder” and other words of similar import refer to
this Agency Agreement as a whole and not to any particular section or other
subdivision of this Agency Agreement;     (c)   the word “including”, when
following any general statement, term or matter, is not to be construed to limit
such general statement, term or matter to the specific items or matters set
forth immediately following such word or to similar items or matters, whether or
not non-limiting language (such as “without limitation” or “but not limited to”
or words of similar import) is used with reference thereto but rather refers to
all other items or matters that could reasonably fall within the broadest
possible scope of such general statement, term or matter;     (d)   any
reference to a statute includes and, unless otherwise specified herein, is a
reference to such statute and to the regulations made pursuant thereto, with all
amendments made thereto and in force from time to time, and to any statute or
regulations that may be passed which have the effect of supplementing or
superseding such statute or such regulation;     (e)   any reference to “party”
or “parties” means the Trust, the Originator and the Agents, or one of or both
of the foregoing, as the context requires;     (f)   all amounts expressed
herein in terms of money refer to lawful currency of Canada and all payments to
be made hereunder will be made in such currency;     (g)   the headings in this
Agency Agreement are for convenience of reference only and do not affect the
interpretation of this Agency Agreement; and     (h)   words importing the
masculine gender include the feminine or neuter gender and words in the singular
include the plural, and vice versa.

Section 23   FURTHER ASSURANCES

     Each of the parties hereto will do or cause to be done all such acts and
things and will execute or cause to be executed all such documents, agreements
and other instruments as may be reasonably necessary or desirable for the
purpose of carrying out the provisions and intent of this Agency Agreement.

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Section 24   NO FIDUCIARY DUTY

     Each of the Originator and the Trust acknowledges and agrees that, in
connection with the offering of the Notes contemplated hereunder or any other
services the Agents may be deemed to be providing hereunder, notwithstanding any
pre-existing relationship, advisory or otherwise, between the parties or any
oral representations or assurances previously or subsequently made by the
Agents: (i) no fiduciary relationship between the Originator, the Trust and any
other person, on the one hand, and the Agents, on the other hand, exists;
(ii) the Agents are not acting as advisor, expert or otherwise, to the
Originator or the Trust, and such relationship between the Originator and the
Trust on the one hand, and the Agents, other the other hand, is entirely and
solely commercial, based on arms-length negotiations; (iii) any duties and
obligations that the Agents may have to the Originator or the Trust shall be
limited to those duties and obligations specifically stated herein; and (iv) the
Agents and their respective affiliates may have interests that differ from those
of the Originator and the Trust. The Originator and the Trust hereby waive any
claims that the Originator or the Trust may have against the Agents with respect
to any breach of fiduciary duty in connection with the offering of the Notes.

Section 25   LIMITATION OF LIABILITY

     Notwithstanding any other provision of this Agency Agreement, in enforcing
any claim against the Trust for losses, costs, damages, expenses or other
liabilities incurred by the Agents in connection with any breach of the Trust of
its obligations hereunder in the event the purchase of the Notes is completed as
contemplated herein, an Agent’s recourse against the Trust will be solely
limited to recovery against the Related Collateral, subject to the prior payment
of certain amounts as described in the Prospectus.
     Nothing in this Agency Agreement will be deemed to cause the Issuer Trustee
personally to be liable for any obligations of the Trust hereunder and the
Agents will not seek any personal or deficiency judgment on such obligations
against the Issuer Trustee. Any liability of the Issuer Trustee hereunder is
non-recourse to the Issuer Trustee in its personal capacity and limited solely
to the Related Collateral. No other property or assets of the Issuer Trustee,
whether owned by it in its personal capacity or otherwise, will be subject to
levy, execution or other enforcement procedure with regard to any obligation
hereunder. There will be no further liability against the Issuer Trustee.
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     IN WITNESS WHEREOF the parties hereto have caused this Agency Agreement to
be executed as of the date first written above.

            BNY TRUST COMPANY OF CANADA,
in its capacity as Trustee of FLEET LEASING RECEIVABLES TRUST, by its Financial
Services Agent, PHH VEHICLE MANAGEMENT SERVICES INC.
      By:   /s/ Mark E. Johnson         Name:   Mark E. Johnson        Title:  
Senior Vice President & Treasurer        PHH VEHICLE MANAGEMENT SERVICES INC.
      By:   /s/ Mark E. Johnson         Name:   Mark E. Johnson        Title:  
Senior Vice President & Treasurer        FLR GP 1 INC., as general partner on
behalf of PHH
FLEET LEASE RECEIVABLES L.P.
      By:   /s/ Mark E. Johnson         Name:   Mark E. Johnson        Title:  
Senior Vice President & Treasurer        MERRILL LYNCH CANADA INC.
      By:   /s/ Rasha Katabi         Name:   Rasha Katabi        Title:  
Managing Director   

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            BANC OF AMERICA SECURITIES LLC
      By:   /s/ William Heskett         Name:   William Heskett        Title:  
Managing Director     

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