Document:

Exhibit 4.4

COVER POOL MONITOR AGREEMENT

 

 

SCOTIABANK COVERED BOND GUARANTOR
LIMITED PARTNERSHIP,

as Guarantor

- and -

THE BANK OF NOVA SCOTIA,

as Issuer and Cash Manager

- and -

KPMG LLP,

as Cover Pool Monitor

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA,

as Bond Trustee

 

 

 

 

 

DATED AS OF JULY 19, 2013

 

    	 

    	 

    

CONTENTS

	ARTICLE 1 DEFINITIONS AND INTERPRETATION	2
	1.1	Definitions	2
	1.2	Interpretation	2
	1.3	Schedule	2
	1.4	Acknowledgment	2
	ARTICLE 2 APPOINTMENT AND SERVICES OF THE COVER POOL MONITOR	2
	2.1	Appointment and Annual Cover Pool Monitor Report	2
	2.2	Certain Testing Services	3
	2.3	Sampling Methodology	5
	2.4	Confirming Mathematical Accuracy of Asset Coverage Test, Amortization Test and Valuation Calculation	5
	2.5	Confirming Accuracy of Pre-Maturity Required Ratings, Reserve Fund Required Amount and Related Calculations	6
	2.6	Confirming Accuracy of Latest Valuation Determinations	6
	2.7	Hedging Arrangements and Use of ISDA Documentation	7
	2.8	Errors	7
	2.9	Reporting Non-Compliance with CMHC Guide and Other Information	7
	2.1	Cover Pool Monitor Assumptions	8
	2.11	Compliance with Requirements	8
	2.12	No Responsibility to Update	8
	2.13	Timely Performance of Tests	9
	ARTICLE 3 PROVISION OF INFORMATION TO THE COVER POOL MONITOR	9
	3.1	Asset Coverage Test	9
	3.2	Amortization Test	10
	3.3	Valuation Calculation	10
	3.4	Access to Information	10
	3.5	Ratings Information	11
	3.6	Reliance	11
	3.7	Nominated Persons	11
	3.8	Preparation of Final Annual Cover Pool Monitor Report	11
	3.9	Ownership of Working Papers	12
	ARTICLE 4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COVER POOL MONITOR	12
	ARTICLE 5 TERMINATION	13
	5.1	Resignation	13
	5.2	Resignation Costs	13
	5.3	Removal	13
	5.4	Removal Costs	14

    	 

    	 

    
	5.5	Replacement Cover Pool Monitor	14
	5.6	Co-Operation	14
	5.7	Other	15
	5.8	Notice of Termination or Resignation	15
	ARTICLE 6 FEES	15
	6.1	Cover Pool Monitor Fee	15
	6.2	Cover Pool Monitor Payment Date	15
	6.3	Other Costs	16
	6.4	Priorities of Payments	16
	6.5	Payment in Error	16
	6.6	Other	16
	ARTICLE 7 ASSIGNMENTS AND TRANSFERS	17
	7.1	Assignment	17
	7.2	Assignment under Security Agreement	17
	7.3	Agency, Partnership and Joint Venture	17
	ARTICLE 8 CONFIDENTIALITY	17
	8.1	General	17
	8.2	Limitation	18
	ARTICLE 9 PROVISION OF INFORMATION TO THE BOND TRUSTEE	19
	9.1	Provision of Information to the Bond Trustee	19
	ARTICLE 10 LIABILITY	19
	10.1	General	19
	10.2	Limitation of Liability	19
	10.3	Claims	19
	10.4	Dishonesty, Bad Faith, Wilful Misconduct, Gross Negligence or Reckless Disregard	20
	10.5	Sole Responsibility of the Cover Pool Monitor	20
	10.6	Other	20
	ARTICLE 11 FURTHER PROVISIONS	20
	11.1	Rights	20
	11.2	Invalidity, Illegality and Unenforceability	21
	11.3	Insolvency of the Issuer	21
	ARTICLE 12 NOTICES	21
	12.1	General	21
	12.2	Change in Address	22
	Article 13 COUNTERPARTS	22

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	13.1	Counterparts	22
	ARTICLE 14 THE BOND TRUSTEE	22
	14.1	Change of Bond Trustee	22
	14.2	Limitation of Liability of Bond Trustee	23
	ARTICLE 15 LIMITATION OF LIABILITY	23
	15.1	Limitation of Liability	23
	ARTICLE 16 AMENDMENTS, MODIFICATION, VARIATION OR WAIVER	23
	16.1	Amendments, Modification, Variation or Waiver	23
	16.2	Non-Petition	23
	ARTICLE 17 EXCLUSION OF THIRD PARTY RIGHTS	24
	17.1	Exclusion of Third Party Rights	24
	ARTICLE 18 AGENCY	24
	18.1	Agency	24
	ARTICLE 19 CONTINUING PROVISIONS	24
	19.1	Continuing Provisions	24
	ARTICLE 20 ENTIRE AGREEMENT	24
	20.1	Entire Agreement	24
	ARTICLE 21 FURTHER ASSURANCE	25
	21.1	Further Assurance	25
	ARTICLE 22 GOVERNING LAW	25
	22.1	Governing Law	25
	22.2	Submission to Jurisdiction	25

	SCHEDULE 1 CERTAIN SPECIFIED PROCEDURES	1
	SCHEDULE 2 VALUATION CALCULATIONS	1

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THIS COVER POOL MONITOR AGREEMENT
is made as of July 19, 2013

BETWEEN:

		(1)	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
6100, 1 First Canadian Place, Toronto, Ontario, M5X 1B8, by its managing general partner, SCOTIABANK COVERED BOND GP INC.,
in its capacity as the Guarantor;

		(2)	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 and the Cash Manager;

		(3)	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; and

		(4)	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.

WHEREAS:

		(A)	Under the terms of the Program, the Issuer will issue Covered
Bonds from time to time on an Issue Date.

		(B)	In connection with the Program, the Guarantor has agreed
to guarantee payments of interest and principal under the Covered Bonds pursuant to the Covered Bonds Guarantee.

		(C)	In connection therewith, the Guarantor has entered into
the Cash Management Agreement with the Cash Manager of even date herewith, pursuant to which the Cash Manager has agreed to, inter
alia, perform certain calculations in relation to the Asset Coverage Test, the Amortization Test and the Valuation Calculation.

		(D)	The Cover Pool Monitor has agreed to be appointed by the
Guarantor and the Bond Trustee to carry out various testing and notification procedures in relation to the calculations performed
by the Cash Manager in relation to the Asset Coverage Test, the Amortization Test and the Valuation Calculation and in relation
to certain other matters, in each case subject to and in accordance with the terms of this Agreement.

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

    	 

    	 

    

Article
1

DEFINITIONS AND INTERPRETATION

		1.1	Definitions

The Master Definitions and
Construction Agreement made between the parties to the Transaction Documents on July 19, 2013 (as the same may be amended,
restated and/or supplemented from time to time) (the “Master Definitions and Construction Agreement”) is
expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master
Definitions and Construction Agreement (as so amended, restated and/or supplemented) will, except where the context otherwise
requires and save where otherwise defined herein, have the same meanings in this Agreement, including the recitals hereto,
and this Agreement will be construed in accordance with the interpretation provisions set out in Section 2 (Interpretation
and Construction) of the Master Definitions and Construction Agreement.

		1.2	Interpretation

For the purposes of this Agreement, this
Agreement has the same meaning as Cover Pool Monitor Agreement in the Master Definitions and Construction Agreement.

		1.3	Schedule

The Schedule attached to this Agreement
will, for all purposes of this Agreement, form an integral part of it.

Schedule 1 – Certain Specified
Procedures

Schedule 2 – Valuation Calculation

		1.4	Acknowledgment

The parties hereto acknowledge that the
Cash Manager is performing services for and on behalf of the Guarantor pursuant to the terms of the Cash Management Agreement and
that to the extent that anything herein is referred to as being done by the Cash Manager, such reference is deemed to include a
reference to such thing being done by the Guarantor (or the Cash Manager on its behalf).

Article
2

appointment and SERVICES OF THE COVER POOL MONITOR

		2.1	Appointment and Annual
                                                                                                    Cover Pool Monitor Report
                                                                                                    

		(a)	Appointment: The Issuer, the Guarantor and the
Bond Trustee (according to their respective estates and interests) each hereby appoints the Cover Pool Monitor to provide the
services set out in this Agreement and the Cover Pool Monitor hereby accepts such appointment on the terms and subject to the
conditions of this Agreement. The Bond Trustee hereby consents to the appointment of the Cover Pool Monitor on the terms and conditions
set out herein.

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		(b)	Annual Cover Pool Monitor Report: The Cover Pool
Monitor will, subject to due receipt of the information to be provided by the Cash Manager to the Cover Pool Monitor in accordance
with Article 3 (Provision of Information to the Cover Pool Monitor) below, no later than the fifth Toronto Business Day prior
to the First Issue Date, and on or prior to the anniversary of the First Issue Date in each year, prepare and deliver to the Issuer,
the Guarantor, the Cash Manager, CMHC and the Bond Trustee (each a “Recipient”) a report (the “Annual
Cover Pool Monitor Report”), prepared in accordance with Section 9100 of the Other Canadian Standards issued by the
Canadian Institute of Chartered Accountants:

		(i)	detailing the scope of work undertaken and the specified
procedures as described in Sections 2.2, 2.4, 2.5 and 2.6 (collectively, the “Specified Procedures”);

		(ii)	confirming the matters set out in Section
2.3; and

		(iii)	detailing the results of the Specified Procedures.

		(c)	The first issuance of Covered Bonds shall not proceed
until CMHC has approved and accepted the initial Annual Cover Pool Monitor Report.

		(d)	Each Annual Cover Pool Monitor Report must be dated
(or current to a date not later than) the anniversary of the First Issue Date, but may be issued or delivered to the Issuer, the
Guarantor, the Cash Manager, CMHC and the Bond Trustee at any time within 90 days of its date or currency.

		2.2	Certain Testing Services

		(a)	Test Period: In connection with each Annual Cover
Pool Monitor Report, the Cover Pool Monitor will randomly select one Investor Report (such Investor Report, the “Selected
Investor Report”) from the Investor Reports prepared since the date of its last report (or, in the case of the Annual
Cover Pool Monitor Report delivered in connection with the First Issue Date, the Selected Investor Report prepared in relation
to such issuance, which may be prepared on a pro forma basis in accordance with Section 5.1.1 of the CMHC Guide).

		(b)	Loan Sample: From the system records, extraction
files and original asset documents, including the Issuer’s and Servicer’s mortgage files in respect of the Covered
Bond Portfolio (collectively, the “Source Materials”), the Cover Pool Monitor will select a sample of Loans
and a sample of Substitute Assets (the “Sample”) from the then current Covered Bond Portfolio, which Sample
must be of a size sufficient to provide a 95% confidence level, with a tolerable deviation rate of 5% (an “Industry Standard
Sampling Size”).

		(c)	Procedures:

		(i)	In respect of each Selected Investor Report, the Cover
Pool Monitor will:

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		A.	agree the mortgage information disclosed in the Selected
Investor Report with the Source Materials, and verify non-mortgage information disclosed in the Selected Investor Report by inspection
of the Issuer’s accounting records or other appropriate data made available to the Cover Pool Monitor by the Issuer;

		B.	perform the specified procedures set forth in Schedule
1 hereto with respect to the Loans contained in the Sample with reference to the Source Materials by inspection of the data
elements identified in Schedule 1 under the heading “Category”; and

		(ii)	with reference to the Source Materials, the Cover Pool
Monitor will (A) agree that the assets in the Sample meet the criteria specified in Sections 4.1.1 and 4.1.3 of the CMHC Guide,
and (B) perform the specified procedures set forth in Schedule 1 hereto with respect to the Substitute Assets in the Sample
by inspection of the data elements identified in Schedule 1 under the heading “Category”.

		(d)	Materials delivered to Custodian: Using the Sample,
the Cover Pool Monitor will agree the Custodial Information provided to the Custodian by the Seller pursuant to the Mortgage Sale
Agreement with respect to the Loans contained in the Sample.

		(e)	Deficiency Reporting: Using the Sample, the Cover
Pool Monitor will inspect the Source Materials and report any Loans where:

		(i)	at the time of transfer to the Guarantor, one or more
payments of principal or interest payable thereunder were in arrears;

		(ii)	at the time of transfer to the Guarantor, one or more
payments of principal or interest (or blended payment(s) of principal and interest) had not been made in accordance with the terms
of the Loan;

		(iii)	there is no evidence that the mortgage or hypothecary
instrument charging the Mortgaged Property securing such Loan represents a first priority perfected security interest; or

		(iv)	there is evidence of any Loans advanced under the same
mortgage or other hypothecary instrument having been insured by 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 hereof or otherwise identified in the Protection of Residential Mortgage or Hypothecary Insurance
Act (Canada), or any successor to any of them.

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		2.3	Sampling Methodology

The Cover Pool Monitor will confirm the
sampling methodology used in connection with the matters set out in Section 2.2, including a description of the Sample and populations
used, in each case, accords with the Industry Standard Sampling Size.

		2.4	Confirming Mathematical
                                                                                                    Accuracy of Asset Coverage
                                                                                                    Test, Amortization Test and
                                                                                                    Valuation Calculation

Using the Selected Investor Report (provided
that, for the purposes of any Recalculation Procedures, “Selected Investor Report” as used in this Section 2.4
shall include any Investor Report required to be tested in accordance with Section 2.8),
the Cover Pool Monitor shall do the following and report the findings thereof:

		(a)	recalculate the results of the Asset Coverage and/or
Amortization Test disclosed in the Selected Investor Report; and

		(b)	in connection with the Valuation Calculation disclosed
in the Selected Investor Report:

		(i)	recalculate such Valuation Calculation;

		(ii)	enquire of the Cash Manager as to the following whether,
in calculating the Present Value for purposes of the Valuation Calculation disclosed in the Selected Investor Report, expected
future cash flows are discounted using (A) the publicly posted mortgage rates or (B) the current market interest rates for mortgage
loans with credit risks similar to those of the Performing Eligible Loans;

		(iii)	where the responses to Section 2.4(b)(ii) is (B), enquire
of the Cash Manager whether the same discounting methodology has been used as that used as part of the fair value disclosure in
the Issuer’s audited financial statements for the related period;

		(iv)	enquire of the Cash Manager as to the determination of
the Trading Values of (i) all Substitute Assets, (ii) assets pledged or otherwise transferred to the Guarantor as collateral for
the obligations of the Swap Provider under or pursuant to the Interest Rate Swap Agreement or a Covered Bond Swap Agreement, and
(iii) the Covered Bond liabilities, in each case as used in such Valuation Calculation; and

		(v)	agree the Valuation Calculation to the requirements set
forth in Schedule 2 and Section 4.6 of the CMHC Guide.

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		2.5	Confirming Accuracy
                                                                                                    of Pre-Maturity Required Ratings,
                                                                                                    Reserve Fund Required Amount
                                                                                                    and Related Calculations

Using the Selected Investor Report (provided
that, for the purposes of any Recalculation Procedures, “Selected Investor Report” as used in this Section 2.5
shall include any Investor Report required to be tested in accordance with Section 2.8)
and the ratings of the Issuer received from the Cash Manager in accordance with Section 3.5, the Cover Pool Monitor will do the
following and report the findings thereof:

		(a)	determine whether the Issuer no longer maintains all of the Pre-Maturity Required Ratings;

		(b)	following the determination that the Issuer no longer maintains all of the Pre-Maturity Required Ratings, if one or more
                                                                                 Series of Hard Bullet Covered Bonds are outstanding: (i) obtain a schedule from the Issuer computing the amount, if any,
                                                                                 required to be credited to the Pre-Maturity Liquidity Ledger with respect to each applicable Calculation Date, (ii) perform
                                                                                 recalculation procedures on the information contained in such schedule, and (iii) enquire of the Issuer as to whether the
                                                                                 amount credited to the Pre-Maturity Liquidity Ledger on such Calculation Date is sufficient to comply with the requirements
                                                                                 in respect thereof;

		(c)	determine whether, based on the Reserve Fund Required
Amount Ratings, the Reserve Fund Required Amount is greater than nil, and, if greater than nil, (i) obtain from the Issuer a schedule
computing the Reserve Fund Required Amount with respect to each applicable Calculation Date, (ii) perform recalculation procedures
on the information contained in such schedule, and (iii) enquire of the Issuer as to whether the amount credited to the Reserve
Ledger on such Calculation Date is equal to the Reserve Fund Required Amount.

		2.6	Confirming Accuracy
                                                                                                    of Latest Valuation Determinations

		(a)	The Cover Pool Monitor shall obtain a schedule of the
Latest Valuation for each Eligible Loan in respect of the last day of the Calculation Period to which the Selected Investor Report
relates (or, in the case of the Annual Cover Pool Monitor Report to be delivered no later than five Toronto Business Days prior
to the First Issue Date, the Selected Investor Report must be for a Calculation Period ending not more than 45 days prior to the
date of the Annual Cover Pool Monitor Report).

		(b)	Using the Sample (or another sample of Loans that is
of an Industry Standard Sampling Size), inspect that, for each Loan in the relevant sample:

		(i)	on or before July 1, 2014, the Latest Valuation has been
determined by either (i) adjusting the original value given to the related Mortgaged Property, at least quarterly, to account
for subsequent price developments, or (ii) by reference to the original value given to the related Mortgaged Property; and

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		(ii)	after July 1, 2014, the Latest Valuation has been determined by adjusting the original value given to the related Mortgaged
Property, at least quarterly, to account for subsequent price developments.

		2.7	Hedging Arrangements
                                                                                                    and Use of ISDA Documentation
                                                                                                    

The Covered Pool Monitor will, for each
offering of a series or tranche of Covered Bonds, enquire of the Guarantor whether (i) at the time of issuance, the Guarantor entered
into one or more contracts the purpose or effect of which was to mitigate its risk of financial loss or exposure from fluctuations
in interest rates or currency exchange rates affecting, or which may come to affect, its obligations to make one or more payments,
and (ii) the Interest Rate Swap Agreement or the Covered Bond Swap Agreement has been documented using ISDA documentation, and,
in each case, report the findings of such enquiries to the Issuer, Guarantor, the Bond Trustee and CMHC in writing.

		2.8	Errors

		(a)	If the arithmetic tests conducted by the Cover Pool Monitor in accordance with Section 2.4 or Section 2.5 (the “Recalculation
Procedures”), as applicable, reveal arithmetic errors in the relevant calculations performed by the Cash Manager, the
Cover Pool Monitor shall perform the Recalculation Procedures in relation to the Investor Reports in respect of the Program (i)
for the last Calculation Period of each calendar quarter of the preceding year, (ii) for each Calculation Period of the next succeeding
year until such Recalculation Procedures demonstrate no arithmetical error for three consecutive Calculation Periods, and (iii)
thereafter, for the last Calculation Period of each remaining calendar quarter in the next succeeding year.

		(b)	For every Calculation Period in respect of which the
Cover Pool Monitor performs the Recalculation Procedures in accordance with Section 2.8(a), the Cover Pool Monitor shall promptly
prepare and deliver to the Issuer, the Guarantor, the Bond Trustee and CMHC a report detailing the results of such Recalculation
Procedures, including the factual results of the Recalculation Procedures applied and any errors found in performing the Recalculation
Procedures.

		2.9	Reporting Non-Compliance
                                                                                                    with CMHC Guide and Other
                                                                                                    Information 

		(a)	The Cover Pool Monitor will advise the Issuer, Guarantor, CMHC and the Bond Trustee in writing (a “Non-Compliance
Notice”) as soon as practicable after it has become aware or reasonably believes (as a consequence of, or in the course
of, the performance of its obligations under this Agreement) that: (i) the Issuer, the Guarantor and/or the Program are non-compliant
with the requirements of Section 1.4.6, Section 3.6.8(a) and (b), Section 3.6.9(i), and Section 3.6.17 of the CMHC Guide; (ii)
the Issuer has failed to provide (or cause to be provided) to the Cover Pool Monitor all books, records, accounts, information
and explanations to which it is entitled pursuant to Section 7.4 of the CMHC Guide; (iii) there exists a

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discrepancy or inconsistency in the books, records, accounts,
information and/or explanations provided by the Issuer to the Cover Pool Monitor; or (iv) the Issuer has otherwise failed to comply
with its obligations under Chapter 7 of the CMHC Guide.

		(b)	Upon receiving a Non-Compliance Notice, CMHC will have
the right to request such additional information and explanation concerning the matters reported therein as may be reasonably
necessary for CMHC to verify that the Issuer, the Guarantor and/or the Program are in compliance with the items identified in
Section 2.9(a). If so requested, the Cover Pool Monitor will report to the Issuer, Guarantor, CMHC and the Bond Trustee on such
matters and at such times and intervals, as CMHC may reasonably request, if necessary for CMHC to verify that the Issuer, the
Guarantor and/or the Program are in compliance with the items identified in Section 2.9(a).

		2.10	Cover Pool Monitor
                                                                                                     Assumptions

Other than in relation to the testing
by the Cover Pool Monitor of the arithmetic accuracy of the calculations performed by the Cash Manager in accordance with the provisions
of this Agreement, the Cover Pool Monitor is entitled, in the absence of manifest error, to assume that all information provided
to the Cover Pool Monitor in accordance with Article 3 (Provision of Information to the Cover Pool Monitor) is true, correct, complete
and not misleading and is not required to conduct an audit or otherwise take steps to verify the accuracy or completeness of any
such information. Furthermore, the Cover Pool Monitor will not be required to confirm whether the information provided to it by
the Cash Manager (i) has been accurately extracted from the sources identified therein or agrees with any underlying accounting
or other information, or (ii) is presented in compliance with any relevant accounting or other definitions as to its elements and
composition.

		2.11	Compliance with Requirements

Nothing in this Agreement precludes the
Cover Pool Monitor from taking such steps as are necessary in order to comply with any legal or regulatory requirement or any professional
or ethical rules of any relevant professional body of which the Cover Pool Monitor or any of its partners or employees is, at the
time, a member.

		2.12	No Responsibility
                                                                                                     to Update

The Cover Pool Monitor has no responsibility
to update any Annual Cover Pool Monitor Report or advice for events occurring after its completion (which, unless provided otherwise
in this Agreement, will be the date on which such Annual Cover Pool Monitor Report is delivered or signed), nor to monitor its
continuing relevance or suitability for the purposes of the Guarantor, the Cash Manager, the Issuer or the Bond Trustee.

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		2.13	Timely Performance
                                                                                                     of Tests

The Cover Pool Monitor will perform the
tests required under this Agreement by no later than ten (10) Toronto Business Days following the receipt of the relevant information
from the Cash Manager.

		2.14	Reliance on Annual
                                                                                                     Cover Pool Monitor Report
                                                                                                     and Other Advice from the
                                                                                                     Cover Pool Monitor

Each Annual Cover Pool Monitor Report
and any advice the Cover Pool Monitor provides to the Recipients in connection with this Agreement are for the exclusive use of
the Recipients (except as provided in the CMHC Guide) in the context of the Program and is provided subject to and in accordance
with the terms of this Agreement and the CMHC Guide. Each Annual Cover Pool Monitor Report and such advice should not be used for
any other purpose, recited or referred to in any document, copied or made available (in whole or in part) to any person other than
the parties to this Agreement or CMHC, without the Cover Pool Monitor’s prior written express consent, except as provided
in the CMHC Guide. The Recipients which are party to this Agreement acknowledge that were they to do so (and without limitation)
this could expose the Cover Pool Monitor to a risk that a third party who otherwise would not have access to any such Annual Cover
Pool Monitor Reports or advice might claim to have relied upon such Annual Cover Pool Monitor Report or advice to its detriment
and might bring or threaten to bring an action, claim or proceedings against the Cover Pool Monitor. Save as expressly provided
by this Agreement or the CMHC Guide, no person other than the Recipients may rely on any Annual Cover Pool Monitor Report, or any
advice and/or information derived from it. The Cover Pool Monitor has no responsibility or liability to any other party (including,
without limitation, any Dealer or Rating Agency) who is shown or gains access to any Annual Cover Pool Monitor Report or advice.

Article
3

PROVISION OF INFORMATION TO THE COVER POOL MONITOR

		3.1	Asset Coverage Test

In accordance with Section 3.4 (Compliance
with the Asset Coverage Test, the Amortization Test, the Pre-Maturity Test and the Valuation Calculation) of the Cash Management
Agreement, the Cash Manager will provide the Cover Pool Monitor with:

		(a)	the figures used by the Cash Manager for items A, B, C, D, E and F described in Schedule 2
(Asset Coverage Test) of the Guarantor Agreement in its calculation of the ACT Asset Value and ACT Liability Value on the relevant
Calculation Date;

		(b)	the constituent figures used in the calculations of items A and F described in Schedule 2
(Asset Coverage Test) of the Guarantor Agreement in order to test the arithmetical accuracy of the figures used by the Cash Manager
for items A and D provided in accordance with Section 3.1(a) above; and

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		(c)	the Canadian Dollar Equivalent of the aggregate Principal Amount Outstanding of the Covered Bonds as calculated by the Cash
Manager on the relevant Calculation Date.

		3.2	Amortization Test

In accordance with Section 3.4 (Compliance
with the Asset Coverage Test, the Amortization Test, the Pre-Maturity Test and the Valuation Calculation) of the Cash Management
Agreement, the Cash Manager will provide the Cover Pool Monitor with:

		(a)	the figures used by the Cash Manager for items A, B, C and D described in Schedule 3
(Amortization Test) of the Guarantor Agreement in its calculation of the Amortization Asset Value and Amortization Liability Value
on the relevant Calculation Date;

		(b)	the constituent figures used in the calculation of items A and D described in Schedule 3
(Amortization Test) of the Guarantor Agreement in order to test the arithmetical accuracy of the figures used by the Cash Manager
for items A and Z provided in accordance with Section 3.2(a) above; and

		(c)	the Canadian Dollar Equivalent of the aggregate Principal Amount Outstanding of the Covered Bonds as calculated by the Cash
Manager on the relevant Calculation Date.

		3.3	Valuation Calculation
                                                                                                    

In accordance with Section 3.4 (Compliance
with the Asset Coverage Test, the Amortization Test, the Pre-Maturity Test and the Valuation Calculation) of the Cash Management
Agreement, the Cash Manager will provide the Cover Pool Monitor with:

		(a)	the figures used by the Cash Manager for items A, B, C, D, E and F described in Schedule
10 (Valuation Calculation) of the Guarantor Agreement in its calculation of the Asset Value
on the relevant Calculation Date;

		(b)	the constituent figures used in the calculation of items A and F described in Schedule
10 (Valuation Calculation) of the Guarantor Agreement in order to test the arithmetical
accuracy of the figures used by the Cash Manager for items A and F
provided in accordance with 3.3(a) above; and

		(c)	the Trading Value of the aggregate Principal Amount Outstanding of the Covered Bonds as calculated by the Cash Manager on the
relevant Calculation Date.

		3.4	Access to Information
                                                                                                    

To the extent not already provided, the
Issuer shall, immediately upon the reasonable request of the Cover Pool Monitor, for purposes of performing its responsibilities
in relation to the Program:

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		(a)	make available to the Cover Pool Monitor, and afford
it reasonable access to, any books, records or accounts of the Issuer that relate to the Program;

		(b)	require any officer or employee of the Issuer or any
of its Affiliates to provide to the Cover Pool Monitor such information, explanations and representations as the Cover Pool Monitor
reasonably considers necessary in the performance of its responsibilities; and

		(c)	cause the Guarantor, any servicer of the Loans, any
Swap Provider, the Cash Manager, the Account Bank (or other financial institution at which an account may be maintained), the
Managing GP, the GDA Provider, Corporate Services Provider and the Custodian to provide to the Cover Pool Monitor such information
as may be in their possession and the Cover Pool Monitor reasonably considers necessary in the performance of its responsibilities.

		3.5	Ratings Information

In accordance with Section 3.4 (Compliance
with the Asset Coverage Test, the Amortization Test, the Pre-Maturity Test and the Valuation Calculation) of the Cash Management
Agreement, the Cash Manager will provide the Cover Pool Monitor with the ratings assigned to the short-term and long-term unsecured,
unsubordinated and unguaranteed debt obligations, or issuer default ratings, of the Issuer by each of the Rating Agencies.

		3.6	Reliance

The Cover Pool Monitor may rely on any
instructions, request or representation made, notices given or information supplied, whether orally or in writing, by any person
known or reasonably believed by the Cover Pool Monitor to be authorized from time to time by the Guarantor and/or the Cash Manager
in connection with the provision by the Guarantor and/or the Cash Manager of information pursuant to the terms of this Agreement.

		3.7	Nominated Persons

For the avoidance of doubt, any notice
to be given to the Cover Pool Monitor, will be sent to those persons nominated by the Cover Pool Monitor from time to time (the
“Nominated Persons” and each a “Nominated Person”) and the Cover Pool Monitor will not be
deemed to have any knowledge of any notice sent to a person other than a Nominated Person, provided that a person will continue
to be a Nominated Person until such time as the Cover Pool Monitor has sent notice to the Bond Trustee and the Guarantor (or the
Cash Manager on its behalf) that any such Nominated Person has ceased to be a Nominated Person for the purpose of this Agreement.
Furthermore, a Nominated Person will not be required, expected or deemed to have knowledge of any information known to any person
not being a Nominated Person and is not required to obtain such information from any such other person.

		3.8	Preparation of Final
                                                                                                    Annual Cover Pool Monitor
                                                                                                    Report

In the preparation of the final form
of any Annual Cover Pool Monitor Report, the Cover Pool Monitor may comment or provide advice to the Guarantor, the Cash Manager,
the Issuer or

    	11

    	 

    

the Bond Trustee on information provided to it by the Cash
Manager or show the Guarantor, the Cash Manager, the Issuer or the Bond Trustee drafts of such Annual Cover Pool Monitor Report
for comment. The Cover Pool Monitor does this on the basis that the Guarantor, the Cash Manager, the Issuer or the Bond Trustee
will not rely on any drafts or oral comments or advice. Accordingly, the Cover Pool Monitor will not be responsible if the Guarantor,
the Cash Manager, the Issuer or the Bond Trustee choose to act, or refrain from acting, on the basis of any drafts or oral comments
or advice. If the Guarantor, the Cash Manager, the Issuer or the Bond Trustee want to rely or want to act on oral comments, they
will inform the Cover Pool Monitor in order that it may deal with them in its final Annual Cover Pool Monitor Report. Furthermore,
for the convenience of the Guarantor, the Cash Manager, the Issuer or the Bond Trustee, the Annual Cover Pool Monitor Reports,
or any advice, may be made available to the Guarantor, the Cash Manager, the Issuer or the Bond Trustee in draft or in electronic
as well as hard copy format. Multiple copies and versions of documents may therefore exist in different media. In the case of any
discrepancy, the signed hard copy of the final Annual Cover Pool Monitor Report is definitive.

		3.9	Ownership of Working
                                                                                                    Papers

The Cover Pool Monitor will own and retain
ownership of its working papers in respect of Annual Cover Pool Monitor Reports and any advice. Any papers retained by the Cover
Pool Monitor on termination of this Agreement (including documents legally belonging to the Guarantor, the Cash Manager, the Issuer
or the Bond Trustee) may, unless requested to be returned to the Guarantor, the Cash Manager, the Issuer or the Bond Trustee or
any one of them in the case of documents legally belonging to the Guarantor, the Cash Manager, the Issuer or the Bond Trustee,
routinely be destroyed in accordance with the Cover Pool Monitor's internal policies.

Article
4

representations, warranties and COVENANTS OF THE COVER POOL MONITOR

The Cover Pool Monitor hereby represents,
warrants and covenants to the Issuer, Guarantor, the Bond Trustee and the Cash Manager as of the date of this Agreement, and for
so long as it remains a party to this Agreement, that:

		(a)	it possesses the necessary experience, qualifications,
facilities and other resources to perform its responsibilities in relation to its duties and obligations hereunder and the other
Transaction Documents to which it is a party;

		(b)	it is and will continue to be in regulatory good standing
and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction
Documents to which it is a party;

		(c)	it is and will continue to be in material compliance
with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder
and the other Transaction Documents to which it is a party;

    	12

    	 

    

		(d)	it is and will continue to be a firm or company engaged
in the practice of accounting that is qualified to be an auditor of the Issuer under both the Bank Act (Canada) and Canadian
auditing standards;

		(e)	it will exercise reasonable skill and care in the performance
of its obligations hereunder and the other Transaction Documents to which it is a party;

		(f)	it will comply with the CMHC Guide and all material
legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance
of its obligations hereunder and the other Transaction Documents to which it is a party; and

		(g)	it will comply with all Transaction Documents to which
it is a party.

Article
5

TERMINATION

		5.1	Resignation

The Cover Pool Monitor may, at any time,
resign from its appointment under this Agreement upon providing the Guarantor (or the Cash Manager on its behalf) and the Bond
Trustee with 60 days’ prior written notice. The Cover Pool Monitor may resign from its appointment immediately on written
notice if any action taken by the Recipients causes a professional conflict of interest for the Cover Pool Monitor under the rules
of the professional and/or regulatory bodies regulating the activities of the Cover Pool Monitor. The Cover Pool Monitor will inform
the Recipients as soon as reasonably practicable of any action of which the Cover Pool Monitor is aware that may cause a professional
conflict of interest for the Cover Pool Monitor which could result in resignation under this Clause 5.1.

		5.2	Resignation Costs

Any costs, charges, fees or expenses
incurred by the Cover Pool Monitor as a result of its resignation under Section 5.1 (Resignation) above will be payable in full
by the Cover Pool Monitor and will not be liable for reimbursement by the Guarantor save that the Cover Pool Monitor will remain
entitled to payment for any costs, charges, fees or expenses payable to the Cover Pool Monitor in accordance with this Agreement
incurred or accruing prior to such resignation.

		5.3	Removal

The Guarantor may, at any time, but subject
to the prior written consent of the Bond Trustee, terminate the appointment of the Cover Pool Monitor hereunder upon providing
the Cover Pool Monitor with at least 60 days’ prior written notice, provided that the consent of the Bond Trustee or such
notice period shall not be required for the Guarantor to terminate the appointment of the Cover Pool Monitor in the event that
the Cover Pool Monitor defaults in the performance or observance of any of its covenants, or breaches any of its representations
and warranties made, under Article 4, and provided further subject to Section 5.5 (Replacement Cover Pool Monitor) below, such
termination may not be effected unless and until a replacement

    	13

    	 

    

approved by the Bond Trustee has been found by the Guarantor
(such approval to be given by the Bond Trustee if the replacement is an accountancy firm of national standing in Canada) which
meets the requirements for a cover pool monitor in the CMHC Guide and agrees to perform the duties (or substantially similar duties)
of the Cover Pool Monitor set out in this Agreement.

		5.4	Removal Costs

Any costs, charges, fees or expenses
incurred by the Cover Pool Monitor as a result of its appointment being terminated under Section 5.3 (Removal) above (together
with the Cover Pool Monitor’s rights under Article 6 (Fees) in relation to funds owing to the Cover Pool Monitor for the
period up to and including the date of the termination of the Cover Pool Monitor’s appointment becoming effective) will be
payable in full by the Guarantor, unless the Cover Pool Monitor has been terminated as a result of a breach of its duties or obligations
hereunder.

		5.5	Replacement Cover Pool
                                                                                                    Monitor

Following any receipt of any notice of
resignation by the Cover Pool Monitor in accordance with Section 5.1 (Resignation) above, the Guarantor will immediately use all
commercially reasonable endeavours to appoint a substitute Cover Pool Monitor to provide the services set out in this Agreement,
provided that:

		(a)	the appointment of such substitute Cover Pool Monitor
is approved by the Bond Trustee, acting reasonably; and

		(b)	the substitute Cover Pool Monitor meets the requirements
for a cover pool monitor in the CMHC Guide and enters into an agreement substantially on the same terms as the terms of this Agreement
(or on such terms as are satisfactory to the Bond Trustee, acting reasonably).

If a substitute Cover Pool Monitor is
not appointed within 60 days of the giving of notice of resignation or termination or by the date which is 30 days prior to the
date when tests are to be carried out in accordance with the terms of this Agreement, then the Guarantor will use all commercially
reasonable endeavours to appoint an accountancy firm of national standing in Canada which meets the requirements for a cover pool
monitor in the CMHC Guide to carry out the duties of the Cover Pool Monitor set out in the Cover Pool Monitor Agreement on a one-off
basis, provided that such appointment is approved by the Bond Trustee, acting reasonably. The Bond Trustee will not be obliged
to act as Cover Pool Monitor in any circumstances.

		5.6	Co-Operation

The Cover Pool Monitor agrees that, if
a replacement is found in accordance with the provisions of Section 5.1 (Resignation) or Section 5.3 (Removal) above, or a temporary
arrangement is instituted pursuant to Section 5.5 (Replacement Cover Pool Monitor) above, the Cover Pool Monitor will provide all
reasonable co-operation to the replacement and will provide access to such replacement all records, papers, files and computer
data which it has received pursuant to this Agreement since the most recent Calculation Date in respect of which the Cover Pool
Monitor was obliged, in accordance with Article 2 (Services of the Cover Pool Monitor)

    	14

    	 

    

above, to conduct arithmetic tests of the calculations performed
by the Cash Manager on such Calculation Date. The Cover Pool Monitor will retain all of its intellectual property rights in relation
to any reports provided by it under this Agreement.

		5.7	Other

The Cover Pool Monitor’s appointment
under this Agreement will terminate upon the earlier of the occurrence of (i) a Guarantor Event of Default and service of a Guarantor
Acceleration Notice, or (ii) the repayment in full of all amounts outstanding in relation to all Covered Bonds.

		5.8	Notice of Termination
                                                                                                    or Resignation

Upon any termination or resignation of
the Cover Pool Monitor hereunder, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Cover
Pool Monitor’s replacement contemporaneously with the earlier of (i) notice of such termination or resignation and replacement
to a Rating Agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available
to Covered Bondholders, and (iii) five (5) Toronto Business Days following such termination or resignation and replacement (unless
the replacement Cover Pool Monitor has yet to be identified at that time, in which case notice of the replacement Cover Pool Monitor
may be provided no later than ten (10) Toronto Business Days thereafter). Any such notice shall include (if known) the reasons
for the termination or resignation of the Cover Pool Monitor, all information relating to the replacement Cover Pool Monitor required
by the CMHC Guide and the new agreement or revised and amended copy of this Agreement to be entered into with the replacement Cover
Pool Monitor.

Article
6

FEES

		6.1	Cover Pool Monitor
                                                                                                    Fee

The Guarantor will (subject to Sections
6.2 (Cover Pool Monitor Payment Date) and 6.3 (Other Costs) below) pay to the Cover Pool Monitor for its services hereunder a fee
per report that it provides (the “Cover Pool Monitor Fee”) in such amount as may be agreed to between the Guarantor
and Cover Pool Monitor from time to time. The Cover Pool Monitor Fee will be payable on a Guarantor Payment Date in accordance
with Section 6.2 (Cover Pool Monitor Payment Date) below.

		6.2	Cover Pool Monitor
                                                                                                    Payment Date

The parties hereto agree that the Cover
Pool Monitor Fee will be payable by the Guarantor (or the Cash Manager on its behalf) following delivery by the Cover Pool Monitor
of an Annual Cover Pool Monitor Report on the Guarantor Payment Date immediately following the Calculation Period in which such
duly completed invoice addressed to the Guarantor is delivered to the Guarantor (or the Cash Manager on its behalf), and the Issuer
(the “Cover Pool Monitor Payment Date”), provided that such duly completed invoice is delivered, at least 35
days prior to the relevant Cover Pool Monitor Payment Date. In the event that the Guarantor, the Cash Manager or the Issuer fails
to receive a duly completed invoice at least 35 days prior to the

    	15

    	 

    

relevant Cover Pool Monitor Payment Date, the Cover Pool
Monitor Fee will become due and payable on the next Guarantor Payment Date falling not less than 35 days after receipt by the Guarantor,
the Cash Manager and the Issuer of a duly completed invoice.

		6.3	Other Costs

For the avoidance of doubt, other than
as specified herein, the Bond Trustee will not be responsible for payment of fees, costs and expenses due to or incurred by the
Cover Pool Monitor pursuant to its appointment and performance of its duties hereunder.

		6.4	Priorities of Payments

The Cover Pool Monitor agrees to be bound
by the terms of the Priorities of Payments set out in the Guarantor Agreement and the Security Agreement. The Cover Pool Monitor
further agrees that, notwithstanding any other provision contained herein, it will not demand or receive payment of, or any distribution
in respect of or on account of, any amounts payable by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee, as
applicable, to the Cover Pool Monitor under this Agreement, in cash or in kind, and will not apply any money or assets in discharge
of any such amounts payable to it (whether by set off or by any other method), unless all amounts then due and payable by the Guarantor
to all other creditors ranking higher in the relevant Priorities of Payments have been paid in full. The Cover Pool Monitor agrees
(subject to the Security granted pursuant to the Security Agreement) that it will have recourse only to sums paid to or received
by (or on behalf of) the Guarantor from time to time.

		6.5	Payment in Error

Without prejudice to Section 6.4 above,
whether in the liquidation of the Guarantor or of any other party to the Transaction Documents or otherwise, if any payment or
distribution (or the proceeds of any enforcement of any security) is received by the Cover Pool Monitor in respect of any amount
payable by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to the Cover Pool Monitor under
this Agreement at a time when, by virtue of the provisions of this Agreement and the Cash Management Agreement and the Security
Agreement no payment or distribution should have been made, the amount so received will be held by the Cover Pool Monitor in trust
for the entity from which such payment was received and will be returned to such entity forthwith upon receipt (whereupon the relevant
payment or distribution will be deemed not to have been made or received).

		6.6	Other

None of the Guarantor, the Cash Manager
or the Bond Trustee will pay or repay, or make any distribution in respect of, any amount owing to the Cover Pool Monitor under
this Agreement (in cash or in kind) unless and until all amounts then due and payable by the Guarantor or the Bond Trustee to all
other creditors ranking higher in the applicable Priorities of Payments have been paid in full.

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Article
7

ASSIGNMENTS AND TRANSFERS

		7.1	Assignment

Subject always to the provisions of Article
13 of the Mortgage Sale Agreement and Section 7.2 herein, no party hereto will be entitled to assign all or any part of
its rights or obligations hereunder to any other party without the prior written consent of each of the other parties hereto (which
will not, if requested, be unreasonably withheld or delayed or made subject to unreasonable conditions) save that the Guarantor
will be entitled to assign whether by way of security or otherwise all or any of its rights under this Agreement and all or any
of its interest in the Loans and their Related Security without such consent to the Bond Trustee pursuant to the Security Agreement
and the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement and all or
any of its interest in the Loans and their Related Security without such consent in exercise of its rights under the Security Agreement.
If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least
10 Toronto Business Days’ prior written notice of such assignment to DBRS.

		7.2	Assignment under Security
                                                                                                    Agreement

The parties hereto, other than the Bond
Trustee and the Guarantor, acknowledge that on the assignment pursuant to the Security Agreement by the Guarantor to the Bond Trustee
of the Guarantor’s rights under this Agreement, the Bond Trustee may enforce such rights in the Bond Trustee’s own
name without joining the Guarantor in any such action (which right such parties hereby waive) and such parties hereby waive as
against the Bond Trustee any rights or equities in its favour arising from any course of dealing between one or more of such parties
and the Guarantor.

		7.3	Agency, Partnership
                                                                                                    and Joint Venture

Save as set out in Article 18 (Agency),
this Agreement does not make any of the parties an agent or legal representative of any of the other parties, nor does it create
a partnership or joint venture.

Article
8

CONFIDENTIALITY

		8.1	General

The Cover Pool Monitor agrees to keep
confidential all information of any kind whatsoever provided to it in its capacity as Cover Pool Monitor hereunder save for:

		(a)	information which it is expressly authorized to provide
to the Guarantor, the Rating Agencies, the Cash Manager, the Bond Trustee or any other party under the terms of this Agreement
or any of the other Transaction Documents;

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		(b)	information which is public knowledge otherwise than
as a result of the wrongful conduct of the Cover Pool Monitor;

		(c)	information that the Cover Pool Monitor is required
to disclose pursuant to any laws or order of any court or pursuant to any direction, request or requirement (whether or not having
the force of law) of any governmental or other regulatory or taxation authority in Canada (including, without limitation, any
official bank examiners or regulators), or any stock exchange on which securities issued by the Issuer are listed;

		(d)	information which the Cover Pool Monitor wishes to disclose
to its professional indemnity insurers or advisers where such insurers or advisers receive the same under a duty of confidentiality;

		(e)	information which the Cover Pool Monitor is required
to disclose to the relevant authorities on a public interest disclosure basis or in order to comply with its statutory obligations
relating to money laundering and the proceeds of crime;

		(f)	information disclosed to professional advisers of the
Cover Pool Monitor who receive the same under a duty of confidentiality in substantially the same terms as this Article 8; and

		(g)	information disclosed with the prior written consent
of the Guarantor, the Cash Manager and the Bond Trustee.

		8.2	Limitation

The parties agree that the Cover Pool
Monitor and each Nominated Person will not be required to disclose to any other party any information which is confidential to
any other client of the Cover Pool Monitor and any information received by the Cover Pool Monitor or any Nominated Person other
than by reason of, or in their capacity as, Cover Pool Monitor or Nominated Person (as applicable) pursuant to the terms of this
Agreement.

		8.3	Disclosure Required
                                                                                                    by Law, CMHC Guide, etc.

Notwithstanding any other provision in
this Agreement to the contrary, nothing in this Agreement will prevent a recipient of information provided by another party to
this Agreement to disclose such information to the extent the recipient is required to disclose the same pursuant to and in accordance
with (i) any law or order of any court of competent jurisdiction, (ii) any direction, request or requirement (whether or not having
the force of law) of any central bank or any governmental or other authority (including, without limitation, any official bank
examiners or regulators), or (iii) the CMHC Guide and the Covered Bond Legislative Framework.

    	18

    	 

    

Article
9

PROVISION OF INFORMATION TO THE BOND TRUSTEE

		9.1	Provision of Information
                                                                                                    to the Bond Trustee

The Cash Manager, solely in its capacity
as cash manager, the Guarantor and the Cover Pool Monitor will each provide to the Bond Trustee, or procure the provision to the
Bond Trustee of, such information and evidence available to that party in respect of any dealing between that relevant party or
its officers, employees, attorneys or agents and the Cash Manager, solely in its capacity as cash manager, the Guarantor and the
Cover Pool Monitor (as applicable) under or in relation to this Agreement as the Bond Trustee may reasonably request and the Cash
Manager, solely in its capacity as cash manager, the Guarantor and the Cover Pool Monitor hereby waive any right or duty of confidentiality
which they may have or which may be owed to them in respect of the disclosure of such information and evidence pursuant to this
Article 9 (Provision of Information to the Bond Trustee).

Article
10

LIABILITY

		10.1	General

To the fullest extent permitted by law,
the Cover Pool Monitor will not have liability hereunder to the extent that liability would (but for this Section 10.1) be imposed
upon the Cover Pool Monitor by reason of it having relied upon any statement or information made or provided by any Person (including
information provided in accordance with Article 3 (Provision of Information to the Cover Pool Monitor) above) which was untrue,
inaccurate, incomplete or misleading without the Cover Pool Monitor having been aware of this other than the arithmetical accuracy
of the calculations performed by the Cash Manager in respect of the Asset Coverage Test, the Amortization Test and the Valuation
Calculation which the Cover Pool Monitor has been appointed to test in accordance with the provisions of this Agreement.

		10.2	Limitation of Liability

To the fullest extent permitted by law,
the Cover Pool Monitor will not be liable or responsible to any other party hereto for any loss, cost, damage or expense which
results from the fraud of any other party or a breach by any of the other parties hereto of any provision of the Transaction Documents
and the Guarantor agrees (subject to the Priorities of Payments) to indemnify the Cover Pool Monitor for any liability (including
all liabilities in respect of all proceedings, claims, demands, losses, damages, costs and expenses relating to the same) which
becomes payable or which is incurred by the Cover Pool Monitor in respect of a breach by any of the other parties hereto of any
provision of the Transaction Documents.

		10.3	Claims

The Cover Pool Monitor agrees that any
and all claims that it may have under or pursuant to this Agreement (including, without limitation, by exercising any rights of
set-off) (other than any amounts which are due under Article 6 (Fees) above) may be made solely against the Guarantor under the
terms of Section 10.2 (Limitation of Liability) above and may not be made

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against any other Person including without limitation any
of the other parties hereto or any parent, Subsidiary, Affiliate or holding company of the Issuer.

		10.4	Bad Faith, Wilful
                                                                                                     Misconduct, Gross Negligence
                                                                                                     or Reckless Disregard 

The Cover Pool Monitor will not be liable
to any other party hereto for any loss, liability, claim, expense or damage suffered by them or any one of them as a result of
the proper performance of the duties of the Cover Pool Monitor hereunder save to the extent that any loss, liability, claim, expense
or damage is suffered or incurred as a result of any bad faith, wilful misconduct, gross negligence or reckless disregard of the
Cover Pool Monitor or as a result of a breach by the Cover Pool Monitor of the terms and provisions of this Agreement in relation
to such functions.

		10.5	Sole Responsibility
                                                                                                     of the Cover Pool Monitor

The performance of the services of the
Cover Pool Monitor is the responsibility of the Cover Pool Monitor alone. Neither the Guarantor nor the Bond Trustee will bring
any claim against any Person other than the Cover Pool Monitor in respect of loss or damage suffered by the Guarantor or the Bond
Trustee arising out of or in connection with the performance by the Cover Pool Monitor of its obligations under this Agreement.
This restriction will not operate to exclude or limit the liability of the Cover Pool Monitor for the acts and omissions of any
of its officers, employees, attorneys or agents.

		10.6	Other

Any clauses in this Agreement which operate
or which may operate to exclude or limit the liability of the Cover Pool Monitor or any other person in any respects will not operate
to exclude or limit any liability which cannot lawfully be excluded or limited. The Cover Pool Monitor will not be liable for any
losses arising out of the use by the Recipients of any Annual Cover Pool Monitor Report for a purpose other than the purposes of
the Program.

Article
11

FURTHER PROVISIONS

		11.1	Rights

The respective rights of the parties
under this Agreement are cumulative, and may be exercised as often as they consider appropriate and are in addition to their respective
rights under the general law. The respective rights of each of the parties hereto in relation to this Agreement (whether arising
under this Agreement or under the general law) will not be capable of being waived or restated otherwise than by an express waiver
or variation in writing. In particular, any failure to exercise or any delay in exercising of any such rights will not operate
as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights will not preclude
any other or further exercise of that or any other such right. No act or course of conduct or negotiation on their part or on their
behalf will in any way preclude them from exercising any such right or constitute a suspension or any variation of any such right.

    	20

    	 

    

		11.2	Invalidity, Illegality
                                                                                                     and Unenforceability

If any of the provisions of this Agreement
become invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired.

Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction
will not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law,
each party hereto hereby waives any provision of law (where permitted by law) which renders any provision of this Agreement prohibited
or unenforceable in any respect.

		11.3	Insolvency of the
                                                                                                     Issuer

On and following the occurrence of an
Insolvency Event in respect of the Issuer, (a) the Cover Pool Monitor will continue to act as Cover Pool Monitor for the Guarantor,
(b) any subsequent engagement of a Cover Pool Monitor will be made by the Guarantor (and related fees will be paid by the Guarantor
or the Bond Trustee), and (c) all references to the Issuer in the provisions of this Agreement which correspond to the relevant
provisions of Chapter 7 of the CMHC Guide will be construed as references to the Guarantor.

Article
12

NOTICES

		12.1	General

Any notices to be given pursuant to this
Agreement to any of the parties hereto will be in writing and will be sufficiently served if sent by prepaid first class mail,
by hand, e-mail or facsimile transmission and will be deemed to be given (if by facsimile transmission) when dispatched, (in the
case of e-mail) upon confirmation of receipt, (if delivered by hand) on the day of delivery if delivered before 5:00 p.m. (Toronto
time) on a Toronto Business Day or on the next Toronto Business Day if delivered thereafter or on a day which is not a Toronto
Business Day or (if by first class mail) when it would be received in the ordinary course of the post and will be sent:

		(a)	in the case of the Guarantor, Scotiabank Covered Bond
Guarantor Limited Partnership, c/o The Bank of Nova Scotia, Scotia Plaza, 44 King Street West, Toronto, Ontario M5H 1H1 (facsimile
number 416-945-4001) for the attention of the Managing Director, Alternate Funding, e-mail: jake.lawrence@scotiabank.com;

		(b)	in the case of the Cover Pool Monitor, to KPMG LLP, acting through its offices at Bay
                                                                                 Adelaide Centre, 333 Bay Street, Suite 4600, Toronto, Ontario, M5H 2S5 (facsimile number (416) 777-8818) for the attention of Ms.
                                                                                 Heather                                                                                  Kaine, e-mail: hkaine@kpmg.ca;

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		(c)	in the case of the Cash Manager, to The Bank of Nova
Scotia, at its Executive Offices, Scotia Plaza, 44 King Street West, Toronto, Ontario M5H 1H1 (facsimile number 416-945-4001)
for the attention of the Managing Director, Alternate Funding, e-mail: jake.lawrence@scotiabank.com;

		(d)	in the case of the Bond Trustee, to Computershare
Trust Company of Canada, 100 University Avenue, 11th Floor, North Tower, Toronto, Ontario M5J 2Y1 (facsimile number 416-981-9777)
for the attention of the Manager, Corporate Trust, e-mail: corporatetrust.toronto@computershare.com;
and

		(e)	in the case of the Issuer, to The Bank of Nova Scotia,
Scotia Plaza, 44 King Street West, Toronto, Ontario, M5H 1H1 (facsimile number 416-945-4001) for the attention of the Managing
Director, Alternate Funding, e-mail: jake.lawrence@scotiabank.com,

or to such other physical or e-mail address or facsimile
number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written
notice in accordance with the provisions of this Article.

		12.2	Change in Address

Any party may change its address for
notice, or facsimile contact information for service from time to time by notice given in accordance with this Article 12 and any
subsequent notice will be sent to such party at its changed address, or facsimile contact information, as applicable.

Article
13

COUNTERPARTS

		13.1	Counterparts

This Agreement may be executed in any
number of counterparts (manually, electronically or by facsimile or in pdf format) and by different parties hereto in separate
counterparts, each of which when so executed will be deemed to be an original and all of which when taken together will constitute
one and the same instrument.

Article
14

THE BOND TRUSTEE

		14.1	Change of Bond Trustee

If there is any change in the identity
of the Bond Trustee or an additional Bond Trustee is appointed in accordance with the Security Agreement, the parties to this Agreement
will execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require
for the purpose of vesting in the successor Bond Trustee the rights and obligations of the outgoing Bond Trustee under this Agreement
and under the Security Agreement and releasing the outgoing Bond Trustee from any future obligations under this Agreement. Notice
thereof will be given to the Rating Agencies while any of the Covered Bonds remain outstanding.

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		14.2	Limitation of Liability
                                                                                                     of Bond Trustee

It is hereby acknowledged and agreed
that by its execution of this Agreement, the Bond Trustee will not assume or have any obligations or liabilities to the other parties
to this Agreement notwithstanding any provision herein and that the Bond Trustee has agreed to become a party to this Agreement
for the purpose only of taking the benefit of this Agreement and agreeing to amendments to this Agreement pursuant to Article 16
(Amendments, Modification, Variation or Waiver). For the avoidance of doubt, the parties to this Agreement acknowledge that the
rights and powers of the Bond Trustee are governed by the Security Agreement. Any liberty or right which may be exercised or determination
which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee's absolute discretion,
without any obligation to give reasons therefor, and the Bond Trustee will not be responsible for any liability occasioned by so
acting, except if acting in breach of the standard of care set out in Section 11.1 (Standard of Care) of the Security Agreement.

Article
15

LIMITATION OF LIABILITY

		15.1	Limitation of Liability

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.

Article
16

Amendments, MODIFICATION, Variation or Waiver

		16.1	Amendments, Modification,
                                                                                                     Variation or Waiver

Any amendment, modification, variation
or waiver to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this
Agreement will be effective unless it is in writing and signed by (or by some Person duly authorized by) each of the parties. Each
proposed amendment or waiver of this Agreement that is considered by the Guarantor to be a material amendment, modification, variation
or waiver will be subject to satisfaction of the Rating Agency Condition, and the Guarantor (or the Cash Manager on its behalf)
will 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 will not constitute a breach of the obligations of the Guarantor under this
Agreement. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement will constitute
a waiver or preclude any other or further exercise of that or any other right.

		16.2	Non-Petition

Each of the Cover Pool Monitor and the
Cash Manager agrees that it will not institute against, or join any other Person or entity in instituting against, or with respect
to, the Guarantor, or any general partners of the Guarantor, any bankruptcy, reorganisation, arrangement,

    	23

    	 

    

insolvency or liquidation proceeding under any federal, provincial
or foreign bankruptcy, insolvency or similar law, for one year and one day after all Covered Bonds have been repaid in full. The
foregoing provision will survive the termination of this Agreement by any of the parties.

Article
17

EXCLUSION OF THIRD PARTY RIGHTS

		17.1	Exclusion of Third
                                                                                                     Party Rights

The parties to this Agreement do not
intend that any term of this Agreement should be enforced by any Person who is not a party to this Agreement but without prejudice
to the rights of the Bond Trustee as assignee under the Security Agreement.

Article
18

AGENCY

		18.1	Agency

The Cover Pool Monitor agrees and confirms
that, unless otherwise notified by the Guarantor or the Bond Trustee in accordance with the terms of this Agreement, the Cash Manager,
as agent of the Guarantor, may act on behalf of the Guarantor under this Agreement.

Article
19

CONTINUING PROVISIONS

		19.1	Continuing Provisions

Sections 5.2 (Resignation Costs), 5.4
(Removal Costs), 5.6 (Co-Operation) and 16.2 (Non-Petition) as well as Article 6 (Fees), Article 8 (Confidentiality), Article 10
(Liability), Article 11 (Further Provisions), Article 17 (Exclusion of Third Party Rights), Article 20 (Entire Agreement) and Article
22 (Governing Law) of this Agreement will survive the expiry or termination of this Agreement.

Article
20

ENTIRE AGREEMENT

		20.1	Entire Agreement

This Agreement contains the entire agreement
between the parties hereto in relation to the services to be performed hereunder and supersedes any prior agreements, understandings,
arrangements, statements or representations relating to such services. Nothing in this Article or Agreement will operate to limit
or exclude any liability for fraud.

    	24

    	 

    
Article
21

FURTHER ASSURANCE

		21.1	Further Assurance

From time to time, each party will do
and perform any acts and execute any further instruments which may be required or which may be reasonably requested by any other
party to more fully give effect to the purpose of this Agreement.

Article
22

GOVERNING LAW

		22.1	Governing Law

This 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.

		22.2	Submission to Jurisdiction

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

[The remainder of this page left
intentionally blank]

    	25

    	 

    

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

	 	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
	 	 	 
	 	THE BANK OF NOVA SCOTIA, in its capacity as Cash Manager
	 	 	 
	 	By:	/s/ Ian Berry
	 	 	Name: Ian Berry
	 	 	Title: Managing Director and Head, Funding and Liquidity Management
	 	 	 
	 	 	 
	 	KPMG LLP, as Cover Pool Monitor
	 	 	 
	 	By:	/s/ Heather Kaine
	 	 	Name: Heather Kaine
	 	 	Title: Partner, KPMG LLP
	 	 	 
	 	COMPUTERSHARE TRUST COMPANY OF CANADA, 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

    	26

    	 

    

 

Schedule
1

Certain
specified procedures

	Procedure Reference	Category	Specific Procedures
	Eligible Loans	 	 
	1.       	Name	
        Agree the borrower(s)’ first name
        (or initials) and surname with the following:

        (i) Certificate of Title
        (COT) or Report on Title (ROT), and

        (ii) Registered Mortgage
        document (or, if not on file, either the mortgage loan agreement or the mortgage application form)

         

	2.       	Address	
        Inspect that the property
        address confirmed to be in Canada and agree  on the following (allowing for common abbreviations but with no exception
        for         spelling):

        (i) Certificate of Title
        (COT) or Report on Title (ROT), and

        (ii) Valuation report, where commissioned

         

	3.       	Loan/Account number	Agree the loan/account number with the primary system of record
	4.       	Term	Agree the latest agreed term of the loan with the latest mortgage offer or account statement (or agree it is a HELOC)
	5.       	Interest rate	Agree
    the interest rate (or spread to index), interest rate type and interest rate index with the most current
    loan document or account statement
	6.       	Amortization	Agree
    the remaining amortization period as reported with the remaining amortization on the mortgage administration system as of
    cut-off date (or agree it is a HELOC)
	7.       	Amount advanced	Agree the total amount advanced to the latest offer/loan documents
	8.       	Mortgage balance	Agree the mortgage balance (and the limit in the case of a HELOC) on the mortgage administration extraction file with the balance on the mortgage loan processing system at the cut-off date
	9.       	Maturity date	Agree the maturity date of each mortgage on the primary system of record with the latest offer document or account statement, and that it is within a 30 day range (or agree it is a HELOC)
	10.   	Valuation 	Agree
the valuation amount in the extraction file is less than or equal to the amount from the latest valuation, based on the underwriting
policy of

    	 

    	- 2 -

    

 

	  	 amount	the
    registered issuer or its Affiliate  (if it is the regulated lender) that was valid at the
    valuation     date
	11.   	Valuation date	Inspect the valuation date from  the latest valuation report and check whether it is within one year of the completion date
	12.   	Currency of Loan	Inspect that the loan is not specified as denominated in a currency other than Canadian dollars in the mortgage loan documents
	13.   	Loan characteristics	Agree
    the loan interest characteristics (e.g. fixed, variable) with the latest offer or supporting documentation (including the
    account statement)
	14.   	Repayment type	Agree the repayment type (amortizing/ interest only etc.) with supporting documents (which can include mortgage loan offer document or system record)
	15.   	Property tenure and type	Agree the property tenure (freehold, condominium or other) with the valuation report, land registry records or report on title
	16.   	Flag	Inspect that the mortgage loan in the primary system of record (or primary medium where loans are being flagged) has a flag to indicate it is used solely for the purpose of the covered bond pool
	17.   	Credit Bureau Score	Agree the credit score with the score information reflected on the issuer’s records for updated credit scores 
	18.   	Employment & Income Verification	Agree the borrower’s employment income in the application form to underlying evidence of income (such as payslips or tax returns) where income verification is carried out. Where evidence of income is unavailable, this will be considered a material negative finding unless, at the time of origination of the loan, the policies and guidelines of the Issuer or its Affiliate (if it is the regulated lender) did not require the retention of such records and disclosure has been made to investors of their absence in each public offering document (as defined in the CMHC Guide) or, in the case of a private placement, offering memorandum or similar disclosure document prepared in connection with the issuance of a series or tranche of covered bonds under the Program following its registration
	19.   	Title	Inspect that there is evidence of title or title insurance
	20.   	Property Insurance	Inspect
that there is evidence of property insurance if required under the terms of the mortgage. Where evidence of property insurance
is unavailable, this will be considered a material negative finding unless (a) at the time of origination of the loan, the policies
and guidelines of the Issuer or its Affiliate (if it is the regulated lender) did not require the retention of such records and
(b) disclosure has been made to investors in each public offering document or, in the case of a private placement, offering memorandum
or similar disclosure document prepared in connection with the issuance of a series or tranche of covered bonds

    	 

    	- 3 -

    

 

	    	 	 under the Program following its registration of (i) the absence of evidence of property insurance and (ii) the Issuer’s or its Affiliate’s acknowledgement of self-insurance against the risk represented by a borrower’s failure to obtain property insurance where incapable of verification
	Substitute Assets	 	 
	21.   	CUSIP	Agree the CUSIP recorded with the primary system of record
	22.   	Maturity Date	Agree the maturity date recorded with the primary system of record
	23.   	Face Value	Agree the face value recorded with the primary system of record
	24.   	Coupon	Agree the coupon recorded with the primary system of record

    	 

    	 

    

Schedule
2

VALUATION
CALCULATION

		a)	The “Valuation Calculation” is equal to the VC Asset Value (as defined below) minus the Canadian Dollar
Equivalent of the Trading Value of the aggregate Principal Amount Outstanding of the Covered Bonds as calculated on the relevant
Calculation Date. For greater certainty, references in this Schedule to “immediately preceding Calculation Date” and
“previous Calculation Date” are to the Calculation Period ending on the Calculation Date.

		b)	For the purposes of the Valuation Calculation, the “VC Asset Value” means the amount calculated as at each
Calculation Date as follows:

A+B+C+D+E+F

where,

A=the aggregate “LTV Adjusted Loan Present
Value” of (a) each Performing Eligible Loan, which shall be the lower of (1) the Present Value of the relevant Loan on
such Calculation Date, and (2) 80% multiplied by the Latest Valuation relating to that Loan, and (b) each Non-Performing Loan,
which shall be zero

minus

the aggregate sum of the following deemed reductions to the
aggregate LTV Adjusted Loan Present Value of the Loans in the Covered Bond Portfolio if any of the following occurred during
the previous Calculation Period:

(1)a Loan or its Related Security was, in the immediately
preceding Calculation Period, in breach of the Loan Representations and Warranties contained in the Mortgage Loan Sale Agreement
or subject to any other obligation of the Seller to repurchase the relevant Loan and its Related Security, and in each case the
applicable Seller has not repurchased the Loan or Loans of the relevant Borrower and its or their Related Security to the extent
required by the terms of the Mortgage Loan Sale Agreement. In this event, the aggregate LTV Adjusted Loan Present Value of the
Loans in the Covered Bond Portfolio on such Calculation Date will be deemed to be reduced by an amount equal to the LTV Adjusted
Loan Present Value of the relevant Loan or Loans on such Calculation Date of the relevant Borrower; and/or

(2)a Seller, in any preceding Calculation Period,
was in breach of any other material warranty under the Mortgage Loan Sale Agreement and/or the Servicer was, in any preceding Calculation
Period, in breach of a material term of the Servicing Agreement. In this event, the aggregate LTV Adjusted Loan Present Value of
the Loans in the Covered Bond Portfolio on such Calculation Date will be deemed to be reduced by an amount equal to the resulting
financial loss incurred by the Partnership in the immediately preceding Calculation Period (such financial loss to be calculated
by the Cash Manager

    	 

    	- 2 -

    

without double counting and to be reduced by any amount
paid (in cash or in kind) to the Partnership by the applicable Seller to indemnify the Partnership for such financial loss);

B= the aggregate amount of any Principal Receipts
on the Loans and their Related Security up to such Calculation Date (as recorded in the Principal Ledger) which have not been applied
as at such Calculation Date to acquire further Loans and their Related Security or otherwise applied in accordance with Article
6 (Priorities of Payments) of the Guarantor Agreement and/or the other Transaction Documents;

C= the aggregate amount of (i) any Cash Capital Contributions
made by the Partners (as recorded in the Capital Account Ledger for each Partner of the Guarantor), (ii) proceeds advanced under
the Intercompany Loan Agreement or (iii) proceeds from any sale of Randomly Selected Loans which, in each case, have not been applied
as at such Calculation Date to acquire further Loans and their Related Security or otherwise applied in accordance with Article
6 (Priorities of Payments) and/or the other Transaction Documents;

D= the Trading Value of any Substitute Assets;

E= the balance, if any, of the Reserve Fund and
the Pre-Maturity Liquidity Ledger; and

F= the Trading Value of the Swap Collateral.Exhibit 4.5

 

 

servicing
Agreement

 

 

THE BANK OF NOVA SCOTIA,

as Servicer, Seller and Cash Manager

-
and -

SCOTIABANK
COVERED BOND Guarantor LIMITED PARTNERSHIP,

as Guarantor

- and -

computershare
TRUST COMPANY OF CANADA,

as Bond Trustee

 

 

 

 

 

 

DATED AS OF JULY 19,
2013

    	 

    	-i -

    

contents

	Article 1 Definitions and Interpretation	 	 	1	 

	 	1.1	 	 	Definitions	 	 	1	 
	 	1.2	 	 	Interpretation	 	 	2	 
	 	1.3	 	 	Schedule	 	 	2	 
	 	1.4	 	 	Warranties and Undertakings	 	 	2	 
	 	1.5	 	 	Successor Servicer, New Servicer and New Seller	 	 	2	 

	Article 2 Appointment of Servicer	 	 	2	 

	 	2.1	 	 	Appointment of Servicer	 	 	2	 
	 	2.2	 	 	Authority of Servicer	 	 	2	 
	 	2.3	 	 	Condition of Servicer’s Appointment	 	 	2	 
	 	2.4	 	 	STEP Plan and STEP Loans	 	 	3	 

	Article 3 Servicing duties	 	 	4	 

	 	3.1	 	 	General	 	 	4	 
	 	3.2	 	 	Standard of Care	 	 	4	 
	 	3.3	 	 	Servicing Duties	 	 	4	 
	 	3.4	 	 	Enforcement and Liquidation of Loans	 	 	5	 
	 	3.5	 	 	Legal Proceedings	 	 	5	 
	 	3.6	 	 	Funds in Trust	 	 	5	 
	 	3.7	 	 	Taxes	 	 	6	 
	 	3.8	 	 	Registration of the Sale of Loans to the Guarantor	 	 	6	 
	 	3.9	 	 	Sale of Loans in the Portfolio	 	 	6	 

	Article 4 ADMINISTRATION OF MORTGAGES	 	 	7	 

	 	4.1	 	 	Direct Debiting System	 	 	7	 

	Article 5 COVENants; REPRESENTATIONS AND WARRANTIES	 	 	8	 

	 	5.1	 	 	Servicing Covenants	 	 	8	 
	 	5.2	 	 	Positive Covenants	 	 	8	 
	 	5.3	 	 	Negative Covenants	 	 	10	 
	 	5.4	 	 	Survival of Covenants	 	 	10	 
	 	5.5	 	 	Representations and Warranties	 	 	10	 

	Article 6 delegation of duties	 	 	11	 

	 	6.1	 	 	Delegation of Duties	 	 	11	 
	 	6.2	 	 	Permitted Delegation of Duties	 	 	12	 
	 	6.3	 	 	Assignment of Rights	 	 	12	 
	 	6.4	 	 	Liability of Servicer	 	 	12	 

	Article 7 indemnification by Servicer	 	 	12	 

	 	7.1	 	 	Indemnification by Servicer	 	 	12	 

	Article 8 No Liability	 	 	13	 

	 	8.1	 	 	No Liability	 	 	13	 

    	 

    	-ii -

    

	Article 9 additional loans	 	 	13	 

	 	9.1	 	 	Additional Loans	 	 	13	 

	Article 10 Product Switches	 	 	14	 

	 	10.1	 	 	Product Switches	 	 	14	 

	Article 11 redemption of mortgages	 	 	14	 

	 	11.1	 	 	Redemption of Mortgages	 	 	14	 

	Article 12 Powers of Attorney	 	 	15	 

	 	12.1	 	 	Guarantor Appointment of Servicer as Attorney	 	 	15	 
	 	12.2	 	 	Powers of Attorney Irrevocable	 	 	16	 

	Article 13 Information	 	 	16	 

	 	13.1	 	 	Maintenance of Records	 	 	16	 
	 	13.2	 	 	Access to Books and Records	 	 	17	 
	 	13.3	 	 	Information Covenants	 	 	17	 

	Article 14 PROPERTY INSURANCE	 	 	18	 

	 	14.1	 	 	Property Insurance	 	 	18	 

	Article 15 DATA PROTECTION	 	 	18	 

	 	15.1	 	 	Data Protection	 	 	18	 

	Article 16 Remuneration	 	 	18	 

	 	16.1	 	 	Remuneration	 	 	18	 
	 	16.2	 	 	Successor Servicer	 	 	19	 

	Article 17 Services Non-Exclusive	 	 	19	 

	 	17.1	 	 	Services Non-Exclusive	 	 	19	 

	Article 18 Termination	 	 	19	 

	 	18.1	 	 	Servicer Termination Events	 	 	19	 
	 	18.2	 	 	Resignation	 	 	20	 
	 	18.3	 	 	Termination of Authority and Power	 	 	21	 
	 	18.4	 	 	Actions Upon Termination or Resignation	 	 	21	 
	 	18.5	 	 	Notification of Servicer Termination Event	 	 	22	 
	 	18.6	 	 	Notification of Insolvency Event	 	 	22	 
	 	18.7	 	 	Liability of the Guarantor	 	 	22	 
	 	18.8	 	 	Termination of Agreement	 	 	22	 
	 	18.9	 	 	Notice of Termination/Resignation to CMHC	 	 	22	 

	Article 19 Further Assurance	 	 	23	 

	 	19.1	 	 	Co-operation	 	 	23	 
	 	19.2	 	 	No Obligations of Guarantor to Perform Services	 	 	23	 

	Article 20 Miscellaneous	 	 	23	 

	 	20.1	 	 	No Set-Off	 	 	23	 

    	 

    	-iii -

    

	Article 21 Confidentiality	 	 	23	 

	 	21.1	 	 	Confidentiality	 	 	23	 

	Article 22 Notices	 	 	24	 

	 	22.1	 	 	Notices	 	 	24	 

	Article 23 Amendments, Variation and Waiver	 	 	25	 

	 	23.1	 	 	Amendments, Variation and Waiver	 	 	25	 

	Article 24 No Agency or Partnership	 	 	25	 

	 	24.1	 	 	No Agency or Partnership	 	 	25	 

	Article 25 Assignment	 	 	26	 

	 	25.1	 	 	Assignment	 	 	26	 
	 	25.2	 	 	Assignment under Security Agreement	 	 	26	 

	Article 26 Bond Trustee	 	 	26	 

	 	26.1	 	 	Change of Bond Trustee	 	 	26	 
	 	26.2	 	 	Limitation of Liability of Bond Trustee	 	 	26	 

	Article 27 LIMITATION OF LIABILITY	 	 	27	 

	 	27.1	 	 	Limitation of Liability	 	 	27	 

	Article 28 non-petition	 	 	27	 

	 	28.1	 	 	Non-Petition	 	 	27	 

	Article 29 Counterparts	 	 	27	 

	 	29.1	 	 	Counterparts	 	 	27	 

	Article 30 Governing Law	 	 	27	 

	 	30.1	 	 	Governing Law	 	 	27	 
	 	30.2	 	 	Submission to Jurisdiction	 	 	28	 

	SCHEDULE 1	 	 	 	1	 

 

    	 

    	 

    

THIS SERVICING 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 Seller, Servicer and Cash Manager;

		(2)	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 6100, 1 First Canadian Place, Toronto, Ontario, M5X 1B8, by
its managing general partner, SCOTIABANK COVERED BOND GP INC. in its capacity as Guarantor; and

		(3)	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.

WHEREAS,

		(A)	The Servicer carries on the business of, inter alia, administering mortgage loans secured on residential properties
within Canada.

		(B)	Pursuant to the Mortgage Sale Agreement, the Seller has agreed to sell Loans, their Related Security and certain other assets
to the Guarantor on a fully-serviced basis and to service the Loans and their Related Security sold by it to the Guarantor on the
terms and subject to the conditions contained in this Agreement (as the same may be amended, supplemented and/or restated from
time to time) in relation to, inter alia, such Loans and their Related Security.

		(C)	The Seller has agreed to cause all Additional STEP Loans it originates to be serviced by it pursuant to this Agreement prior
to the sale thereof to the Guarantor.

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

Article 1

Definitions and Interpretation

		1.1	Definitions

The Master Definitions and Construction
Agreement made between the parties to the Transaction Documents on the date hereof (as the same may be amended, restated and/or
supplemented from time to time, with the consent of the parties thereto) is expressly and specifically incorporated into this Agreement
and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or
supplemented) will, except where the context otherwise requires and save where otherwise defined herein, have the same meanings
in this Agreement, including the recitals hereto and this Agreement will be construed in accordance with the interpretation provisions
set out in Section 2 (Interpretation and Construction) of the Master Definitions and Construction Agreement.

    	 

    	-2 -

    

		1.2	Interpretation

For the purposes of this Agreement, this
Agreement has the same meaning as Servicing Agreement in the Master Definitions and Construction Agreement.

		1.3	Schedule

The Schedule attached to this Agreement
will, for all purposes of this Agreement, form an integral part of it.

		1.4	Warranties and Undertakings

Save as expressly provided herein, any
warranties or undertakings provided under this Agreement are made to each other party to this Agreement.

		1.5	Successor Servicer, New Servicer and New Seller

In the event that a Successor Servicer,
New Servicer or a New Seller become(s) party to this Agreement, references herein to Servicer and Seller, as applicable, will include
such Successor Servicer, New Servicer or New Seller, as applicable, unless otherwise specified or required by the context in which
such terms are used in this Agreement. With respect to any STEP Loans, such Successor Servicer, New Servicer or New Seller will
execute and deliver a Security Sharing Agreement if required by Article 13 (STEP Plan and Intercreditor Arrangements) of the Mortgage
Sale Agreement.

Article 2

Appointment of Servicer

		2.1	Appointment of Servicer

Subject to Section 2.3 (Condition of
Servicer’s Appointment), and until terminated pursuant to Article 18 (Termination), the Guarantor hereby appoints the
Servicer as its lawful agent on its behalf to service the Loans and their Related Security in the Portfolio, to exercise the rights,
powers and discretions of the Guarantor, and to perform the duties of the Guarantor, under and in relation to such Loans and their
Related Security. The Servicer hereby accepts its appointment as Servicer on the terms and subject to the conditions of this Agreement.
The Bond Trustee consents to the appointment of the Servicer on the terms of and subject to the conditions of this Agreement.

		2.2	Authority of Servicer

For the avoidance of doubt and in connection
with the rights, powers and discretions conferred under Section 2.1 (Appointment of Servicer), during the continuance of its appointment
hereunder, the Servicer will, subject to the terms and conditions of this Agreement, the Mortgage Terms and terms of the Related
Security and the other Transaction Documents, have the full power, authority and right to do or cause to be done any and all things,
not inconsistent with the sale, transfer and assignment of the Loans and their Related Security to the Guarantor, which it reasonably
considers necessary, convenient or incidental to the servicing of the Loans and their Related Security or the exercise of such
rights, powers and discretions.

		2.3	Condition of Servicer’s Appointment

The confirmation of appointment pursuant
to Section 2.1 (Appointment of Servicer) is conditional upon the purchase of the Initial Portfolio by the Guarantor from the Seller
having taken 

    	 

    	-3 -

    

place under the Mortgage Sale Agreement and will take effect upon and from the First Transfer Date under the Mortgage
Sale Agreement automatically without any further action on the part of any Person.

		2.4	STEP Plan and STEP Loans

Without limiting any other provision
hereof:

		(a)	The Servicer will service all STEP Loans and Other STEP Products it has made to the same STEP Borrower that are secured by
the same STEP Collateral Mortgage and Related Security for the benefit of the Guarantor and, in respect of any Additional STEP
Loans or Other STEP Products owned by it as Seller, for its benefit as Seller, and, in respect any Other STEP Products owned by
an Other STEP Creditor, for the benefit of such Other STEP Creditor in accordance with the provisions of Article 13 of the Mortgage
Sale Agreement, and, to the extent not inconsistent with Article 13 of the Mortgage Sale Agreement, the provisions of this Agreement.
If there is any conflict or inconsistency between the provisions of this Agreement and the provisions of Article 13 of the Mortgage
Sale Agreement, the provisions of Article 13 of the Mortgage Sale Agreement are to prevail.

		(b)	Any servicing fees due to any Servicer hereunder relating to any Additional STEP Loan or any Other STEP Product owned by the
Seller or an Other STEP Creditor are to be charged to and payable solely by the Seller or such Other STEP Creditor, as applicable,
and not by the Guarantor and are not to be paid from any collections from any Loans or Related Security included in the Portfolio.

		(c)	Without limiting the foregoing, the provisions of Sections 13.1, 13.3, 13.6, 13.8 and 13.9 of the Mortgage Sale Agreement are
incorporated in and deemed to be included in this Agreement, mutatis mutandis.

    	 

    	-4 -

    

 

Article 3

Servicing duties

		3.1	General

		(a)	The Seller hereby agrees to perform the duties and obligations of the Servicer pursuant to the terms hereof at no additional
cost to the Guarantor or the Bond Trustee, in return for the consideration paid by the Guarantor for the Loans and their Related
Security sold by the Seller to the Guarantor pursuant to the Mortgage Sale Agreement.

		(b)	The Servicer will provide the services set out in this Agreement, including those services set out in Schedule 1 (The Services)
hereto (the “Services”).

		(c)	If and only when the Servicer is requested to confirm or state the capacity in which it is servicing the Loans and their Related
Security sold by the Seller to the Guarantor and related matters pursuant to this Agreement by any Borrower or any third party
not being a party to this Agreement and to whom the Servicer is obliged by law to disclose such information or if required with
respect to any related enforcement or realisation proceedings, the Servicer will confirm or state that it is acting in its capacity
as servicer of the Loans and their Related Security sold by the Seller to the Guarantor and related matters as agent for and on
behalf of the Guarantor and not on its own behalf.

		3.2	Standard of Care

The Servicer, as agent for the Guarantor
(to the extent provided herein), will perform its duties hereunder in respect of the Loans and their Related Security in the Portfolio
solely in the best interests of the Guarantor and the Bond Trustee in accordance with applicable Law, this Agreement and the other
Transaction Documents and with reasonable care and diligence, using that degree of skill and attention that it exercises in managing,
servicing, administering, collecting on and performing similar functions relating to comparable loans that it services for itself
and, to the extent not inconsistent with the foregoing, the relevant Credit and Collection Policy and, in respect of STEP Loans
and Other STEP Products, in a manner consistent with the provisions of Article 13 (STEP Plan and Intercreditor Arrangements) of
the Mortgage Sale Agreement (collectively, the “Servicing Standard”).

		3.3	Servicing Duties

Without limiting the generality of the
authority granted by the appointment of the Servicer, and subject to the other provisions hereof, the Servicer is hereby authorised
and empowered by the Guarantor to take any and all reasonable steps in its name and on its behalf that are necessary or desirable
and not inconsistent with the sale, transfer and assignment of the Loans and the Related Security to the Guarantor, except that
the Servicer may not notify any Person of the Guarantor’s interest therein until the Seller is required to do so in accordance
with Section 3.5(1) of the Mortgage Sale Agreement or until the occurrence of a Registered Title Event or pursuant to Section 3.1(c)
to collect all amounts due under any and all Loans, including executing and delivering, on behalf of the Guarantor and any subsequent
assignees, any and all instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to the Loans and their Related Security and, after delinquency of any such Loans and to the

    	 

    	-5 -

    

extent permitted under and in compliance with applicable
Law, to commence proceedings with respect to enforcing payment of such Loans and their Related Security, and adjusting, settling
or compromising the account or payment thereof, in accordance with the Servicing Standard. The Guarantor will furnish the Servicer
with any powers of attorney and other documents that are within the ability of the Guarantor to furnish and which are reasonably
necessary or appropriate to enable it to carry out its servicing and administrative duties hereunder as agent of the Guarantor.

		3.4	Enforcement and Liquidation of Loans

Subject to Section 3.5 (Legal Proceedings),
for the benefit of the Guarantor, the Servicer will use reasonable efforts, in accordance with the Servicing Standard, to (a) collect
or enforce each Loan and the Related Security in the Portfolio and any related insurance policy (against the related Mortgaged
Property, Borrower, insurer or otherwise), and (b) liquidate or convert the related Mortgaged Property securing any such Loan which
is and continues to be a Non-Performing Loan and as to which no satisfactory arrangements can be made with the Borrower for the
collection of delinquent payments thereunder or as to which it will have otherwise determined that eventual payment in full is
unlikely. To the extent that such enforcement procedures are not applicable having regard to the nature of the default in question,
the Servicer will use the procedures that would be undertaken by reasonable and prudent institutional mortgage lenders in the Servicer’s
market on behalf of the Guarantor.

		3.5	Legal Proceedings

If in any enforcement suit or legal proceeding,
it will be held that the Servicer may not enforce a right under a Loan or the Related Security in the Portfolio on the grounds
that it should not be or is not a real party in interest or a holder entitled to enforce rights in respect of such Loan or the
Related Security, without limiting the obligations of the Seller and the Other STEP Creditor pursuant to Article 13 of the Mortgage
Sale Agreement, the Guarantor will, at the Servicer’s expense and direction, join in such action or proceeding and take such
steps as are necessary to enforce such Loan or the Related Security.

		3.6	Funds in Trust

If the Servicer receives any funds whatsoever
arising from the Loans and their Related Security comprised in the Portfolio which belong to the Guarantor and are to be paid to
the GDA Account (or, as applicable, the Standby GDA Account) pursuant to this Agreement or any of the other Transaction Documents
or otherwise, it will hold such monies in trust for the Guarantor and will:

(a)               
prior to a downgrade of the ratings of the Servicer by one or more Rating Agencies below the Servicer Deposit Threshold
Ratings, transfer such monies on or before the next Guarantor Payment Date (i) at any time prior to a downgrade of the ratings
of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings, to the Cash Manager, and (ii) at
any time following a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit
Ratings, directly into the GDA Account; and

(b)              
in the event of a downgrade of the ratings of the Servicer by one or more Rating Agencies below the Servicer Deposit Threshold
Ratings, transfer such monies (i) at any time prior to a downgrade of the ratings of the Cash Manager by one or more Rating Agencies
below the Cash Management Deposit Ratings, to the Cash Manager, and (ii) at any time following a downgrade of the ratings of the
Cash Manager by one or more Rating Agencies below the Cash

    	 

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Management Deposit Ratings, directly
into the GDA Account, in either case within two Toronto Business Days of the collection and/or receipt thereof.

The Servicer shall make each such payment
to the GDA Account without any deduction as a result of any defence, set off right or counterclaim. Until paid into the GDA Account,
the Servicer is entitled to commingle such funds with any other funds held by it.

		3.7	Taxes

The Servicer will remit to the relevant
Governmental Authority all Taxes collected by it pursuant to the terms of, or in respect of, any Loan, and will prepare and file
all returns and reports related thereto, and the Guarantor will forthwith remit to the Servicer any amounts received by it from
a Borrower in respect of such Taxes. The Servicer will with respect to any Loan, to the extent not inconsistent with its Credit
and Collection Policy, pay: (i) arrears of Taxes or utilities; (ii) costs of repairing, maintaining, insuring or securing the related
Mortgaged Property; (iii) costs of liquidating or disposing of such Loan if it becomes a Non-Performing Loan or the related Mortgaged
Property; and (iv) any other cost or expense, which the Servicer deems necessary or advisable, acting in a reasonable and prudent
manner, to preserve or maintain the realisable value of such Loan or the related Mortgaged Property.

		3.8	Registration of the Sale of Loans to the Guarantor

		(a)	Subject to Article 6 (Actions Upon a Registered Title Event and Related Matters) of the Mortgage Sale Agreement, the Servicer
will on behalf of the Seller and within the time periods required by the Mortgage Sale Agreement following the occurrence of a
Registered Title Event, take such steps and procure the doing of all or any acts, matters or things as may be necessary, based
on the advice of counsel, to register and record on behalf of the Seller the sale, transfer and assignments of the Loans and their
Related Security then in the Portfolio and such other actions contemplated by Section 6.1(a) of the Mortgage Sale Agreement all
in accordance with Article 6 (Actions Upon a Registered Title Event and Related Matters) of the Mortgage Sale Agreement or will
provide sufficient information to the Guarantor and the Bond Trustee to enable the Guarantor or the Bond Trustee to register or
record or cause to be registered or recorded on behalf of the Seller (pursuant to and in reliance on the powers of attorney set
out in Article 12 (Powers of Attorney)) such sales, transfers and assignments.

		(b)	Subject to Section 3.1(c) of this Agreement and Article 6 (Actions Upon a Registered Title Event and Related Matters) of the
Mortgage Sale Agreement, prior to the occurrence of a Registered Title Event, unless required to be given by the Seller in accordance
with Section 3.5(1) of the Mortgage Sale Agreement, the Servicer will not be required to notify any Person of the Guarantor’s
interest in any Loans or their Related Security in the Portfolio.

		3.9	Sale of STEP Loans in the Portfolio

In the event of any sale of any Selected
Loans by the Guarantor to any Purchaser other than the Seller, unless the Purchaser
will own all STEP Loans and Other STEP Products secured by the same STEP Collateral Mortgages and other Related Security as the
Selected Loans following such purchase, the following conditions precedent must be satisfied in respect of such purchase:

    	 

    	-7 -

    

		(a)	the Purchaser and any other Person that owns any related STEP Loan or Other STEP Product shall have entered into a servicing
agreement with a servicer (which may be the Purchaser, the Servicer or such other person as may be selected by the Purchaser)
which provides that the Selected Loans and any other STEP Loans and Other STEP Products secured by the same STEP Collateral Mortgage
and other Related Security shall be serviced by the same servicer in accordance with the terms of this Agreement and Article 13
of the Mortgage Sale Agreement, provided that such servicing agreement may be terminated by the Purchaser at any time upon at least
30 days’ prior written notice to the servicer thereunder; and

		(b)	the Purchaser shall have entered into a Security Sharing Agreement with each owner of the STEP Loans and/or Other STEP
                                                               Products secured by the same STEP Collateral Mortgage and other Related Security as the Selected Loans, which Security
                                                               Sharing Agreement shall, inter alia, (i) provide such Purchaser with the same rights, priorities and entitlements in
                                                               respect of the STEP Collateral Mortgage and other Related Security for the Selected Loans as those of the Guarantor under the
                                                               Mortgage Sale Agreement, the Servicing Agreement and any other Security Sharing Agreement previously entered into by the
                                                               Guarantor prior to the sale of Selected Loans to such Purchaser, and (ii) provide such Purchaser with the same rights
                                                               relating to the servicing of the Selected Loans and all other STEP Loans and Other STEP Products secured by the same STEP
                                                               Collateral Mortgage and other Related Security as those afforded to the Guarantor.

The Guarantor shall be entitled to terminate
the appointment of the Servicer under this Agreement in respect of any Selected Loans following a sale thereof to a Purchaser upon
not less than 30 days’ prior written notice to the Servicer, or such shorter notice period as may be agreed to between the
Servicer and the Guarantor.

Article 4

ADMINISTRATION OF MORTGAGES

		4.1	Direct Debiting System

For the purposes of collecting amounts
due from Borrowers under the Loans and their Related Security sold by the Seller to the Guarantor comprised in the Portfolio, the
Servicer in accordance with this Agreement will, unless otherwise agreed to in writing with the Guarantor, act or cause another
Person approved in writing by the Guarantor and the Bond Trustee (such approval not to be unreasonably withheld) to act as collection
agent for the Guarantor under a scheme for either the manual or automated debiting of bank accounts (the “Direct Debiting
System”) provided such Direct Debiting System is operated in accordance with policies and procedures which would be acceptable
to reasonable and prudent institutional mortgage lenders in the Servicer’s market. Any unpaid amounts under such Direct Debiting
System 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 accounts, will be paid in accordance with Section 4.11 (Third Party Amounts) of the Mortgage Sale Agreement.

 

 

    	 

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Article 5

COVENants; REPRESENTATIONS AND WARRANTIES

		5.1	Servicing Covenants

The Servicer covenants with and undertakes
to each of the Guarantor and the Bond Trustee that without prejudice to any of its specific obligations hereunder it will (unless
the Servicer is a Successor Servicer), at its own expense take or cause to be taken all such reasonable actions as may be necessary
or advisable from time to time to administer and service the Loans and their Related Security in the Portfolio in accordance herewith,
including, without limitation, the Servicing Standard.

		5.2	Positive Covenants

The Servicer covenants and agrees, subject
to the Sections 3.2 (Standard of Care) and 5.1 (Servicing Covenants) of this Agreement, that without prejudice to any of its specific
obligations hereunder it will (unless the Servicer is a Successor Servicer), at its own expense:

		(a)	administer the Loans and their Related Security in the Portfolio in accordance with the Servicing Standard and, in the event
the Servicer agrees, subject to Article 9 (Additional Loans) of this Agreement, to service Additional Loans and their Related
Security sold by New Seller to the Guarantor, in accordance with the Servicing Standard, except (i) to the extent necessary or
desirable to accommodate the exercise by the Guarantor of its right hereunder, or (ii) as otherwise required hereby;

		(b)	comply with any proper directions, orders and instructions which the Guarantor may from time to time give to it in accordance
with the provisions of this Agreement in respect of the Loans and their Related Security in the Portfolio;

		(c)	employ and provide general administrative, supervisory and accounting staff and general overhead as may from time to time be
reasonably required to carry out its obligations hereunder;

		(d)	pay all general administrative expenses and other costs incurred by it in carrying out its obligations hereunder and all fees
and expenses of any administrator appointed or subcontractor retained by it without any right of reimbursement, except as expressly
provided herein;

		(e)	fully perform in a timely fashion and comply in all material respects with all material provisions, covenants and other obligations
required to be observed by the Seller, the Guarantor or the Servicer under or in connection with the Loans and their Related Security
in the Portfolio and agreements related thereto;

		(f)	except as provided to the contrary herein or as permitted by the Mortgage Sale Agreement and other than by (i) providing actual
notice of the sale, transfer and assignment to the Borrowers of the Loans in the Portfolio or the obligors under any Related Security
with respect thereto, or (ii) registering the assignment of such Loans and their Related Security on title to the real property
underlying those Mortgages, take all steps reasonably necessary, or in the opinion of the Guarantor or its counsel advisable, to
validate, protect or perfect the ownership interest of the Guarantor in, or to defeat the assertion by any third party (other than
a third party claiming through or under the Guarantor or a Borrower) of any Adverse Claim on, such Loans or their Related Security;

    	 

    	-9 -

    

		(g)	take all reasonable steps to ensure the maintenance by Borrowers of appropriate fire and all perils or property damage insurance
with respect to each Mortgaged Property in respect of the Loans and their Related Security in the Portfolio;

		(h)	take all reasonable steps to enforce the Guarantor’s rights or make any claims in respect of a lender’s title insurance
policy on a Mortgaged Property in respect of the Loans and their Related Security in the Portfolio;

		(i)	settle all losses in the event of damage to or destruction by fire or other insured casualty of any Mortgaged Property in respect
of the Loans and their Related Security in the Portfolio in the same manner as reasonable and prudent institutional mortgage lenders
in the Servicer’s market would settle losses in respect of mortgages administered by it on its own behalf;

		(j)	except as otherwise provided in this Agreement, deal with the Loans in the Portfolio only as specifically authorised and directed
by the Guarantor, the Bond Trustee or their respective duly appointed agents;

		(k)	forthwith and in any event prior to the next Guarantor Payment Date after becoming aware of any event which may reasonably
give rise to an obligation of the Seller to repurchase any Loan sold to the Guarantor pursuant to the Mortgage Sale Agreement,
notify the Guarantor in writing of such event;

		(l)	upon the Seller being required to do so by the Guarantor or the Bond Trustee pursuant to Article 6 (Actions Upon a Registered
Title Event and Related Matters) of the Mortgage Sale Agreement, and subject to Section 3.8 (Registration of the Sale of Loans
to the Guarantor) of this Agreement, do or procure the doing of all or any of the acts, matters or things required thereunder (including
Section 6.1(a) of the Mortgage Sale Agreement) on behalf of the Seller within the time period provided by the Mortgage Sale Agreement
or, if requested to do so by the Bond Trustee, provide sufficient information to enable the Guarantor or the Bond Trustee to do
so at the Servicer’s expense;

		(m)	keep in force all licences, approvals, authorisations and consents which may be necessary in connection with the performance
of the Services and prepare and submit on a timely basis all necessary applications and requests for any further approval, authorisation,
consent or licence required in connection with the performance of the Services;

		(n)	comply with any applicable Law and the provisions of the CMHC Guide in the performance of the Services hereunder and in the
performance of any of its obligations under any other Transaction Document to which it is a party in any capacity;

		(o)	make all payments required to be made by it pursuant to this Agreement on the due date for payment thereof in Canadian Dollars
in immediately available funds for value on such day without set-off (including, without limitation, in respect of any fees owed
to it) or counterclaim;

		(p)	at any time upon request from the Guarantor or the Bond Trustee, provide any information or assistance requested by the Guarantor
or the Bond Trustee for the purpose of completing any information necessary in respect of a Power of Attorney granted by the Seller
to the Guarantor under the Mortgage Sale Agreement; and

    	 

    	-10 -

    

		(q)	within five Toronto Business Days of notification from the Guarantor of the identity of any proposed New Seller, provide the
Rating Agencies with such details of that proposed New Seller as may be reasonably required by the Rating Agencies.

		5.3	Negative Covenants

The Servicer covenants and agrees that
it will not:

		(a)	except as required by applicable Law, the Superintendent or the Canada Deposit Insurance Corporation, make any change to its
Credit and Collection Policy that would reasonably be expected to have a Material Adverse Effect in respect of the Loans and their
Related Security in the Portfolio without having satisfied the Rating Agency Condition with respect thereto;

		(b)	except in accordance with the Servicing Standard, extend, amend or otherwise modify or waive the terms of any Loan or its Related
Security in the Portfolio, or amend, modify or waive any term or condition of any agreement related thereto, if the result of such
amendment could reasonably be expected to have a Material Adverse Effect on the value or collectability of such Loan without having
satisfied the Rating Agency Condition with respect thereto;

		(c)	amend or terminate any of the Transaction Documents save in accordance with their terms; or

		(d)	take or omit to take any action if the taking or omitting to take such action by it would constitute a breach by it of any
representation, warranty or covenant herein, or in any other document delivered hereunder or contemplated hereby and such action
or omission would reasonably be expected to have a Material Adverse Effect in respect of the Loans and their Related Security in
the Portfolio.

		5.4	Survival of Covenants

The covenants of the Servicer in this
Article 5 will remain in force until this Agreement is terminated in respect of the Servicer, but without prejudice to any
right or remedy of the Guarantor, the Bond Trustee and/or the Seller arising from a breach of any such covenants prior to the date
of termination of this Agreement.

		5.5	Representations and Warranties

The Servicer hereby represents and warrants
to the Guarantor, the Seller, the Cash Manager and the Bond Trustee that, at the date hereof:

		(a)	it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation
to its duties and obligations hereunder;

		(b)	it is and will continue to be in good standing with OSFI;

		(c)	it is in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations
hereunder and under the other Transaction Documents to which it is a party in any capacity;

    	 

    	-11 -

    

		(d)	the unsecured, unsubordinated and unguaranteed debt obligations of the Servicer are rated by each of the Rating Agencies at
ratings that are at or above each of the Servicer Replacement Ratings; and

		(e)	it is in material compliance with its internal policies and procedures (including risk management policies) relevant to its
duties and obligations hereunder and under the other Transaction Documents to which it is a party in any capacity.

Article 6

delegation of duties

		6.1	Delegation of Duties

The Servicer may sub-contract or delegate
the performance of all or any of its powers and obligations under this Agreement, provided that (but subject to Section 6.2 (Permitted
Delegation of Duties)):

		(a)	where the arrangements involve the custody or control of any Customer Files relating to the Portfolio for the purpose of performing
any delegated Services, the sub-contractor or delegate has executed an acknowledgement in form and substance acceptable to
the Guarantor and the Bond Trustee to the effect that any such Customer Files are and will be held to the order of the Bond Trustee
or as the Bond Trustee will direct;

		(b)	where the arrangements involve or may involve the receipt by the sub-contractor or delegate of funds belonging to the Guarantor,
the sub-contractor or delegate has executed a declaration in form and substance acceptable to the Guarantor that any such funds
held by it or to its order are held in trust for the Guarantor and will be paid forthwith to the Cash Manager prior to a downgrade
of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings, and following a downgrade
of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings, into the GDA Account
(or, as applicable, the Standby GDA Account);

		(c)	the prior written consent of the Guarantor and the Bond Trustee to the proposed arrangement in respect of the Loans and their
Related Security in the Portfolio (including, if the Guarantor and the Bond Trustee consider it necessary, approving any contract
which sets out the terms on which such arrangements are to be made) has been obtained, which consent will not be unreasonably withheld,
and written notification of such sub-contracting or delegation has been given to each of the Rating Agencies;

		(d)	any such sub-contractor or delegate has executed a written waiver of any Security Interest arising in connection with such
delegated Services (to the extent that such Security Interest relates to the Portfolio or any amount referred to in (a) above);
and

		(e)	any sub-contracting or delegation will be at the expense of the Servicer and neither the Bond Trustee nor the Guarantor will
have any liability for any costs, fees, charges or expenses payable to or incurred by such sub-contractor or delegate or arising
from the entering into, the continuance, amendment or the termination of any such arrangement.

    	 

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		6.2	Permitted Delegation of Duties

The provisos in Sections 6.1(a), 6.1(b)
and 6.1(c) will not apply:

		(a)	to the engagement by the Servicer of:

		(i)	any receiver, solicitor, insurance broker, valuer, surveyor, accountant, estate agent, insolvency practitioner, auctioneer,
bailiff, sheriff officer, debt counsellor, tracing agent, property management agent, licensed conveyancer, qualified conveyancer
or other professional adviser acting as such; or

		(ii)	any locksmith, builder or other contractor acting as such in relation to a Mortgaged Property,

in any such case being a Person or Persons whom the Servicer
would be willing to appoint in respect of its own mortgages in connection with the performance by the Servicer of any of its obligations
or functions or in connection with the exercise of its powers under this Agreement; or

		(b)	to any delegation to any Subsidiary of the Bank from time to time.

		6.3	Assignment of Rights

The Guarantor and the Bond Trustee may
require the Servicer to assign to the Guarantor any rights which the Servicer may have against any sub-contractor or delegate
arising from the performance of Services by such Person relating to any matter contemplated by this Agreement and the Servicer
acknowledges that such rights assigned to the Guarantor will be exercised by the Guarantor subject to the terms of the Guarantor
Agreement.

		6.4	Liability of Servicer

Notwithstanding any sub-contracting
or delegation of the performance of its obligations under this Agreement in respect of the Loans and their Related Security, the
Servicer will not be released or discharged from any liability hereunder and will remain responsible for the performance of all
of its obligations under this Agreement in respect of the Loans and their Related Security, and the performance or non-performance
or the manner of performance by any sub-contractor or delegate of any of the Services in respect of the Loans and their Related
Security will not affect the Servicer’s obligations under this Agreement in respect of the Loans and their Related Security
and any breach in the performance of the Services in respect of the Loans and their Related Security by such sub-contractor
or delegate will, subject to the Servicer being entitled for a period of 20 Toronto Business Days from receipt of any notice of
the breach to remedy such breach by any sub-contractor or delegate, be treated as a breach of this Agreement in respect of
the Loans and their Related Security by the Servicer.

Article 7

indemnification by Servicer

		7.1	Indemnification by Servicer

		(a)	The Servicer, solely in its capacity as Servicer, will indemnify the Guarantor on demand for any loss, liability, claim, expense
or damage suffered or incurred by the Guarantor in respect of the Servicer’s dishonesty, bad faith, wilful misconduct,

    	 

    	-13 -

    

negligence or reckless disregard by the Servicer or any
of its officers, employees or agents under this Agreement in carrying out its functions as Servicer in respect of the Loans and
their Related Security under this Agreement or any other Transaction Document or as a result of a breach by it of the terms and
provisions of this Agreement or any other Transaction Document in relation to such functions.

		(b)	For the avoidance of doubt, the Servicer will not be liable in respect of any loss, liability, claim, expense or damage suffered
or incurred under Section 7.1(a) by the Guarantor and/or any other Person as a result of the proper performance of the Services
by the Servicer in respect of the Loans and their Related Security save where such loss, liability, claim, expense or damage is
suffered or incurred as a result of any dishonesty, bad faith, wilful misconduct, negligence or reckless disregard of the Servicer
or any of its officers, employees or agents or as a result of a breach by the Servicer of the terms and provisions of this Agreement
or any other Transaction Document in relation to such functions.

Article 8

No Liability

		8.1	No Liability

The Servicer, in such capacity, will
have no liability for any obligation of a Borrower under any Loan comprised in the Portfolio or any Related Security and nothing
herein will constitute a guarantee, indemnity or similar obligation, by or of it of or in relation to any Loan, any Related Security
or any Borrower. Save as otherwise provided in this Agreement, the Servicer, in such capacity, will have no liability for the obligations
of the Guarantor under any Transaction Document or otherwise and nothing herein will constitute a guarantee, indemnity or similar
obligation, by or of it of the Guarantor in respect of any of those obligations.

Article 9

additional loans

		9.1	Additional Loans

		(a)	The Portfolio may be augmented from time to time by the sale to the Guarantor on any Transfer Date of Additional Loans and
their Related Security by the Seller (or any New Seller) in accordance with the Mortgage Sale Agreement, which sales will in all
cases be subject to the terms set out in the Mortgage Sale Agreement.

		(b)	In the event the Guarantor acquires Additional Loans and their Related Security from a New Seller, either (i) such New Seller
will service such Additional Loans and their Related Security, provided that it enters into a servicing agreement with the Guarantor
and the Bond Trustee which sets out the servicing obligations of such New Seller in relation to such Additional Loans and their
Related Security and is on terms substantially similar to the terms set out in this Agreement (provided that the fees payable to
such New Seller acting as servicer of such Additional Loans and their Related Security would be determined on or around the date
of the accession of such New Seller to the Program), or (ii) another Servicer will service such Additional Loans and their Related
Security under the terms of this Agreement (with such subsequent amendments as may be agreed by the parties hereto) (provided that

    	 

    	-14 -

    

the fees payable to the Servicer would be determined
on or around the date of the accession of such New Seller to the Program).

Article 10

Product Switches

		10.1	Product Switches

		(a)	In the event that the Seller accepts a request from a Borrower for a Product Switch, then if such Product Switch results in
any of the Loan Representations and Warranties not being satisfied in respect of the relevant Loan on the next Calculation Date,
or if subsequent to the sale of a First STEP Loan to the Guarantor, the origination of any related Additional STEP Loan by the
Seller results in any of the Loan Representations and Warranties not being satisfied in respect of any related STEP Loan owned
by the Guarantor, or if any Product Switch would give rise to an increased tax liability to the Guarantor, the Guarantor will be
entitled to rectify such breach of the Loan Representations and Warranties or avoid such increased tax liability by requiring the
Seller to repurchase such Loan and its Related Security to which the Product Switch relates (and any other Loan secured or intended
to be secured by that Related Security or any part of it whether or not there has been any breach of a Loan Representation and
Warranty in respect of such other Loan) from the Guarantor in accordance with Section 8.3 (Breach of Loan Representations and Warranties,
Additional Loan Advances and Product Switch) of the Mortgage Sale Agreement.

		(b)	The Servicer will notify the Seller (if other than itself) and the Guarantor (or the Cash Manager on its behalf) following
acceptance by the Servicer of any application for a Product Switch.

Article 11

redemption of mortgages

		11.1	Redemption of Mortgages

		(a)	Upon receipt of repayment in full of all sums due in relation
to Loans in the Portfolio secured by a Mortgage and/or other Related Security comprised in the Portfolio, the Servicer will, and
is hereby authorised by the Seller and the Guarantor to, in the name of the Seller or the Guarantor, execute a receipt, discharge
or other relevant document releasing the Mortgage at the applicable land registry office, land titles office or similar place
of public record in which the related Mortgage is registered and any such other or further instrument or deed of satisfaction
regarding such Mortgage and/or the Related Security as it considers to be necessary or advisable to release the relevant conveyancing
deeds and documents, if any, which make up the title to such Mortgaged Property and the security for the Loan to the Person or
Persons entitled thereto. The foregoing will be in addition to any right of the Servicer under Article 12 (Powers of Attorney)
of this Agreement to grant postponements and partial releases or discharges in respect of any Loan in the Portfolio sold by the
Seller to the Guarantor. Notwithstanding the foregoing, with respect to STEP Loans in respect of which the STEP Collateral Mortgage
remains as security for Other STEP Products, after all of the STEP Loans in the Portfolio are repaid in full, the Servicer will,
and is hereby authorised by the Seller and the

    	 

    	-15 -

    

			Guarantor to, in the name of the Seller or the Guarantor, execute a registrable transfer or assignment of the STEP
                                                                            Collateral Mortgage and other Related Security, without representation, warranty or covenant of any kind except those usually
                                                                            given by a trustee, into the name of the Seller, for itself and on behalf of any Other STEP Creditor, as applicable, who is
                                                                            the holder of the Other STEP Products secured by such STEP Collateral Mortgage, and to release the relevant conveyancing
                                                                            deeds and documents and possession and control of the Related Security to the Seller or Other STEP Creditor, as
                                                                            applicable.

		(b)	The Servicer undertakes that prior to any actual release by it of the relevant documents as described in Section 11.1(a) it
will take such steps as would be taken by reasonable and prudent institutional mortgage lenders in the Servicer’s market
to satisfy itself that such documents are being released to the Person or Persons entitled thereto.

		(c)	Subject to Section 2.4 (STEP Plan and STEP Loans) of this Agreement, following any enforcement procedures taken by the Servicer
as part of its performance of the Services hereunder, if upon completion of such enforcement procedures, an amount in excess of
all sums due by the relevant Borrower to the Guarantor in respect of or related to the relevant Loan in the Portfolio pursuant
to the terms of such Loan and its Related Security is recovered or received, then the Servicer will cause the balance, after discharge
of any sums due by the Borrower in respect thereof, to be paid to the Person or Persons next entitled thereto in accordance with
the terms of such Loan and its Related Security and applicable Laws and, in respect of any STEP Loan, the STEP Plan.

Article 12

Powers of Attorney

		12.1	Guarantor Appointment of Servicer as Attorney

For good and valuable consideration and
as security for the interests of the Guarantor hereunder, the Guarantor hereby appoints the Servicer as its attorney on its behalf,
and in its own or the attorney's name, for the following purposes:

		(a)	executing all documents necessary for the purpose of discharging a Mortgage and/or any other Related Security in relation to
a Loan comprised in the Portfolio which has been repaid in full and any other Related Security or for the sale of a Mortgaged Property
which is subject to a Mortgage;

		(b)	executing all documents necessary for the purposes of assigning and transferring a STEP Collateral Mortgage and any other Related
Security in relation to a STEP Loan which has been repaid in full to the Seller or Other STEP Creditor, as applicable, who is the
holder of the Other STEP Products secured by such STEP Collateral Mortgage (provided that no such assignment or transfer is to
be made while the Guarantor holds any related STEP Loan under which there remains outstanding indebtedness);

		(c)	executing all documents necessary for the purpose of releasing or discharging a Mortgage in the Portfolio in accordance with
this Agreement (provided that no such release or discharge of a STEP Collateral Mortgage and any other Related Security

    	 

    	-16 -

    

is to be made while the Guarantor holds any related STEP
Loan under which there remains outstanding indebtedness);

		(d)	executing all documents and doing all such acts and things which in the reasonable opinion of the Servicer are necessary or
desirable for the efficient provision of the Services hereunder; and

		(e)	exercising its rights, powers and discretion under the Mortgages and/or any other Related Security relating to Loans comprised
in the Portfolio,

provided that, for the avoidance of doubt, this power of
attorney will be exercised in accordance with the Servicing Standard and will not authorise the Servicer to sell any of the Loans
and/or their Related Security comprised in the Portfolio except as specifically authorised in the Transaction Documents. For the
avoidance of doubt, the Guarantor will not be liable or responsible for the acts of the Servicer or any failure by the Servicer
to act under or in respect of this power of attorney.

		12.2	Powers of Attorney Irrevocable

The appointments contained in Section
12.1 (Guarantor Appointment of Servicer as Attorney) of this Agreement will be coupled with an interest and will be irrevocable
unless and until the termination of the appointment of the Servicer pursuant to Article 18 (Termination) of this Agreement
upon which the appointments contained in Section 12.1 (Guarantor Appointment of Servicer as Attorney) will be automatically revoked.

Article 13

Information

		13.1	Maintenance of Records

The Servicer will:

		(a)	keep the Customer Files relating to the Loans comprised in the Portfolio in safe custody in a fire-proof location and will
take appropriate technical and organisational measures against the unauthorised or unlawful processing of personal data and against
accidental loss or destruction of, or damage to, personal data, and will not without the prior written consent of the Guarantor,
part with possession, custody or control of such Customer Files other than to a sub-contractor or delegate appointed pursuant to
Article 6 (Delegation of Duties) of this Agreement or to a solicitor or notary subject to such undertakings as would be acceptable
to reasonable and prudent institutional mortgage lenders in the Servicer’s market in similar circumstances;

		(b)	maintain in an adequate form such records as are necessary to enforce each Mortgage comprised in the Portfolio and, where relevant,
any other Related Security;

		(c)	will keep Customer Files relating to Loans comprised in the Portfolio (including, but not limited to conveyancing deeds and
documents which make up the title and security in relation to such Loans) in such a way that they can be distinguished from information
held by it for its own behalf as mortgagee or for other third persons;

    	 

    	-17 -

    

		(d)	keep the Bond Trustee informed of the location of the Customer Files relating to the Loans comprised in the Portfolio and any
duplicate computer records; and

		(e)	in the event one or more Rating Agencies downgrades the ratings of the Servicer below the Servicer Replacement Ratings, use
reasonable endeavours to ensure that the Customer Files, computer records and files relating to Loans comprised in the Portfolio
serviced by it are identified as distinct from the information held by it for its own behalf as mortgagee or for other third persons
which do not form part of the Portfolio.

		13.2	Access to Books and Records

Subject to all applicable laws, the Servicer
will permit the Guarantor (and the Guarantor’s auditors) and the Bond Trustee and any other person nominated by the Guarantor
(to whom the Servicer has no reasonable objection) upon reasonable notice during normal office hours to have access, or procure
that such person or persons are granted access, to all books of record and account (including, for the avoidance of doubt, the
Customer Files) relating to the administration of the Loans and their Related Security comprised in the Portfolio and related matters
in accordance with this Agreement.

		13.3	Information Covenants

		(a)	The Servicer will assist the Cash Manager in the production of the Monthly Asset Coverage Report substantially in the form
set out in Schedule 3 (Form of Monthly Asset Coverage Report) of the Cash Management Agreement.

		(b)	The Servicer will notify the Rating Agencies in writing of the details of (i) any proposed material change in the valuation
procedures or policies applied by it or to be applied in relation to Mortgaged Properties in connection with its mortgage business
(details of which change may be included in the report provided under Section 13.3(a)), and (ii) any other information relating
to its mortgage business and financial condition as the Rating Agencies may reasonably request in connection with the ratings of
any Covered Bonds issued under the Program and other matters contemplated by the Program, provided that such request does not adversely
interfere with its day to day provision of the Services under the other terms of this Agreement. For greater certainty, any failure
by the Servicer to deliver any such notice prior to making any such proposed change will not limit the ability of the Servicer
to proceed with any such change or constitute a breach of its obligations hereunder.

		(c)	The Servicer will, upon reasonable request, but subject to any restrictions under applicable privacy laws, provide the Guarantor
(or the Cash Manager on its behalf), the Bond Trustee and each Rating Agency quarterly with a report stored upon electronic media
including, but not limited to, a CD-ROM, in a form acceptable to the Guarantor and Bond Trustee (each acting reasonably) containing
information regarding the Loans then comprised in the Portfolio including, but not limited to, details of the relevant mortgage
reference number and the postal code of the relevant Mortgaged Property.

		(d)	The Servicer will, at the request of the Guarantor and the Bond Trustee, provide the Guarantor, the Bond Trustee and the Rating
Agencies with such other information relating to its business and financial condition and (to the extent that it has such information
and subject to any confidentiality restrictions binding upon it) that of

    	 

    	-18 -

    

any person to whom it has sub-contracted or delegated
part of its obligations hereunder as it may be reasonable for the Guarantor and the Bond Trustee (as appropriate) to request in
connection with the ratings of any Covered Bonds issued under the Program and other matters contemplated by the Program, provided
that the Guarantor or the Bond Trustee (as appropriate) will not make such a request more than once every three months unless,
in the reasonable belief of the Guarantor or the Bond Trustee (as appropriate), an Issuer Event of Default or a Servicer Termination
Event will have occurred and is continuing or may reasonably be expected to occur.

Article 14

PROPERTY INSURANCE

		14.1	Property Insurance

Any amounts received by the Servicer
in respect of any policies of insurance carried by the Servicer in respect of third party liability and extended coverage claims
applicable to or relating to the Loans and their Related Security will be held and dealt with by the Servicer in accordance with
Section 3.6 (Funds in Trust) of this Agreement.

Article 15

DATA PROTECTION

		15.1	Data Protection

Each of the parties hereto will maintain
privacy policies and procedures consistent with the terms of this Agreement and compliant with all Applicable Privacy Laws. In
all cases, and without limiting the foregoing, each such party will comply with Applicable Privacy Laws in the performance of its
obligations under this Agreement. For greater certainty, and without limiting the foregoing, the Servicer will have in place and
maintain, policies (“Servicer Privacy Policies”) governing the collection, use, disclosure, management and security
of Personal Information, including, without limitation, an outline of the procedure and reasonable measures that the Servicer has
in place to maintain the security of such Personal Information. From time to time, but not more often than once per annum, the
Guarantor may, by request in writing to the Servicer, request that the Servicer provide and the Servicer will, promptly following
a receipt of such request, provide to the Guarantor a certificate of an officer of the Servicer certifying the Servicer's maintenance
of, and compliance with, the Servicer Privacy Policies.

Article 16

Remuneration

		16.1	Remuneration

Subject to Section 16.2 (Successor Servicer),
the Servicer, including any New Servicer(s), will not be entitled to any additional compensation for the performance of its obligations
under this Agreement or any reimbursement for costs and expenses incurred by it in connection therewith, it being acknowledged
that the Loans, the Related Security and the other assets comprised in the Portfolio have been sold to the Guarantor by the Seller
pursuant to the Mortgage Sale Agreement on a fully-serviced basis. Any compensation to be paid to the Servicer for the performance
of its obligations under this Agreement or any reimbursement for costs and expenses incurred by the

    	 

    	-19 -

    

Servicer in connection therewith in respect of any Additional
STEP Loans owned by the Seller will be paid by the Seller and not from the proceeds of any Loans or Related Security in the Portfolio.

		16.2	Successor Servicer

Notwithstanding Section 16.1 (Remuneration)
above, in the event the Servicer is replaced in accordance with the terms of this Agreement by a Successor Servicer, unless otherwise
agreed by the parties hereto, the Guarantor will on each Guarantor Payment Date reimburse such Successor Servicer, in accordance
with the applicable Priority of Payments, for all costs, expenses, disbursements, charges and fees (together with any applicable
Taxes due thereon) properly incurred by such Successor Servicer in the performance of the Services and its obligations under this
Agreement in respect of the Loans serviced by such Successor Servicer including any such expenses, disbursements, charges or fees
not reimbursed to such Successor Servicer on any previous Guarantor Payment Date and such Successor Servicer will supply the Guarantor
(or the Cash Manager on its behalf) with a copy of an appropriate invoice in respect of such Taxes, if any, issued by the Person
making the supply. In the circumstances set forth in this Section 16.2, such Successor Servicer will use reasonable endeavours
in accordance with the standards of reasonable and prudent institutional mortgage lenders in such Successor Servicer’s market
to recover from the relevant Borrowers all costs and expenses incurred by such Successor Servicer which are properly recoverable
from those Borrowers under the terms of the relevant Loan and its Related Security.

Article 17

Services Non-Exclusive

		17.1	Services Non-Exclusive

Nothing in this Agreement will prevent
the Servicer from rendering or performing services similar to those provided for in this Agreement to or for itself or other Persons
or from carrying on business similar to or in competition with the business of the Guarantor.

Article 18

Termination

		18.1	Servicer Termination Events

If
any of the following events (each, a “Servicer Termination Event” and, in
relation to the events referred to in Sections 18.1(a) to (d), a “Servicer Event of Default”)
shall occur:

		(a)	one or more Rating Agencies downgrades the Servicer’s unsecured, unguaranteed and unsubordinated
debt obligations, or its issuer default ratings, below the Servicer Replacement Ratings;

		(b)	default is made by the Servicer in the payment on the due date of any amount due to the Guarantor
and payable by it under this Agreement and such default continues unremedied for a period of three (3) Toronto Business Days after
the earlier of the Servicer becoming aware of such default and receipt by the Servicer of written notice from the Bond Trustee
or the Guarantor requiring the same to be remedied;

		(c)	default is made by the Servicer (or any delegate thereof) in the performance of its obligations
under Section 3.6 at any time that one or more Rating Agencies has downgraded the Servicer’s unsecured, unguaranteed and
unsubordinated debt

    	 

    	-20 -

    

			obligations, or its issuer default ratings, below the Servicer Deposit Threshold Ratings, and
                                                                            such default continues unremedied for a period of one (1) Toronto Business Day after the earlier of the Servicer becoming
                                                                            aware of such default and receipt by the Servicer of written notice from the Bond Trustee or the Guarantor requiring the same
                                                                            to be remedied;

		(d)	an Insolvency Event occurs in relation to the Servicer;

		(e)	the Guarantor resolves, after due consideration and acting reasonably, that the appointment of
the Servicer should be terminated provided that a substitute servicer has entered into a servicing agreement with the parties hereto
(excluding the Servicer) on terms and conditions substantially similar to the terms and conditions contained herein, and with respect
to which the Rating Agency Condition has been satisfied;

		(f)	a breach of a representation, warranty or covenant provided in Section 5.2(n) or Sections 5.5(a),
(b), (c), (d) or (e);

		(g)	an Issuer Event of Default (i) occurs and is continuing, or (ii) has previously occurred and is
continuing, at any time that the Guarantor is Independently Controlled and Governed; or

		(h)	default is made by the Servicer in the performance or observance of any of its other covenants
and obligations under this Agreement, which in the reasonable opinion of the Bond Trustee is materially prejudicial to the interests
of the Covered Bondholders from time to time and such default continues unremedied within the earlier of 30 Toronto Business Days
after becoming aware of such default and receipt by the Servicer of written notice from the Guarantor or the Bond Trustee requiring
the same to be remedied;

then the Guarantor and/or the Bond Trustee (x) may
at once or at any time thereafter while such Servicer Termination Event continues by notice in writing to the Servicer or, (y)
in the case of the occurrence of a Servicer Termination Event described in paragraph (a) above at any time that the Guarantor is
not Independently Controlled and Governed, shall, terminate its appointment as Servicer under this Agreement with effect from a
date (not earlier than the date of the notice) specified in the notice.

		18.2	Resignation

The Servicer may resign and terminate
its appointment as the Servicer of the Loans and their Related Security in the Portfolio under this Agreement upon the expiry of
not less than 12 months’ written notice of termination given by it to the Bond Trustee, the Guarantor and each Rating Agency,
provided that:

		(a)	if the Servicer who wishes to terminate its appointment is the Bank, the Guarantor and the Bond Trustee consent in writing
to such termination;

		(b)	one or more New Servicer(s) or Successor Servicer(s) will be appointed, with such appointment to be effective no later than
the date of such resignation, and the Servicer who wishes to terminate its appointment notifies the Rating Agencies in writing
of the identity of such New Servicer(s) or Successor Servicer(s);

		(c)	each New Servicer(s) or Successor Servicer(s) is qualified to act as such under applicable laws;

    	 

    	-21 -

    

		(d)	each New Servicer(s) or Successor Servicer(s) enters into an agreement substantially on the same terms as the relevant provisions
of this Agreement with the Guarantor and the Bond Trustee (which agreement may, for the avoidance of doubt, provide for the payment
of such fees, costs and expenses of the New Servicer(s) as the Guarantor and Bond Trustee may deem appropriate in accordance with
Article 16 (Remuneration) of this Agreement) and the Servicer will not be released from its obligations under the relevant
provisions of this Agreement until such New Servicer(s) or Successor Servicer(s) has entered into such new agreement;

		(e)	each New Servicer(s) or Successor Servicer(s) agrees to service each Additional STEP Loan owned by the Seller in the manner
contemplated in Section 2.4 (STEP Plan and STEP Loans) of this Agreement; and

		(f)	the Rating Agency Condition has been satisfied with respect to such resignation and appointment of the New Servicer(s) or Successor
Servicer(s), unless the resignation is otherwise agreed to by an Extraordinary Resolution of the Covered Bondholders.

		18.3	Termination of Authority and Power

On and after termination of the
appointment of the Servicer under this Agreement pursuant to this Article 18, all authority and power of it under this
Agreement will be terminated and be of no further effect and it will not thereafter hold itself out in any way as the agent
of the Guarantor pursuant to this Agreement. On and after any termination of the appointment of the Servicer under this
Agreement with respect to Selected Loans pursuant to Section 3.9, all authority and power of the Servicer under
this Agreement in respect of such Selected Loans will be terminated and be of no further effect and it will not thereafter
hold itself out in any way as the agent of the Guarantor pursuant to this Agreement in connection with any such Selected
Loans. 

		18.4	Actions Upon Termination or Resignation

Upon the termination or resignation of
the appointment of the Servicer, the Servicer will:

		(a)	promptly deliver (and in the meantime hold in trust for, and to the order of, the Bond Trustee) to the Guarantor, or as it
will direct, the Customer Files, all books of account, papers, records, registers, correspondence and documents in its possession
or under its control relating to the affairs of or belonging to the Guarantor and the Loans comprised in the Portfolio and any
Related Security (if practicable, on the date of receipt by it) and any funds then held by it on behalf of the Guarantor and any
other assets of the Guarantor;

		(b)	take such further action as the Guarantor and the Bond Trustee may reasonably direct at its expense (including in relation
to the appointment of a New Servicer(s) or Successor Servicer(s)) provided that, prior to the occurrence of a Servicer Termination
Event, the Bond Trustee will not be required to take or direct to be taken such further action unless it has been indemnified to
its satisfaction;

		(c)	provide all relevant information contained on computer records in the form of magnetic tape, CD-ROM and/or other form of electronic
media, as appropriate, together with details of the layout of the files encoded on such magnetic tapes, CD-ROMs and/or other form
of electronic media (or such other format as the parties may agree); and

		(d)	co-operate and consult with and assist the Guarantor, the Bond Trustee and their nominees (which will, for the avoidance
of doubt, include any New Servicer(s) or Successor Servicer(s) appointed by any of them) for the purposes of explaining the file
layouts and the format of the magnetic tapes, CD-ROMs and/or other form of

    	 

    	-22 -

    

electronic media generally containing such computer records
on the computer system of the Guarantor, the Bond Trustee or such nominee.

		18.5	Notification of Servicer Termination Event

The Servicer will deliver to the Guarantor
and the Bond Trustee as soon as reasonably practicable but in any event within five Toronto Business Days of becoming aware thereof
a notice of any Servicer Termination Event or any event which with the giving of notice or lapse of time or certification would
constitute the same, including any breach by a sub-contractor or delegate contemplated in Section 6.4 (Liability of Servicer)
of this Agreement.

		18.6	Notification of Insolvency Event

If an Insolvency Event occurs in relation
to any person to whom the Servicer has sub-contracted or delegated part of its obligations hereunder, the Servicer will notify
the Bond Trustee and it will within ten Toronto Business Days of such an event occurring terminate the relevant sub-contracting
or delegation arrangements.

		18.7	Liability of the Guarantor

Termination of this Agreement, the termination
or resignation of the Servicer of the Loans and their Related Security in the Portfolio or the appointment of a New Servicer or
Successor Servicer of the Loans and their Related Security in the Portfolio under this Agreement will be without prejudice to the
liabilities of the Guarantor to it or vice versa incurred before the date of such termination. The Servicer will have no
right of set-off or any lien in respect of such amounts against amounts held by it on behalf of the Guarantor or the Bond Trustee.

		18.8	Termination of Agreement

		(a)	This Agreement will terminate at such time as the Guarantor and the Bond Trustee have no further interest in any Loans or their
Related Security serviced under this Agreement that have been comprised in the Portfolio.

		(b)	On termination/resignation of the appointment of the Servicer under the provisions of this Article 18, the terminated
or resigning Servicer will, if so entitled pursuant to the terms of Article 16 (Remuneration) of this Agreement, be entitled
to receive all fees and other compensation accrued up to the date of termination, if any, but will not be entitled to any other
or further compensation. Such funds so receivable by the Servicer will be paid by the Guarantor on the dates on which they would
otherwise have fallen due hereunder. For the avoidance of doubt, such termination will not affect the Servicer’s rights to
receive payment of all amounts (if any) due to it from the Guarantor other than under this Agreement.

		(c)	On a termination of the Servicer’s obligations in relation to Selected Loans pursuant to Section 3.9, the Servicer
will, if so entitled pursuant to the terms of Article 16 (Remuneration) of this Agreement, be entitled to receive all fees
and other compensation accrued up to the date of termination, if any, in respect of such Selected Loans. Such funds so receivable
by the Servicer will be paid by the Guarantor on the dates on which they would otherwise have fallen due hereunder.

		(d)	Any provision of this Agreement which is stated to continue after termination of this Agreement will remain in full force and
effect notwithstanding termination.

		18.9	Notice of Termination/Resignation to CMHC

Upon any termination or resignation of
the Servicer hereunder, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Servicer’s
replacement contemporaneously with the earlier of (i) notice of such termination or resignation and replacement to a Rating Agency,
(ii) notice of such termination or resignation and replacement being provided to or otherwise made available to Covered Bondholders,
and (iii) five Toronto Business Days

    	 

    	-23 -

    

following such termination or resignation and replacement
(unless the replacement Servicer has yet to be identified at that time, in which case notice of the replacement Servicer may be
provided no later than 10 Toronto Business Days thereafter). Any such notice shall include (if known) the reasons for the termination
or resignation of the Servicer and all information relating to the replacement Servicer required by the CMHC Guide to be provided
to CMHC in relation to the Servicer and this Agreement, including any new agreement to be entered into with such replacement Servicer
or any amendments to this Agreement and/or any other Transaction Document in respect of such replacement Servicer.

Article 19

Further Assurance

		19.1	Co-operation

From time to time, each party will do
and perform any acts and execute any further instruments which may be required or which may be reasonably requested by any other
party to more fully give effect to the purpose of this Agreement.

		19.2	No Obligations of Guarantor to Perform Services

Nothing herein contained will impose
any obligation or liability on the Guarantor to assume or perform any of the obligations of the Servicer hereunder or render it
liable for any breach thereof.

Article 20

Miscellaneous

		20.1	No Set-Off

Each of the Seller and Servicer agrees
that it will not:

		(a)	set off or purport to set off any amount which the Guarantor or the Issuer is or will become obliged to pay to it under any
of the Transaction Documents against any amount from time to time standing to the credit of or to be credited to a Guarantor Account
or in any other account prior to transfer to a Guarantor Account; or

		(b)	make or exercise any claims or demands, any rights of counterclaim or any other equities against or withhold payment of any
and all sums of money which may at any time and from time to time be standing to the credit of a Guarantor Account.

Article 21

Confidentiality

		21.1	Confidentiality

During the continuance of this Agreement
or after its termination, each of the Guarantor, the Cash Manager, the Seller, the Servicer, and the Bond Trustee (in their respective
capacities) will use their best endeavours not to disclose to any Person, firm or company whatsoever any information relating to
the business, finances or other matters of a confidential nature of any other party hereto of which they may exclusively by virtue
of being party to the Transaction Documents

    	 

    	-24 -

    

have become possessed and will use all reasonable endeavours
to prevent any such disclosure as aforesaid, provided however that the provisions of this Article 21 will not apply:

		(a)	to any information already known to the recipient other than as a result of entering into any of the Transaction Documents;

		(b)	to any information subsequently received by the recipient which it would otherwise be free to disclose;

		(c)	to any information which is or becomes public knowledge otherwise than as a result of the conduct of the recipient;

		(d)	to any extent that the recipient is required to disclose the same pursuant to and in accordance with (i) the CMHC Guide and
the Covered Bond Legislative Framework, (ii) the Transaction Documents, or (iii) any law or order of any court of competent jurisdiction
or pursuant to any direction, request or requirement (whether or not having the force of law) of any central bank or any governmental
or other authority (including, without limitation, any official bank examiners or regulators);

		(e)	to the extent that the recipient needs to disclose the same for determining the existence of, or declaring, a Guarantor Event
of Default or a Servicer Termination Event, the protection or enforcement of any of its rights under any of the Transaction Documents,
including, without limitation, any enforcement or realisation on the Loans and their Related Security in the Portfolio or in connection
herewith or therewith or for the purpose of discharging, in such manner as it thinks fit, its duties under or in connection with
such agreements in each case to such Persons as are required to be informed of such information for such purposes; or

		(f)	in relation to any information disclosed to the professional advisers of the recipient, a Purchaser of any Loans and their
Related Security in the Portfolio in accordance with the terms of the Transaction Documents, a third party purchaser of any such
Loans and their Related Security in accordance with the terms of the Transaction Documents, or (in connection with the review of
current ratings of any Covered Bonds issued under the Program or with a prospective rating of any debt to be issued by the Issuer)
to any Rating Agency or any prospective New Servicer(s) or Successor Servicer(s).

Article 22

Notices

		22.1	Notices

Any notices to be given pursuant to this
Agreement to any of the parties hereto will be in writing and will be sufficiently served if sent by prepaid registered mail, by
hand or by e-mail or facsimile transmission and will be deemed to be given (in the case of facsimile transmission) when despatched,
(in the case of e-mail) upon confirmation of receipt, or (in the case of registered mail) when it would be received in the ordinary
course of the mail and will be sent:

		(a)	in the case of the Servicer, to The Bank of Nova Scotia, Scotia Plaza, 44 King Street West, Toronto, Ontario M5H 1H1 (facsimile
number 416-945-4001) for the

    	 

    	-25 -

    

attention of the Managing Director, Alternate Funding,
e-mail: jake.lawrence@scotiabank.com;

		(b)	in the case of the Guarantor, to Scotiabank Covered Bond Guarantor Limited Partnership, c/o The Bank of Nova Scotia, Scotia
Plaza, 44 King Street West, Toronto, Ontario M5H 1H1 (facsimile number 416-945-4001) for the attention of the Managing Director,
Alternate Funding, e-mail: jake.lawrence@scotiabank.com; and

		(c)	in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, (facsimile number 416-981-9777) for the attention of Manager, Corporate Trust, e-mail: corporatetrust.toronto@computershare.com;

or to such other address or facsimile number or for the attention
of such other person or entity as may from time to time be notified by any party to the others by written notice in accordance
with the provisions of this Section 22.1. All notices served under this Agreement will be simultaneously copied to the Bond Trustee
by the person serving the same.

Article 23

Amendments, Variation and Waiver

		23.1	Amendments, Variation and Waiver

Subject to the terms of the Security Agreement and Section 5.3 (Negative
Covenants) of this Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to
this Agreement. No waiver of this Agreement will be effective unless it is in writing and signed by (or by some person duly authorised
by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement will
constitute a waiver or preclude any other or further exercise of that or any other right. Each proposed amendment, variation or
waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, will
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, with respect to each affected Rating Agency only, be deemed to
be a material amendment and shall be subject to satisfaction of the Rating Agency Condition with respect to each affected Rating
Agency. The Guarantor will deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers for
which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice will not constitute
a breach of the obligations of the Guarantor under this Agreement. The Guarantor will deliver notice to CMHC from time to time
of any amendment, variation or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure
to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

Article 24

No Agency or Partnership

		24.1	No Agency or Partnership

It is hereby acknowledged and agreed
by the parties that nothing in this Agreement will be construed as giving rise to any relationship of agency, save as expressly
provided herein, or

    	 

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partnership between the parties and that in fulfilling its
obligations hereunder, each party will be acting entirely for its own account.

Article 25

Assignment

		25.1	Assignment

Subject always to the provisions of Article
13 (STEP Plan and Intercreditor Arrangements) of the Mortgage Sale Agreement and Section 25.2 (Assignment under Security Agreement)
herein, no party hereto will be entitled to assign all or any part of its rights or obligations hereunder to any other party without
the prior written consent of each of the other parties hereto (which will not, if requested, be unreasonably withheld or delayed
or made subject to conditions) save that the Guarantor will be entitled to assign whether by way of security or otherwise all or
any of its rights under this Agreement and all or any of its interest in the Loans and their Related Security in the Portfolio
without such consent to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign
all or any of its rights under or in respect of this Agreement and all or any of its interest in the Loans and their Related Security
in the Portfolio without such consent in exercise of its rights under the Security Agreement. At least 10 Toronto Business Days’
prior written notice of any such assignment shall be provided to DBRS by the related party.

		25.2	Assignment under Security Agreement

Each of the Seller and the Servicer acknowledges
that on the assignment pursuant to the Security Agreement by the Guarantor to the Bond Trustee of the Guarantor's rights under
this Agreement the Bond Trustee may enforce such rights in the Bond Trustee's own name without joining the Guarantor in any such
action (which right the Seller and the Servicer hereby waives) and The Seller and Servicer hereby waives as against the Bond Trustee
any rights or equities in its favour arising from any course of dealing between it and the Guarantor.

Article 26

Bond Trustee

		26.1	Change of Bond Trustee

If there is any change in the identity
of the Bond Trustee or an additional Bond Trustee is appointed, the remaining Bond Trustee and/or the retiring Bond Trustee, the
Servicer, the Seller and the Guarantor will execute such documents with any other parties to this Agreement and take such actions
as such new Bond Trustee may reasonably require for the purposes of vesting in such new Bond Trustee the rights of the Bond Trustee
under this Agreement and under the Security Agreement and while any of the Covered Bonds remain outstanding will give notice thereof
to the Rating Agencies.

		26.2	Limitation of Liability of Bond Trustee

It is hereby acknowledged and agreed
that by its execution of this Agreement, the Bond Trustee will not assume or have any obligations or liabilities to the Servicer
or the Guarantor under this Agreement notwithstanding any provision herein and that the Bond Trustee has agreed to become a party
to this Agreement for the purpose only of taking the benefit of this Agreement and agreeing to amendments to this Agreement pursuant
to Article 23 (Amendments, Variation and

    	 

    	-27 -

    

Waiver).
For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed
by the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement
by the Bond Trustee may be exercised or made in the Bond Trustee's absolute discretion, without any obligation to give reasons
therefor, and the Bond Trustee will not be responsible for any liability occasioned by so acting, except if acting in breach of
the standard of care set out in Section 11.1 (Standard of Care) of the Security Agreement.

Article 27

LIMITATION OF LIABILITY

		27.1	Limitation of Liability

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.

Article 28

non-petition

		28.1	Non-Petition

The Servicer, the Seller and the Cash
Manager agree that they will not institute against, or join any other party in instituting against, the Guarantor or any general
partner of the Guarantor, any bankruptcy, reorganisation, arrangement, insolvency or liquidation proceeding, or other proceeding
under any federal, provincial or foreign bankruptcy, insolvency similar law, for one year and one day after all Covered Bonds have
been repaid in full. The foregoing provision will survive the termination of this Agreement by any party.

Article 29

Counterparts

		29.1	Counterparts

This Agreement may be executed in any
number of counterparts (manually or by facsimile or in pdf format) and by different parties hereto in separate counterparts, each
of which when so executed will be deemed to be an original and all of which when taken together will constitute one and the same
instrument.

Article 30

Governing Law

		30.1	Governing Law

This 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.

    	 

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		30.2	Submission to Jurisdiction

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

 

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intentionally blank]

 

    	 

    	 

    

IN WITNESS WHEREOF the parties
have caused this Agreement to be executed the day and year first before written.

	 	 	THE BANK OF NOVA SCOTIA, as Seller, Servicer and Cash Manager
	 	 	 
	 	 	By:	/s/ Ian Berry
	 	 	 	Name: Ian Berry
	 	 	 	Title: Managing Director and Head, Funding and Liquidity Management
	 	 	 
	 	 	 
	 	 	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
	 	 	 
	 	 	 
	 	 	COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
	 	 	 
	 	 	 	By:	/s/ Sam Pigott
	 	 	 	 	Name: Sam Pigott
	 	 	 	 	Title: Corporate Trust Officer
	 	 	 
	 	 	 	By:	/s/ Stanley Kwan
	 	 	 	 	Name: Stanley Kwan
	 	 	 	 	Title: Associate Trust Officer

 

    	 

    	 

    

SCHEDULE 1

THE SERVICES

In addition to the Services set out in the body of this Agreement,
the Servicer will in relation to those Loans and their Related Security in the Portfolio:

		(a)	take or cause to be taken all such actions as may be necessary or desirable from time to time, including utilising the procedures
provided for in its Credit and Collection Policy, to collect such Loans and their Related Security in accordance with the terms
and provisions thereof and any related agreements (including, without limitation, taking all necessary actions with respect to
any claims under insurance policies relating to any such Loan);

		(b)	keep and maintain records and books of account in respect of such Loans for the purposes of identifying amounts paid by the
related Borrower, any amount due from such Borrower and the Outstanding Principal Balance of such Loans and such other records
as would be kept by reasonable and prudent institutional mortgage lenders in its market;

		(c)	assist the Auditors, if applicable, of the Guarantor and provide information to them upon reasonable request with respect to
such Loans and their Related Security;

		(d)	give timely notice to the Borrower of each such Loan of any default in payment or other default thereunder, or under any related
agreements;

		(e)	record a Loan as being a Non-Performing Loan, in accordance with its Credit and Collection Policy;

		(f)	investigate all delinquencies and defaults under such Loans;

		(g)	respond to all reasonable enquiries of the Borrower of a Loan or other obligors under the Related Security;

		(h)	take such steps as are necessary to protect and maintain the perfection and priority of the security interests created pursuant
to such Loans and their Related Security, and, subject to items (j) and (k) in this Schedule 1, refrain from releasing any such
security interest in whole or in part except in the event of payment in full by a Borrower of all amounts owing under a Loan or
upon foreclosure or sale by it of the Mortgaged Property secured thereby, but only to the extent that it would have done so in
a similar situation with respect to Mortgages administered by it on its own behalf;

		(i)	determine the advisability of taking action and instituting and carrying out legal proceedings with respect to such Loans and
their Related Security in case of default by a Borrower under a Loan and take such action and institute and carry

    	 

    	 

    

out such legal proceedings as would a reasonable and
prudent institutional mortgage lenders in its market in similar circumstances;

		(j)	hold as trust property for and on behalf of the Guarantor, free of any Adverse Claim, all collections received in respect thereof
and all Customer Files with respect to such Loans;

		(k)	execute and deliver all such assignments, releases and discharges of such Loans and their Related Security as are required
by the terms thereof upon receipt of all amounts due thereunder;

		(l)	settle, compromise and otherwise deal with any claims under such Loans or their Related Security if necessary, advisable or
otherwise permitted in accordance with its Credit and Collection Policy;

		(m)	take such enforcement actions and proceedings in respect of such Loans and their Related Security as it would be reasonable
to expect a reasonable and prudent institutional mortgage lenders in its market to take in administering its loans and their related
security;

		(n)	take all steps necessary to ensure compliance by the Seller, the Servicer, the Guarantor and each Other STEP Creditor with
the provisions of Article 13 of the Mortgage Sale Agreement, and monitor compliance by such Persons with their respective obligations
thereunder and under any STEP Assumption Agreement; and

		(o)	take all other action and do all other things which it would be reasonable to expect reasonable and prudent institutional mortgage
lenders in its market to do in administering its loans and their related security.

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