Exhibit 4.2


MASTER DEFINITIONS AND
CONSTRUCTION AGREEMENT


 


 


THE BANK OF NOVA SCOTIA


- and -


THE BANK OF NOVA SCOTIA, LONDON BRANCH


- and -


THE BANK OF NOVA SCOTIA TRUST COMPANY
OF NEW YORK


- and -


SCOTIABANK COVERED BOND GUARANTOR
LIMITED PARTNERSHIP


- and -


SCOTIABANK COVERED BOND GP INC.


-and-


COMPUTERSHARE
TRUST COMPANY OF CANADA


- and –


8429057
CANADA INC.


-and-


KPMG LLP


 


 


DATED AS OF JULY 19,
2013


 


 




    	 



    	 



    

CONTENTS


 


	1	DEFINITIONS	2
	2	INTERPRETATION AND CONSTRUCTION	59
	3	AMENDMENTS	61
	4	RATING AGENCY CONDITION	62
	5	GOVERNING LAW	63
	6	SUBMISSION TO JURISDICTION	63
	7	LIABILITY OF LIMITED PARTNERS	63





 




    	 



    	 



    

THIS MASTER DEFINITIONS AND CONSTRUCTION
AGREEMENT is made as of July 19, 2013


BETWEEN:


		(1)	THE BANK OF NOVA SCOTIA, a bank named in Schedule I to the Bank Act, whose executive office
is at Scotia Plaza, 44 King Street West, Toronto, Ontario, M5H 1H1, in its capacity as the Issuer, the Seller, the Servicer, the
Cash Manager, the Account Bank, the GDA Provider, the Intercompany Loan Provider, the Interest Rate Swap Provider and the Covered
Bond Swap Provider;



		(2)	THE BANK OF NOVA SCOTIA, LONDON BRANCH, acting through its office at 201 Bishopsgate, London
EC2M 3NS, in its capacity as the Principal Paying Agent, a Registrar and a Transfer Agent;



		(3)	THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, acting through its office at One Liberty
Plaza, 23rd Floor, New York, NY 10006, in its capacity as a Paying Agent, a Registrar, a Transfer Agent and the Exchange
Agent;



		(4)	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under
the laws of the Province of Ontario, whose registered office is at 100 King Street West, Suite 6600, 1 First Canadian Place, Toronto,
Ontario, M5X 1B8, by its managing general partner, Scotiabank
Covered Bond GP Inc. (in its capacity as the Guarantor);



		(5)	Scotiabank
Covered Bond GP Inc., a corporation incorporated under the laws of Canada whose registered
office is located at 100 King Street West, Suite 6600, 1 First Canadian Place, Toronto, Ontario, M5X 1B8, in its capacity
as Managing General Partner;



		(6)	8429057 CANADA INC. a corporation incorporated under the
laws of Canada whose registered office is located at 100 King Street West, Suite 6600, 1 First Canadian Place, Toronto,
Ontario, M5X 1B8, in its capacity as Liquidation General Partner;



		(7)	COMPUTERSHARE TRUST COMPANY OF CANADA, a trust
company incorporated under the laws of Canada, whose registered office is at 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, in its capacity as Bond Trustee and Custodian; and



		(8)	KPMG LLP, a limited liability partnership under the laws of the Province of Ontario, whose
registered office is at Bay Adelaide Centre, 333 Bay Street, Suite 4600, Toronto, Ontario, M5H 2S5, in its capacity as Cover Pool
Monitor.



WHEREAS,


(A)Each of the parties hereto is
a party to one or more Transaction Documents (as defined herein) in respect of the U.S. $15,000,000,000
Global Registered Covered Bond Program under which the Issuer will issue Covered Bonds (as amended, restated and/or supplemented
from time to time); and


(B)The parties hereto desire to
confirm that, except where the context otherwise requires and save where otherwise defined in the relevant Transaction Document,
capitalised terms used in the




    	 



    	2



    


Transaction Documents will have the
meanings set forth herein and will be construed in accordance with the interpretation provisions set out in this Master Definitions
and Construction Agreement.


NOW THEREFORE IT IS HEREBY AGREED
that in consideration of the mutual covenants and agreements herein set forth, the parties hereto agree as follows:


		1.	DEFINITIONS



Except where the context otherwise requires
and save where otherwise defined in the relevant Transaction Document, the following terms when used in the Transaction Documents
will have the following meanings:


$ or Canadian Dollar(s)
The lawful currency for the time being of Canada


€ or euro
The lawful currency of the Member States that adopt the single currency in accordance with the Treaty


£ or Sterling
The lawful currency for the time being of the United Kingdom of Great Britain and Northern Ireland


30/360, 360/360 or Bond
Basis The meaning given in Condition 4.5(c)(vi) of the Terms and Conditions


30E/360 or Eurobond
Basis The meaning given in Condition 4.5(c)(vii) of the Terms and Conditions


U.S.$ or U.S. Dollars
or US Dollars The lawful currency for the time being of the United States of America


¥, Yen or JPY
The lawful currency for the time being of Japan


24 hours Where referred
to in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed, the meaning given in Schedule 5 to the Trust
Deed


48 hours Where referred
to in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed, the meaning given in Schedule 5 to the Trust
Deed


ACT Asset Value The meaning
given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement


ACT Liability Value The
meaning given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement


Accession Undertaking A
form of deed of accession to the Security Agreement substantially in the form set out in Schedule 2 (Form of Accession Undertaking)
to the Security Agreement


Account Bank The Bank and
any other financial institution that accedes to the Bank Account Agreement as an Account Bank or enters into an agreement in form
and substance similar to the Bank Account Agreement




    	 



    	3



    




Account Bank Ratings Downgrade
The meaning given in Section 4.1 (Establishment of Bank Accounts) of the Cash Management Agreement


Account Bank Required Ratings
The threshold ratings of (i) P-1 (in respect of Moody’s), (ii) A and F1 (in respect of Fitch), and (iii) AA(low)
or R-1 (middle) (in respect of DBRS), as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or,
in the case of Fitch, the issuer default rating) of the Account Bank by the Rating Agencies 


Accountholder The meaning
given in Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) to the Trust Deed


Accrual Yield In relation
to a Zero Coupon Covered Bond, the meaning given in the applicable Final Terms Document


Accrued Interest In relation
to any Loan as at any date, interest accrued but not yet due and payable on the Loan from (and including) the Monthly Payment Day
immediately preceding the relevant date to (but excluding) the relevant date


Actual/Actual (ICMA) The
meaning given in Condition 4.5(c)(i) of the Terms and Conditions


Actual/Actual or Actual/Actual
(ISDA) The meaning given in Condition 4.5(c)(ii) of the Terms and Conditions


Actual/360 The meaning
given in Condition 4.5(c)(v) of the Terms and Conditions


Actual/365 (Fixed) The
meaning given in Condition 4.5(c)(iii) of the Terms and Conditions


Actual/365 (Sterling) The
meaning given in Condition 4.5(c)(iv) of the Terms and Conditions


Additional Business Centre
The meaning (if any) given in the applicable Final Terms Document


Additional Loan Advances A
further drawing (including, but not limited to, Further Advances) in respect of any Loan sold by the Seller to the Guarantor



Additional Loan Notice A
notice in the form set out in the Mortgage Sale Agreement served in accordance with the terms of the Mortgage Sale Agreement


Additional Loans Loans,
other than the Loans comprised in the Initial Portfolio, that the Seller may sell to the Guarantor after the First Transfer Date
pursuant to the Mortgage Sale Agreement, including each Additional STEP Loan




    	 



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Additional STEP Loans STEP
Loans made by the Seller to a particular STEP Borrower, which are originated subsequent to the sale to the Guarantor of the First
STEP Loan to the same STEP Borrower


Adjusted Required Redemption
Amount The meaning given in Schedule 9 to the Guarantor Agreement


Adjustments The meaning
given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement 


Advance The meaning given
in Section 2.1 (The Intercompany Loan) of the Intercompany Loan Agreement


Advance Request The meaning
given in Section 5.1 (Giving of Advance Requests) of the Intercompany Loan Agreement


Adverse Claim A lien, security
interest or other charge, encumbrance or claim, or any other type of preferential arrangement, it being understood that a lien,
security interest or other charge, encumbrance or claim on any Mortgaged Property subject to any Loan, which, in the reasonable
opinion of the Guarantor does not materially impair the marketability of such Mortgaged Property will not constitute an Adverse
Claim


Affiliate The meaning given
thereto in the Bank Act


Agency Agreement The agency
agreement dated as of the Program Date and made between the Issuer, the Guarantor,
the Bond Trustee and the Agents


Agents The Paying Agents,
the Registrar, the Transfer Agent and the Exchange Agent


Agreement for Sale The
meaning given in Schedules 4 (Loan Repurchase Notice), 5 (Additional Loan Notice) and 7 (Selected Loan Repurchase Notice) to the
Mortgage Sale Agreement, as applicable


Amortization Asset Value
The meaning given in Schedule 3 (Amortization Test) to the Guarantor Agreement


Amortization Liability Value
The meaning given in Schedule 3 (Amortization Test) to the Guarantor Agreement


Amortization Test The meaning
given in Schedule 3 to the Guarantor Agreement


Amortized Face Amount The
meaning given in Condition 6.7(b) of the Terms and Conditions


Annual Accounting Date December
31 in each year or such other date as the Guarantor may determine




    	 



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Annual Cover Pool Monitor Report
The results of the tests conducted by the Cover Pool Monitor in accordance with the Cover Pool Monitor Agreement to be delivered
to the Issuer, the Guarantor, the Cash Manager, CMHC and the Bond Trustee


Applicable Privacy Laws With
respect to a relevant Person, PIPEDA and any similar Canadian federal or provincial legislation now in force or that may in the
future come into force governing the protection of Personal Information that is applicable to such Person


Appointee Any attorney,
manager, agent, delegate, nominee, custodian or other person appointed by the Bond Trustee under the Trust Deed or the Security
Agreement


Arrangers Barclays Capital
Inc., Scotia Capital (USA) Inc. and Scotia Capital Inc.


Arrears of Interest In
relation to a Loan as at any date, the aggregate of all interest and expenses that are due and payable and unpaid on that date


Asset Coverage Test The
meaning given to it in Schedule 2 to the Guarantor Agreement


Asset Coverage Test Breach
Notice The notice required to be served in accordance with Section 5.1 of the Guarantor Agreement if the Asset Coverage Test
has not been met on two consecutive Calculation Dates


Asset Percentage The meaning
given in Schedule 2 to the Guarantor Agreement


Asset Percentage Adjusted Loan
Balance The meaning given in Schedule 2 to the Guarantor Agreement


Associate Any company which
is for the time being an associate (within the meaning of the Securities Act (Ontario))


Attorney The meaning given
in Schedule 2 (Power of Attorney) to the Security Agreement and Schedule 3 (Power of Attorney) to the Mortgage Sale Agreement,
as applicable


Auditors The auditors for
the time being of the Issuer or, as the case may be, the Guarantor or, in the event of their being unable or unwilling promptly
to carry out any action requested of them pursuant to the provisions of the Transaction Documents, such other firm of accountants
as may be nominated or approved by the Bond Trustee for the purposes of the Transaction Documents


Authorized Signatory



		(a)	in relation to the Bank Account Agreement, any authorized signatory referred to in the GDA Account
Mandate;



		(b)	in relation to the Standby Bank Account Agreement, any authorized signatory referred to in the
Standby Transaction Account Mandate or the Standby GDA Account Mandate, as applicable; and



		(c)	in all other cases, an officer of the Issuer, or the Guarantor, or such other person appointed
by the Issuer or the Guarantor to act as an authorized signatory, in each





    	 



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case as specified in the list of
authorized signatories (as amended from time to time) sent to the Bond Trustee pursuant to Section 15.1(f) of the Trust Deed


Available Principal Receipts
On a relevant Calculation Date, an amount equal to the aggregate of (without double counting):


		(a)	the amount of Principal Receipts received during the immediately preceding Calculation Period and
credited to the Principal Ledger (but, for the avoidance of doubt, excluding any Principal Receipts received in the Calculation
Period commencing on (but excluding) the relevant Calculation Date);



		(b)	any other amount standing to the credit of the Principal Ledger including (i) the proceeds
of any advances under the Intercompany Loan Agreement (where such proceeds have not been applied to acquire additional Loans and
their Related Security, refinance an advance under the Intercompany Loan, invest in Substitute Assets or make a Capital Distribution),
(ii) any Cash Capital Contributions and (iii) the proceeds from any sale of Loans and their Related Security or Substitute
Assets pursuant to the terms of the Guarantor Agreement or the Mortgage Sale Agreement but excluding any amounts received under
the Covered Bond Swap Agreement in respect of principal (but, for the avoidance of doubt, excluding in each case any such amounts
received in the Calculation Period commencing on (but excluding) the relevant Calculation Date); and



		(c)	following repayment of any Hard Bullet Covered Bonds by the Issuer and the Guarantor on the Final
Maturity Date thereof, any amounts standing to the credit of the Pre-Maturity Liquidity Ledger in respect of such Series of Hard
Bullet Covered Bonds (except where the Guarantor has elected to or is required to retain such amounts on the Pre-Maturity Liquidity
Ledger)



Available Revenue Receipts
On a relevant Calculation Date, an amount equal to the aggregate of (without double counting):


		(a)	the amount of Revenue Receipts received during the immediately preceding Calculation Period and
credited to the Revenue Ledger;



		(b)	other net income of the Guarantor, including all amounts of interest received on the Guarantor
Accounts and the Substitute Assets in the immediately preceding Calculation Period, but excluding amounts received by the Guarantor
under the Interest Rate Swap Agreement and in respect of interest received by the Guarantor under the Covered Bond Swap Agreement;



		(c)	prior to the service of a Notice to Pay on the Guarantor, amounts standing to the credit of the
Reserve Fund in excess of the Reserve Fund Required Amount;



		(d)	the amount of any termination payment or premium received from a Swap Provider which is not applied
to pay a replacement Swap Provider;



		(e)	any other Revenue Receipts not referred to in paragraphs (a) to (d) (inclusive) above received
during the immediately preceding Calculation Period and standing to the credit of the Revenue Ledger; and





    	 



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		(f)	following the service of a Notice to Pay on the Guarantor, amounts standing to the credit of the
Reserve Fund;



less


		(g)	Third Party Amounts, which shall be paid on receipt in cleared funds to the Seller;



Average Loan Balance In
respect of a Guarantor Calculation Period, the average daily aggregate Outstanding Principal Balance of Loans in the Portfolio
during such Guarantor Calculation Period as determined by the Cash Manager and notified to the Calculation Agent in accordance
with the Cash Management Agreement


Bank The Bank of Nova Scotia


Bank Account Agreement
The bank account agreement entered into on the Program Date between the Guarantor,
the Account Bank, the Cash Manager, the GDA Provider and the Bond Trustee


Bank Act The Bank Act
(Canada)


Bearer Covered Bonds Covered
Bonds in bearer form


Bearer Definitive Covered
Bond A Bearer Covered Bond in definitive form issued or, as the case may require, to be issued by the Issuer in accordance
with the provisions of the Program Agreement or any other agreement between the Issuer and the relevant Dealer(s), the Agency Agreement
and the Trust Deed in exchange for either a Temporary Global Covered Bond or part thereof or a Permanent Global Covered Bond (all
as indicated in the applicable Final Terms Document), such Bearer Covered Bond in definitive form being in the form or substantially
in the form set out in the relevant schedule to the Trust Deed with such modifications (if any) as may be agreed between the Issuer,
the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s) or Lead Manager (in the case of syndicated issues) and
having the Terms and Conditions endorsed thereon or, if permitted by the relevant Stock Exchange, incorporating the Terms and Conditions
by reference as indicated in the applicable Final Terms Document and having the relevant information supplementing, replacing or
modifying the Terms and Conditions appearing in the applicable Final Terms Document endorsed thereon or attached thereto and (except
in the case of a Zero Coupon Covered Bond in bearer form) having Coupons and, where appropriate, Talons attached thereto on issue


Bearer Global Covered Bonds
Global Covered Bonds in bearer form, comprising Temporary Global Covered Bonds and Permanent Global Covered Bonds


block voting instructions The
meaning given in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


Bond Trustee Computershare
Trust Company of Canada, in its capacity as bond trustee under the Trust Deed or as trustee under the Security Agreement, together
with any successor or additional bond trustee or trustee appointed from time to time thereunder




    	 



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Borrower In relation to
a Loan, each individual specified as such in the relevant Mortgage Terms together with each individual (if any) who assumes from
time to time an obligation to repay such Loan or any part of it, and includes a STEP Borrower


Broken Amount The meaning
(if any) given in the applicable Final Terms Document


Business Day In the case
of any Covered Bond, the meaning given in Condition 4.5(a) of the Terms and Conditions in respect of such Covered Bonds, and in
all other cases, a Toronto Business Day


Business Day Convention
In respect of a Tranche of Covered Bonds and either the Interest Periods or the Interest Payment Dates, the business day convention
specified in the applicable Final Terms Document and determined in accordance with Condition 4.5(b) of the Terms and Conditions


Calculation Agency Agreement
In relation to any Series of Covered Bonds, an agreement in or substantially in the form of Schedule 1 (Form of Calculation Agency
Agreement) to the Agency Agreement


Calculation Agent The meaning
given in the ISDA Definitions


Calculation Amount The
meaning given in the applicable Final Terms Document


Calculation Date The third
Toronto Business Day prior to each Guarantor Payment Date


Calculation Period The
period from (and including) one Calculation Date to (but excluding) the next following Calculation Date, except that the first
Calculation Period will commence on (and include) the first Issue Date under the Program and end on (but exclude) the next following
Calculation Date


Canadian Dollar Equivalent
In relation to a Series of Covered Bonds (including any calculations of the Required Redemption Amount of such Series of Covered
Bonds) which is denominated in (a) a currency other than Canadian Dollars, the Canadian Dollar equivalent of such amount ascertained
using the relevant Covered Bond Swap Exchange Rate relating to the Guarantee Loan applicable to such Series of Covered Bonds, and
(b) Canadian Dollars, the applicable amount in Canadian Dollars


Capital Account Ledger
The ledger maintained by the Managing GP (or the Cash Manager on its behalf) in respect of each Partner to record the balance of
each Partner’s Capital Contributions from time to time


Capital Contribution In
relation to each Partner, the aggregate of the capital contributed by or agreed to be contributed by that Partner to the Guarantor
from time to time by way of Cash Capital Contributions and Capital Contributions in Kind as determined on each Calculation Date
in accordance with the formula set out in the Guarantor Agreement


Capital Contribution Balance
The balance of each Partner’s Capital Contributions as recorded from time to time in the relevant Partner’s Capital
Account Ledger




    	 



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Capital Contribution in Kind
A contribution by a Partner to the Guarantor other than a Cash Capital Contribution, including contributions of Substitute Assets
(up to the prescribed limit), and/or Loans and their Related Security on a fully-serviced basis to the Guarantor (which shall constitute
a Capital Contribution equal to (a) the aggregate of the fair market value of those Loans as at the relevant Transfer Date, minus
(b) any cash payment paid by the Guarantor for such Loans and their Related Security on that Transfer Date)


Capital Distribution Any
return on a Partner’s Capital Contribution in accordance with the terms of the Guarantor Agreement


Capitalised Arrears In
relation to a Loan at any date (the determination date), the amount (if any) at such date of any Arrears of Interest in
respect of which, on or prior to the determination date, each of the following conditions has been satisfied:


		(a)	the Seller (or the Servicer on the Seller’s behalf) acting as a reasonable and prudent institutional
mortgage lender in the Seller’s market has, by arrangement with the relevant Borrower, agreed to capitalise such Arrears
of Interest; and



		(b)	such Arrears of Interest have been capitalised and added, in the relevant accounts of the Seller
(or, if the determination date occurs after the First Transfer Date, the Guarantor), to the principal amount outstanding in respect
of such Loan



Capitalised Expenses In
relation to a Loan, the amount of any expense, charge, fee, premium or payment (excluding, however, any Arrears of Interest) capitalised
and added to the principal amount outstanding in respect of such Loan in accordance with the relevant Mortgage Terms


Cash Cash and/or amounts
standing to the credit of a bank account, as the context shall require


Cash Capital Contributions
A Capital Contribution made in cash


Cash Flow Model
Calculation Date The Calculation Date falling in February, May, August and November of each year (commencing on the
Calculation Date falling in the first such month following the First Issue Date)


Cash Management Agreement The
cash management agreement entered into on the Program Date between the Guarantor, the Seller, the Servicer, the Cash Manager, the
GDA Provider and the Bond Trustee


Cash Management
Deposit Ratings The threshold ratings of (i) P-1 (in respect of Moody’s), (ii) F1 or A (in respect of Fitch) or
AA (low) and (iii) R-1 (middle) (in respect of DBRS) as applicable, of the unsecured, unsubordinated and unguaranteed debt
obligations (or, in the case of Fitch, the issuer default rating) of the Cash Manager by the Rating Agencies


Cash Management Services The
services to be provided to the Guarantor and the Bond Trustee pursuant to the Cash Management Agreement


Cash Manager The Bank in
its capacity as cash manager or any successor cash manager appointed from time to time




    	 



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Cash Manager Required Ratings
The threshold ratings (i) P-1 (in respect of Moody’s), (ii) BBB+ and F2 (in respect of Fitch), and (iii) BBB(low) (in respect
of DBRS) as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or in the case of Fitch, the issuer
default rating) of the Cash Manager by the Rating Agencies


Cash Manager Termination Event
The meaning given to it in Section 14.1 (Cash Manager Termination Events) of the Cash Management Agreement


CDOR Canadian Deposit Offering
Rate for Canadian Dollar deposits having the relevant maturity


CGCB A Temporary Global
Covered Bond or a Permanent Global Covered Bond, in either case, where the applicable Final Terms Document specifies that the Covered
Bonds are in CGCB form


Charged Property The property,
assets and rights of the Guarantor charged by the Guarantor pursuant to the Security Agreement


Civil Code of Québec
The Civil Code of Québec


Clearing Systems Euroclear
and/or Clearstream, Luxembourg


Clearstream, Luxembourg
Clearstream Banking, société anonyme or its successors


CMHC Canada Mortgage and
Housing Corporation and its successors


CMHC Guide The Canadian Registered Covered Bond Programs Guide issued by CMHC on June 27, 2013, as the same may be supplemented, amended or replaced
by CMHC from time to time


Code The U.S. Internal
Revenue Code of 1986 


Collections With respect
to any Loan, (a) all funds received after the relevant date in payment of any amounts due under or in respect of such Loan (including,
without limitation, all scheduled payments, prepayments, Liquidation Proceeds, finance charges, interest, principal prepayment
bonuses, indemnities or penalties and all other charges and all arrears of such amounts), or applied to amounts due under or in
respect of such Loan, (b) all cash collections of the Outstanding Principal Balance of such Loan received after the relevant time
and all other proceeds of such Loan, (c) all proceeds of insurance policies, if applicable, with respect to the relevant Property
to the extent not required by the terms of the relevant policy or the Mortgage Terms to be applied to repair damages for which
they compensate, and (d) all such other amounts received in connection with or relation to the relevant Loan excluding, for greater
certainty with respect to the Seller, the Purchase Price received in respect of such Loan pursuant to the terms of the Mortgage
Sale Agreement


Common Depositary The common
depositary for Euroclear and Clearstream, Luxembourg


Common Safekeeper The meaning
given in Section 2.8 of the Agency Agreement




    	 



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Corporate Representations and
Warranties The representations and warranties set out in Schedule 1 (Representations and Warranties) to the Mortgage Sale Agreement



Corporate Services Agreement
The corporate services agreement entered into on the Program Date by and among the Corporate Services Provider, the Liquidation
GP, the Bank and the Guarantor


Corporate Services Provider
Computershare Trust Company of Canada, a trust company formed under the laws of Canada, as corporate services provider to the
Liquidation GP under the Corporate Services Agreement, together with any successor corporate services provider appointed from time
to time


Couponholders The holders
of the Coupons (which expression will, unless the context otherwise requires, include the holders of the Talons)


Coupons Interest coupons
in respect of Bearer Definitive Covered Bonds


Cover Pool Monitor KPMG
LLP, in its capacity as Cover Pool Monitor under the Cover Pool Monitor Agreement together with any successor or additional Cover
Pool Monitor appointed from time to time thereunder


Cover Pool Monitor Agreement
The Cover Pool Monitor agreement entered into on the Program Date between
the Cover Pool Monitor, the Guarantor, the Cash Manager and the Bond Trustee


Cover Pool Monitor Fee The
meaning given in Section 6.1 (Cover Pool Monitor Fee) of the Cover Pool Monitor Agreement


Cover Pool Monitor Payment
Date The meaning given in Section 6.2 (Cover Pool Monitor Payment Date) of the Cover Pool Monitor Agreement


Covered Bond Collateral
The Loans included in the Portfolio and all Substitute Assets owned by the Guarantor


Covered Bond Guarantee An
unconditional and irrevocable guarantee by the Guarantor in the Trust Deed for the payment (following service of a Notice to Pay
or a Guarantor Acceleration Notice) of Guaranteed Amounts in respect of the Covered Bonds when the same will become Due for Payment


Covered Bond Guarantee Activation
Event The earlier to occur of (a) an Issuer Event of Default, service of an Issuer Acceleration Notice on the Issuer and service
of a Notice to Pay on the Guarantor, and (b) a Guarantor Event of Default and service of a Guarantor Acceleration Notice on the
Issuer and the Guarantor


Covered Bond Guarantee Activation
Event Date The date on which a Covered Bond Guarantee Activation Event occurs


Covered Bond Legislative Framework
The legislative framework established by Part I.1 of the National Housing Act (Canada)




    	 



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Covered Bond Swap Each
transaction between the Guarantor, the Covered Bond Swap Provider and the Bond Trustee in respect of a Series or Tranche, as applicable,
of Covered Bonds 


Covered Bond Swap Agreement
The agreement(s) between the Guarantor, the Covered Bond Swap Provider and the Bond Trustee governing any Covered Bond Swap in
the form of an ISDA Master Agreement, including a schedule and one or more confirmations thereunder for each Tranche and/or Series
of Covered Bonds entered into at the time such Covered Bonds are issued


Covered Bond Swap Early Termination
Event A Termination Event or Event of Default (each as defined in the relevant Covered Bond Swap Agreement), excluding a Swap
Provider Downgrade Event, pursuant to which the Non-defaulting Party or the party that is not the Affected Party (each as defined
in the relevant Covered Bond Swap Agreement), as applicable, may terminate the Covered Bond Swap Agreement


Covered Bond Swap Effective
Date The “Effective Date” as defined in the related Covered Bond Swap Agreement 


Covered Bond Swap Rate
In relation to a Series of Covered Bonds, the exchange rate specified in the Covered Bond Swap relating to such Covered Bonds or,
if the Covered Bond Swap Agreement has terminated, the applicable spot rate


Covered Bond Swap Provider
The Bank and, from time to time, any additional provider(s) of a Covered Bond Swap under the Covered Bond Swap Agreement, together
with any successor covered bond swap provider(s)


Covered Bondholders The
holders of the Covered Bonds at any given time


Covered Bonds Each covered
bond issued or to be issued pursuant to the Program Agreement and which is or is to be constituted under the Trust Deed, which
covered bond may be represented by a Global Covered Bond or any Definitive Covered Bond and includes any replacements for a Covered
Bond issued pursuant to Condition 6.11 (Legislative Exchange) and Condition 10 (Replacement of Covered Bonds, Coupons and Talons)
of the Terms and Conditions


Credit and Collection Policy
With respect to each Seller, such customary credit and collection policies and practices of the Seller, relating to
the granting of credit on the security of Loans and the collection and enforcement of Loans, as in effect on the Program Date,
as modified in compliance with the Mortgage Sale Agreement, from time to time


Custodial Information Collectively,
the Eligible Loan Details and the Substitute Asset Details with respect to the Loans and Related Security and Substitute Assets
in the Portfolio


Custodian Computershare
Trust Company of Canada, in its capacity as Custodian under the Mortgage Sale Agreement




    	 



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Customer Files The file
or files relating to each Loan and its Related Security containing, inter alia:


		(a)	all material correspondence relating to that Loan; and



		(b)	the completed mortgage documentation applicable to the Loan, including the Valuation Report and
the solicitor’s, notary’s or licensed qualified conveyancer’s certificate of title or report on title,



whether original documentation,
or in electronic form or otherwise


Cut-Off Date The second
Toronto Business Day following the Calculation Date preceding a relevant Transfer Date or (in the case of a Product Switch or Additional
Loan Advance) the Guarantor Payment Date, as the case may be


Day Count Fraction The
applicable meaning given in Condition 4.5(c) of the Terms and Conditions


DBRS DBRS Limited and its
successors


Dealer Each dealer appointed
from time to time in accordance with the Program Agreement, which appointment may be for a specific issue or on an ongoing basis.
References to the relevant Dealer(s) will, in the case of an issue of Covered Bonds being (or intended to be) subscribed for or
purchased by more than one Dealer, be to all Dealers agreeing to subscribe for or purchase such Covered Bonds


Dealership Agreement The
Dealership Agreement entered into on or after the Program Date between the Issuer,
the Guarantor and the Dealers


Defaulted Covered Bonds The
meaning given in Section 6.8 of the Agency Agreement


Definitive Covered Bond A
Bearer Definitive Covered Bond and/or a Registered Definitive Covered Bond, as the context may require


Definitive Regulation S Covered
Bond A Registered Covered Bond in definitive form sold to non-U.S. persons outside the United States in reliance on Regulation
S


Definitive Rule 144A Covered
Bond means a Registered Covered Bond in definitive form sold in the United States to QIBs pursuant to Rule 144A


Definitive U.S. Registered
Covered Bond A Registered Covered Bond in definitive form issued under the U.S. Registration Statement


Declaration A declaration
of limited partnership made under the LP Act and, where the context requires, the registration thereof if and as required under
the Business Names Act (Ontario), and includes a Declaration that has been amended


Demand Loan The meaning
given in Section 3.2 (Guarantee Loan and Demand Loan) of the Intercompany Loan Agreement




    	 



    	14



    


Demand Loan Contingent Amount
As of any time, an amount equal to the lesser of (a) the aggregate amount of the Intercompany Loan then outstanding, minus
the aggregate amount of the Guarantee Loan then outstanding (as determined by an Asset Coverage Test calculated on the relevant
Calculation Date), and (b) one per cent. of the amount of the Guarantee Loan then outstanding (as determined by an Asset Coverage
Test calculated on the relevant Calculation Date)


Demand Loan Repayment Event
The meaning given in Section 7.2 (Mandatory Repayment upon Demand Loan Repayment Event) of the Intercompany Loan Agreement


Demand Loan Required Amount
The meaning given to it in the Guarantor Agreement


Departing Managing GP The
meaning given to it in Section 11.4 (Transfer to New Managing GP) of the Guarantor Agreement


Designated Account The
meaning given in Condition 5.4 (Payments in respect of Registered Covered Bonds) of the Terms and Conditions


Designated Bank The meaning
given in Condition 5.4 (Payments in respect of Registered Covered Bonds) of the Terms and Conditions


Designated Maturity The
meaning given in the ISDA Definitions


Determination Date The
meaning given in the applicable Final Terms Document


Determination Period The
meaning given in Condition 4.5(d) of the Terms and Conditions


Direct Debiting System The
meaning given in Section 4.1 (Direct Debiting System) of the Servicing Agreement 


Direct Participants Direct
participants in DTC


Disclosure Documents The
Final Terms Document together with the Prospectus and, if applicable, any relevant Pricing Supplement


Drawdown Date The meaning
given to it in Section 2.1 (The Intercompany Loan) of the Intercompany Loan Agreement


DTC The Depository Trust
Company or its successors


DTC Covered Bonds Registered
Covered Bonds accepted into DTC’s book-entry settlement system


Due for Payment The requirement
by the Guarantor to pay any Guaranteed Amount:


		(a)	following service of a Notice to Pay but prior to service of a Guarantor Acceleration Notice:



		(i)	(except where paragraph (ii) below applies) on the date on which the Scheduled Payment Date in
respect of such Guaranteed Amount is reached, or, if the applicable Final Terms Document specified that an Extended Due





    	 



    	15



    


for Payment Date is applicable
to the relevant Series of Covered Bonds, on the Interest Payment Date that would have applied if the Final Maturity Date of such
Series of Covered Bonds had been the Extended Due for Payment Date or such other Interest Payment Date(s) specified in the applicable
Final Terms Document (the “Original Due for Payment Date”); and


		(ii)	in relation to any Guaranteed Amount in respect of the Final Redemption Amount payable on the Final
Maturity Date of a Series of Covered Bonds for which an Extended Due for Payment Date is specified in the applicable Final Terms
Document, on the Extended Due for Payment Date, but only to the extent that the Guarantor, having received the Notice to Pay no
later than the date falling one Business Day prior to the Extension Determination Date, does not pay Guaranteed Amounts corresponding
to the full amount of the Final Redemption Amount in respect of such Series of Covered Bonds by the Extension Determination Date,
because the Guarantor has insufficient funds available under the Guarantee Priority of Payments to pay such Guaranteed Amounts
in full on the earlier of (1) the date which falls two Business Days after service of the Notice to Pay on the Guarantor or, if
later, the Final Maturity Date (in each case after the expiry of the grace period set out in Condition 9.2(a) of the Terms and
Conditions and (2) the Extension Determination Date



For the avoidance of doubt, Due
for Payment does not refer to any earlier date upon which payment of any Guaranteed Amounts may become due under the guaranteed
obligations, by reason of prepayment, acceleration of maturity, mandatory or optional redemption or otherwise; or


		(b)	following service of a Guarantor Acceleration Notice, on the date on which the Guarantor Acceleration
Notice is served on the Issuer and the Guarantor



Earliest Maturing Covered Bonds
At any time, the Series of the Covered Bonds (other than any Series which is fully collateralised by amounts standing to the credit
of the GDA Account) that has or have the earliest Final Maturity Date as specified in the applicable Final Terms Document (ignoring
any acceleration of amounts due under the Covered Bonds prior to service of a Guarantor Acceleration Notice)


Early Redemption Amount
The amount calculated in accordance with Condition 6.7 (Early Redemption Amounts) of the Terms and Conditions


ECOFIN The Economic and
Financial Affairs Council


Eligibility Criteria The
following criteria:


		(a)	there has been neither an Issuer Event of Default and service of an
Issuer Acceleration Notice nor a Guarantor Event of Default and service of a Guarantor Acceleration Notice as at the relevant Transfer
Date;



		(b)	the Guarantor, acting on the advice of the Cash Manger, is not aware,
and could not reasonably be expected to be aware, that the proposed purchase by the Guarantor of the Loans and their Related Security
on the relevant Transfer Date does not satisfy the Rating Agency Condition;





    	 



    	16



    

		(c)	no Loan that is proposed to be sold to the Guarantor on the relevant
Transfer Date has an Outstanding Principal Balance of more than $3,000,000.00 or, in the case of any STEP Loans, all such STEP
Loans made to the same STEP Borrower from time to time, whether or not sold to the Guarantor, shall not have an Outstanding Principal
Balance of more than $3,000,000.00 in the aggregate;



		(d)	if the Loans that are proposed to be sold constitute a New Loan Type,
the Rating Agency Condition has been satisfied in accordance with the terms of the Mortgage Sale Agreement with respect to the
sale of such Loans to the Guarantor 



		(e)	such Loan is not secured by a Mortgage that also secures one
or more other loans or, in the case of a STEP Loan, also secures any Other STEP Product, which in either case has the benefit of
insurance from any Prohibited Insurer; 



		(f)	if the Loan is extended or advanced upon the security of a Mortgage that also secures (or is
                                                               capable of securing) Retained Loans, the Loan and all Related Retained Loans have the benefit of cross-default provisions
                                                               (whether contained in the terms and conditions of the Loan and Related Retained Loans, the Mortgage securing the Loan and
                                                               Related Retained Loans or other documentation applicable to the Loan and Related Retained Loans, and enforceable against the
                                                               Borrower) such that a default under the Loan or a Related Retained Loan will constitute a default under the Loan and all
                                                               Related Retained Loans or, in the case of a Loan or Related Retained Loan not having the benefit of cross-default provisions
                                                               but repayable on demand, the Guarantor or the Seller (and each mortgage lender as may be on title) have covenanted in writing
                                                               to demand repayment of the Loan or such Related Retained Loans upon a default under the Loan or the Related Retained Loan, as
                                                               the case may be;



		(g)	at the time of transfer to the Guarantor, no payments of principal or interest thereunder are in
arrears;



		(h)	the first payment due in respect of such Loan has been paid by the relevant Borrower;



		(i)	the related Mortgage constitutes a valid first mortgage lien or a valid first-ranking hypothec
over the related Mortgaged Property under which no claims have been made and subject to Permitted Encumbrances;



		(j)	at the time of transfer, the Guarantor will acquire the entire legal and beneficial ownership interest
of the Seller in the applicable Loans and their Related Security, excluding registered title therein, free and clear of any encumbrances
or ownership interests, other than (i) Permitted Encumbrances, and (ii) those which are reflected in a Security Sharing Agreement
and the subject of a Release of Security delivered by the Seller or any mortgage lender on title to the Custodian in trust upon
and subject to the provisions of this Agreement and in compliance with the CMHC Guide;





    	 



    	17



    


		(k)	as at the Transfer Date, the Loan is not subject to any dispute proceeding, set-off, counterclaim
or defence whatsoever;



		(l)	neither the Mortgage Terms for the Loan nor the provisions of any other documentation applicable to
the Loan and enforceable by the Borrower expressly afford the Borrower a right of set-off;



		(m)	to the extent the Loan is extended, advanced or renewed on or after July 1, 2014 (which for greater
certainty will not include further advances under an existing non-amortizing Loan unless amended), an express waiver of set-off
rights on the part of the Borrower is included in the terms and conditions of the Loan and all Related Retained Loans, the Mortgage
securing the Loan and all Related Retained Loans or other documentation applicable to the Loan and all Related Retained Loans,
and enforceable against the Borrower; and



		(n)	prior to the making of each advance under such Loan, the Lending Criteria and all preconditions to
the making of that Loan were satisfied; and



		(o)	such Loan is an “Eligible Loan” as defined in the
CMHC Guide from time to time



Eligible
Loan A Loan with respect to which each of the Loan Representations and Warranties is true and correct


Eligible Loan Details In
electronic format, the following data with respect to each Loan:


		(a)	the Seller’s loan number;



		(b)	mortgagor(s) full name;



		(c)	property address (no., street, city/town, province,
postal code);



		(d)	principal balance amount;



		(e)	authorized loan amount (at origination or last renewal);



		(f)	interest adjustment date (at origination or last renewal);



		(g)	mortgage maturity date; and



		(h)	mortgage lender on title if other than the Seller.



Encumbrance The same meaning
as Adverse Claim


Equity Interest (i) In
the case of a corporation, any shares of its capital stock, (ii) in the case of a limited liability company, any membership interest
therein, (iii) in the case of a partnership, any partnership interest (whether general or limited) therein, (iv) in the case of
any other business entity, any participation or other interest in the equity or profits thereof, (v) any warrant, option or other
right to acquire any Equity Interest described in this definition, or (vi) any security entitlement in respect of any Equity Interest
described in the definition




    	 



    	18



    


Established Rate The meaning
given in Condition 5.9 (Definitions) of the Terms and Conditions


euro LIBOR or EURIBOR
Euro-zone inter-bank offered rate


Euroclear Euroclear Bank
S.A./N.V. or its successors


European Economic Area
Member States of the European Union together with Iceland, Norway and Liechtenstein


European Member State Any
member state of the European Economic Union


Eurosystem-eligible NGCB
An NGCB which is intended to be held in a manner which would allow Eurosystem eligibility, as stated in the applicable Final Terms
Document


Excess Proceeds Funds received
(following service of an Issuer Acceleration Notice) by the Bond Trustee from the Issuer or any liquidator or other similar officer
appointed in relation to the Issuer


Excess Proceeds Amount The
meaning given in Section 7.11 (Excess Proceeds Amount) of the Trust Deed


Exchange Agent The Bank
of Nova Scotia Trust Company of New York as appointed pursuant to the Agency Agreement as the exchange agent together with any
successor appointed from time to time thereunder


Exchange Date The meaning
given in Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) to the Trust Deed


Exchange Event The meanings
given in Parts 2 and 7 of Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) to the Trust Deed, as applicable


Excluded Scheduled Interest
Amounts The meaning given in the definition of “Scheduled Interest”


Excluded Scheduled Principal
Amounts The meaning given in the definition of “Scheduled Principal”


Excluded Swap Termination Amount
In relation to a Swap Agreement, an amount equal to the amount of any termination payment due and payable under that Swap Agreement
(a) to the relevant Swap Provider as a result of a Swap Provider Default with respect to such Swap Provider, or (b) to the relevant
Swap Provider following a Swap Provider Downgrade Event with respect to such Swap Provider


Executive Offices The executive
offices of the Bank located at Scotia Plaza, 44 King Street West, Toronto, Ontario, M5H 1H1


Expenses The meaning given
in Section 22.1 of the Agency Agreement


Extended Due for Payment Date
In relation to any Series of Covered Bonds, the date, if any, specified as such in the applicable Final Terms Document to which
the payment of all




    	 



    	19



    


or (as applicable) part of the
Final Redemption Amount payable on the Final Maturity Date will be deferred in the event that the Final Redemption Amount is not
paid in full by the Extension Determination Date


Extension Determination Date
In relation to any Series of Covered Bonds, the date falling two Business Days after the expiry of seven days from (and including)
the Final Maturity Date of such Series of Covered Bonds


Extension Notice The meaning
given in Section 15.2 (Extendable Obligations) of the Agency Agreement


Extraordinary Resolution
The meaning given in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


Fair Market Value In respect
of a Loan and its Related Security, the fair market value at the relevant time, being the price expressed in terms of money or
monies' worth, a willing, prudent and informed buyer would pay in an open and unrestricted market to a willing, prudent and informed
seller, each acting at arms' length, where neither party is under any compulsion to enter into the transaction, as part of the
acquisition of all of the Loans and their Related Security being purchased or sold at the relevant time


FATCA The meaning given
in Condition 7 (Taxation)


FATCA Withholding Any withholding
or deduction required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections
1471 through 1474 of the Code (or any regulations thereunder or official interpretations thereof) or an intergovernmental agreement
between the United States and another jurisdiction facilitating the implementation thereof (or any law implementing such an intergovernmental
agreement) 


FFI A foreign financial
institution as defined in the Code


Final Maturity Date The
Interest Payment Date on which a Series of Covered Bonds will be redeemed at the Final Redemption Amount in accordance with the
Terms and Conditions


Final Redemption Amount
The meaning given in the relevant Final Terms Document


Final Terms Document The
final terms document or, in the case of U.S. Registered Covered Bonds, the prospectus supplement relating to each Series (or Tranche,
as the case may be) of Covered Bonds, which sets out the final terms for that Tranche or Series; and applicable Final Terms
Document means, with respect to a Series or Tranche of Covered Bonds, the Final Terms Document applicable to such Series or
Tranche, as the case may be, and unless the context requires otherwise, any reference to a Final Terms Document or applicable Final
Terms Document shall include a reference to the related pricing supplement, if applicable


financial institutions The
meaning given in Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) to the Trust Deed




    	 



    	20



    


First Issue Date The date
on which the Issuer issues a Series of Covered Bonds for the first time pursuant to the Program


First STEP Loan The first
STEP Loan made by the Seller to a particular STEP Borrower under the STEP Plan, which is sold to the Guarantor


First Transfer Date The
date on which the Initial Portfolio was sold, assigned and transferred to the Guarantor pursuant to the terms of the Mortgage
Sale Agreement


Fiscal Year A fiscal year
of the Partnership, currently being the calendar year


Fitch Fitch Ratings Inc.
and its successors


Fitch Demand Loan Repayment
Ratings The threshold short-term issuer default rating F2 or the threshold long-term issuer default rating BBB+, in each case
by Fitch in respect of the Intercompany Loan Provider


Fixed Coupon Amount The
meaning given in the applicable Final Terms Document


 Fixed Rate The rate
of interest paid under the Fixed Rate Covered Bonds


Fixed Rate Covered Bonds
Covered Bonds that pay a Fixed Rate of interest on such date or dates as may be agreed between the Issuer and the relevant Dealer(s)
and on redemption calculated on the basis of such Day Count Fraction as may be agreed between the Issuer and the relevant Dealer(s)


Floating Rate The meaning
given in the ISDA Definitions


Floating Rate Convention
The meaning given in Condition 4.5(b)(i) of the Terms and Conditions


Floating Rate Covered Bond
Margin In respect of a Floating Rate Covered Bond, the percentage rate per annum (if any) specified in the applicable Final
Terms Document


Floating Rate Covered Bonds
Covered Bonds which bear interest at a rate determined:


		(a)	on the same basis as the floating rate under a notional interest rate swap transaction in the relevant
Specified Currency governed by an agreement incorporating the ISDA Definitions; or



		(b)	on the basis of a Reference Rate appearing on the agreed screen page of a commercial quotation
service; or



		(c)	on such other basis as may be agreed between the Issuer and the relevant Dealer(s),



as set out in the applicable Final
Terms Document


Floating Rate Option The
meaning given in the ISDA Definitions


Following Business Day Convention
The meaning given in Condition 4.5(b)(ii) of the Terms and Conditions




    	 



    	21



    


form of proxy The meaning
given in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


FSMA The Financial Services
and Markets Act 2000 (as amended)


Further Advance In relation
to a Loan, any advance of further money to the relevant Borrower following the making of the Initial Advance, which is secured
by the same Mortgage as the Initial Advance, excluding the amount of any retention in respect of the Initial Advance


GDA Account The account
in the name of the Guarantor held with the Bank and maintained subject to the terms of the Guaranteed Deposit Account Contract,
the Bank Account Agreement and the Security Agreement or such additional or replacement account as may for the time being be in
place with the prior consent of the Bond Trustee and designated as such


GDA Account Mandate The
bank account mandate between the Guarantor and the Account Bank relating to the operation of the GDA Account


GDA Balance On any day,
the amount standing to the credit of the GDA Account as at the opening of business on such day


GDA Provider The Bank,
in its capacity as GDA provider under the Guaranteed Deposit Account Contract or any successor or additional GDA provider appointed
from time to time thereunder


GDA Rate The variable rate
of interest accruing on the balance standing to the credit of the GDA Account being a variable rate at a minimum of 0.10 per cent.
below the 1-month CDDR that appears on
the Reuters screen as of 10:00 a.m. (Toronto time) on the date of determination, as reported by the GDA Provider (and if such screen
is not available, any successor or similar service as may be selected by the GDA Provider) (calculated on the basis of the actual
number of days elapsed and a 365 day year) or such greater amount as the Guarantor (or the Cash Manager on its behalf) and the
GDA Provider may agree from time to time. For greater certainty, any change in the GDA Rate agreed to by the Guarantor (or the
Cash Manager on its behalf) and the GDA Provider in accordance with the foregoing shall not constitute an amendment to, or a modification
or variation of, the Guaranteed Deposit Account Contract


General Partners The Managing
GP and the Liquidation GP


Global Covered Bond A Bearer
Global Covered Bond and/or a Registered Global Covered Bond, as the context may require


Governmental Authority The
government of Canada or any other nation, or of any political subdivision thereof, whether provincial, territorial, state, municipal
or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including any supra-national
bodies, the Superintendent or other comparable authority or agency




    	 



    	22



    


GST The goods and services
tax payable under Part IX of the Excise Tax Act (Canada) or pursuant to any similar value added tax legislation applicable
that is stated to be harmonized with the foregoing, including for greater certainty, any harmonized sales tax payable


Guarantee Fee The guarantee
fee agreed to from time to time between the Issuer and the Guarantor in accordance with the Trust Deed


Guarantee Loan The meaning
given in Section 3.2 (Guarantee Loan and Demand Loan) of the Intercompany Loan Agreement


Guarantee Priority of Payments
The meaning given in Section 6.4 of the Guarantor Agreement


Guaranteed Amounts Prior
to service of a Guarantor Acceleration Notice, with respect to any Original Due for Payment Date or, if applicable, any Extended
Due for Payment Date, the sum of Scheduled Interest and Scheduled Principal, in each case, payable on that Original Due for Payment
Date or, if applicable, any Extended Due for Payment Date, or after service of a Guarantor Acceleration Notice, an amount equal
to the relevant Early Redemption Amount as specified in the Terms and Conditions plus all accrued and unpaid interest and all other
amounts due and payable in respect of the Covered Bonds (other than additional amounts payable under Condition 7 (Taxation) of
the Terms and Conditions), including all Excluded Scheduled Interest Amounts, all Excluded Scheduled Principal Amounts (whenever
the same arose) and all amounts payable by the Issuer under the Trust Deed


Guaranteed Deposit Account
Contract or GDA The guaranteed deposit account contract between the Guarantor, the GDA Provider, the Account Bank, the
Bond Trustee and the Cash Manager dated as of the Program Date


Guarantor Scotiabank Covered
Bond Guarantor Limited Partnership, a limited partnership established under the laws of the Province of Ontario, Canada


Guarantor Acceleration Notice
The meaning given in Condition 9.2 (Guarantor Events of Default) of the Terms and Conditions


Guarantor Accounts The
GDA Account and the Transaction Account and any additional or replacement accounts opened in the name of the Guarantor from time
to time with the prior consent of the Bond Trustee, including the Standby GDA Account and Standby Transaction Account


Guarantor Activities The
activities of the Guarantor described in Section 2.3 (Guarantor Activities) of the Guarantor Agreement


Guarantor Agreement The
limited partnership agreement in respect of the Guarantor entered into on the Program Date by and among the Managing GP, the Liquidation
GP, the Bond Trustee and the Bank as Limited Partner and any other parties who accede thereto in accordance with its terms


Guarantor Auditor Such
firm of chartered accountants of recognized standing as may at any time be appointed by the Managing GP to act as Guarantor Auditor
of the Partnership in accordance with the terms of the Guarantor Agreement




    	 



    	23



    


Guarantor Calculation Period
Each period from, but excluding, the last Toronto Business Day of each month to, and including, the last Toronto Business Day
of the next succeeding month, provided that (a) the first Guarantor Calculation Period begins on, and includes, the Program Date,
and (b) the final Guarantor Calculation Period will end on, but exclude, the Termination Date


Guarantor Event of Default
The meaning given in Condition 9.2 (Guarantor Events of Default) of the Terms and Conditions


Guarantor Expenses The
costs and expenses of the Guarantor incurred in connection with or relating to the performance of its obligations under the Transaction
Documents


Guarantor Payment Date
The 17th of each month or if not a Toronto Business Day the next following Toronto Business Day


Guarantor Payment Period
The period from (and including) a Guarantor Payment Date to (but excluding) the next following Guarantor Payment Date


Hard Bullet Covered Bonds Those
Series of Covered Bonds that are scheduled to be redeemed in full on their respective Final Maturity Dates without any provision
for scheduled redemption other than on the Final Maturity Date 


ICMA The International
Capital Market Association


IFRS International Financial
Reporting Standards


Income Tax Act The Income
Tax Act (Canada) and the regulations thereunder, as amended from time to time



    	 



    	24



    

Independently Controlled and
Governed In respect of the Guarantor, at the time of determination, it is demonstrated that, whether by attestation of an executive
officer of the Issuer or otherwise, each of the following is correct:


		(a)	the managing general partner of the Guarantor is not (and cannot be) an Affiliate of the Issuer
and less than ten percent of its voting securities are (or can be) owned, directly or indirectly, by the Issuer or any of its Affiliates,



		(b)	if an administrative agent or other analogous entity has been engaged by the managing general partner
of the Guarantor to fulfil its responsibility or role to carry on, oversee, manage or otherwise administer the business, activities
and assets of the Guarantor, the agent or entity is not (and cannot be) an Affiliate of the Issuer and less than ten percent of
its voting securities are (or can be) owned, directly or indirectly, by the Issuer or any of its Affiliates,



		(c)	all members (but one) of the board of directors or other governing body of the managing general
partner of the Guarantor and each such administrative agent or other entity are not (and cannot be) directors, officers, employees
or other representatives of the Issuer or any of its Affiliates, do not (and cannot) hold greater than ten percent of the voting
or equity securities of the Issuer or any of its Affiliates and are (and must be) otherwise free from any material relationship
with the Issuer or any of its Affiliates (hereinafter referred to as Independent Members), and



		(d)	the board of directors or other governing body of the managing general partner of the Guarantor
and each such administrative agent or other entity is (and must be) composed of at least three members, and the non-Independent
Member is not (and shall not be) entitled to vote on any resolution or question to be determined or resolved by the board (or other
governing body) and shall attend meetings of the board (or other governing body) at the discretion of the remaining members thereof,
provided that such board of directors or other governing body may be composed of only two Independent Members with “observer
status” granted to one director, officer, employee or other representative of the Issuer or any of its Affiliates



Indexation Methodology The
indexation methodology of the Issuer used to account for subsequent price developments in the valuation of a Loan, which indexation
methodology shall be consistent with all regulatory requirements to which the Issuer is subject (or supervisory guidelines provided
to the Issuer) in relation to the valuation of residential properties or the indexation of such values, together with any additional
requirements as may be established by CMHC in relation thereto and set forth in the CMHC Guide




    	 



    	25



    


Indirect Participants Indirect
participants in DTC that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly


Industry Standard Sampling
Size The meaning given in Section 2.2(b) (Certain Testing Services) of the Cover Pool Monitor Agreement


Initial Advance In relation
to a Loan, the original principal amount advanced by the Seller, including any retention(s) advanced to the relevant Borrower after
completion of the Mortgage


Initial Portfolio The initial
portfolio of Loans and their Related Security sold by the Seller(s) to the Guarantor on the First Transfer Date pursuant to the
Mortgage Sale Agreement (other than any Loans and their Related Security which do not otherwise comply with the terms of the
Mortgage Sale Agreement as at the First Transfer Date or which have been repurchased by the Seller from the Portfolio or otherwise
sold from the Portfolio by the Guarantor), and all right, title, interest and benefit of the Seller in and to:


		(a)	all payments of principal and interest (including, for the avoidance of doubt, all Accrued Interest,
Arrears of Interest, Capitalised Expenses and Capitalised Arrears) and other sums due or to become due in respect of such Loans
and Related Security, including the right to demand, sue for, recover and give receipts for all principal funds, interest and costs
and the right to sue on all covenants and any undertakings made or expressed to be made in favour of the Seller under the applicable
Mortgage Terms (but excluding, in respect of any STEP Loan, any such amounts required to be distributed to the Seller or Other
STEP Creditor in respect of any Additional STEP Loans on a pari passu basis with such STEP Loan in accordance with the Transaction
Documents);



		(b)	the right to exercise all the powers of the Seller in
relation thereto subject to and in accordance with the applicable Mortgage Terms;



		(c)	all the estate and interest in the Mortgaged Properties
vested in the Seller;



		(d)	to the extent they are assignable, each solicitor’s
or notary’s report on title (in each case where available) and any right of action of the Seller against any solicitor,
licensed conveyancer, qualified conveyancer, valuer or other Person in connection with any report, valuation, opinion, certificate
or other statement of fact or opinion given in connection with such Loans and Related Security, or any part thereof or affecting
the decision of the Seller to make or offer to make any such Loan or part thereof;



		(e)	the right to all proceeds of all claims made by or on
behalf of the Seller or to which the Seller is entitled under any insurance policies in respect of the Loans and their Related
Security; and



		(f)	all proceeds of the foregoing



Insolvency Event In respect
of any Person, any impending or actual insolvency on the part of such Person, as evidenced by, but not limited to:




    	 



    	26



    


		(a)	the commencement of a dissolution proceeding or a case in bankruptcy involving the Person (and
where such proceeding is the result of an involuntary filing, such proceeding is not dismissed within 60 days after the date of
such filing),



		(b)	the appointment of a trustee or other similar court officer over, or the taking of control or possession
by such officer of the Person’s business, in whole or in part, before the commencement of a dissolution proceeding or a case
of bankruptcy,



		(c)	a general assignment by the Person for the benefit of any of its creditors, and



		(d)	the general failure of, or the inability to, or the written admission of the inability of, the
Person to pay its debts as they become due



Intercompany Loan The loan
made available by the Issuer to the Guarantor on a secured basis pursuant to the Intercompany Loan Agreement, comprised of the
Guarantee Loan and the Demand Loan in a combined aggregate amount equal to the Total Credit Commitment


Intercompany Loan Agreement
The intercompany loan agreement dated as of the Program date between
the Intercompany Loan Provider, the Guarantor, the Cash Manager and the Bond Trustee


Intercompany Loan Interest
Amount The meaning given in Section 6.2 (Interest Rate) of the Intercompany Loan Agreement


Intercompany Loan Ledger
The ledger of such name maintained by the Cash Manager pursuant to the Cash Management Agreement


Intercompany Loan Provider
The Bank, in its capacity as intercompany loan provider under the Intercompany Loan Agreement, or any successor or additional
loan provider appointed from time to time thereunder


Interest Amount The amount
of interest payable on the Floating Rate Covered Bonds for the relevant Interest Period, as indicated in the applicable Final Terms
Document


Interest Basis The meaning
given in the applicable Final Terms Document


Interest Commencement Date
In the case of interest-bearing Covered Bonds, the date specified in the applicable Final Terms Document from (and including) which
the relevant Covered Bonds will accrue interest


Interest Determination Date
In respect of Floating Rate Covered Bonds to which Screen Rate Determination is applicable, the meaning given in the applicable
Final Terms Document


Interest Payment Date In
respect of Fixed Rate Covered Bonds, the meaning given in the applicable Final Terms Document and in respect of Floating Rate Covered
Bonds, the meaning given in Condition 4.2(a) of the Terms and Conditions




    	 



    	27



    


Interest Period In accordance
with Condition 4.5(f) of the Terms and Conditions, the period from (and including) an Interest Payment Date (or the Interest Commencement
Date) to (but excluding) the next (or first) Interest Payment Date


Interest Rate Swap Interest
rate swap entered into in connection with the Covered Bonds under the terms of the Interest Rate Swap Agreement


Interest Rate Swap Activation
Event Date The meaning given in the Interest Rate Swap Agreement


Interest Rate Swap Agreement
The agreement(s) between the Guarantor and an Interest Rate Swap Provider governing the Interest Rate Swap in the form of an ISDA
Master Agreement, including a schedule and one or more confirmations thereunder for each Tranche and/or Series of Covered Bonds
entered into at the time such Covered Bonds are issued


Interest Rate Swap Early Termination
Event A Termination Event or an Event of Default (each as defined in the Interest Rate Swap Agreement, or the relevant Interest
Rate Swap Agreement, as applicable)


Interest Rate Swap Effective
Date The “Effective Date” as defined in the Interest Rate Swap Agreement


Interest Rate Swap Provider
The Bank of Nova Scotia and, from time to time, any additional provider(s) of an Interest Rate Swap under the Interest Rate Swap
Agreement together with any successor interest rate swap provider(s)


Internal Revenue Code or Code
The U.S. Internal Revenue Code of 1986


Investment Company Act The
U.S. Investment Company Act of 1940


Investor Report The monthly
report required to be delivered under Section 9.4(b) of the Cash Management Agreement


ISA International Standards
on Auditing


ISDA International Swaps
and Derivatives Association, Inc.


ISDA Definitions The 2006
ISDA Definitions, as published by ISDA, unless otherwise specified in the applicable Final Terms Document


ISDA Determination If specified
as applicable in the applicable Final Terms Document, the manner in which the Rate of Interest on Floating Rate Covered Bonds is
to be determined in accordance with Condition 4.2(b)(i) of the Terms and Conditions


ISDA Master Agreement The
2002 ISDA Master Agreement (as published by ISDA), unless otherwise specified in the applicable Final Terms Document


ISDA Rate The meaning given
in Condition 4.2(b)(i) of the Terms and Conditions


ISIN International Securities
Identification Number




    	 



    	28



    


Issue Date Each date on
which the Issuer issues a Tranche of Covered Bonds under the Program, as specified in the applicable Final Terms Document


Issue Price The price,
generally expressed as a percentage of the nominal amount of the Covered Bonds, at which a Series or Tranche of Covered Bonds will
be issued


Issuer The Bank of Nova
Scotia


Issuer Acceleration Notice
The meaning given in Condition 9.1 (Issuer Events of Default) of the Terms and Conditions


Issuer Call The meaning
given in Condition 6.3 (Redemption at the option of the Issuer (“Issuer Call”)) of the Terms and Conditions


Issuer Event of Default
The meaning given in Condition 9.1 (Issuer Events of Default) of the Terms and Conditions


Latest Valuation In relation
to any Mortgaged Property, the value given to that Mortgaged Property by the most recent Valuation Report addressed to the Seller
or the purchase price of that Mortgaged Property or current property tax assessment, as applicable


Law Includes common or
customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative
measure in any jurisdiction and any present or future directive, regulation, guideline, practice, concession, request or requirement
whether or not having the force of law issued by any governmental body, agency or department or any central bank or other fiscal,
monetary, Taxation, regulatory, self regulatory or other authority or agency


Ledger Each of the Revenue
Ledger, the Principal Ledger, the Intercompany Loan Ledger, the Subordinated Loan Ledger, the Reserve Ledger, the Payment Ledger
and the Pre-Maturity Liquidity Ledger


Lending Criteria The lending
criteria of the Seller from time to time, or such other criteria as would be acceptable to reasonable and prudent institutional
mortgage lenders in the Seller’s market


Letter Agreement The engagement
letter in respect of the appointment of the independent directors of the Liquidation GP, entered into on the Program Date by and
among the Bank, the Guarantor and Computershare Trust Company of Canada


Liability Any loss, damage,
cost, charge, claim, demand, expense, judgment, decree, action, proceeding or other liability whatsoever (including taxes, duties,
levies, imposts and other charges) and including any taxes charged or chargeable in respect thereof and legal fees and expenses
on a full indemnity basis


Liability Value The meaning
given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement


LIBOR London Interbank
Offered Rate




    	 



    	29



    


Limited Partner The Bank,
in its capacity as a limited partner of the Guarantor, individually and together with such other persons who may from time to time,
become limited partner(s) of the Guarantor pursuant to the terms of the Guarantor Agreement


Liquidation GP
8429057 Canada Inc., in its capacity as liquidation general partner of the Guarantor together with any of its successors and any
successor liquidation general partner appointed pursuant to the terms of the Guarantor Agreement


Loan Each
mortgage loan or (if approved by the Rating Agencies as a New Loan Type) home equity line of credit secured, in each case, by a
Mortgage on Mortgaged Property, referenced by its mortgage loan identifier number and comprising the aggregate of all principal
sums, interest, costs, charges, expenses and other funds (including all Additional Loan Advances) due or owing by the related Borrower
from time to time with respect to that mortgage loan or home equity line of credit under the relevant Mortgage Terms and all of
the related Borrower’s obligations in respect of the same 


Loan Interest Payment Date
The meaning given in Section 6.1 (Interest Periods) of the Intercompany Loan Agreement


Loan Interest Period The
meaning given in Section 6.1 (Interest Periods) of the Intercompany Loan Agreement


Loan Representations and Warranties
The representations and warranties relating to the Loans set out in the Mortgage Sale Agreement


Loan Repurchase Notice
A notice in substantially the form set out in the Mortgage Sale Agreement served by the Guarantor on the Seller in relation to
the purchase of Loans in the Portfolio by the Seller in accordance with the terms of the Mortgage Sale Agreement


London Stock Exchange London
Stock Exchange plc


Losses The meaning given
in Section 22.1 of the Agency Agreement


LP Act The Limited Partnerships
Act (Ontario) as the same may be amended from time to time


LTV Adjusted Loan Balance The
meaning given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement 


Managing GP Scotiabank
Covered Bond GP Inc., in its capacity as managing general partner of the Guarantor, any successor managing general partner of the
Guarantor appointed in accordance with the terms of the Guarantor Agreement, including without limitation the Liquidation GP if
and while appointed as Managing GP in accordance with Article 11 of the Guarantor Agreement (Removal and Resignation of the
Managing General Partner and the Liquidation General Partner), and any successor or assign of any of them as the context requires


Managing GP Default Event The
meaning given in Section 11.2 of the Guarantor Agreement




    	 



    	30



    


Mandate The GDA Account
Mandate and/or the Transaction Account Mandate and/or the mandates in relation to any other Guarantor Account, as the case may
be


Market The London Stock
Exchange’s Regulated Market


Market Value With respect
of a Mortgaged Property and any date of determination, (a) if such date of determination is prior to July 31, 2014, the Original
Market Value of such Mortgaged Property, or (b) if such date of determination is on or after July 31, 2014, the Original Market
Value of such Mortgage Property as adjusted in accordance with the Indexation Methodology


Master Definitions and
Construction Agreement This master definitions and construction agreement made between the parties to the Transaction
Documents as of the Program Date (as the same may be amended and/or supplemented and/or restated from time to time)


Material Adverse Effect
Any effect:


		(a)	upon the business, operations, property, financial or other condition of the Seller or the Servicer
(other than a Successor Servicer); or



		(b)	on the Portfolio, taken as a whole,



which, in either case, could reasonably
be expected to materially and adversely affect the interests of the Guarantor in the Portfolio, taken as a whole, the collectability
of the Loans, taken as a whole, the enforceability of the Portfolio, taken as a whole, or the Seller’s or the Servicer’s
ability to perform its obligations under any Transaction Documents


Maximum Rate of Interest
In respect of Floating Rate Covered Bonds the percentage rate per annum (if any) specified in the applicable Final Terms Document


Maximum Redemption Amount
The amount specified as such in the applicable Final Terms Document


Member State Any member
state of the European Union


Minimum Rate of Interest
In respect of Floating Rate Covered Bonds the percentage rate per annum (if any) specified in the applicable Final Terms Document


Minimum Redemption Amount
The amount specified as such in the applicable Final Terms Document


Modified Following Business
Day Convention The meaning given in Condition 4.5(b)(iii) of the Terms and Conditions


Monthly Payment The amount
which the relevant Mortgage Terms require a Borrower to pay on each Monthly Payment Day in respect of that Borrower’s Loan


Monthly Payment Day The
date on which interest (and principal in relation to a repayment mortgage) is due to be paid by a Borrower on a Loan or, if any
such day is not a Toronto Business Day, the next following Toronto Business Day




    	 



    	31



    


Moody’s Moody’s
Investors Service, Inc. and its successors


Mortgage The legal charge,
mortgage, hypothec, standard security or charge securing a Loan, and includes a STEP Collateral Mortgage


Mortgage Maturity Date
The meaning given in Section 8.5 (Maturing Loans) of the Mortgage Sale Agreement


Mortgage Sale Agreement
The mortgage sale agreement made as of the Program Date as between the Seller,
the Servicer, the Bond Trustee, the Custodian and the Guarantor and, where the context so requires, including any New Mortgage
Sale Agreement entered into from time to time between any New Seller, the Bond Trustee, the Custodian and the Guarantor


Mortgage Terms All the
terms and conditions applicable to a Loan, including the applicable Mortgage Terms and Offer Conditions and, in respect of a STEP
Loan, the STEP Plan


Mortgaged Property Freehold
or leasehold residential property located in Canada (or owned residential immovable property situated in the Province of Quebec)
that is subject to a Mortgage


Negative Carry Factor The
meaning given in Schedule 2 or Schedule 3 to the Guarantor Agreement, as the context requires


Net Income or Net Loss
Respectively, the net income or net loss of the Partnership as determined in accordance with IFRS


New Entity The meaning
given in Section 21.3 (Merger, Consolidation, Amalgamation and Substitution) of the Trust Deed


New Global Covered Bond
A Temporary Global Covered Bond in the form set out in Part 1 of Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons
and Talons) to the Trust Deed or a Permanent Global Covered Bond in the form set out in Part 2 of Schedule 2 (Forms of Global and
Definitive Covered Bonds, Coupons and Talons) to the Trust Deed, in either case where the applicable Final Terms Document specifies
that the Covered Bonds are in NGCB form


New Guaranteed Deposit Account
Contract has the meaning given in Section 4.1(g) of the Cash Management Agreement


New Loan Loans, other than
the Loans comprised in the Initial Portfolio, which the Seller may sell to the Guarantor after the First Transfer Date pursuant
to the Mortgage Sale Agreement


New Loan Type A
new type of loan originated or acquired by the Seller (such as a home equity line of credit), which the Seller intends to transfer
to the Guarantor, the terms and conditions of which are materially different (in the opinion of the Seller, acting reasonably)
from the Loans. For the avoidance of doubt, a loan will not constitute a New Loan Type if it differs from the Loans in the Portfolio
due to it having different interest rates and/or interest periods and/or time periods




    	 



    	32



    


New Mortgage Sale
Agreement Any new mortgage sale agreement entered into between any New Seller, the Guarantor and the Bond Trustee, which
will be substantially in the same form and contain substantially the same provisions as the mortgage sale agreement made as
of the Program Date as between the Seller, the Servicer, the Bond Trustee and the Guarantor


New Portfolio Each portfolio
of Additional Loans and their Related Security (other than any Additional Loans and their Related Security which have been redeemed
in full prior to the relevant Transfer Date or which do not otherwise comply with the terms of the Mortgage Sale Agreement
as at the relevant Transfer Date, or which have been repurchased by the Seller from the Portfolio or otherwise sold from the Portfolio
by the Guarantor), particulars of which are set out in the relevant Additional Loan Notice or in a document stored upon electronic
media (including, but not limited to, a CD-ROM), and all right, title, interest and benefit of the Seller in and to the rights
and assets set out in paragraphs (a) to (f) in the definition of Initial Portfolio


New Secured Creditor Any
other Person that becomes a Secured Creditor pursuant to Section 4.3 (Accession of New Secured Creditors) of the Security Agreement
by executing a copy of the Accession Undertaking in the form, or substantially in the form, set out in Schedule 2 to the Security
Agreement


New Seller Any member of
the Scotiabank Group (other than the Bank and Scotia Mortgage Corporation) that accedes to the relevant Transaction Documents in
accordance with the terms thereof and sells Additional Loans and their Related Security to the Guarantor in the future pursuant
to the Mortgage Sale Agreement or a New Mortgage Sale Agreement


New Servicer
Any member of the Scotiabank Group (other than the Bank and Scotia Mortgage Corporation) appointed as a new servicer in
accordance with the Servicing Agreement


New Standby Bank Account Agreement
has the meaning given in Section 4.1(g) of the Cash Management Agreement


New Standby GDA Agreement has
the meaning given in Section 4.1(g) of the Cash Management Agreement


New York Business Day A
day (other than a Saturday or Sunday) on which commercial banks are open for general business (including dealings in foreign exchange
and foreign currency deposits) in New York


NGCB New Global Covered
Bond


Nominated Person The meaning
given in Section 3.7 (Nominated Persons) of the Cover Pool Monitor Agreement


Non-Compliance Notice The
meaning given in Section 2.9(a) of the Cover Pool Monitor Agreement


Non-Performing Loan Any
Loan in the Portfolio that is 90 days or more in arrears (for greater certainty, a STEP Loan shall be considered to be 90 days
or more in arrears if any Other STEP Product extended to the same STEP Borrower is 90 days or more in arrears)




    	 



    	33



    


Non-Performing Loans Notice
A notice from the Cash Manager to the Seller identifying one or more Non-Performing Loans


Non-Resident A non-resident
as such term is defined in the Income Tax Act


Notice to Pay The meaning
given in Condition 9.1 (Issuer Events of Default) of the Terms and Conditions


Obligations The meaning
given in Section 2.02 (Contractual Rights) of the Security Agreement


Offer Conditions The terms
and conditions applicable to a specified Loan as set out in the relevant offer letter to the Borrower


Official List Official
list of the UK Listing Authority


Omnibus Proxy The omnibus
proxy mailed by DTC to the Issuer as soon as possible after the Record Date in accordance with DTC’s usual procedures


Optional Redemption Amount
The meaning (if any) given in the applicable Final Terms Document


Optional Redemption Date
The meaning (if any) given in the applicable Final Terms Document


Original Due for Payment Date
The meaning given in paragraph (a) of the definition of Due for Payment


Original Market Value In
respect of a Mortgaged Property, its value as most recently determined or assessed in accordance with the underwriting policies
of the Seller or, if not capable of determination in accordance therewith, on the basis of the most recent sale price of the property


OSFI Office of the Superintendent
of Financial Institutions


Other STEP Creditor Any
owner of any STEP Account outstanding from time to time under the STEP Plan, or any interest therein, including any person holding
and/or having the benefit of a security interest therein, other than the Seller and the Guarantor


Other STEP Products All
STEP Accounts that may be extended by the Seller to a particular STEP Borrower from time to time, except for STEP Loans


outstanding In relation
to the Covered Bonds of all or any Series, all the Covered Bonds of such Series issued other than:


		(a)	those Covered Bonds that have been redeemed pursuant to the Trust Deed;



		(b)	those Covered Bonds in respect of which the date (including, where applicable, any deferred date)
for redemption in accordance with the Conditions has occurred and the redemption funds (including all interest payable thereon)
(i) have been duly paid to the Bond Trustee or to the Paying Agent in the manner provided in the Agency





    	 



    	34



    


Agreement (and where appropriate
notice to that effect has been given to the relative Covered Bondholders in accordance with Condition 13 (Notices) of the
Terms and Conditions and remain available for payment against presentation of the relevant Covered Bonds and/or Coupons) and (ii)
are not Excess Proceeds;


		(c)	those Covered Bonds that have been purchased and cancelled in accordance with Conditions 6.8
(Purchases) and 6.9 (Cancellation) of the Terms and Conditions;



		(d)	those Covered Bonds that have become void or in respect of which claims have become prescribed,
in each case under Condition 8 (Prescription) of the Terms and Conditions;



		(e)	those mutilated or defaced Covered Bonds that have been surrendered and cancelled and in respect
of which replacements have been issued pursuant to Condition 10 (Replacement of Covered Bonds, Coupons and Talons) of the
Terms and Conditions;



		(f)	(for the purpose only of ascertaining the Principal Amount Outstanding of the Covered Bonds outstanding
and without prejudice to the status for any other purpose of the relevant Covered Bonds) those Covered Bonds that are alleged to
have been lost, stolen or destroyed and in respect of which replacements have been issued pursuant to Condition 10 (Replacement
of Covered Bonds, Coupons and Talons) of the Terms and Conditions; and



		(g)	any Global Covered Bond to the extent that it will have been exchanged for Definitive Covered Bonds
or another Global Covered Bond pursuant to its provisions, the provisions of the Trust Deed and the Agency Agreement, and



provided that for each of the
following purposes, namely:


		(i)	the right to attend and vote at any meeting of the holders
of the Covered Bonds of any Series;



		(ii)	the determination of how many and which Covered Bonds
of any Series are for the time being outstanding for the purposes of Section 10.1 (Proceedings, Action and Indemnification)
of the Trust Deed, Conditions 9.1 (Issuer Events of Default), 9.2 (Guarantor Events of Default) and 13 (Notices) of the Terms
and Conditions and paragraphs 2, 5, 6 and 8 of Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust
Deed;



		(iii)	any discretion, power or authority (whether contained
in the Trust Deed or vested by operation of law) that the Bond Trustee is required, expressly or impliedly, to exercise in or
by reference to the interests of the holders of the Covered Bonds of any Series; and



		(iv)	the determination by the Bond Trustee whether any event,
circumstance, matter or thing is, in its opinion, materially prejudicial to the interests of the holders of the Covered Bonds
of any Series,





    	 



    	35



    


those Covered Bonds of the relevant
Series (if any) that are for the time being held by or on behalf of the Issuer or the Guarantor, in each case as beneficial owner,
will (unless and until ceasing to be so held) be deemed not to remain outstanding


Outstanding Principal Balance
In relation to any Loan at any date (the “determination date”), the aggregate at such date (but avoiding double
counting) of:


		(a)	the Initial Advance;



		(b)	Capitalised Expenses; and



		(c)	Capitalised Arrears




in each case relating to such
Loan less any prepayment, repayment or payment of any of the foregoing made on or prior to the determination date


Partial Portfolio Part
of any portfolio of Selected Loans


Participating FFI An FFI
that has an agreement described in Section 1471(b) of the Code and any regulations thereunder or official interpretations thereof
in full force and effect as from the effective date of withholding on any “passthru payments” (as such term is defined
under Sections 1471 through 1474 of the Code and any regulations thereunder or official interpretations thereof)


Partner Each of the Managing
GP, the Liquidation GP and the Limited Partner and any other limited partner or general partner who may become a limited partner
of the Guarantor from time to time, and the successors and assigns thereof, and “Partners” means any two or more of
them


Partnership Scotiabank
Covered Bond Guarantor Limited Partnership


Partnership Record The
register of the Partners maintained pursuant to Section 9.2 of the Guarantor Agreement


Paying Agent Required Ratings
The threshold ratings of (a) P-1 with respect to the short-term unsecured, unsubordinated and unguaranteed debt obligations of
the Paying Agent by Moody’s, (b) F1 with respect to the short-term issuer default rating of the Paying Agent by Fitch, and
(c) A with respect to long-term issuer default rating of the Paying Agent by Fitch


Paying Agents The Principal
Paying Agent and any other paying agent appointed pursuant to the terms of the Agency Agreement


Payment The meaning given
in Section 6.7 of the Agency Agreement


Payment Advance The meaning
given in Section 6.7 of the Agency Agreement


Payment Day The meaning
given in Condition 5.6 (Payment Day) of the Terms and Conditions




    	 



    	36



    


Payment in Kind The meaning
given in Section 11.1(b)(ii) of the Intercompany Loan Agreement


Payment in Kind Date The
meaning given in Section 11.1(c) of the Intercompany Loan Agreement


Payment in Kind Notice The
meaning given in Section 11.1(c) of the Intercompany Loan Agreement


Payment Ledger The ledger
on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the
ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement) to record the credits
and debits of Available Revenue Receipts and Available Principal Receipts for application in accordance with the applicable Priority
of Payments


Perfect In respect of any
relevant Loan and its Related Security in the Portfolio, delivery of notice to the Borrower of the sale, assignment and transfer
of such Loan and its Related Security to the Guarantor and a direction to make all future repayments of the Loan to the Standby
Account Bank for the account of the Guarantor by the Seller or, as necessary, by the Guarantor (or the Servicer on behalf of the
Guarantor) on behalf of the Seller (under applicable powers of attorney granted to the Guarantor) to the Guarantor of such Loan
and its Related Security and if required on the advice of counsel to the Guarantor (or the Servicer on its behalf) to perfect an
interest in such Loan and its Related Security, registration of the transfer of legal title to the Mortgages in the appropriate
land registry office, land titles office or similar office of public registration for the location where the relevant real property
is located and Perfect and Perfection shall have corresponding meanings 


Performing Eligible Loans The
meaning given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement 


Permanent Bearer Global Covered
Bond A Permanent Global Covered Bond in bearer form


Permanent Global Covered Bond
A global covered bond substantially in the form set out in Part 2 of Schedule 2 (Forms of Global and Definitive Covered Bonds,
Coupons and Talons) to the Trust Deed with such modifications (if any) as may be agreed between the Issuer, the Principal Paying
Agent, the Bond Trustee and the relevant Dealer(s) or Lead Manager (in the case of syndicated issued), together with the copy of
the applicable Final Terms Document annexed thereto, comprising some or all of the Covered Bonds of the same Series, issued by
the Issuer pursuant to the Program Agreement or any other agreement between the Issuer and the relevant Dealer(s) relating to the
Program, the Agency Agreement and the Trust Deed in exchange for the whole or part of any Temporary Global Covered Bond issued
in respect of such Covered Bonds


Permitted Encumbrances
(i) Any Encumbrance for taxes, assessments or governmental charges or levies which relate to obligations not yet due and delinquent,
(ii) easements, servitudes, encroachments and other minor imperfections of title which do not, individually or in the aggregate,
detract from the value of or impair the use or marketability of any real property, and (iii) undetermined or inchoate Security
Interests arising or potentially arising under statutory provisions which have not at the relevant time been filed or registered
in




    	 



    	37



    


accordance with applicable laws
or of which written notice has not been given in accordance with applicable laws


Personal Information Information
that is protected by any Applicable Privacy Laws


Persons Includes individuals,
corporations, limited and unlimited liability companies, general and limited partnerships, associations, trusts, unincorporated
organisations, joint ventures and Governmental Authority


PIPEDA The Personal
Information Protection and Electronic Documents Act (Canada)


Pledged Securities The
meaning given in Section 2.01 (Loans and Related Security) of the Security Agreement


Portfolio The Loans and
their Related Security and the Substitute Assets owned by the Guarantor and any cash balances credited to the Guarantor Accounts


Post-Enforcement Priority of
Payments The meaning given in Section 6.2 (Payment of Funds After Service of a Guarantor Acceleration Notice and Enforcement
of Security) of the Security Agreement


Potential Guarantor Event of
Default The meaning given in Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) of the Terms
and Conditions


Potential Issuer Event of Default
The meaning given in Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) of the Terms and Conditions


Power of Attorney The meaning
given in Section 3.1 (Deliveries on First Transfer Date) of the Mortgage Sale Agreement


PPSA The personal property
security legislation, as amended, supplemented or replaced from time to time, as in effect in each province and territory of Canada
(other than Québec), and the Civil Code of Québec, as amended, supplemented or replaced from time to time, as in
effect in Québec


Pre-Acceleration Principal
Priority of Payments The meaning given in Section 6.1 of the Guarantor Agreement


Pre-Acceleration Revenue Priority
of Payments The meaning given in Section 6.1 of the Guarantor Agreement


Pre-Maturity Liquidity Eligible
Assets Each Substitute Asset having: (i) a maturity date occurring before the Final Maturity Date of the relevant Series of
Hard Bullet Covered Bonds; and (ii) with respect to which the Rating Agency Condition has been satisfied


Pre-Maturity Liquidity Ledger
The ledger on the GDA Account established to record the credits and debits of moneys available to repay any Series of Hard
Bullet Covered Bonds on the Final Maturity Date thereof if the Pre-Maturity Test has been breached




    	 



    	38



    


Pre-Maturity Liquidity Required
Amount Nil, unless the Pre-Maturity Test has been breached in respect of one or more Series of Hard Bullet Covered Bonds, in
which case an amount equal to the aggregate for each affected Series (without double counting) of (i) the Required Redemption Amount
for such affected Series, (ii) the Required Redemption Amount for all other Series of Hard Bullet Covered Bonds which will mature
within 12 months of the date of the calculation, and (iii) the amount required to satisfy paragraphs (a) through (f) of the Guarantee
Priority of Payments on the Final Maturity of the affected Series of Hard Bullet Covered Bonds and on the Final Maturity Date of
all other Series of Hard Bullet Covered Bonds which will mature within 12 months of the date of the calculation;


Pre-Maturity Required Ratings
With respect to the Issuer’s unsecured, unsubordinated and unguaranteed debt obligations of the Issuer by the Rating Agencies
on any Toronto Business Day, the threshold ratings of (a) in the case of Fitch, F1+, (b) in the case of Moody’s, P-1, and
(c) in the case of DBRS, (i) if such Toronto Business Day falls within six months of the Final Maturity Date of any Series of Hard
Bullet Covered Bonds, A(high), or (ii) otherwise, A(low)


Pre-Maturity Test The meaning
given in Schedule 4 (Pre-Maturity Test) to the Guarantor Agreement


Pre-Maturity Test Date
The meaning given in Schedule 4 (Pre-Maturity Test) to the Guarantor Agreement


Pre-Maturity Test Interval
The meaning given in Schedule 4 (Pre-Maturity Test) to the Guarantor Agreement


Prescribed Cash Limitation
The meaning given to it in Section 9.8 (Prescribed Cash Limitation) of the Guarantor Agreement


Present Value For any Loan
the value of the outstanding loan balance of such Loan, calculated by discounting the expected future cash flow (on a loan level
basis) using current market interest rates for mortgage loans with credit risks similar to those of the Loan (using the same discounting
methodology as that used as part of the fair value disclosure in the Issuer’s audited financial statements), or using publicly
posted mortgage rates


Pricing Supplement The
pricing supplement, or in the case of U.S. Registered Covered Bonds, the prospectus supplement, issued in relation to each Series
or Tranche, as the case may be, of Covered Bonds, as a supplement to the relevant Prospectus under which such Covered Bonds are
being issued, which gives details of that Series or Tranche, and applicable Pricing Supplement means the Pricing
Supplement applicable to a Series or Tranche of Covered Bonds, and unless the context requires otherwise, any reference to the
applicable Pricing Supplement includes reference to the related Final Terms Document or applicable Final Terms Document, respectively


Principal Amount Outstanding
In accordance with Condition 4.5(g) of the Terms and Conditions, in respect of a Covered Bond on any day, the principal amount
of that Covered Bond on the relevant Issue Date thereof less principal amounts received by the relevant Covered Bondholder in respect
thereof on or prior to that day




    	 



    	39



    


Principal Ledger The ledger
on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the
ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement) to record the credits
and debits of Principal Receipts in accordance with the terms of the Guarantor Agreement


Principal Paying Agent
The Bank of Nova Scotia, London Branch as appointed pursuant to the Agency Agreement as the principal paying agent together with
any successor appointed from time to time thereunder


Principal Receipts Any
payment received in respect of principal in respect of any Loan (including payments pursuant to any insurance policies), whether
as all or part of a Monthly Payment in respect of such Loan, on redemption (including partial redemption) of such Loan, on enforcement
of such Loan (including the proceeds of sale of the relevant Mortgaged Property) or on the disposal of such Loan or otherwise
(without double counting but including principal received or treated as received after completion of the enforcement procedures)


Priorities of Payments
The orders of priority for the allocation and distribution of amounts standing to the credit of the Guarantor in different circumstances
being the Pre-Acceleration Revenue Priority of Payments, the Pre-Acceleration Principal Priority of Payments and the Guarantee
Priority of Payments (see Article 6 of the Guarantor Agreement) and the Post-Enforcement Priority of Payments (see Section 4.07
of the Security Agreement) and Priority of Payment means any one of the foregoing


Product Switch In respect
of a Loan, a variation in the financial terms and conditions applicable to the relevant Borrower’s Loan other than:


		(a)	any variation agreed with a Borrower to control or manage arrears on the Loan;



		(b)	any variation imposed by statute; or



		(c)	any change in the repayment method of the Loan



Program The U.S.$15,000,000,000
global registered covered bond program established by the Issuer on the Program Date which may be increased by the Issuer and the
Guarantor in accordance with the terms of the Program Agreement and applicable regulatory requirements


Program Agreement The Dealership
Agreement and the Underwriting Agreement, and such other agreement or agreements, as the case may be, to the extent then in force,
under which the Covered Bonds may from time to time be agreed to be sold by the Issuer to, and purchased by, the Dealers


Program Date July 19,
2013


Program Limit The meaning
given in the Trust Deed




    	 



    	40



    


Program Resolution Any
Extraordinary Resolution to direct the Bond Trustee to accelerate the Covered Bonds or take any enforcement action pursuant to
Condition 9 (Events of Default, Acceleration and Enforcement) of the Terms and Conditions


Program Website The meaning
given in Section 9.4(a) (Information Covenants) of the Cash Management Agreement


Prohibited Insurer CMHC,
Canada Guaranty Mortgage Insurance Company, the Genworth Financial Mortgage Insurance Company of Canada, the PMI Mortgage Insurance
Company Canada, any other private mortgage insurer recognized by CMHC for purposes of the Covered Bond Legislative Framework or
otherwise identified in the Protection of Residential Mortgage or Hypothecary Insurance Act (Canada), or any successor to
any of them


Prospectus The base prospectus
dated July 19, 2013 relating to the issuance of Covered Bonds by the Bank
of Nova Scotia, and/or the U.S. Prospectus


proxy The meaning given
in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


PSM The London Stock Exchange’s
Professional Securities Market


Purchase Price Consideration
to be paid by the Guarantor to:


		(a)	each relevant Seller in consideration of the Seller’s sale of its portion of the Initial
Portfolio to the Guarantor pursuant to Section 2.1 (Sale of Initial Portfolio) of the Mortgage Sale Agreement; and



		(b)	each relevant Seller in consideration of that Seller’s sale of Additional Loans to the Guarantor
pursuant to Section 4.4 (Consideration for Additional Loans) of the Mortgage Sale Agreement,



the aggregate
of which, in each case, shall be equal to the aggregate of the Fair Market Value of each of the Loans and their Related Security
sold, transferred, assigned and conveyed on the related Transfer Date.


Purchased Assets The meaning
given in Schedule 2 (Power of Attorney), Schedule 3 (Power of Attorney) and Schedule 9 (Form of Seller Assignment) to the Mortgage
Sale Agreement, as applicable


Purchaser Any third party
or the Seller to whom the Servicer offers to sell Selected Loans pursuant to the Mortgage Sale Agreement and/or the Guarantor Agreement


Put Notice The meaning
given in Condition 6.4 (Redemption at the option of the Covered Bondholders (“Investor Put”)) of the Terms and Conditions


QIB A “qualified
institutional buyer” within the meaning of Rule 144A


Québec Additional Loans
Additional Loans and their Related Security, in each case where the related Mortgaged Properties are situated in the Province
of Québec




    	 



    	41



    


Québec Purchased Assets
The meaning given in a Québec Seller Assignment


Québec Security Collectively,
(a) the deed of hypothec to secure payment of titles of indebtedness entered into on the Program Date between the
Guarantor and the Bond Trustee, as fondé de pouvoir, (b) the movable hypothec entered into on the Program Date
between the Guarantor and the Bond Trustee, and (c) the collateral bond No. *01* in the amount of $15,000,000,000 issued as
of the Program Date by the Guarantor in favour of the Bond Trustee and certified by the Bond Trustee as fondé de
pouvoir on the Program Date


Québec Seller Assignment
An assignment in or substantially in the form of Schedule 10 (Form of Québec Seller Assignment) to the Mortgage Sale
Agreement


Randomly Selected Loans
Loans and, if applicable, their Related Security, in the Portfolio, selected in accordance with the terms of the Guarantor Agreement
on a basis that (i) would not, or would not reasonably be expected to, adversely effect the interests of the Covered Bondholders,
and (ii) is not designed to favour the selection of any identifiable class or type or quality of Loans and their Related Security
over all the Loans and their Related Security in the Portfolio, except with respect to identifying such Loans and their Related
Security as having been acquired by the Guarantor from a particular Seller, if applicable, provided that for such purpose, all
STEP Loans made to the same STEP Borrower that are owned by the Guarantor shall be considered as a single Loan


Rate of Interest In respect
of a Series of interest-bearing Covered Bonds, the rate of interest payable from time to time in respect of such Covered Bonds
determined in accordance with the Terms and Conditions and the applicable Final Terms Document


Rating Agencies Fitch,
Moody’s and DBRS each, a “Rating Agency”, in each case for so long as it is rating Covered Bonds, and
any other internationally recognised rating agency that may rate the Covered Bonds from time to time


Rating Agency Condition
With respect to any event or matter, (i) an indication in writing by each of the applicable Rating Agencies (other than Fitch)
that the then current ratings of the Existing Covered Bonds will not be downgraded or withdrawn as a result of the relevant event
or matter, and (ii) no less than 5 Toronto Business Days’ prior written notice of such event matter having been given to
Fitch (for so long as Fitch is a Rating Agency)


Ratings Trigger The Account
Bank Required Ratings, the Cash Management Deposit Ratings, the Cash Manager Required Ratings, the Fitch Demand Loan Repayment
Ratings, Paying Agent Required Ratings, the Pre-Maturity Required Ratings, the Reserve Fund Required Amount Ratings, the Servicer
Replacement Ratings and the Swap Agreement Ratings


Recalculation Procedures
The meaning given in Section 2.8(a) of the Cover Pool Monitor Agreement


Receipt Ratio The meaning
given to it in the Interest Rate Swap Agreement in respect of any relevant Interest Rate Swap confirmation




    	 



    	42



    


Receiver Any Person or
Persons appointed (and any additional Person or Persons appointed or substituted) as an administrator, liquidator, receiver, manager,
or receiver and manager of the Charged Property by the Bond Trustee pursuant to Section 8.3 (Application to Court) of the Security
Agreement or under applicable Law following service of a Guarantor Acceleration Notice on the Guarantor


Recipient The meaning given
in Section 2.1(b) (Appointment and Annual Cover Pool Monitor Report) of the Cover Pool Monitor Agreement


Record Date The meaning
given in Condition 5.4 (Payments in respect of Registered Covered Bonds) of the Terms and Conditions


records The meaning given
in Section 1.2 (Interpretation) of the Agency Agreement


Records With respect to
each Loan, all documents and information (other than the Customer File), including computer programs, tapes, discs, punch cards,
data processing software and related property and rights, maintained by the Seller or the Servicer with respect to such Loan, the
Related Security and the related Borrower


Redeemed Covered Bonds The
meaning given in Condition 6.3 (Redemption at the option of the Issuer (“Issuer Call”)) of the Terms and Conditions


Redenomination Date The
meaning given in Condition 5.9 (Definitions) of the Terms and Conditions


Reference Banks In the
case of a determination of CDOR, four major Canadian Schedule I chartered banks; in the case of a determination of LIBOR, four
major banks in the London interbank market; and, in the case of a determination of EURIBOR, four major banks in the Euro-zone interbank
market


Reference Price In respect
of a Zero Coupon Covered Bond, the meaning given in the applicable Final Terms Document


Reference Rate In respect
of Floating Rate Covered Bonds to which Screen Rate Determination applies, the meaning given in the applicable Final Terms Document


Register The meaning given
in Section 11.2 of the Agency Agreement


Registered Covered Bond
A Covered Bond in registered form


Registered Definitive Covered
Bond A Rule 144A Definitive Covered Bond, a U.S. Registered Definitive Covered Bond and/or a Regulation S Definitive Covered
Bond, as the context may require


Registered Global Covered Bond
Global Covered Bonds in registered form, comprising Rule 144A Global Covered Bonds, U.S. Registered Global Covered Bonds and/or
Regulation S Global Covered Bonds




    	 



    	43



    


Registered Title Event
means the occurrence of the earliest of any of the following:


		(a)	the Servicer Event of Default that has not been remedied within 30
days or such shorter period permitted by the Servicing Agreement;



		(b)	an Issuer Event of Default (other than an actual or impending Insolvency
Event with respect to the Issuer) that has not been remedied within 30 days or such shorter period permitted by Condition 7.01;



		(c)	an actual or impending Insolvency Event (without regard to
the parenthetical language in clause (a) of such definition) with respect to the Seller;



		(d)	the acceptance by an applicable purchaser of any offer by the Guarantor
to sell Loans and their Related Security (only in respect of the Loans being sold and their Related Security) to any such purchaser
other than the Seller or the relevant Originator, unless otherwise agreed by such purchaser and the Guarantor, with the consent
of the Bond Trustee, which consent will not be unreasonably withheld; 



		(e)	the Seller and/or the Guarantor being required to Perfect legal title
to the Mortgages by:



		a)	law;



		b)	by an order of a court of competent jurisdiction; or



		c)	by any regulatory authority which has jurisdiction over the Seller
or the Guarantor to effect such perfection; and



		(f)	the date on which the Bank ceases to be assigned a long-term, unsecured,
unsubordinated unguaranteed debt obligation rating by Moody’s of at least A3 or by Fitch of at least BBB- or by DBRS of at
least BBB(low) or R-1 (middle)





Registrable Transfer means each transfer, assignment or conveyance in appropriate form that is required to assign the relevant
Loan and its Related Security to the relevant purchaser or as the relevant purchaser directs, containing all necessary information
(including mortgage registration number and a legal description of the related Mortgaged Property that complies with local law)
and executed as necessary (including witnessed and under seal, if necessary) and accompanied by all required affidavits and certificates,
for registration in the land registry or land titles office for the location where the real property subject thereto is situate
or filing under the PPSA, as the case may be


Registrar The Bank of Nova
Scotia, London Branch and The Bank of Nova Scotia Trust Company of New York, in each case as appointed pursuant to the Agency Agreement
as a registrar together with any successor appointed from time to time thereunder


Regulation S Regulation
S under the Securities Act


Regulation S Definitive Covered
Bond The meaning given in Condition 2.7 (Definitions) of the Terms and Conditions 




    	 



    	44



    


Regulation S Global Covered
Bond The meaning given in Condition 2.7 (Definitions) of the Terms and Conditions 


Related
Retained Loans In relation to any STEP Loan owned by the Guarantor, all Other STEP Products and Additional STEP Loans
that are not owned by the Guarantor, in either case that are secured by the same STEP Collateral Mortgages and other Related
Security as such STEP Loan


Related Security With respect
to any Loan, subject to sub-paragraphs (A) and (B) of this definition in respect of any STEP Loan, all of the Seller’s right,
title and interest in:


		(a)	all security interests, hypothecs or liens and property subject thereto from time to time purporting
to secure payment of such Loan and all proceeds thereof or realised thereunder, including, without limitation:



		(i)	the Mortgage and the security interest or hypothec granted to the Seller by the related Borrower
in the related Mortgaged Property as security for or pursuant to such Loan, and all Records related thereto;



		(ii)	all PPSA financing statements or other filings relating thereto;



		(b)	the related Customer File;



		(c)	all guaranties, indemnities, insurance (other than blanket insurance coverage maintained by the
Seller) and other agreements or arrangements of whatever character from time to time supporting or documenting payment of such
Loan, which are or should be included in the Customer Files, and all proceeds of the foregoing; and



		(d)	the proceeds of any claims made under the blanket insurance coverage maintained by the Seller where
such proceeds relate to a Loan sold to the Guarantor;



and in relation to a STEP Loan:


		(A)	as to (a), (b), (c) and (d) above, all of the Seller’s right, title and interest therein,
provided that upon the transfer and/or assignment of which (excluding
any such property relating solely to such STEP Loan or any related STEP Loan owned by the Guarantor from time to time) to
the Guarantor, the Guarantor will hold (i) an undivided interest in such property for the sole and absolute account and benefit
of the Guarantor to the extent of the indebtedness owing under such Loan or
any related STEP Loan owned by the Guarantor from time to time, and (ii) an undivided interest in such property as agent,
nominee and bare trustee for the Seller and/or Other STEP Creditor to the extent of any amounts of indebtedness owing under any
Additional STEP Loans and Other STEP Products outstanding under the STEP Plan from time to time, in each case, subject to the applicable
priority arrangements described in Article 13 (STEP Plan and Intercreditor Arrangements) of the Mortgage Sale Agreement; and





    	 



    	45



    


		(B)	notwithstanding (A) above, with
                                                               respect to STEP Loans secured by a STEP Collateral Mortgage over Mortgaged Property situated in the Province of Quebec, as
                                                               to                                                                (a) above, the Guarantor will become a beneficiary of the
                                                               security interests, hypothecs or liens and property subject thereto
                                                               from time to time purporting to secure payment of such STEP Loan and all proceeds thereof or realised thereunder, and will
                                                               become, together with the Seller and any related Other STEP Creditor, a secured party as to any STEP Collateral Mortgage and other
                                                               security                                                                interest
                                                               or                                                                                                           hypothec granted
                                                               by the related STEP Borrower in the                                                                related
                                                               Mortgaged Property as security for or pursuant to such STEP
                                                               Loan                                                                and any STEP Loan or Other STEP Product owned
                                                               by the Seller or an Other STEP Creditor; provided,                                                                however,
                                                               that                                                                                                               at no
                                                               time                                                                shall
                                                               the                                                                                                              Seller or
                                                               any                                                                Other STEP Creditor have a right to be
                                                               registered on title                                                                with respect to the related Mortgaged
                                                               Property



Release of Security A release
of security in the form of Annex M to the CMHC Guide


Relevant Covered Bonds The
meaning given in Schedule 1 (Form of Calculation Agency Agreement) to the Agency Agreement


Relevant Date The meaning
given in Condition 7 (Taxation) of the Terms and Conditions


Relevant Period The meaning
given in Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) of the Terms and Conditions


Relevant Screen Page In
respect of Floating Rate Covered Bonds to which Screen Rate Determination applies, the meaning given in the Final Terms Document


Representations and Warranties
Collectively, the Loan Representations and Warranties and the Corporate Representations and Warranties


representative The meaning
given in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed 


Repurchase Amount With
respect to a Loan at any time, the sum of the Outstanding Principal Balance of such Loan and all Arrears of Interest and Accrued
Interest thereon


Repurchase Date The meaning
given in Section 8.5 (Maturing Loans) of the Mortgage Sale Agreement


Requesting Party Any of
the Guarantor, the Issuer and/or the Bond Trustee who delivers a written request for a confirmation of satisfaction of the Rating
Agency Condition by a Rating Agency


Required True Loan Balance
Amount The meaning given in Schedule 9 to the Guarantor Agreement


Required Redemption Amount
The meaning given in Schedule 9 to the Guarantor Agreement


Reserve Fund  The reserve
fund that the Guarantor will be required to establish in the GDA Account which may be credited with part of an advance from the
proceeds of the




    	 



    	46



    


Intercompany Loan and with Cash
Capital Contributions (in each case in the Guarantor’s discretion) and the proceeds of Available Revenue Receipts up to an
amount equal to the Reserve Fund Required Amount


Reserve Fund Required
Amount Nil, unless the ratings of the Issuer’s short-term, unsecured, unsubordinated and unguaranteed debt
obligations (or issuer default rating, as applicable) by the Rating Agencies fall below any of the Reserve Fund Required
Amount Ratings and then an amount equal to the Canadian Dollar Equivalent of three month’s interest due on each Series
of Covered Bonds together with an amount equal to three-twelfths of the anticipated aggregate annual amount payable in
respect of the items specified in paragraphs (a) to (c) of the Pre-Acceleration Revenue Priority of Payments


Reserve Fund Required
Amount Ratings The threshold ratings (i) P-1 (in respect of Moody's), (ii) R-1 (middle) and A(low) (in respect of DBRS;
for greater certainty, the ratings from DBRS are only required to be at or above one of such ratings), and (iii) F1 or A (in
respect of Fitch; provided that both such ratings from Fitch are required), as applicable, of the unsecured, unsubordinated
and unguaranteed debt obligations (or in the case of Fitch, the issuer default rating) of the Issuer by the Rating
Agencies


Reserve Ledger The ledger
on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the
ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement), to record the crediting
of Available Revenue Receipts to the Reserve Fund and the debiting of such Reserve Fund in accordance with the terms of the Guarantor
Agreement


Reset Date The meaning
given in the ISDA Definitions


Responsible Persons The
Issuer and the Guarantor


Retained Loan In relation
to any STEP Loan owned by the Guarantor, an Other STEP Product or Additional STEP Loan
that is not owned by the Guarantor, in either case that is secured by the same STEP Collateral Mortgage and other Related
Security as such STEP Loan


Revenue Ledger The ledger
on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the
ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement), to record credits and
debits of Revenue Receipts in accordance with the terms of the Guarantor Agreement


Revenue Receipts Any payment
received in respect of any Loan, including payments pursuant to any insurance policies and any payment received from the Seller
in respect of interest amounts on a Loan (otherwise than in respect of a Loan that has been repurchased by the Seller), whether
as all or part of a Monthly Payment in respect of such Loan, on redemption (including partial redemption) of such Loan, on enforcement
of such Loan (including the proceeds of sale of the relevant Mortgaged Property), or on the disposal of such Loan or otherwise,
which in any such case is not a Principal Receipt in respect of such Loan




    	 



    	47



    


Rule 144A Definitive Covered
Bond The meaning given in Condition 2.7 (Definitions) of the Terms and Conditions


Rule 144A Rule 144A under
the Securities Act


Rule 144A Covered Bond
The meaning given in Condition 2.7 (Definitions) of the Terms and Conditions


Rule 144A Global Covered Bond
The meaning given in Condition 2.7 (Definitions) of the Terms and Conditions


Sample The meaning given
in Section 2.2(b) (Certain Testing Services) of the Cover Pool Monitor Agreement


Sarbanes-Oxley Act The
U.S. Sarbanes-Oxley Act of 2002


Scheduled Interest In relation
to a Series of Covered Bonds, an amount equal to the amount in respect of interest which is or would have been due and payable
under such Covered Bonds on each Interest Payment Date as specified in Condition 4 (Interest) of the Terms and Conditions (but
excluding any additional amounts relating to premiums, default interest or interest upon interest (“Excluded Scheduled
Interest Amounts”) payable by the Issuer following service of an Issuer Acceleration Notice, but including such amounts
(whenever the same arose) following service of a Guarantor Acceleration Notice), as if such Covered Bonds had not become due and
payable prior to their Final Maturity Date and (if the applicable Final Terms Document specified that an Extended Due for Payment
Date is applicable to the relevant Covered Bonds) as if the maturity date of the Covered Bonds had been the Extended Due for Payment
Date (but taking into account any principal repaid in respect of such Covered Bonds or any Guaranteed Amounts paid in respect of
such principal prior to the Extended Due for Payment Date) or, where applicable, after the Final Maturity Date, such other amount
of interest as may be specified in the applicable Final Terms Document but not including any additional amounts the Issuer would
be obliged to pay as a result of any gross-up in respect of any withholding or deduction made under the circumstances set out in
Condition 7 (Taxation) of the Terms and Conditions 


Scheduled Payment Date
In relation to payments under the Covered Bond Guarantee in respect of a Series of Covered Bonds, each Interest Payment Date or
the Final Maturity Date as if such Covered Bonds had not become due and payable prior to their Final Maturity Date


Scheduled Principal In
relation to a Series of Covered Bonds, an amount equal to the amount in respect of principal which is or would have been due and
payable under such Covered Bonds on each Interest Payment Date or the Final Maturity Date (as the case may be) as specified in
Conditions 6.1 (Final Redemption) and 6.7 (Early Redemption Amounts) of the Terms and Conditions (but excluding any additional
amounts relating to prepayments, early redemption, broken funding indemnities, penalties, premiums or default interest (“Excluded
Scheduled Principal Amounts”) payable by the Issuer following service of an Issuer Acceleration Notice, but including
such amounts (whenever the same arose) following service of a Guarantor Acceleration Notice), as if such Covered Bonds had not
become due and payable prior to their Final Maturity Date and (if the Final Terms Document specified that an Extended Due for Payment
Date is applicable to such relevant Covered Bonds) as if the maturity date of such Covered Bonds had been the Extended Due for
Payment Date




    	 



    	48



    


Scotiabank Group The Bank
and its Subsidiaries collectively


Screen Rate Determination
If specified as applicable in the applicable Final Terms Document, the manner in which the Rate of Interest on Floating Rate Covered
Bonds is to be determined in accordance with Condition 4.2(b)(ii) of the Terms and Conditions


SEC The U.S. Securities
and Exchange Commission


Secured Creditors The
Bond Trustee (in its own capacity and on behalf of the other Secured Creditors and on behalf of the Covered Bondholders), the
Covered Bondholders, the Couponholders, the Intercompany Loan Provider, the Seller, the Servicer, the Account Bank, the GDA
Provider, the Standby Account Bank, the Standby GDA Provider, the Cash Manager, the Swap Providers, the Agents, the Corporate
Services Provider, any New Secured Creditor and any other person which becomes a Secured Creditor pursuant to the Security Agreement
except, pursuant to the terms of the Guarantor Agreement, to the extent and for so long as such person is a Limited
Partner


Secured Obligations The
obligations and liabilities of the Guarantor under the Trust Deed, including the Covered Bond Guarantee and:


		(a)	all debts, liabilities and obligations, present or future, direct or indirect, absolute or contingent,
matured or unmatured, at any time or from time to time due or accruing due and owing by or otherwise payable by the Guarantor to
the Secured Creditors, or any one or more of them, in any currency, under, in connection with or pursuant to the Trust Deed and
any other Transaction Document to which the Guarantor is a party, and whether incurred by the Guarantor alone or jointly with another
or others and whether as principal, guarantor or surety; and



		(b)	all expenses, costs and charges incurred by or on behalf of the Secured Creditors in connection
with the Security Agreement, the Security or the Charged Property, including all legal fees, court costs, receiver’s or agent’s
remuneration and other expenses of taking possession of, repairing, protecting, insuring, preparing for disposition, realising,
collecting, selling, transferring, delivering or obtaining payment for the Charged Property, and of taking, defending or participating
in any action or proceeding in connection with any of the foregoing matters or otherwise in connection with the Secured Creditors’
interest in any Charged Property, whether or not directly relating to the enforcement of the Security Agreement or any other Transaction
Document



Securities Act The U.S.
Securities Act of 1933, as amended


Security The mortgage,
charge, hypothec, assignment and security interest granted by the Guarantor to the Bond Trustee over the Charged Property under
and pursuant to the terms of the Security Agreement and the Québec Security


Security Agreement The
security agreement entered into on the Program Date between the Guarantor,
the Bond Trustee and certain other Secured Creditors


Security Interest Any mortgage,
charge, pledge, hypothec, security interest, assignment, lien (statutory or otherwise), privilege, easement, servitude and any
other encumbrance of




    	 



    	49



    


any nature or any other arrangement
or condition that, in substance, secures payment or performance of an obligation


Security Sharing Agreement
The meaning given in the CMHC Guide


Selected Investor Report
The meaning given in Section 2.2(a) of the Cover Pool Monitor Agreement

Selected Loan
Offer Notice A notice from the Guarantor served on the Seller offering to sell Selected Loans for an offer price equal to
the amount specified in Schedule 9 of the Guarantor Agreement


Selected Loans Repurchase Notice
A notice from the Seller served on the Guarantor accepting an offer set out in a Selected Loan Offer Notice


Selected Loans Loans and
their Related Security in the Portfolio to be sold by the Guarantor, pursuant to the terms of the Guarantor Agreement or the Mortgage
Sale Agreement, in accordance with Section 9 of the Guarantor Agreement


Selection Date The meaning
given in Condition 6.3 (Redemption at the option of the Issuer (“Issuer Call”)) of the Terms and Conditions


Seller The Bank, and any
New Seller


Seller Arranged Policy Any
property insurance policy arranged by the Seller for the purposes of the Borrower insuring the Mortgaged Property for an amount
equal to the full rebuilding cost of the Mortgaged Property


Seller Assignment An assignment
in or substantially in the form of Schedule 9 (Form of Seller Assignment) to the Mortgage Sale Agreement


Seller’s Account Such
account as the Seller may specify to the Guarantor from time to time


Series A Tranche of Covered
Bonds together with any further Tranche or Tranches of Covered Bonds which are (i) expressed to be consolidated and form a single
series, and (ii) identical in all respects (including as to listing and admission to trading) except for their respective Issue
Dates, Interest Commencement Dates and/or Issue Prices


Series Reserved Matter The
meaning given in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


Servicer The Seller in
its capacity as Servicer under the Servicing Agreement and any New Servicer and/or any Successor Servicer




    	 



    	50



    


Servicer Deposit
Threshold Ratings The threshold ratings (i) P-1 (in respect of Moody’s), (ii) F1 or A (in respect of Fitch) or
BBB(low), and (iii) R-1 (middle) (in respect of DBRS) as applicable, of the unsecured, unsubordinated and unguaranteed
debt obligations (or, in the case of Fitch, the issuer default rating) of the Servicer by the Rating Agencies


Servicer Downgrade With
respect to a Servicer that is an Affiliate of the Issuer, a downgrade in the long-term unsecured, unsubordinated and unguaranteed
debt obligations, long-term issuer default rating or short-term issuer default rating of the Issuer or, with respect to any other
Servicer, of such Servicer or its guarantor, in each case below the Servicer Replacement Ratings


Servicer Privacy Policies The
meaning given in Section 15.1 (Data Protection) of the Servicing Agreement


Servicer Replacement Ratings
The threshold ratings of (i) Baa2 (in respect of Moody’s), (ii) F2 (in respect of Fitch), and (iii) either BBB(low)
or R-1 (middle) (in respect DBRS) as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or, in the
case of Fitch, the issuer default rating) of the Servicer by the Rating Agencies;


Servicer Termination The
meaning given in Section 18.1 (Servicer Termination Events) of the Servicing Agreement


Servicer Termination Event
The meaning given in Section 18.1 (Servicer Termination Events) of the Servicing Agreement


Services The services to
be provided by the Servicer pursuant to the Servicing Agreement


Servicing Agreement The
servicing agreement made as of the Program Date as between the Servicer,
the Seller, the Cash Manager, the Bond Trustee and the Guarantor


Servicing Records With
respect to any Loan, an accounting or transcript that identifies the Seller’s loan number in respect of such Loan and, in
chronological order:


		(a)	the installment due dates for such Loan;



		(b)	the amount and date of each collection, disbursement, advance, adjustment or other transaction
affecting the amounts due from or to the related Borrower; and



		(c)	the latest outstanding balances of principal, deposits, advances and unapplied payments of the
Loan



Servicing Standard The
meaning given in Section 3.2 (Standard of Care) of the Servicing Agreement


Shortfall The meaning given
in Section 8.1 (Payments) of the Trust Deed


Source Materials The meaning
given in Section 2.2(b) of the Cover Pool Monitor Agreement




    	 



    	51



    


Specified Currency Subject
to any applicable legal or regulatory restrictions, euro, Sterling, U.S. Dollars, Canadian Dollars and such other currency or currencies
as may be agreed from time to time by the Issuer, the relevant Dealer(s), the Principal Paying Agent and the Bond Trustee and specified
in the applicable Final Terms Document


Specified Denomination
The meaning given in the applicable Final Terms Document


Specified Period In respect
of Floating Rate Covered Bonds the meaning (if any) given in the applicable Final Terms Document


Specified Procedures The
meaning given in Section 2.1(b)(i) of the Cover Pool Monitor Agreement


Specified Time 11:00 a.m.
(London time, in the case of determination of LIBOR, or Brussels time, in the case of a determination of EURIBOR)


STA The securities transfer
legislation, as amended, supplemented or replaced from time to time, as in effect in each province and territory of Canada that
has enacted such legislation


Stabilising Manager If
specified as applicable in the applicable Final Terms Document, the stabilising manager for that Series of Covered Bonds, and any
successor stabilising manager or Person acting on behalf of the stabilising manager


Standardised Approach Annex
VI (Standardised Approach) to the Capital Requirements Directive (or, after any amendment, variation, enactment or implementation
of such Directive, the corresponding Annex)


Standby Account Bank Canadian
Imperial Bank of Commerce, acting through its offices at 11th Floor, 161 Bay Street, Toronto, Ontario, M5J 2S8, in its
capacity as standby account bank under the Standby Bank Account Agreement, together with any successor standby account bank


Standby Account Bank Notice
The meaning given to it in the Standby Bank Account Agreement


Standby Account Bank Required
Ratings The meaning given to it in the Standby Bank Account Agreement


Standby Bank Account Agreement
The standby bank account agreement entered into on the Program Date between
the Guarantor, the Standby Account Bank, the Cash Manager and the Bond Trustee


Standby GDA Account The
account in the name of the Guarantor held with the Standby Account Bank and maintained subject to the terms of the Standby Guaranteed
Deposit Account Contract, the Standby Bank Account Agreement and the Security Agreement or such additional or replacement account
as may be in place from time to time


Standby GDA Account Mandate
The meaning given to it in the Standby Bank Account Agreement




    	 



    	52



    


Standby GDA Provider Canadian
Imperial Bank of Commerce, acting through its offices at 11th Floor, 161 Bay Street, Toronto, Ontario, M5J 2S8, in its
capacity as standby GDA provider under the Standby Guaranteed Deposit Account Contract, together with any successor standby GDA
provider


Standby
Guaranteed Deposit Account Contract The standby guaranteed deposit account contract dated as of the Program Date between
the Standby GDA Provider, the Guarantor, the Cash Manager and the Bond Trustee


Standby Transaction Account
The account in the name of the Guarantor held with the Standby Account Bank and maintained subject to the terms of the Standby
Bank Account Agreement and the Security Agreement or such additional or replacement account as may be in place from time to time


Standby Transaction Account
Mandate The meaning given to it in the Standby Bank Account Agreement


STEP Account A separate
and distinct loan or other credit product that is made available by the Seller to a STEP Borrower under the STEP Plan, being a
“Mortgage Loan”, “Scotia Plan Loan”, “ScotiaLine line of credit”, “ScotiaLine Visa”,
and “Overdraft Protection”, as such credit products are presently described in the documentation for STEP Plans at
the date hereof and such credit products as they may be differently described under the documentation for STEP Plans after the
date hereof, but have the same priorities and otherwise substantially the same attributes as those previously described in this
definition


STEP Borrower A Borrower
under a STEP Loan


STEP Collateral Mortgage The
Mortgage that secures indebtedness owing in respect of outstanding STEP Accounts extended by the Seller to the same STEP Borrower


STEP Enforcement Costs
The out-of-pocket costs, fees, expenses, losses, liabilities, judgments and/or causes of action of any kind suffered, incurred
or paid by or on behalf of the Guarantor (including the Servicer on the Guarantor’s behalf) in regard to the collection of
indebtedness and enforcement of other obligations of a STEP Borrower under the related STEP Loans, including realisation upon the
related STEP Collateral Mortgage and all of the other Related Security, except (i) those costs and expenses resulting from the
gross negligence or wilful misconduct of the Guarantor or any such Servicer, and (ii) the day-to-day customary and usual, ordinary
overhead costs of servicing and administering such STEP Loans


STEP Loan Each Loan that
is a STEP Account and described in the documentation for STEP Plans at the date hereof as a “Mortgage Loan” (including
a STEP Account under a successor description from time to time where the STEP Account under such successor description has the
same priority and in all other respects has substantially the same attributes as a “Mortgage Loan” possesses under
the documentation presently used in STEP Plans at the date hereof), which is made by the Seller to a STEP Borrower and is subject
to the STEP Plan from time to time, and includes the First STEP Loan and each Additional STEP Loan advanced to such Borrower




    	 



    	53



    


STEP LOC A home equity
line of credit extended to a STEP Borrower under the STEP Plan, being those STEP Accounts described in the documentation for STEP
Plans at the date hereof as a “ScotiaLine” and includes a STEP Account under a successor description from time to time
where the STEP Account under such successor description has the same priority and in all other respects has substantially the same
attributes as a “ScotiaLine” possesses under the documentation presently used in STEP Plans at the date hereof. STEP
LOCS are not to be included in the Portfolio until approved by the Rating Agencies as a New Loan Type


STEP Plan With respect
to any Borrower, the umbrella agreement with the Seller for the provision of multiple secured loans or other credit products, which
is currently marketed as the Scotia Total Equity Plan


Stock Exchange The London
Stock Exchange or any other or further stock exchange(s) on which any Covered Bonds may from time to time be listed or admitted
to trading


sub-proxy The meaning given
in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


Subsidiary Any company
which is for the time being a subsidiary (within the meaning of Section 2 of the Bank Act)


Substitute The meaning
given in Schedule 1 (Form of Security Power of Attorney) to the Security Agreement


Substitute Cash Manager The
meaning given in Section 9.1(b)(ii) of the Cash Management Agreement


Substitute Asset Details The
following information, in electronic format, with respect to the related Substitute Asset:


		(a)	asset type;



		(b)	coupon;



		(c)	interest payment dates;



		(d)	maturity date;



		(e)	principal amount; and



		(f)	CUSIP/ISIN, if applicable



Substitute Assets The classes
and types of assets from time to time eligible under the Covered Bond Legislative Framework and the CMHC Guide to collateralise
covered bonds which include the following: (a) securities issued by the Government of Canada, and (b) repos of Government of Canada
securities having terms acceptable to CMHC, provided that the total exposure to Substitute Assets shall not exceed 10 per cent
of the aggregate value of (x) the aggregate loan balance of the Loans in the Portfolio; (y) the face value of any




    	 



    	54



    


Substitute Assets; and (z) cash
balances held by the Guarantor (subject to the Prescribed Cash Limitation);


in each case, provided that:


		(a)	such exposures will have certain minimum long-term and short-term ratings from the Rating Agencies,
as specified by such Rating Agencies from time to time;



		(b)	the maximum aggregate total exposures in general to classes of assets with certain ratings by the
Ratings Agencies will, if specified by the Rating Agencies, be limited to the maximum percentages specified by such Rating Agencies;
and



		(c)	in respect of investments of Available Revenue Receipts in such classes and types of assets, the
Interest Rate Swap Provider has given its consent to investments in such classes and types of assets;



Sub-unit In accordance
with Condition 4.5(j) of the Terms and Conditions, with respect to any currency other than euro, the lowest amount of such currency
that is available as legal tender in the country of such currency and, with respect to euro, € 0.01


Successor Servicer A successor
servicer to the Servicer in respect of Loans and their Related Security in the Portfolio other than a member of the Scotiabank
Group


Superintendent The Superintendent
of Financial Institutions appointed pursuant to the Office of the Superintendent of Financial Institutions Act (Canada)


Swap Agreement Ratings The
“Minimum Ratings” and “Subsequent Ratings” by the Rating Agencies, as applicable, as
such terms are defined in the Covered Bond Swap Agreement and the Interest Rate Swap Agreement


Swap Agreements The Covered
Bond Swap Agreement together with the Interest Rate Swap Agreement, and each a Swap Agreement


Swap Collateral At any
time, any asset (including cash and/or securities) that is paid or transferred by a Swap Provider to the Guarantor as collateral
in respect of the performance by such Swap Provider of its obligations under the relevant Swap Agreement together with any income
or distributions received in respect of such asset and any equivalent of such asset into which such asset is transformed


Swap Collateral Available Amounts
At any time, the amount of Swap Collateral which under the terms of the relevant Swap Agreement may be applied at that time
in satisfaction of the relevant Swap Provider's obligations to the Guarantor to the extent that such obligations relate to payments
to be made in connection with the Pre-Acceleration Revenue Priority of Payments, the Pre-Acceleration Principal Priority of Payments
or the Guarantee Priority of Payments


Swap Collateral Excluded Amounts
At any time, the amount of Swap Collateral that may not be applied under the terms of the relevant Swap Agreement at that time
in satisfaction of




    	 



    	55



    


the relevant Swap Provider’s
obligations to the Guarantor, including Swap Collateral that is to be returned to the relevant Swap Provider upon termination of
the relevant Swap Agreement


Swap Provider Default The
occurrence of an Event of Default or Termination Event (each as defined in each of the Swap Agreements) where the relevant Swap
Provider is the Defaulting Party or the sole Affected Party (each as defined in relevant Swap Agreement), as applicable, other
than a Swap Provider Downgrade Event


Swap Provider Downgrade Event
The occurrence of an Additional Termination Event (as defined in the relevant Swap Agreement) following a failure by a Swap Provider
to comply with the requirements of the ratings downgrade provisions set out in the relevant Swap Agreement


Swap Providers The Covered
Bond Swap Provider and the Interest Rate Swap Provider, and each a “Swap Provider”


Talonholders The several
persons who are for the time being holders of the Talons


Talons Talons for further
Coupons in respect of interest-bearing Bearer Definitive Covered Bonds


TARGET System In accordance
with Condition 4.5(a)(ii) of the Terms and Conditions, the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET2) System


Tax Act The Income Tax
Act (Canada)


Tax Credit The meaning
given in the relevant Swap Agreement


Taxes All present and future
taxes, levies, imposts, duties (other than stamp duty), fees, deductions, withholdings or charges of any nature whatsoever and
wheresoever imposed, including income tax, corporation tax, goods and services tax or other tax in respect of added value and any
franchise, transfer, sales, gross receipts, use, business, occupation, excise, personal property, real property or other tax imposed
by any national, local or supranational taxing or fiscal authority or agency together with any penalties, fines or interest thereon
and “Tax” and “Taxation” will be construed accordingly


TEFRA The U.S. Tax
Equity and Fiscal Responsibility Act of 1982


Temporary Global Covered Bonds
A temporary global covered bond substantially in the form set out in Part 1 of Schedule 2 (Forms of Global and Definitive Covered
Bonds, Coupons and Talons) to the Trust Deed with such modifications (if any) as may be agreed between the Issuer, the Principal
Paying Agent, the Bond Trustee and the relevant Dealer(s) or Lead Manager (in the case of syndicated issues), together with the
copy of the applicable Final Terms Document annexed thereto, comprising some or all of the Covered Bonds of the same Series, issued
by the Issuer pursuant to the Program Agreement or any other agreement between the Issuer and the relevant Dealer(s) relating to
the Program, the Agency Agreement and the Trust Deed




    	 



    	56



    


Terms and Conditions or
Conditions The terms and conditions of the Covered Bonds, as set out in Schedule 1 (Terms and Conditions of the Covered
Bonds) to the Trust Deed


Third Party Amounts Each
of:


		(a)	payments of insurance premiums, if any, due to an insurer in respect of the Seller Arranged Policy
to the extent not paid or payable by the Seller;



		(b)	amounts under an unpaid direct debit which are repaid
by the Seller to the bank making such payment if such bank is unable to recoup that amount itself from its customer’s account;
and



		(c)	any amount received from a Borrower for the express
purpose of payment being made to a third party for the provision of a service (including giving insurance cover) to any of that
Borrower or the Seller or the Guarantor,



which amounts will be paid on
receipt by the Guarantor to the Seller from funds on deposit in the GDA Account, with the Seller paying such amounts to the relevant
third party


Toronto Business Day A
day (other than a Saturday or Sunday) on which commercial banks are open for general business (including dealings in foreign exchange
and foreign currency deposits) in Toronto


Total Credit Commitment
The combined aggregate amount available to be drawn by the Guarantor under the terms of the Intercompany Loan Agreement, subject
to increase and decrease in accordance with the terms of the Intercompany Loan Agreement, which amount is initially $16,500,000,000.


Trading Value The value
determined with reference to one of the methods set forth in (a) through (f) below which can reasonably be considered the most
accurate indicator of institutional market value in the circumstances:


		(a)	the last selling price;



		(b)	the average of the high and low selling price on the
calculation date;



		(c)	the average selling price over a given period of days (not exceeding 30) preceding the calculation
date;



		(d)	the close of day bid price on the calculation date (in
the case of an asset);



		(e)	the close of day ask price on the calculation date (in
the case of a liability);



		(f)	such other value as may be indicated by at least two actionable quotes obtained from appropriate
market participants instructed to have regard for the nature of the asset or liability, its liquidity and the current interest
rate environment



plus accrued return where applicable
(with currency translations undertaken using or at the average close of day foreign exchange rates posted on the Bank of Canada
website for the month in relation to which the calculation is made), provided that, in each case, the




    	 



    	57



    


methodology selected, the reasons
therefor and the determination of value pursuant to such selected methodology shall be duly documented


Tranche An issue of Covered
Bonds which are identical in all respects (including as to listing and admission to trading)


Transaction Account The
account in the name of the Guarantor held with the Account Bank and maintained subject to the terms of the Bank Account Agreement
and the Security Agreement or such additional or replacement account as may for the time being be in place with the prior consent
of the Bond Trustee and designated as such


Transaction Account Mandate
The bank account mandate between the Guarantor and the Account Bank relating to the operation of the Transaction Account


Transaction Documents The
following documents:


		(a)	the Trust Deed (which includes the Covered Bond Guarantee and true form of the Global Covered Bonds,
the Definitive Covered Bonds, the Coupons and the Talons);



		(b)	the Security Agreement (and any documents entered into
pursuant to the Security Agreement);



		(c)	the Mortgage Sale Agreement (and, if applicable, any
New Mortgage Sale Agreement entered into from time to time);



		(d)	the Servicing Agreement;



		(e)	the Guarantor Agreement;



		(f)	the Intercompany Loan Agreement;



		(g)	the Interest Rate Swap Agreement;



		(h)	the Covered Bond Swap Agreement;



		(i)	the Cover Pool Monitor Agreement;



		(j)	the Cash Management Agreement;



		(k)	the Guaranteed Deposit Account Contract;



		(l)	the Standby Guaranteed Deposit Account Contract;



		(m)	the Bank Account Agreement;



		(n)	the Standby Bank Account Agreement;



		(o)	the Agency Agreement;



		(p)	the Program Agreement;





    	 



    	58



    


		(q)	each Final Terms Document for Covered Bonds which are
listed on the Official List and admitted to trading on the Market, the PSM or offered to the public in the European Economic Area;



		(r)	a copy of each subscription agreement for Covered Bonds
issued on a syndicated basis which are listed on the Official List and admitted to trading on the Market, the PSM or offered to
the public in the European Economic Area;



		(s)	any Security Sharing Agreement entered into by the Guarantor;
and



		(t)	the Master Definitions and Construction Agreement



Transfer In reference to
any interest in the Partnership, (i) any transfer of such interest, directly or indirectly, by operation of law, by court order,
by judicial process, or by foreclosure, levy or attachment, (ii) any sale, assignment, gift, donation, redemption, conversion or
other disposition of such interest, directly or indirectly, pursuant to an agreement, arrangement, instrument or understanding
by which legal title to or beneficial ownership of such securities passes from one Person to another Person or to the same Person
in a different legal capacity, whether or not for value, and (iii) the granting, directly or indirectly, of any mortgage, charge,
pledge, encumbrance or grant of security interest, and in each case any agreement to effect any of the foregoing; and the words
Transferred, Transferring and similar words have corresponding meanings


Transfer Agent The Bank
of Nova Scotia, London Branch, and The Bank of Nova Scotia Trust Company of New York, each as appointed pursuant to the Agency
Agreement as a transfer agent together with any successor appointed from time to time thereunder


Transfer Certificate A
transfer certificate in or substantially in the form of Schedule 4 (Form of Certificate for Exchange or Transfer of Global covered
bonds or Beneficial Interest in Global covered bonds) to the Agency Agreement


Transfer Date Each of the
First Transfer Date and each other date on which a Loan and its Related Security is sold by the Seller to the Guarantor in accordance
with the terms of the Mortgage Sale Agreement


Treaty The meaning given
in Condition 5.9 (Definitions) of the Terms and Conditions


True Loan Balance The meaning
given in Schedule 3 (Amortization Test) to the Guarantor Agreement


Trust Corporation A trust
company incorporated under the laws of Canada


Trust Deed The trust deed
dated as of the Program Date between the Issuer, the Guarantor and the Bond Trustee


Trust Indenture Act The
U.S. Trust Indenture Act of 1939, as amended


UK Listing Authority The
FSA in its capacity as competent authority under the FSMA




    	 



    	59



    


United States persons or U.S.
person The meaning given in Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) to the Trust Deed


Underwriting
Agreement An underwriting agreement for the sale of Covered Bonds in the United States pursuant to the U.S.
Registration Statement to be entered into on or after the Program Date between dealers named therein, the Issuer and
the Guarantor


U.S. Prospectus The prospectus
included in the U.S. Registration Statement as revised, supplemented or amended from time to time by the Issuer and the Guarantor,
including any documents which are from time to time incorporated into the U.S. Prospectus by reference, except that in relation
to each Series or Tranche of Covered Bonds only, the applicable Final Terms Document shall be deemed to be included in the U.S.
Prospectus


U.S. Registered Covered Bond
A Covered Bond issued under the U.S. Registration Statement


U.S. Registered Definitive
Covered Bond A Definitive Covered Bond in registered form issued under the U.S Registration Statement 


U.S. Registered Global Covered
Bond A Registered Global Covered Bond issued under the U.S Registration Statement


U.S. Registration Statement
A registration statement on Form F-3 (File No. 333-188984) in respect of certain issuances of Covered Bonds to be registered with
the SEC, as revised, supplemented or amended from time to time


Utilisation Date The Guarantor
Payment Date on which a Subordinated Advance is made


Valuation Calculation The
meaning given to it in Schedule 10 of the Guarantor Agreement


Valuation Report The valuation
report or reports for mortgage purposes, obtained by the Seller in respect of each Mortgaged Property or a valuation report in
respect of a valuation of a Mortgaged Property made using a methodology that would be acceptable to reasonable and prudent institutional
mortgage lenders in the Seller’s market and that has been approved by the relevant officers of the Seller


Voluntary Overcollateralization
The meaning given to it in Section 7.5 of the Guarantor Agreement


voting certificate The
meaning given in Schedule 5 (Provisions for Meetings of Covered Bondholders) to the Trust Deed


Zero Coupon Covered Bonds
Covered Bonds which will be offered and sold at a discount to their nominal amount and which will not bear interest


		2.	INTERPRETATION AND CONSTRUCTION



Any reference in this Master Definitions
and Construction Agreement, or in any Transaction Document or any document to which this Master Definitions and Construction Agreement
is expressed to be incorporated or as to which this Master Definitions and Construction




    	 



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Agreement is expressed to apply
(unless expressly stated otherwise in such Transaction Document or other document), to:


the “assets”
of any Person will be construed as a reference to the whole or any part of its business, undertakings, property, intellectual property,
shares, securities, debts, accounts, revenues (including any right to receive revenues), goodwill, shareholdings and uncalled capital
including premium whether now or hereafter acquired and any other assets whatsoever;


an “authorisation”
includes an authorisation, consent, approval, resolution, licence, exemption, filing or registration;


“disposal”
will be construed as any sale, lease, transfer, conveyance, assignment, assignation, licence, sub licence or other disposal and
“dispose” will be construed accordingly;


a “guarantee”
means any guarantee, bond, indemnity, letter of credit, third party security or other legally binding assurance against financial
loss granted by one Person in respect of any indebtedness of another Person, or any agreement to assume any indebtedness of any
other Person or to supply funds or to invest in any manner whatsoever in such other Person by reason of, or otherwise in relation
to, indebtedness of such other Person;


“indebtedness”
will be construed so as to include any obligation (whether incurred as principal or as surety or guarantor) for the payment or
repayment of money, whether present or future, actual or contingent;


a “month” is
a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar
month save that, where any such period would otherwise end on a day which is not a Business Day, it will end on the next Business
Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it will
end on the preceding business day provided that, if a period starts on the last business day in a calendar month or if there is
no numerically corresponding day in the month in which that period ends, that period will end on the last business day in that
later month (and references to “months” will be construed accordingly);


a “regulation”
includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental,
inter governmental or supranational body, agency, department or regulatory, self regulatory or other authority or organisation;


a “wholly owned subsidiary”
of a company or corporation will be construed as a reference to any company or corporation which has no other members except that
other company or corporation and that other company’s or corporation’s wholly owned subsidiaries or Persons acting
on behalf of that other company or corporation or its wholly owned subsidiaries; and


the “winding up”,
“dissolution” or “administration” of a company or corporation will be construed so as to include
any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated
or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding up,
bankruptcy, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors.




    	 



    	61



    


In this Master Definitions and
Construction Agreement and in any of the Transaction Documents in which this Master Definitions and Construction Agreement is expressed
to be incorporated or to which this Master Definitions and Construction Agreement is expressed to apply:


		(a)	words denoting the singular number only will include the plural number also and vice versa;



		(b)	words denoting one gender only will include the other gender;



		(c)	references to any statutory provision will be deemed also to refer to any statutory modification
or re enactment thereof or any statutory instrument, order or regulation made thereunder or under any such re enactment;



		(d)	references to any agreement or other document (including any of the Transaction Documents) will
be deemed also to refer to such agreement or document as amended, varied, supplemented or novated from time to time;



		(e)	references to the Security Agreement will include all documents entered into pursuant thereto;



		(f)	article, section, paragraph and schedule headings are for ease of reference only;



		(g)	reference to a statute will be construed as a reference to such statute as the same may have been,
or may from time to time be, amended or re enacted to the extent such amendment or re enactment is substantially to the same effect
as such statute on the date hereof;



		(h)	reference to a time of day will be construed as a reference to Toronto time, unless expressly specified
otherwise;



		(i)	references to any Person will include references to his successors, transferees and assigns and
any Person deriving title under or through him;



		(j)	the words “including” and “includes” mean “including (or includes)
without limitation”;



		(k)	the phrase “the aggregate of”, “the total of”, “the sum of”,
or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”


	 	(l)	the withdrawal of a rating by a Rating Agency of the ratings of any Person shall constitute a “downgrade”
of the ratings of such Person for purposes of determining whether the ratings of such Person have been downgraded below a specified level; and



		(m)	in the computation of periods of time from a specified date to a later specified date, unless otherwise
expressly stated, the word “from” means “from and including” and the words “to” and “until”
each mean “to but excluding”.



		3.	AMENDMENTS



Subject to Section 20.7 (Modification,
Waiver or Authorisation to Transaction Documents) of the Security Agreement, any amendments to this Master Definitions and Construction
Agreement will be made only with the prior written consent of each party to this Master Definitions and Construction Agreement.
Each proposed amendment or waiver of this




    	 



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Agreement that is considered by
the Guarantor to be a material amendment or waiver shall be subject to satisfaction of the Rating Agency Condition. For certainty,
any amendment to (a) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (b) the consequences
of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be
a material amendment. The Guarantor (or the Cash Manager on its behalf) shall deliver notice to the Rating Agencies of any amendment
or waiver which does not require satisfaction of the Rating Agency Condition provided that failure to deliver such notice shall
not constitute a breach of the obligations of the Guarantor under this Agreement. Notwithstanding the foregoing, any amendment
to the definition of “Latest Valuation” contained herein or any related amendment for purposes of addressing changes
to the CMHC Guide referenced in the proviso to such definition shall not require the consent of any party nor shall it require
satisfaction of the Rating Agency Condition.


		4.	RATING AGENCY CONDITION



(a) Notwithstanding
anything to the contrary in the Trust Deed or any of the other Transaction Documents, if:


		(i)	confirmation of the satisfaction of the Rating Agency Condition is a condition to any action or
step under any Transaction Document; or



		(ii)	a written request for such confirmation is delivered to that Rating Agency by any Requesting Party
and either one or more of the Rating Agencies indicates that it does not consider satisfaction of the Rating Agency Condition necessary
in the circumstances or no such confirmation or other response is received by one or more of the Rating Agencies within 30 days
of the date of receipt of such request by such Rating Agency (each, a Non-Responsive Rating Agency),



the
Requesting Party shall be entitled to disregard the requirement for satisfaction of the Rating Agency Condition with respect to
each Non-Responsive Rating Agency and proceed on the basis of confirmation of the satisfaction of the Rating Agency Condition by
each other Rating Agency on the basis that such confirmation by the Non-Responsive Rating Agency is not required in the particular
circumstances of the request. 


The
failure by a Rating Agency to respond to a written request for a confirmation of satisfaction of the Rating Agency Condition shall
not be interpreted to mean that such Rating Agency has given any deemed confirmation of satisfaction thereof or other response
in respect of such action or step. 


(b) Notwithstanding
anything to the contrary in the Trust Deed or any of the other Transaction Documents, if at any time the Issuer determines that
any one of DBRS, Moody’s or Fitch shall not be a Rating Agency, then, so long as (i) the Program is in compliance with the
terms of the CMHC Guide, and (ii) each outstanding series of Covered Bonds is rated by at least two Rating Agencies, the Ratings
Triggers for such rating agency will not be applicable to the Program without any action or formality, including for greater certainty
satisfaction of the Rating Agency Condition with respect to any Rating Agency or consent or approval of the Bond Trustee or the
holders of the Covered Bonds. Any amendments to this Master Definitions and Construction Agreement to reflect the foregoing shall
be deemed not to be a material amendment and may be made without the requirement for satisfaction of the




    	 



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Rating Agency Condition with respect
to any Rating Agency or consent or approval of the Bond Trustee or the holders of the Covered Bonds.


		5.	GOVERNING LAW



This Master Definitions and Construction
Agreement will be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada
applicable therein.


		6.	SUBMISSION TO JURISDICTION



Each party to this Master Definitions
and Construction Agreement hereby irrevocably submits to the exclusive jurisdiction of the courts of the Province of Ontario in
any action or proceeding arising out of or relating to this Master Definitions and Construction Agreement.


		7.	liability of Limited partners



Scotiabank Covered Bond Guarantor
Limited Partnership is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which
is, except as expressly required by law, only liable for any of its liabilities or any of its losses to the extent of the amount
that the limited partner has contributed or agreed to contribute to its capital.


 


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IN WITNESS WHEREOF
the parties hereto have executed this Master Definitions and Construction Agreement on the day and year first before written.


	 	THE BANK OF NOVA SCOTIA, in its capacity as the Issuer, the Seller, the Servicer, the Cash Manager, the Account Bank, the GDA Provider, the Intercompany Loan Provider, the Interest Rate Swap Provider and the Covered Bond Swap Provider 
	 	 
	 	By:	/s/ Ian Berry
	 	 	Name: Ian Berry

Title: Managing Director and Head, Funding and Liquidity Management
	 	 
	 	THE BANK OF NOVA SCOTIA, LONDON BRANCH, in its capacity as Principal Paying Agent, a Registrar and a Transfer Agent
	 	 
	 	By:	/s/
    Mark Caplan
	 	 	Name: Mark Caplan

Title: Managing Director and  Head of Europe
	 	 
	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner SCOTIABANK COVERED BOND GP INC.
	 	 
	 	By:	/s/ Jake Lawrence
	 	 	Name: Jake Lawrence

Title: President and Secretary




    	 



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	 	SCOTIABANK COVERED BOND GP INC., in its capacity as Managing GP
	 	 
	 	By:	/s/ Jake Lawrence
	 	 	Name: Jake Lawrence

Title: President and Secretary
	 	 
	 	By:	 
	 	 	Name:

Title:
	 	 
	 	8429057 CANADA INC., in its capacity as Liquidation GP
	 	 
	 	By:	/s/
    Stuart Swartz
	 	 	Name: Stuart Swartz

Title: President
	 	By:	/s/
    Charles Eric Gauthier
	 	 	Name: Charles Eric Gauthier

Title: Vice-President
	 	 
	 	COMPUTERSHARE TRUST COMPANY OF CANADA, in its capacity as Bond Trustee
	 	 
	 	By:	/s/ Sean Pigott
	 	 	Name: Sean Pigott

Title: Corporate Trust Officer
	 	 
	 	By:	/s/ Stanley Kwan
	 	 	Name: Stanley Kwan

Title: Associate Trust Officer
	 	 
	 	KPMG LLP, in its capacity as Cover Pool Monitor
	 	 
	 	By:	/s/
    Heather Kaine
	 	 	
        Name: Heather Kaine

        Title: Partner, KPMG LLP

         

	 	 




    	 



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	 	THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, in its capacity as a Paying Agent, a Registrar, a Transfer Agent and Exchange Agent
	 
	 	 	 
	 	By:	/s/
    Warren A. Goshine
	 	 	Name: Warren A. Goshine

Title: Vice President