Document:

Exhibit 4.2

MASTER DEFINITIONS AND
CONSTRUCTION AGREEMENT

 

 

THE BANK OF NOVA SCOTIA

- and -

THE BANK OF NOVA SCOTIA, LONDON BRANCH

- and -

THE BANK OF NOVA SCOTIA TRUST COMPANY
OF NEW YORK

- and -

SCOTIABANK COVERED BOND GUARANTOR
LIMITED PARTNERSHIP

- and -

SCOTIABANK COVERED BOND GP INC.

-and-

COMPUTERSHARE
TRUST COMPANY OF CANADA

- and –

8429057
CANADA INC.

-and-

KPMG LLP

 

 

DATED AS OF JULY 19,
2013

 

 

    	 

    	 

    

CONTENTS

 

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

 

    	 

    	 

    

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

BETWEEN:

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

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

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

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

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

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

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

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

WHEREAS,

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

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

    	 

    	2

    

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

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

		1.	DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    	 

    	3

    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    	 

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

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

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

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

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

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

Affiliate The meaning given
thereto in the Bank Act

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

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

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

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

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

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

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

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

    	 

    	5

    

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

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

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

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

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

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

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

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

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

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

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

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

Authorized Signatory

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

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

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

    	 

    	6

    

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

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

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

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

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

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

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

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

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

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

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

    	 

    	7

    

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

less

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

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

Bank The Bank of Nova Scotia

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

Bank Act The Bank Act
(Canada)

Bearer Covered Bonds Covered
Bonds in bearer form

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

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

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

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

    	 

    	8

    

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

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

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

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

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

Calculation Agent The meaning
given in the ISDA Definitions

Calculation Amount The
meaning given in the applicable Final Terms Document

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

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

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

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

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

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

    	 

    	9

    

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

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

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

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

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

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

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

Cash Capital Contributions
A Capital Contribution made in cash

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

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

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

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

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

    	 

    	10

    

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

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

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

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

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

Civil Code of Québec
The Civil Code of Québec

Clearing Systems Euroclear
and/or Clearstream, Luxembourg

Clearstream, Luxembourg
Clearstream Banking, société anonyme or its successors

CMHC Canada Mortgage and
Housing Corporation and its successors

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

Code The U.S. Internal
Revenue Code of 1986 

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

Common Depositary The common
depositary for Euroclear and Clearstream, Luxembourg

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

    	 

    	11

    

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

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

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

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

Coupons Interest coupons
in respect of Bearer Definitive Covered Bonds

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

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

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

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

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

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

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

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

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

    	 

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

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

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

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

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

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

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

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

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

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

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

    	 

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

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

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

whether original documentation,
or in electronic form or otherwise

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

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

DBRS DBRS Limited and its
successors

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

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

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

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

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

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

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

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

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

    	 

    	14

    

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

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

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

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

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

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

Designated Maturity The
meaning given in the ISDA Definitions

Determination Date The
meaning given in the applicable Final Terms Document

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

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

Direct Participants Direct
participants in DTC

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

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

DTC The Depository Trust
Company or its successors

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

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

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

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

    	 

    	15

    

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

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

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

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

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

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

ECOFIN The Economic and
Financial Affairs Council

Eligibility Criteria The
following criteria:

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

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

    	 

    	16

    

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

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

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

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

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

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

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

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

    	 

    	17

    

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

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

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

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

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

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

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

		(a)	the Seller’s loan number;

		(b)	mortgagor(s) full name;

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

		(d)	principal balance amount;

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

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

		(g)	mortgage maturity date; and

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

Encumbrance The same meaning
as Adverse Claim

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

    	 

    	18

    

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

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

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

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

European Member State Any
member state of the European Economic Union

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

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

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

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

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

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

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

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

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

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

Expenses The meaning given
in Section 22.1 of the Agency Agreement

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

    	 

    	19

    

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

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

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

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

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

FATCA The meaning given
in Condition 7 (Taxation)

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

FFI A foreign financial
institution as defined in the Code

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

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

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

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

    	 

    	20

    

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

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

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

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

Fitch Fitch Ratings Inc.
and its successors

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

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

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

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

Floating Rate The meaning
given in the ISDA Definitions

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

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

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

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

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

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

as set out in the applicable Final
Terms Document

Floating Rate Option The
meaning given in the ISDA Definitions

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

    	 

    	21

    

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

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

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

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

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

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

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

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

General Partners The Managing
GP and the Liquidation GP

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

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

    	 

    	22

    

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

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

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

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

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

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

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

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

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

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

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

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

    	 

    	23

    

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

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

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

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

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

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

ICMA The International
Capital Market Association

IFRS International Financial
Reporting Standards

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

    	 

    	24

    

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

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

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

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

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

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

    	 

    	25

    

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

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

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

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

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

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

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

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

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

		(f)	all proceeds of the foregoing

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

    	 

    	26

    

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

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

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

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

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

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

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

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

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

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

Interest Basis The meaning
given in the applicable Final Terms Document

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

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

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

    	 

    	27

    

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

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

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

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

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

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

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

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

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

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

ISA International Standards
on Auditing

ISDA International Swaps
and Derivatives Association, Inc.

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

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

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

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

ISIN International Securities
Identification Number

    	 

    	28

    

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

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

Issuer The Bank of Nova
Scotia

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

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

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

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

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

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

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

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

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

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

LIBOR London Interbank
Offered Rate

    	 

    	29

    

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

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

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

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

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

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

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

London Stock Exchange London
Stock Exchange plc

Losses The meaning given
in Section 22.1 of the Agency Agreement

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

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

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

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

    	 

    	30

    

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

Market The London Stock
Exchange’s Regulated Market

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

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

Material Adverse Effect
Any effect:

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

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

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

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

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

Member State Any member
state of the European Union

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

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

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

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

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

    	 

    	31

    

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

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

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

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

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

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

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

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

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

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

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

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

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

    	 

    	32

    

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

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

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

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

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

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

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

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

NGCB New Global Covered
Bond

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

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

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

    	 

    	33

    

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

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

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

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

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

Official List Official
list of the UK Listing Authority

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

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

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

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

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

OSFI Office of the Superintendent
of Financial Institutions

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

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

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

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

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

    	 

    	34

    

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

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

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

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

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

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

provided that for each of the
following purposes, namely:

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

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

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

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

    	 

    	35

    

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

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

		(a)	the Initial Advance;

		(b)	Capitalised Expenses; and

		(c)	Capitalised Arrears

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

Partial Portfolio Part
of any portfolio of Selected Loans

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

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

Partnership Scotiabank
Covered Bond Guarantor Limited Partnership

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

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

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

Payment The meaning given
in Section 6.7 of the Agency Agreement

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

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

    	 

    	36

    

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

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

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

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

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

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

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

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

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

    	 

    	37

    

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

Personal Information Information
that is protected by any Applicable Privacy Laws

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

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

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

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

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

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

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

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

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

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

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

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

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

    	 

    	38

    

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

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

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

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

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

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

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

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

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

    	 

    	39

    

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

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

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

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

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

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

		(b)	any variation imposed by statute; or

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

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

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

Program Date July 19,
2013

Program Limit The meaning
given in the Trust Deed

    	 

    	40

    

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

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

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

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

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

PSM The London Stock Exchange’s
Professional Securities Market

Purchase Price Consideration
to be paid by the Guarantor to:

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

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

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

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

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

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

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

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

    	 

    	41

    

Québec Purchased Assets
The meaning given in a Québec Seller Assignment

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

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

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

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

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

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

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

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

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

    	 

    	42

    

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

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

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

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

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

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

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

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

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

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

Register The meaning given
in Section 11.2 of the Agency Agreement

Registered Covered Bond
A Covered Bond in registered form

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

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

    	 

    	43

    

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

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

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

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

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

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

		a)	law;

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

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

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

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

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

Regulation S Regulation
S under the Securities Act

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

    	 

    	44

    

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

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

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

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

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

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

		(b)	the related Customer File;

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

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

and in relation to a STEP Loan:

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

    	 

    	45

    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    	 

    	46

    

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

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

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

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

Reset Date The meaning
given in the ISDA Definitions

Responsible Persons The
Issuer and the Guarantor

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

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

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

    	 

    	47

    

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

Rule 144A Rule 144A under
the Securities Act

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

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

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

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

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

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

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

    	 

    	48

    

Scotiabank Group The Bank
and its Subsidiaries collectively

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

SEC The U.S. Securities
and Exchange Commission

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

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

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

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

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

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

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

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

    	 

    	49

    

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

Security Sharing Agreement
The meaning given in the CMHC Guide

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

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

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

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

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

Seller The Bank, and any
New Seller

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

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

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

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

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

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

    	 

    	50

    

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

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

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

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

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

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

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

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

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

		(a)	the installment due dates for such Loan;

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

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

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

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

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

    	 

    	51

    

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

Specified Denomination
The meaning given in the applicable Final Terms Document

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

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

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

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

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

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

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

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

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

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

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

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

    	 

    	52

    

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

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

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

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

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

STEP Borrower A Borrower
under a STEP Loan

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

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

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

    	 

    	53

    

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

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

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

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

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

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

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

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

		(a)	asset type;

		(b)	coupon;

		(c)	interest payment dates;

		(d)	maturity date;

		(e)	principal amount; and

		(f)	CUSIP/ISIN, if applicable

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

    	 

    	54

    

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

in each case, provided that:

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

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

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

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

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

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

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

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

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

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

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

    	 

    	55

    

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

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

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

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

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

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

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

Tax Act The Income Tax
Act (Canada)

Tax Credit The meaning
given in the relevant Swap Agreement

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

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

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

    	 

    	56

    

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

Third Party Amounts Each
of:

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

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

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

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

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

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

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

		(a)	the last selling price;

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

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

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

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

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

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

    	 

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

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

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

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

Transaction Documents The
following documents:

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

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

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

		(d)	the Servicing Agreement;

		(e)	the Guarantor Agreement;

		(f)	the Intercompany Loan Agreement;

		(g)	the Interest Rate Swap Agreement;

		(h)	the Covered Bond Swap Agreement;

		(i)	the Cover Pool Monitor Agreement;

		(j)	the Cash Management Agreement;

		(k)	the Guaranteed Deposit Account Contract;

		(l)	the Standby Guaranteed Deposit Account Contract;

		(m)	the Bank Account Agreement;

		(n)	the Standby Bank Account Agreement;

		(o)	the Agency Agreement;

		(p)	the Program Agreement;

    	 

    	58

    

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

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

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

		(t)	the Master Definitions and Construction Agreement

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

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

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

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

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

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

Trust Corporation A trust
company incorporated under the laws of Canada

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

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

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

    	 

    	59

    

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

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

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

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

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

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

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

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

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

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

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

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

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

		2.	INTERPRETATION AND CONSTRUCTION

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

    	 

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

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

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

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

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

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

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

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

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

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

    	 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

		3.	AMENDMENTS

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

    	 

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

		4.	RATING AGENCY CONDITION

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

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

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

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

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

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

    	 

    	63

    

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

		5.	GOVERNING LAW

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

		6.	SUBMISSION TO JURISDICTION

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

		7.	liability of Limited partners

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

 

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

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

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

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

Title: President and Secretary

    	 

    	- 2 -

    

 

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

Title: President and Secretary
	 	 
	 	By:	 
	 	 	Name:

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

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

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

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

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

        Title: Partner, KPMG LLP

         

	 	 

    	 

    	- 3 -

    

 

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

Title: Vice PresidentExhibit 4.3

 

mortgage
sale agreement

 

 

THE BANK OF NOVA SCOTIA,

as Seller, as Servicer and as Cash Manager

- and -

SCOTIABANK COVERED BOND GUARANTOR
LIMITED PARTNERSHIP,

as Guarantor

- and -

COMPUTERSHARE
TRUST COMPANY OF CANADA,

as Bond Trustee and Custodian

 

 

 

 

 

 

DATED AS OF JULY 19,
2013

 

    	 

    	 

    

CONTENTS

	Article 1 DEFINITIONS AND INTERPRETATION	1
	1.1	Definitions	1
	1.2	Interpretation	2
	1.3	Electronic Media	2
	1.4	Schedules	2
	1.5	New Seller	2
	Article 2 SALE AND PURCHASE OF INITIAL PORTFOLIO	2
	2.1	Sale of Initial Portfolio	2
	2.2	Conditions to Sale of Initial Portfolio	3
	Article 3 FIRST TRANSFER DATE	3
	3.1	Deliveries on First Transfer Date	3
	3.2	Closing of Sale of Initial Portfolio	5
	3.3	Servicing of Loans and Related Security	5
	3.4	Registered Title of Related Security for Loans and Mortgage Registration Numbers	5
	Article 4 SALE AND PURCHASE OF ADDITIONAL LOANS	6
	4.1	Sale of Additional Loans	6
	4.2	Additional Loan Notice	6
	4.3	Conditions to Sale of Additional Loans	7
	4.4	Consideration for Additional Loans	7
	4.5	Deliveries on Transfer Dates	7
	4.6	Closing of Sale of Additional Loans	9
	4.7	Servicing of Additional Loans and Related Security	10
	4.8	Registered Title of Related Security for Additional Loans	10
	4.9	Fully Advanced Additional Loans	10
	4.10	New Loan Types	10
	4.11	Third Party Amounts	11
	4.12	Sale of Additional Loans after an Asset Coverage Test Breach but Prior to Service of an Asset Coverage Test Breach Notice	11
	4.13	Use of Powers of Attorney	11
	Article 5 TRUST OF FUNDS	11
	5.1	Trust of Funds by Seller	11
	5.2	Trust of Funds by Guarantor	12
	Article 6 ACTIONS UPON A REGISTERED TITLE EVENT AND RELATED MATTERS	12
	6.1	Actions Upon a Registered Title Event and Related Matters	12
	Article 7 UNDERTAKINGS	14

    	 

    	- ii -

    

	7.1	Undertakings of Guarantor	14
	7.2	Undertaking of Seller	15
	7.3	Property Insurance Proceeds	15
	Article 8 REPRESENTATIONS AND WARRANTIES; REPURCHASE BY THE SELLERS; COVENANTS	15
	8.1	Representations and Warranties of the Seller	15
	8.2	Remedies	16
	8.3	Breach of Loan Representations and Warranties, Additional Loan Advances and Product Switch	16
	8.4	Offer to Repurchase Loans and Related Security	18
	8.5	Maturing Loans	18
	8.6	Loan Repurchases	19
	8.7	Release of Loans and Related Security	20
	8.8	Return of Customer Files	20
	8.9	Notification	20
	8.10	Amendments, Modification and Waiver of Loan Representations and Warranties	21
	Article 9 FURTHER ASSURANCE	21
	9.1	Co-operation	21
	9.2	Seller Co-operation	21
	Article 10 CONSEQUENCES OF BREACH	22
	10.1	Consequences of Breach	22
	Article 11 SALE OF SELECTED LOANS	22
	11.1	Sale of Selected Loans Following Service of an Asset Coverage Test Breach Notice	22
	11.2	Selected Loan Offer Notice	23
	11.3	Sale of Selected Loans to Purchasers	23
	11.4	Selected Loan Repurchase Notice	23
	11.5	Release of Security and Certain Representations and Warranties	24
	11.6	Selected Loans and Release of Customer Files and Claims	24
	Article 12 NEW SELLERS	24
	12.1	New Sellers	24
	Article 13 STEP PLAN AND INTERCREDITOR ARRANGEMENTS	26
	13.1	Sale to Guarantor of STEP Loans and STEP LOCs	26
	13.2	Sale to Guarantor of Additional STEP Loans	26
	13.3	Agreements, Modifications, Amendments to STEP Plan or other Actions	26
	13.4	Other STEP Creditors	27
	13.5	Priority of STEP Loans and Other STEP Products	28
	13.6	Application of Payments and Losses under STEP Accounts	29
	13.7	STEP Collateral Mortgage and Related Security	30
	13.8	Servicing and Enforcement	31

    	 

    	- iii -

    

	13.9	Security Sharing Arrangement Breach	34
	13.10	Termination upon Sale of STEP Loans by Guarantor	35
	Article 14 CUSTODIAN	35
	14.1	Appointment of Custodian	35
	14.2	Representations, Warranties and Covenants of Custodian	36
	14.3	Provision of Documentation to Custodian	36
	14.4	Responsibilities of Custodian	38
	14.5	Resignation, Removal and Replacement of Custodian	39
	14.6	Remuneration; Costs and Expenses; Liability and Indemnification	40
	Article 15 NON-MERGER	41
	15.1	Non-Merger	41
	Article 16 NO AGENCY OR PARTNERSHIP	42
	16.1	No Agency or Partnership	42
	Article 17 PAYMENTS	42
	17.1	Payments	42
	Article 18 AMENDMENTS, VARIATION AND WAIVER	42
	18.1	Amendments, Variation and Waiver	42
	Article 19 NOTICES AND OPINION DELIVERY	43
	19.1	Notices	43
	19.2	Delivery of Opinions	43
	Article 20 ASSIGNMENT	43
	20.1	Assignment	43
	20.2	Assignment under Security Agreement	44
	Article 21 BOND TRUSTEE	44
	21.1	Change of Bond Trustee	44
	21.2	Limitation of Liability of Bond Trustee	44
	Article 22 LIMITATION OF LIABILITY	44
	22.1	Limitation of Liability	45
	Article 23 NON-PETITION COVENANT	45
	23.1	Non-Petition Covenant	45
	Article 24 GOVERNING LAW	45
	24.1	Governing Law	45

    	 

    	- iv -

    

	24.2	Submission to Jurisdiction	45
	Article 25 EXECUTION IN COUNTERPARTS	45
	25.1	Execution in Counterparts	45
	SCHEDULE 1 REPRESENTATIONS AND WARRANTIES	1
	SCHEDULE 2 POWER OF ATTORNEY	1
	SCHEDULE 3 POWER OF ATTORNEY	1
	SCHEDULE 4 LOAN REPURCHASE NOTICE	1
	SCHEDULE 5 ADDITIONAL LOAN NOTICE	1
	SCHEDULE 6 SELECTED LOAN OFFER NOTICE	1
	SCHEDULE 7 SELECTED LOAN REPURCHASE NOTICE	1
	SCHEDULE 8 FORM OF SELLER ASSIGNMENT	1
	SCHEDULE 9 FORM OF QUÉBEC SELLER ASSIGNMENT	1
	 	 
	[The remainder of this page left intentionally blank]	9

 

    	 

    	 

    

THIS MORTGAGE SALE AGREEMENT is made as of July 19,
2013

BETWEEN:

THE BANK OF NOVA SCOTIA, a bank named in Schedule
I to the Bank Act, whose executive office is at 44 King Street West, Toronto, Ontario, M5H 1H1, in its capacity as Seller, as Servicer
and as Cash Manager;

SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP,
a limited partnership formed under the laws of the Province of Ontario, whose registered office is at Suite 6100, 100 King Street
West, Toronto, Ontario, M5X 1B8, by its Managing GP SCOTIABANK COVERED BOND GP INC., (in its capacity as the Guarantor);
and

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

WHEREAS,

		(A)	The Seller has agreed to sell from time to time on a fully-serviced basis, and the Guarantor has agreed
to purchase from time to time, certain Loans and their Related Security on and subject to the terms and conditions set out in this
Agreement.

		(B)	The Seller, in its capacity as Servicer, has agreed to enter into the Servicing Agreement with the
Guarantor and the Bond Trustee pursuant to which it will carry out the duties and responsibilities of the Servicer thereunder with
respect to such Loans and their Related Security.

		(C)	The parties wish to establish certain intercreditor and servicing arrangements with respect to STEP
Loans and all related STEP Accounts which will be binding upon all existing and future owners thereof from time to time.

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) (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

    	 

    	2

    

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 Mortgage Sale Agreement in the Master Definitions and Construction Agreement.

		1.3	Electronic Media

The Initial Portfolio, any schedule of
Loans attached to a Seller Assignment, Québec Seller Assignment and any schedule of Additional Loans attached to any Additional
Loan Notice may be provided in a document stored upon electronic media (including, but not limited to, a CD-ROM) in a form acceptable
to the Guarantor, the Bond Trustee and the Custodian (each acting reasonably).

		1.4	Schedules

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

		1.5	New Seller

In the event that a New Seller becomes
a party to this Agreement in accordance with Article 12 (New Seller), references herein to the Seller will include such New Seller
unless otherwise specified or required by the context in which such terms are used in this Agreement.

Article 2

Sale and Purchase of Initial Portfolio

		2.1	Sale of Initial Portfolio

Subject to the fulfilment of the conditions
set out in Sections 2.2 (Conditions to Sale of Initial Portfolio) and Section 3.1 (Deliveries on First Transfer Date) on or
before the First Transfer Date, in consideration of the payment of the Purchase Price for the Initial Portfolio as set forth in
this Section 2.1, the Seller hereby agrees to sell, transfer, assign and convey to the Guarantor all of its right, title, interest
and benefit in and to the Loans and their Related Security in the Initial Portfolio (excluding registered or recorded title to
the Related Security which will continue to be held by the Seller subject to Article 6 (Actions Upon a Registered Title Event and
Related Matters)) on a fully-serviced basis. The Purchase Price for the Initial Portfolio will be satisfied by payment to the Seller
in same day funds an amount equal to the Purchase Price by depositing such amount into the Seller’s Account or, if the Seller
so elects in writing to the Purchaser on or before the applicable Transfer Date, the Purchaser shall credit the Seller’s
Capital Account Ledger with an amount equal to all (or the portion of the Purchase Price not paid in cash) of the Purchase Price.

    	 

    	3

    

		2.2	Conditions to Sale of Initial Portfolio

The obligation of the Seller under Section 2.1
(Sale of Initial Portfolio) will be subject to and conditional upon:

		(a)	the borrowing by the Guarantor of the required funds
under the Intercompany Loan Agreement; and

		(b)	the Transaction Documents having been executed and delivered
by the parties thereto on or before the Program Date.

Article 3

First transfer Date

		3.1	Deliveries on First Transfer Date

On the First Transfer Date, the Seller
will deliver the following documents:

		(a)	to the Custodian:

		(i)	the number of registrable Powers of Attorney as may be
reasonably requested by the Guarantor substantially in the form set out in Schedule 2 (Power of Attorney) hereto (for each province
and territory of Canada other than the Province of Ontario and the Province of Québec) or Schedule 3 (Power of Attorney)
hereto (for the Province of Ontario and the Province of Québec), as applicable, duly executed by the Seller, together with
an opinion of legal counsel to the Seller confirming such Powers of Attorney are valid, enforceable and irrevocable, and sufficient
to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security
sold, transferred, assigned and conveyed by the Seller on the First Transfer Date (which opinion shall contemporaneously be delivered
to CMHC); and

		(ii)	the Eligible Loan Details with respect to all Loans and
their Related Security sold, transferred, assigned and conveyed by the Seller on the First Transfer Date, which may be provided
in a document stored upon electronic media (including, but not limited to, a CD-ROM) in a form acceptable to the Guarantor and
the Custodian (each acting reasonably); and

		(iii)	if any of the Loans to be transferred to the Guarantor
on the First Transfer Date are STEP Loans and any Other STEP Products extended to the same Borrower are secured by the related
STEP Collateral Mortgage and Related Security:

		(A)	a duly executed Release of Security in respect of each
related Other STEP Product by the Seller or any other mortgage lender on title which has any interest in the related STEP Collateral

    	 

    	4

    

Mortgage and Related Security, which Release of Security
shall be held in trust by the Custodian and the use thereof shall be subject to Section 13.9; and

		(B)	an opinion of legal counsel to the Seller confirming
that (i) such Release of Security is valid and enforceable against the party delivering such Release of Security.

		(b)	to the Bond Trustee:

		(i)	a certificate signed by at least one Authorized Signatory of the Seller dated as at the First Transfer Date attaching a copy
of the board minutes or resolutions and any other related delegation of authority of the Seller authorizing its duly appointed
representatives to agree to the sale of the Loans and their Related Security included in the Initial Portfolio and any Additional
Loans and their Related Security and authorizing the execution, delivery and performance of this Agreement, the Servicing
Agreement and any other Transaction Document to which the Seller is a party (in any capacity) and all of the documentation to be
entered into pursuant to this Agreement and confirming that the resolutions referred to therein are in full force and effect and
have not been amended or rescinded as at the date of the certificate;

		(ii)	a completed and executed Seller Assignment by the Seller with respect to all Loans and their Related Security (other than Québec
Loans and their Related Security) sold, transferred, assigned and conveyed by it on the First Transfer Date;

		(iii)	a completed and executed Québec Seller Assignment by the Seller with respect to Québec Loans and their Related
Security sold, transferred, assigned and conveyed by it on the First Transfer Date;

		(iv)	a solvency certificate signed by at least one Authorized Signatory of the Seller dated as at the First Transfer Date in a form
acceptable to the Guarantor and the Bond Trustee (each acting reasonably);

		(v)	acknowledgements or duplicate registration copies of proper assignments, financing statements and other similar documents or
instruments, with registration particulars stamped thereon, naming the Seller as seller or assignor and the Guarantor as purchaser
or assignee, and duly filed on or before the date of such purchase under the PPSA in Ontario and pursuant to Article 1642 of the
Civil Code in Québec within seven Canadian Business Days following such purchase in order to perfect the interests
of the Guarantor in the applicable Loans and their Related Security;

		(vi)	executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge
or release all security interests and other rights or interests of any Person in the Loans

    	 

    	5

    

and their Related Security previously granted by the
Seller, together with copies of the relevant financing change statements or other discharge statements or releases with the registration
particulars stamped thereon or other assurance satisfactory to the Guarantor;

		(vii)	completed PPSA search results, dated within five Canadian Business Days of the date of the initial Transfer Date, listing the
financing statements referred to in Section 3.1(b)(vi) above (other than those filed in Québec, search results in respect
of which will be made available within five Canadian Business Days of such filing) and all other effective financing statements
filed in the jurisdictions referred to in Section 3.1(b)(vi) above that name the Seller as debtor and show no other Adverse Claims
on any of the Loans and their Related Security;

		(viii)	opinions of legal counsel to the Seller with respect to “true sale”, non-consolidation, local counsel matters,
the registrations specified in Section 3.1(b)(v) above and other matters in form and substance satisfactory to the Guarantor and
the Bond Trustee (each acting reasonably); and

		(ix)	a copy of the Eligible Loan Details provided to the Custodian pursuant to Section 3.1(a)(ii) above.

		3.2	Closing of Sale of Initial Portfolio

The parties hereto acknowledge that completion
on the First Transfer Date of the sale to the Guarantor of all of the Seller’s right, title, interest and benefit in the
Initial Portfolio will occur as indicated in this Article 3 provided that the actions described in Article 6 (Actions
Upon a Registered Title Event and Related Matters) will not occur until the relevant time indicated therein. Upon receipt of payment
of the Purchase Price by the Guarantor pursuant to Section 2.1 (Sale of Initial Portfolio) and a completed and executed Seller
Assignment and/or Québec Seller Assignment by the Seller, the Seller will have sold, transferred, assigned and conveyed
all of its right, title, interest and benefit in and to the Initial Portfolio (excluding registered or recorded title to the Related
Security which will continue to be held by the Seller subject to Article 6 (Actions Upon a Registered Title Event and Related Matters))
without the need for any further formal or other instrument or assignment, effective as of the First Transfer Date.

		3.3	Servicing of Loans and Related Security

The Seller’s obligation to fully
service the Loans and their Related Security acquired by the Guarantor from it hereunder will be satisfied pursuant to and in accordance
with the Servicing Agreement.

		3.4	Registered Title of Related Security for Loans and Mortgage
Registration Numbers

Until registered or recorded title to the
Related Security relating to a Loan included in the Portfolio is transferred into the name of the Guarantor (or as it may direct)
pursuant to Sections 6.1(a)(iii) or 6.1(d), (i) the Seller will hold the registered or recorded title to such Related Security
as agent, bare trustee and nominee in trust for and on behalf of the Guarantor (and also, 

    	 

    	6

    

in the case of any STEP Loan, for and
on its behalf and for and on behalf of the Seller and/or any Other STEP Creditor having an interest in any related STEP Account,
in accordance with Section 13.7 (STEP Collateral Mortgage Related Security)), and (ii) except as permitted by Sections 6.1(c) and
13.4(5), neither the Guarantor nor the Managing GP on its behalf will register, record or deposit or cause to be registered, recorded
or deposited, and the Seller will not be required to register, record or deposit or cause to be registered, recorded or deposited,
in any land registry or land titles office or similar place of public record this Agreement or any document giving notice of the
interest of the Guarantor in any of such Loans and Related Security. Prior to the notification of Borrowers, or any guarantor of
such Borrowers, pursuant to Section 6.1(a)(i) or 6.1(c), and prior to such Borrowers receiving notice of the interest of an Other
STEP Creditor in any Other STEP Products, neither the Guarantor nor the Managing GP on its behalf will communicate or the Seller
be required to communicate in any way or manner whatsoever to the Borrowers or to any other Person having any interest in the related
Mortgaged Properties the fact that the Guarantor has an interest in the Loans and their Related Security included in the Portfolio.
If at any time a STEP Borrower receives notice of the interest of an Other STEP Creditor in any Other STEP Product, the Seller
will promptly give, or cause to be given, notice to such STEP Borrower of the interest of the Guarantor in any related STEP Loans
and Related Security, such notice to be in a form that is prepared by the Seller and acceptable to the Guarantor and Bond Trustee
(each acting reasonably).

 

Article 4

Sale and Purchase of Additional Loans

		4.1	Sale of Additional Loans

Subject to fulfilment of the conditions
and undertakings set out in Sections 4.3 (Conditions to Sale of Additional Loans), 4.4 (Consideration for Additional Loans) and
4.5 (Deliveries on Transfer Dates), and subject further to the provisions of the Guarantor Agreement, if the Seller, at any time
and from time to time serves a properly completed Additional Loan Notice substantially in the form set out in Schedule 5 (Additional
Loan Notice) on the Guarantor with a copy to the Bond Trustee (such service to be in the Seller’s sole discretion), the Seller
agrees that on the date for completion of the sale specified in such Additional Loan Notice (which date will be no less than five
Toronto Business Days after the date of such Additional Loan Notice), the Seller will sell, transfer, assign and convey to the
Guarantor all of the Seller’s right, title, interest and benefit in and to the Additional Loans and their Related Security
(excluding registered or recorded title to the Related Security which will continue to be held by the Seller subject to Article 6
(Actions Upon a Registered Title Event and Related Matters)) on a fully-serviced basis.

		4.2	Additional Loan Notice

Within three Toronto Business Days of
receipt of an Additional Loan Notice the Guarantor will countersign the Additional Loan Notice and return an original copy to the
Seller and the Guarantor will, subject to the conditions and undertakings set out in Sections 4.3 (Conditions to Sale of Additional
Loans), 4.4 (Consideration for Additional Loans) and 4.5 

    	 

    	7

    

(Deliveries on Transfer Dates), and subject further to the provisions
of the Guarantor Agreement, purchase the Additional Loans and their Related Security on the date for completion specified in the
relevant Additional Loan Notice.

		4.3	Conditions to Sale of Additional Loans

The conditions to be met as at each Transfer
Date are:

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

		(b)	the Guarantor, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that
the proposed purchase by the Guarantor of the Additional Loans and their Related Security on the relevant Transfer Date would result
in a downgrade or a withdrawal of the then current rating by any of the Rating Agencies of the Covered Bonds;

		(c)	the borrowing by the Guarantor of the required funds
under the Intercompany Loan Agreement if the Seller has not elected to have the entire Purchase Price credited to the Seller’s
Capital Account Ledger; and

		(d)	if the Additional Loans that are proposed to be sold
to the Guarantor on the relevant Transfer Date include New Loan Types, the Rating Agency Condition has been satisfied with respect
to the sale of such New Loan Types.

		4.4	Consideration for Additional Loans

Subject to fulfilment of the conditions
referred to in Section 4.3 (Conditions to Sale of Additional Loans) and Section 4.5 (Deliveries on Transfer Dates), the relevant
Purchase Price to be provided to the Seller for the sale, transfer, assignment and conveyance of Additional Loans and their Related
Security to the Guarantor on a Transfer Date will be satisfied by payment to the Seller in same day funds an amount equal to the
Purchase Price by depositing such amount into the Seller’s Account or, if the Seller so elects in writing to the Purchaser
on or before the applicable Transfer Date, the Purchaser shall credit the Seller’s Capital Account Ledger with an amount
equal to all (or the portion of the Purchase Price not paid in cash) of the Purchase Price. The Purchase Price payable with respect
to any Transfer Date will equal the Fair Market Value of the Loans and their Related Security sold, transferred, assigned and conveyed
on such Transfer Date.

		4.5	Deliveries on Transfer Dates

On the relevant Transfer Date, other
than the First Transfer Date, the Seller will deliver the following documents:

		(a)	to the Custodian:

		(i)	the Eligible Loan Details with respect to all Loans and
their Related Security sold, transferred, assigned and conveyed by the Seller on the

    	 

    	8

    

Transfer Date, which may be provided in a document
stored upon electronic media (including, but not limited to, a CD-ROM) in a form acceptable to the Guarantor and the Custodian
(each acting reasonably);

		(ii)	to the extent not provided on a previous Transfer Date,
the number of registrable Powers of Attorney as may be reasonably requested by the Guarantor substantially in the form set out
in Schedule 2 (Power of Attorney) hereto (for each province and territory of Canada other than the Province of Ontario and the
Province of Québec) or Schedule 3 (Power of Attorney) hereto (for the Province of Ontario and the Province of Québec),
as applicable, duly executed by the Seller, together with an opinion of legal counsel to the Seller confirming such Powers of
Attorney are valid, enforceable and irrevocable, and sufficient to allow the Guarantor (or a nominee on its behalf) to effect
the transfer of registered title to the Loans and Related Security sold, transferred, assigned and conveyed by the Seller on the
Transfer Date (which opinion shall contemporaneously be delivered to CMHC); and

		(iii)	if any of the Loans to be transferred to the Guarantor on such Transfer Date are STEP Loans and any Other STEP Products extended
to the same Borrower are secured by the related STEP Collateral Mortgage and Related Security:

		(A)	a duly executed Release of Security in respect of each
related Other STEP Product by the Seller and by any other mortgage lender on title, which Release(s) of Security shall be held
in trust by the Custodian and the use thereof shall be subject to Section 13.9; and

		(B)	if any other mortgage lender is on title with respect
to the related Mortgaged Property, a copy of a duly executed Security Sharing Agreement made between such Other mortgage lender,
the Seller, the Servicer, the Guarantor, the Bond Trustee and the Custodian, and

		(C)	an opinion of legal counsel to the Seller confirming
that (i) each such Release of Security is valid and enforceable against the party delivering such Release of Security, and (ii)
the Security Sharing Agreement is enforceable by the Guarantor against the other parties thereto, if applicable.

		(b)	to the Bond Trustee:

		(i)	a certificate signed by at least one Authorized Signatory
of the Seller dated as of the relevant Transfer Date confirming that the board minutes or resolutions referred to in Section 3.1(b)
are in full force and effect and have not been amended or rescinded as at the date of the certificate;

    	 

    	9

    

		(ii)	a completed and executed Seller Assignment with respect
to all Additional Loans and their Related Security (other than Québec Additional Loans and their Related Security) sold,
transferred, assigned and conveyed by it on such Transfer Date;

		(iii)	a completed and executed Québec Seller Assignment
with respect to Québec Additional Loans and their Related Security sold, transferred, assigned and conveyed by it on such
Transfer Date;

		(iv)	a solvency certificate signed by at least one Authorized
Signatory of the Seller dated as at the relevant Transfer Date, but only in the event that (i) the relevant Transfer Date is also
an Issue Date; and/or (ii) a solvency certificate has not been delivered by the Seller in the three months prior to the relevant
Transfer Date; and/or (iii) an Issuer Event of Default has occurred and is continuing;

		(v)	to the extent not attached to or provided with the Seller
Assignment in Section 4.5(b)(ii) above or the Québec Seller Assignment in Section 4.5(b)(iii) above, an updated, complete
and accurate list of the Additional Loans and their Related Security sold, transferred, assigned and conveyed by it on such Transfer
Date which may be provided in a document stored upon electronic media (including, but not limited to, a CD-ROM) in a form acceptable
to the Guarantor and the Bond Trustee (each acting reasonably);

		(vi)	to the extent not previously delivered, acknowledgments
or duplicate registration copies of proper assignments, financing statements and other similar documents or instruments, with
registration particulars stamped thereon, naming the Seller as seller or assignor and the Guarantor as purchaser or assignee,
and duly filed under the PPSA in Ontario on or before the date of such purchase and pursuant to Article 1642 of the Civil Code
in Québec within seven Canadian Business Days following such purchase in order to perfect the interests of the Guarantor
in the applicable Loans and their Related Security;

		(vii)	opinions of legal counsel to the Seller with respect to
“true sale”, non-consolidation, local counsel matters, the registrations specified in Section 4.5(b)(vi) above and
other matters in form and substance satisfactory to the Guarantor and the Bond Trustee (each acting reasonably); and

		(viii)	a copy of the Eligible Loan Details provided to the Custodian
pursuant to Section 4.5(a)(ii) above.

		4.6	Closing of Sale of Additional Loans

The parties hereto acknowledge that completion
on each relevant Transfer Date of the sale, transfer, conveyance and assignment to the Guarantor of all of the Seller’s right,
title, interest and benefit in and to the relevant Additional Loans and their Related Security will occur

    	 

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as indicated in this Article 4 provided that the actions
described in Article 6 (Actions Upon a Registered Title Event and Related Matters) will not occur until the relevant time indicated
therein. Upon receipt of payment of the Purchase Price by the Guarantor pursuant to Section 4.1 and the delivery of a completed
and executed Seller Assignment and/or Québec Seller Assignment by the Seller, the Seller will have sold, transferred, assigned
and conveyed all of its right, title, interest and benefit in and to the Additional Loans and their Related Security (excluding
registered or recorded title to the Loans which will continue to be held by the Seller subject to Article 6 (Actions Upon a Registered
Title Event and Related Matters)), without the need for any further formal or other instrument or assignment, effective as of the
relevant Transfer Date.

		4.7	Servicing of Additional Loans and Related Security

The Seller’s obligation to fully
service the Additional Loans and their Related Security acquired by the Guarantor from it hereunder will be satisfied pursuant
to and in accordance with the Servicing Agreement.

		4.8	Registered Title of Related Security for Additional Loans

Until registered or recorded title to
the Related Security relating to any Additional Loan included in the Portfolio is transferred into the name of the Guarantor (or
as it may direct) pursuant to Sections 6.1(a)(iii) or 6.1(d), (i) the Seller that sold such Related Security to the Guarantor will
hold the registered or recorded title to such Related Security as agent, bare trustee and nominee in trust for and on behalf of
the Guarantor (and also, in the case of any STEP Loan, for and on its behalf and for and on behalf of the Seller and/or any Other
STEP Creditor having an interest in a related STEP Account), and (ii) except as permitted by Section 6.1(c), neither the Guarantor
nor the Managing GP on its behalf will register, record or deposit or cause to be registered, recorded or deposited, and the Seller
will not be required to register, record or deposit or cause to be registered, recorded or deposited, in any land registry or land
titles office or similar place of public record this Agreement or any document giving notice of the interest of the Guarantor in
any of the Additional Loans and Related Security included in the Portfolio. Prior to the notification of Borrowers, or any guarantor
of such Borrower, pursuant to Section 6.1(a)(i) or Section 6.1(c), neither the Guarantor nor the Managing GP on its behalf will
communicate or the Seller be required to communicate in any way or manner whatsoever to the Borrowers or to any other Person having
any interest in the related Mortgaged Properties the fact that the Guarantor has an interest in the Additional Loans and their
Related Security included in the Portfolio.

		4.9	Fully Advanced Additional Loans

The sale of Loans to the Guarantor will
not include any obligation of the Seller relating to the payment of funds to a Borrower in respect of such Loans. The Guarantor
shall be under no obligation to fund any Additional Loan Advances.

		4.10	New Loan Types

If any sale of any Additional
Loans and their Related Security by the Seller to the Guarantor on the relevant Transfer Date are New Loan Types, the parties
agree that the Eligibility Criteria, Loan Representations and Warranties and, if such New Loan Types are secured by
Related Security which also secures any other indebtedness of the related Borrower that is not owned by the Guarantor, the
provisions of Article 13, with the prior consent of the Bond

    	 

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Trustee (such consent to be given in accordance with Section
8.10 (Amendments, Modification and Waiver of Loan Representations and Warranties)) and subject to satisfaction of the Rating Agency
Condition with respect to the sale of such New Loan Types, be modified as appropriate to accommodate such Additional Loans prior
to the relevant Transfer Date.

		4.11	Third Party Amounts

The Guarantor will pay to the Seller
all Third Party Amounts actually received by the Guarantor on each Guarantor Payment Date from amounts on deposit in the GDA Account
(or, as applicable, the Standby GDA Account). The Seller will pay any amounts to be paid to any third party with respect to such
Third Party Amounts.

		4.12	Sale of Additional Loans after an Asset Coverage Test Breach
but Prior to Service of an Asset Coverage Test Breach Notice

If at any time prior to the occurrence
of (i) an Issuer Event of Default, or (ii) a Guarantor Event of Default, the Guarantor receives a written notification from the
Cash Manager that the Asset Coverage Test has been breached, as determined by the Cash Manager on any Calculation Date, then, the
Guarantor may request that the Intercompany Loan Provider make a further Advance under the Intercompany Loan Agreement (which may
be in cash or in kind) to satisfy any shortfall. The Guarantor will, within three Toronto Business Days of receiving such written
notice, notify the Seller requesting that the Seller offer to sell to the Guarantor in accordance with the provisions of this Article 4
sufficient Additional Loans and their Related Security on or before the next Calculation Date to ensure that, taking into account
the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date and the
Guarantor will use all reasonable endeavours to acquire from the Seller sufficient Additional Loans and their Related Security
so that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next
Calculation Date.

		4.13	Use of Powers of Attorney

Each of the Managing GP and the Liquidation
GP may exercise their rights under the Powers of Attorney provided by the Seller hereunder only with respect to the Loans and their
Related Security assigned and sold to the Guarantor pursuant to this Agreement and after the occurrence of a Registered Title Event;
provided that (i) the Managing GP shall not exercise such power if a Managing GP Default Event has occurred and is continuing,
unless at such time the Managing GP is not an Affiliate of the Seller; and (ii) the Liquidation GP shall not exercise such power
unless at such time a Managing GP Default Event has occurred and is continuing.

Article 5

Trust of FUNDS

		5.1	Trust of Funds by Seller

Notwithstanding the sales, assignments,
transfers and conveyances effected by this Agreement, if at, or at any other time after, the First Transfer Date (but prior to
any repurchase in accordance with Article 8 (Representations and Warranties; Repurchase by the Seller)) the Seller holds,
or there is held to its order, or it receives, or there is received to its order any property, 

    	 

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interests, rights or benefits and/or
the proceeds thereof hereby sold, assigned, transferred and conveyed, the Seller undertakes to each of the Guarantor and the Bond
Trustee that it will promptly remit, assign and/or transfer the same to the Guarantor or, if appropriate, the Bond Trustee or as
either of them will direct and until it does so or to the extent that the Seller is unable to effect such remittance, assignment,
assignation or transfer, it will hold such property, interests, rights or benefits and/or the proceeds thereof in trust for the
Guarantor.

		5.2	Trust of Funds by Guarantor

If on, or at any other time after, the
First Transfer Date the Guarantor holds, or there is held to its order, or it receives, or there is received to its order, any
property, interests, rights or benefits relating to any Loan and its Related Security repurchased by the Seller pursuant to Article 8
(Representations and Warranties; Repurchase by the Seller) and/or the proceeds thereof, or relating to (without prejudice to Article 10
(Consequences of Breach)) any amounts payable by a Borrower to the Seller in respect of any Loan indicated as being included in
the Portfolio but which the Seller has not sold to the Guarantor, the Guarantor undertakes to the Seller that it will remit, assign,
re-assign, retrocede or transfer the same to the Seller, as the case may require, and until it does so or to the extent that the
Guarantor is unable to effect such remittance, assignment, assignation, re-assignment, retrocession or transfer, the Guarantor
undertakes to hold such property, interests, rights or benefits and/or the proceeds thereof in trust for the Seller as the beneficial
owner thereof or as the Seller may direct, provided that the Guarantor will not be in breach of its obligations under this Section
5.2 if, having received any such funds and paid them to third parties in error, it pays an amount equal to the funds so paid in
error to the Seller in accordance with the Servicing Agreement. In addition, if the Seller is required or elects to repurchase
any Loan and its Related Security pursuant to Article 8 (Representations and Warranties; Repurchase by the Seller) and such
Loan or its Related Security, or any part thereof, or any property, interest, right or benefit therein or any of the proceeds thereof
(each, a “relevant asset”), is held by the Seller subject to a trust pursuant to Section 5.1 (Trust of Funds
by Seller), then the Seller, the Guarantor and the Bond Trustee agree that such relevant asset will be released from the trust
constituted pursuant to Section 5.1 (Trust of Funds by Seller) on the date that such relevant asset is repurchased or re-transferred
pursuant to Article 8 (Representations and Warranties; Repurchase by the Seller).

Article 6

ACTIONS UPON a Registered Title Event AND RELATED MATTERS

		6.1	Actions Upon a Registered Title Event and Related Matters

		(a)	Upon the occurrence of a Registered Title Event, the Seller (or the Bond Trustee) will do or will cause to be done on its behalf
the following:

		(i)	give notice of the Guarantor’s ownership interest in the relevant Loans and their Related Security included in the Portfolio
to each Borrower or any guarantor of a Borrower thereunder, which notice will direct that payments be made directly to the Guarantor
into its name or the name of such other Person acting on its behalf as it may decide, and upon such instruction from the Guarantor,
the Seller will give such notice at the

    	 

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expense of the Seller; provided, that if the Seller
fails to so notify each such Borrower or any guarantor of such Borrower, the Guarantor may so notify each such Borrower or any
guarantor of such Borrower at the expense of the Seller;

		(ii)	direct the Borrowers or any guarantor of such Borrowers to pay all amounts payable under the relevant Loans included in the
Portfolio directly to the Guarantor into its name or a nominee on its behalf;

		(iii)	cause Registrable Transfers for each of the Loans and their Related Security included in the Portfolio, to be prepared, executed
and delivered by the Seller to the Guarantor and registered in the appropriate land registry or land titles office; and

		(iv)	the Seller (or Servicer) will: (A) assemble all of the records then in its possession (including Customer Files, computer records
and files) and which are necessary or desirable to collect the related Loans and their Related Security included in the Portfolio
and make the same available to the Guarantor at a place selected by the Guarantor; (B) segregate all cash, cheques and other instruments
received by it from time to time constituting payments with respect to the relevant Loans and their Related Security included in
the Portfolio in a manner acceptable to the Guarantor and, promptly upon receipt, remit all such cash, cheques and instruments,
duly endorsed or with duly executed instruments of transfer, to the Guarantor; and (C) name the Guarantor (or its designee) as
loss payee on any applicable related insurance policies maintained by the Borrower or the Seller in respect of the Loans and their
Related Security assigned to the Guarantor in the place of the Seller.

		(b)	Notwithstanding the occurrence of any Registered Title Event, none of the sales, transfers and assignments contemplated by
this Agreement are required to be completed if (i) the Rating Agency Condition is satisfied with respect to such sales, transfers and assignments not being contemplated, and
(ii) satisfactory assurances are provided by OSFI or such other supervisory authority
having jurisdiction over the Issuer permitting registered title to the Mortgages and any Related Security for the Loans to remain
with the Seller until such time as:

		(A)	the Loans and their Related Security are to be sold or otherwise disposed of by the Guarantor or the Bond Trustee in the performance
of their respective obligations under the Transaction Documents; or

		(B)	the Guarantor or the Bond Trustee is required to take actions to enforce or otherwise deal with the Loans and their Related
Security.

		(c)	To the extent required, the duty of the Seller in Section
6.1(a)(iii) will be fulfilled as soon as practicable but in any event no later than the 60th day and the duties in

    	 

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Sections 6.1(a)(i), (ii) and (iv) will be fulfilled by
the Seller as soon as practicable but in any event no later than 20 Toronto Business Days, following the day on which the Registered
Title Event occurs. The Seller will be liable for all costs and expenses associated with such duties. The Seller will co-operate
fully to do all such further acts and things and execute any further documents that may be necessary or desirable by the Guarantor
(or the Bond Trustee) to give full effect to such duties.

		(d)	If the Seller is required to, but fails to, perform any of the foregoing duties in Section 6.1(a), the Guarantor or the Bond
Trustee will use the Powers of Attorney to transfer registered or recorded title to the Mortgages evidencing and securing the Loans
sold by the Seller and their Related Security to the Guarantor into its name (or a nominee on its behalf), or for STEP Loans in
Québec, to record an assignment of the related STEP Collateral Mortgages to the extent of the Guarantor’s interest
therein, and perform and complete any of the other matters referred to in Sections 6.1(a) and 7.4(2) and the Guarantor is hereby
irrevocably and unconditionally authorized and directed by the Seller to complete the annexes to the Powers of Attorney in order
to enable it to use the Powers of Attorney to complete the matters referred to in Sections 6.1(a) and 7.4(2). The Seller will provide,
at no cost to the Guarantor, all necessary information required to complete such annexes to the Powers of Attorney within a reasonable
time following the request of, and in a reasonable format required by, the Guarantor or the Bond Trustee, as applicable (each acting
reasonably). The Seller will indemnify the Guarantor and the Bond Trustee for any losses incurred by the Guarantor or the Bond
Trustee as a result of such failure and/or any costs incurred by the Guarantor or the Bond Trustee in respect of the assembly and
completion of such annexes to the Powers of Attorney and/or the use of the such Powers of Attorney.

Article 7

Undertakings

		7.1	Undertakings of Guarantor

The Guarantor undertakes to the Seller
that it will at all times (or will direct the Servicer at all times to) administer and enforce (and exercise its powers and rights
and perform its obligations under) the Loans and their Related Security included in the Portfolio in accordance with the Servicing
Standard, subject, with respect to the STEP Loans, to the provisions of Article 13 (STEP Plan and Intercreditor Arrangements).
The entering into of the Servicing Agreement by the Guarantor will constitute satisfaction of the undertaking in this Section 7.1
(Undertaking of Guarantor).

The Guarantor further undertakes to the
Seller and the Bond Trustee that it will (i) comply in all material respects with its obligations under each of the Transaction
Documents to which it is a party, and (ii) comply with the CMHC Guide.

    	 

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		7.2	Undertaking of Seller

The Seller undertakes to the Guarantor
that, in the event that any Borrower establishes that it has at any time prior to the First Transfer Date or, as the case may be,
the relevant Transfer Date, paid to the Seller any amounts in excess of sums due to the Seller as at the relevant date of payment
under the Mortgage Terms applicable to that Loan, the Seller will reimburse the Borrower for such overpayment together with any
interest, cost or other expense associated therewith. The Seller further agrees to hold the Guarantor harmless against any such
claims and to indemnify the Guarantor for any costs, expense, loss or other claim which may arise in connection therewith. Any
payment made by the Seller to the Guarantor in discharge of the foregoing indemnity will be regarded as a rebate of part of the
Purchase Price of the relevant Loan.

		7.3	Property Insurance Proceeds

The Seller undertakes to direct the relevant
insurer to pay to the Guarantor any insurance payments made under any insurance policy in effect maintained by that Seller covering
all risks of physical loss or damage to a Mortgaged Property in respect of a Loan and its Related Security included in the Portfolio
which applies if the related Borrower fails to maintain such an insurance policy. The Guarantor (or the Cash Manager on its behalf),
will forthwith deposit such insurance proceeds into the GDA Account (or, as applicable, the Standby GDA Account) and credit such
insurance proceeds to the Principal Ledger on the GDA Account (or, as applicable, the Standby GDA Account).

Article 8

Representations and Warranties; Repurchase by the SellerS; COVENANTS

		8.1	Representations and Warranties of the Seller

		(a)             (i)	The Seller hereby makes the Corporate Representations and Warranties set out in Schedule 1 (Representations and Warranties)
in respect of itself and hereby makes the Loan Representations and Warranties set out in Schedule 1 (Representations and Warranties)
in respect of each Loan and its Related Security in the Initial Portfolio on the First Transfer Date in favour of the Guarantor,
the Custodian and the Bond Trustee;

		(ii)	The Seller hereby makes the Corporate Representations and Warranties set out in Schedule 1 (Representations and Warranties)
in respect of itself and hereby makes the Loan Representations and Warranties set out in Schedule 1 (Representations and Warranties)
(as amended from time to time in accordance with Section 8.10 (Amendments, Modification and Waiver of Loan Representations and
Warranties)) in respect of each Additional Loan and its Related Security sold by the Seller pursuant to Article 4 (Sale and
Repurchase of Additional Loans) of this Agreement, on the relevant Transfer Date in favour of the Guarantor, the Custodian and
the Bond Trustee; and

    	 

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		(iii)	The Seller hereby makes the Loan Representations and Warranties set out in Schedule 1 (Representations and Warranties) (as
amended from time to time in accordance with Section 8.10 (Amendments, Modification and Waiver of Loan Representations and Warranties))
in respect of each Calculation Date following the making of any Product Switch in respect of the Loan included in the Portfolio
to which the Product Switch relates and its Related Security.

		(b)	Each statement in the Representations and Warranties
will be construed as a separate statement and (save as expressly provided to the contrary) will not be limited or restricted by
reference to or inference from the terms of any other such statement.

		(c)	The Seller acknowledges:

		(i)	that the Representations and Warranties are made with a view to inducing the Guarantor, the Bond Trustee and the Custodian
(as the case may be) either to enter into this Agreement and the other Transaction Documents to which it is a party or to agree
to purchase the Loans and their Related Security included in the Initial Portfolio and the Additional Loans and their Related Security
in any New Portfolio, respectively;

		(ii)	that each of the Guarantor, the Bond Trustee and the Custodian has entered into this Agreement and the other Transaction Documents
to which it is a party in reliance upon the Representations and Warranties notwithstanding any information in fact possessed or
discoverable by the Guarantor, the Custodian and/or the Bond Trustee or otherwise disclosed to any of them; and

		(iii)	that prior to entering into this Agreement and the other Transaction Documents to which each is a party none of the Guarantor,
the Custodian or the Bond Trustee has made any enquiries of any matter.

		8.2	Remedies

The Guarantor’s and the Bond Trustee’s
sole remedy in respect of a breach of any of the Loan Representations and Warranties will be to take action under Section 8.3 (Breach
of Loan Representations and Warranties, Additional Loan Advances and Product Switch), provided that nothing herein will limit,
restrict or otherwise affect the Guarantor’s rights or remedies arising out of any breach by the Seller or any Other STEP
Creditor of any of its obligations set out in Article 13 (STEP Plan and Intercreditor Arrangements).

		8.3	Breach of Loan Representations and Warranties, Additional Loan Advances and Product Switch

		(a)	In the event of a material breach of any of the Loan
Representations or Warranties in respect of any Loan and/or its Related Security included in the Portfolio made under Section 8.1
(Representations and Warranties of the Seller) or if any of the

    	 

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Loan
Representations or Warranties proves to be untrue in any material respect, as at the First Transfer Date in the case of the Initial
Portfolio or, in the case of any Additional Loans and/or their Related Security as at the relevant Transfer Date, and provided
that:

		(i)	the Guarantor has given the Seller not less than 20 Toronto Business Days’ notice of such breach or untruth in writing;
and

		(ii)	such breach or untruth, where capable of remedy, is not remedied to the reasonable satisfaction of the Bond Trustee within
the 20 Toronto Business Day period (or such longer period as the Bond Trustee may in its absolute discretion direct the Guarantor
in writing) referred to in Section 8.3(a)(i),

then the Guarantor shall serve upon the Seller a Loan
Repurchase Notice substantially in the form set out in Schedule 4 (Loan Repurchase Notice) requiring the Seller to repurchase the
relevant Loan and its Related Security (and any other Loan secured or intended to be secured by the same 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) in accordance
with Section 8.6 (Loan Repurchases).

		(b)	If either:

		(i)	the Seller accepts a request from a Borrower for a Product
Switch in respect of any Loan included in the Portfolio, 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 would result 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, and provided that:

		(A)	the Guarantor has given the Seller not less than 20
Toronto Business Days’ notice of such breach or untruth in writing; and

		(B)	such breach or untruth, where capable of remedy, is
not remedied to the reasonable satisfaction of the Bond Trustee within the 20 Toronto Business Day period (or such longer period
as the Bond Trustee may in its absolute discretion direct the Guarantor in writing) referred to in Section 8.3(b)(i), or

		(ii)	the Seller accepts a request from a Borrower for an Additional
Loan Advance in respect of any Loan included in the Portfolio,

    	 

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then the Guarantor shall serve upon the Seller a Loan
Repurchase Notice substantially in the form set out in Schedule 4 (Loan Repurchase Notice) requiring the Seller to repurchase the
relevant Loan and its Related Security (and any other Loan secured or intended to be secured by the same Related Security or any
part of it whether or not there has been any breach of any Loan Representation and Warranty or agreement to make an Additional
Loan Advance in respect of such other Loan) in accordance with Section 8.6 (Loan Repurchases). With regard to a Product Switch,
the Seller will use reasonable commercial efforts to identify and repurchase any Loans that might give rise to increased tax liability
before completion of such Product Switch, but if the Seller does not repurchase the relevant Loan and its Related Security before
such Product Switch gives rise to an increased tax liability to the Guarantor, the Seller will hold the Guarantor harmless against
any such increased liability and will indemnify the Guarantor for any costs, expenses, losses or other claims that may arise in
connection therewith.

		(c)	For purposes of this Section 8.3, any breach of the Loan Representation and Warranty set out in Section 2.3 of Schedule 1
                                                                                 shall be deemed to be a material breach which is not capable of being remedied.

		8.4	Offer to Repurchase Loans and Related Security

Prior to the occurrence of an Issuer
Event of Default and service of an Issuer Acceleration Notice or a Guarantor Event of Default and service of a Guarantor Acceleration
Notice, the Seller may, from time to time, offer to repurchase any Loan (including a Non-Performing Loan) and its Related Security
from the Portfolio for a Purchase Price equal to the Fair Market Value of such Loan. For the purpose of this Section, all STEP
Loans made to the same STEP Borrower, which are owned by the Guarantor, will be considered to be a single Loan and must be repurchased
together. The Guarantor may accept such offer at its sole discretion by delivering a Loan Repurchase Notice duly signed on behalf
of the Guarantor if the Asset Coverage Test is satisfied on a pro forma basis after giving effect to such sale, and the
provisions of Section 8.6 (Loan Repurchases) will apply. Amounts paid by the Seller pursuant to such option will be deposited into
the GDA Account (or, as applicable, the Standby GDA Account). Any Loans and their Related Security to be purchased under this Section
8.4 will be selected in a manner that would not reasonably be expected to adversely affect to the interests of the Covered Bondholders.

		8.5	Maturing Loans

The Seller (or an Affiliate of the Seller
designated by the Seller, in which case the provisions of this Section 8.5 will apply to such Affiliate mutatis mutandis)
may, upon request and subject to the agreement of the Guarantor, at any time prior to the date which is 90 days prior to the related
Mortgage Maturity Date (the “Repurchase Date”) and from time to time repurchase any Loan from the Portfolio
on the maturity date of such Loan (each, a “Mortgage Maturity Date”) at the greater of (i) Fair Market Value
of such Loan at the Mortgage Maturity Date, and (ii) the Repurchase Amount of such Loan, at the Mortgage Maturity Date. For purposes
of this Section, (i) all STEP Loans made to the same STEP Borrower which are owned by the Guarantor will be considered to be a
single Loan and must be repurchased together, and (ii) where the Guarantor owns more than one STEP Loan made to the same STEP Borrower,
and if the respective STEP Loans have different Mortgage Maturity Dates, the Mortgage Maturity Date for all such STEP Loans will
be deemed to be the earliest Mortgage Maturity Date of any one of such STEP Loans. If the Seller does not deliver to the Guarantor
on or before the related Repurchase Date a written notice specifying the Loans in respect of which it will not exercise such right
granted to the Seller pursuant to this Section 8.5 and the Seller does not inform the 

    	 

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Guarantor in writing that it cannot repurchase
any such Loan, the Seller will repurchase, subject to the agreement of the Guarantor, each such Loan included in the Portfolio
on the Calculation Date next following the applicable Mortgage Maturity Date at the greater of (i) Fair Market Value of such Loan
at the Mortgage Maturity Date, and (ii) the Repurchase Amount of such Loan at the Mortgage Maturity Date; provided, however that
the Seller will not repurchase and will not be required to repurchase pursuant to this Section 8.5 any Loan that (i) is or becomes
a Non-Performing Loan on its Mortgage Maturity Date, or (ii) is repaid in full on its Mortgage Maturity Date from funding provided
to the Borrower under such Loan by a Person other than the Seller (and in the case of STEP Loans to the same STEP Borrower, the
Seller will not repurchase and will not be required to repurchase pursuant to this Section 8.5 any such STEP Loans if any one of
such STEP Loans is or becomes a Non-Performing Loan on its Mortgage Maturity Date). On the Calculation Date next following the
Mortgage Maturity Date on which the Seller purchases such Loan pursuant to this Section 8.5, the Seller will pay to the GDA Account
(or, as applicable, the Standby GDA Account) an amount equal to the greater of (i) Fair Market Value of such Loan at the Mortgage
Maturity Date, and (ii) the Repurchase Amount for the Loan at the Mortgage Maturity Date (or for STEP Loans to the same STEP Borrower,
the Repurchase Amount of such Loans at the earliest Mortgage Maturity Date of such STEP Loans).

Upon the deposit by the Seller to the
GDA Account (or, as applicable, the Standby GDA Account) of the amounts required to be paid for all Loans to be repurchased by
the Seller on any Calculation Date, all such Loans and Related Security and proceeds thereof will be sold, assigned and transferred
to the Seller by the Guarantor without the need for any formal or other instrument or assignment effective as of such Calculation
Date, free from the Security created by or pursuant to the Security Agreement and all related rights of the Bond Trustee and the
Guarantor in respect thereof. If, in respect of any Loan, the Seller delivers to the Guarantor a notice described in this Section
8.5, the Guarantor informs the Seller that the Seller cannot purchase a Loan under this Section 8.5, or if the Seller fails to
deliver such notice and does not remit the amounts required to be paid to the GDA Account (or, as applicable, the Standby GDA Account)
as provided herein, the Guarantor may sell or assign such Loan in any manner permitted by law and the Seller will not have any
further or other right to purchase such Loan pursuant to this Section 8.5.

		8.6	Loan Repurchases

Upon receipt of a Loan Repurchase Notice
duly signed on behalf of the Guarantor, the Seller will, pursuant to its obligation or agreement to repurchase the applicable Loans
pursuant to Section 8.3 (Breach of Loan Representations and Warranties, Additional Loan Advances and Product Switch), Section 8.4
(Offer to Repurchase Loans and Related Security) or Section 13.2(c), sign and return a copy thereof and will thereby repurchase
from the Guarantor, and the Guarantor will thereby re-assign or re-transfer to the Seller the relevant Loan and its Related Security,
and upon execution of such Loan Repurchase Notice by the Bond Trustee, such Loan and its Related Security will be re-assigned or
re-transferred to the Seller free from the Security created by or pursuant to the Security Agreement and all related rights of
the Bond Trustee and the Guarantor in respect thereof without the need for any further action. Completion of such repurchase will
take place on the Calculation Date after receipt by the Seller of such Loan Repurchase Notice or such other date as the Guarantor
may direct in the Loan Repurchase Notice (provided that the date so specified by the Guarantor will not be later than 90 days after
receipt by the Seller of such notice) when the Seller will pay to the GDA Account (or, as applicable, the 

    	 

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Standby GDA Account)
(or as the Guarantor will direct) an amount equal to (x) in the case of a repurchase pursuant to Section 8.3 (Breach of Loan Representations
and Warranties, Additional Loan Advances and Product Switch), the greater of (i) the aggregate Fair Market Value of such Loans,
and (ii) the aggregate Repurchase Amount for such Loans, and (y) in any other case, the aggregate Fair Market Value of such Loans,
and in each case the provisions of Section 8.7 (Release of Loans and Related Security) will apply.

Notwithstanding the foregoing, in respect
of Loans which are the subject of a Loan Repurchase Notice delivered pursuant to the provisions of Section 8.4 (Offer to Repurchase
Loans and Related Security) above, the Seller will not be obliged to sign the copy of the Loan Repurchase Notice and
the affected Loans will not be repurchased by the Seller hereunder, if the Seller has not agreed to do so pursuant to Section 8.4
(Offer to Repurchase Loans and Related Security) above.

		8.7	Release of Loans and Related Security

On the date of completion of any repurchase
of a Loan and its Related Security in accordance with Section 8.3 (Breach of Loan Representations and Warranties, Additional Loan
Advances and Product Switch), Section 8.4 (Offer to Repurchase Loans and Related Security), Section 8.5 (Maturing Loans) above,
or Section 13.2(c), the Bond Trustee and the Guarantor will, at the cost of the Seller, execute and deliver, or cause their respective
duly authorized attorneys to execute and deliver, to the Seller any additional documentation necessary to release such Loan and
its Related Security from the Security created by or pursuant to the Security Agreement and all related rights of the Bond Trustee
and the Guarantor in respect thereof.

		8.8	Return of Customer Files

Upon the completion of any purchase,
transfer, repurchase or re-transfer of any Loan and its Related Security in accordance with this Article 8, the Seller will
cease to be under any further obligation to hold any Customer Files, computer records and files or other documents relating to
such Loan or Loans and its or their Related Security on behalf of the Guarantor or the Bond Trustee, and if the Bond Trustee then
holds any such Customer Files, computer records and files or other documents, the Bond Trustee will forthwith return them to the
Seller. Any such purchase, transfer, repurchase or re-transfer by or to the Seller of a Loan or Loans and its or their Related
Security will constitute a discharge and release of the Seller from any claims which the Guarantor or the Bond Trustee may have
against the Seller arising from any Representation and Warranty in relation to that Loan or Loans and its or their Related Security
only, but will not affect any rights arising from a breach of any other express provision of this Agreement or any Representation
and Warranty in relation to any other Loan and other Related Security.

		8.9	Notification

Forthwith after the Seller becomes aware
of any events which may reasonably give rise to an obligation under this Article 8 to repurchase any Loan from the Portfolio,
it will notify the Guarantor, the Custodian and the Bond Trustee in writing thereof as soon as reasonably practicable.

    	 

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		8.10	Amendments, Modification and Waiver of Loan Representations and Warranties

The parties to this Agreement may, with
the prior written consent of the Bond Trustee, waive, amend or modify any Loan Representation and Warranty, or include new Loan
Representations and Warranties, in each case, including without limitation modifications or additions to accommodate the sale of
New Loan Types to the Guarantor; provided, however, that any such waiver, amendment or modification that is material shall be subject
to satisfaction of the Rating Agency Condition, and notice thereof shall have been provided to CMHC.

Article 9

Further Assurance

		9.1	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.

		9.2	Seller Co-operation

The Seller will provide all reasonable
co-operation to the Guarantor, the Custodian and the Bond Trustee to enable them to carry out their respective duties and enforce
their rights in relation to the Portfolio under the Transaction Documents. Without prejudice to the generality of the foregoing
but without limiting any of its obligations hereunder, the Seller will:

		(a)	upon reasonable prior notice and during normal office
hours, permit the Guarantor, third-party purchasers, the Bond Trustee and their authorized employees and agents and other Persons
nominated by the Bond Trustee and approved by the Seller (such approval not to be unreasonably withheld or delayed), to review
the Customer Files in relation to the Portfolio (subject to such Person(s) agreeing to keep the same confidential provided that
disclosure will be permitted to the professional advisors and auditors of the party to whom such disclosure is made and/or to
the extent that such disclosure is required by law or for the purpose of any judicial or other proceedings);

		(b)	take all such actions and do all such things as may
be necessary for the transfer of Loans and their Related Security sold by it to the Guarantor and to third-party purchasers as
provided for hereunder; and

		(c)	give promptly all such information and explanations
relating to the Loans and their Related Security sold by it to the Guarantor as the Guarantor, the Custodian and/or the Bond Trustee
may reasonably request (including a list of such Loans and their Related Security along with details of the location of the Customer
Files relating thereto), provided that prior to the occurrence of a Registered Title Event, or any event that triggers any right
or obligation of the Guarantor to sell Selected Loans (it being intended that such information and documentation be made available
to a third party purchaser, its directors, employees, authorized agents and professional advisors prior to the completion of any
such purchase), the Seller

    	 

    	22

    

will be under no obligation to provide any information
or documentation to any Person other than the Guarantor, the Custodian and/or the Bond Trustee or their respective directors, officers,
employees, agents and/or professional advisors or allow such Person access to the Customer Files, computer records and files if
to do so would result in a breach of the applicable Mortgage Terms or any applicable law.

Article 10

Consequences of Breach

		10.1	Consequences of Breach

Without prejudice to the rights of the
Guarantor under Article 8 (Representations and Warranties; Repurchase by the Seller), the Guarantor, the Custodian and the
Bond Trustee severally acknowledge to and agree with the Seller, and the Bond Trustee acknowledges to and agrees with the Guarantor,
that the Seller will have no liability or responsibility for any loss or damage for or in respect of any breach of, or any act
or omission in respect of, any of its obligations hereunder other than loss or damage directly (and not indirectly or consequentially)
suffered by the Guarantor by reason of such breach, act or omission. Without limiting the scope of the foregoing exclusion in respect
of indirect or consequential loss or damage, it is further acknowledged and agreed that the Seller will have no liability or responsibility
for any indirect or consequential loss or damage suffered by the Guarantor for or in respect of any such breach, act or omission
giving rise to a Guarantor Event of Default or enforcement of the Security created by the Security Agreement.

Article 11

Sale of Selected Loans

		11.1	Sale of Selected Loans

If: (i) following service of
an Asset Coverage Test Breach Notice (which has not been revoked); (ii) following service of a Notice to Pay; (iii) following
a breach of the Pre-Maturity Test; (iv) prior to the service of an Asset Coverage Test Breach Notice or a Notice to Pay,
a Demand Loan Repayment Event has occurred or the Issuer has demanded that the Demand Loan be repaid, or (v) in the
circumstances described in Section 7.1(2) of the Guarantor Agreement, the Guarantor shall sell Selected Loans in accordance
with Schedule 9 to the Guarantor Agreement, and provided that the Seller is not in default of any of its obligations
hereunder or under any other Transaction Document to which it is a party, the Guarantor will by serving on the Seller a
Selected Loan Offer Notice substantially in the form set out in Schedule 6 (Selected Loan Offer Notice), prior to the
Guarantor making any offer to sell Selected Loans to other Purchasers, offer immediately to sell to the Seller those Selected
Loans in accordance with Schedule 9 of the Guarantor Agreement.

    	 

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		11.2	Selected Loan Offer Notice

If the Seller accepts the Guarantor’s
offer to sell the relevant Selected Loans by signing the Selected Loan Offer Notice in a manner indicating acceptance and delivering
it to the Guarantor with a copy to the Bond Trustee within 10 Toronto Business Days from and including the date of the Selected
Loan Offer Notice and provided that (if an Issuer Event of Default has occurred and is continuing) the Seller has provided a solvency
certificate in a form acceptable to the Guarantor and the Bond Trustee (each acting reasonably), the Guarantor will within three
Toronto Business Days of receipt of such acceptance serve a Selected Loan Repurchase Notice substantially in the form set out in
Schedule 7 (Selected Loan Repurchase Notice) on the Seller.

		11.3	Sale of Selected Loans to Purchasers

The Guarantor will offer for
sale the Selected Loans in respect of which the Seller rejects or fails within the requisite time limit to accept
the Guarantor’s offer to sell to Purchasers in the manner and on the terms set out in Article 8 (Asset Coverage
Test, Amortisation Test and Sale of Loans) of the Guarantor Agreement. If the STEP Collateral Mortgage and other Related Security securing a Selected Loan also secures other
STEP Loans and/or Other STEP Products, the provisions of Section 3.9 of the Servicing Agreement shall apply to such sale of
Selected Loans.

		11.4	Selected Loan Repurchase Notice

Upon receipt of the Selected Loan Repurchase
Notice duly signed on behalf of the Guarantor, the Seller will promptly sign and return the Selected Loan Repurchase Notice and
will repurchase from the Guarantor, and the Guarantor will re-assign or re-transfer to the Seller the Selected Loans (and any other
Loan secured or intended to be secured by the same Related Security or any part of it) referred to in the relevant Selected Loan
Repurchase Notice and, subject to Section 3.4 (Sale of the Portfolio) of the Security Agreement, upon execution of the Selected
Loan Repurchase Notice by the Bond Trustee, such Selected Loans will be re-assigned or re-transferred to the Seller free from the
Security created by or pursuant to the Security Agreement and all related rights of the Bond Trustee and the Guarantor in respect
thereof without the need for any further action. Completion of such repurchase will take place on the Guarantor Payment Date next
occurring after receipt by the Seller of such Selected Loan Repurchase Notice (provided that, where a Notice to Pay has been served,
such date is not to be later than the earlier to occur of the date which is (a) 10 Toronto Business Days after receipt by the Guarantor
of the returned Selected Loan Repurchase Notice, or (b) the Final Maturity Date of as applicable, the Hard Bullet Covered Bonds
or the Earliest Maturing Covered Bonds) and the Seller will pay to the GDA Account (or, as applicable the Standby GDA Account)
(or as the Guarantor will direct) an amount in cash equal to the offer price specified in the relevant Selected Loan Repurchase
Notice and the provisions of Sections 11.5 (Release of Security and Certain Representations and Warranties) and 11.6 (Selected
Loans and Release of Customer Files and Claims) will apply.

    	 

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		11.5	Release of Security and Certain Representations and Warranties

On the date of completion of the repurchase
of the Selected Loans in accordance with Sections 11.3 (Sale of Selected Loans to Purchasers) and 11.4 (Selected Loan Repurchase
Notice), the Bond Trustee and the Guarantor will at the cost of the Seller execute and deliver, or cause their respective duly
authorized attorneys to execute and deliver, to the Purchaser any additional documentation necessary to release such Selected Loans
from the Security created by the Security Agreement and all related rights of the Bond Trustee and the Guarantor in respect thereof.
In accordance with Article 8 (Asset Coverage Test, Amortisation Test and Sale of Loans) of the Guarantor Agreement, any such sale
will not include any representations, warranties or indemnities from the Guarantor or the Seller (or the applicable New Seller)
in respect of the Loans and the Related Security, except for STEP Loans, in respect of which certain representations and warranties
respecting the STEP Plan, the related servicing and priority arrangement and/or the interests of the Seller or related Other STEP
Creditor may be reasonably required, in which case the Seller will co-operate in making such representations and warranties to
the Purchaser or Purchasers.

		11.6	Selected Loans and Release of Customer Files and Claims

Upon such completion of the repurchase
of the Selected Loans in accordance with Section 11.4 (Selected Loan Repurchase Notice) above or the sale of Selected Loans to
a Purchaser or Purchasers pursuant to Article 8 (Asset Coverage Test, Amortisation Test and Sale of Loans) of the Guarantor Agreement,
the Seller will cease to be under any further obligation to hold any Customer Files, computer records and files or other documents
relating to the Selected Loans to the order of the Bond Trustee and, if the Bond Trustee holds such Customer Files, computer records
and files or other documents, it will send them to the Seller or the Purchaser, as applicable. Any repurchase by the Seller of
or in respect of Selected Loans or any sale of Selected Loans by the Guarantor to a Purchaser or Purchasers pursuant to Article
8 (Asset Coverage Test, Amortisation Test and Sale of Loans) of the Guarantor Agreement will constitute a discharge and release
of the Seller from any claims which the Guarantor or the Bond Trustee may have against the Seller arising from any Representation
and Warranty in relation to the Selected Loans previously sold by the Seller to the Guarantor only but will not affect any rights
arising from a breach of any other express provision of this Agreement or any Representation and Warranty in relation to any other
Loan and other Related Security.

Article 12

New Sellers

		12.1	New Sellers

One or more New Sellers may accede to
the Program and sell Loans and their Related Security to the Guarantor. Any such New Seller will accede to this Agreement (or enter
into a New Mortgage Sale Agreement) and any other Transaction Documents to which the Seller is a party. The sale of Loans and their
Related Security by a New Seller to the Guarantor will be subject to the following conditions:

    	 

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		(i)	each New Seller accedes to such Transaction Documents and enters into such other documents as may be required by the Bond Trustee,
the Guarantor and/or the Cash Manager (in each case acting reasonably) to give effect to the addition of a New Seller to the transactions
contemplated under the Program;

		(ii)	each New Seller accedes to the terms of this Agreement (with such subsequent amendments as may be agreed by the parties thereto)
or New Mortgage Sale Agreement, so that it has, in relation to those Loans and their Related Security to be sold by the relevant
New Seller, substantially the same rights and obligations as the Seller had in relation to those Loans and their Related Security
included in the Initial Portfolio under this Agreement;

		(iii)	any Loans and their Related Security sold by a New Seller to the Guarantor will be subject to the Loan Representations and
Warranties and repurchase obligations set out in Article 8 (Representations and Warranties; Repurchase by the Seller);

		(iv)	either (A) the Servicer services the Loans and their Related Security sold by such New Seller to the Guarantor on the terms
set out in the Servicing Agreement (with such subsequent amendments as may be agreed by the parties thereto) or (B) each New Seller
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 the Loans and their Related Security sold by such New Seller to the Guarantor and which is on terms substantially
similar to the terms set out in the Servicing Agreement (provided that the fees payable to the Servicer or such New Seller acting
as servicer of such Loans and their Related Security would be determined on or around the date of the accession of such New Seller
to the Program);

		(v)	the Bond Trustee is satisfied that any accession of a New Seller to the Program will not prejudice the Asset Coverage Test;
and

		(vi)	the Bond Trustee is satisfied that any modifications to the Transaction Documents in order to accommodate the accession of
a New Seller to the Program will not be materially prejudicial to the interests of any of the Covered Bondholders.

If the above conditions are met, the consent of Covered Bondholders
will not be required in relation to the accession of a New Seller to the Program.

    	 

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Article 13

STEP plan and INTERCREDITOR ARRANGEMENTS

		13.1	Sale to Guarantor of STEP Loans and STEP LOCs

A STEP Loan that satisfies the Eligibility
Criteria and other requirements of the Transaction Documents may be sold as a Loan by the Seller to the Guarantor from time to
time pursuant to Section 2.1 (Sale of Initial Portfolio) and Section 4.1 (Sale of Additional Loans). Other STEP Products are not
eligible to be sold to the Guarantor, except for STEP LOCs, but only if and at such time as STEP LOCs are approved as a New Loan
Type by the Rating Agencies, and, then, only if such STEP LOCs satisfy the Eligibility Criteria and other requirements of the Transaction
Documents then in effect. All STEP Accounts, whether or not owned by the Guarantor or the Seller, relating to any STEP Loan sold
to the Guarantor hereunder, are subject to and governed by this Article 13 (and corresponding provisions in the Servicing Agreement)
at all times, and each of the parties hereto agree to be bound by, and will require each owner of any STEP Loan, the Servicer and
each Other STEP Creditor and their respective successors, assigns and successors in interest and replacement servicers to be bound
hereby and any related Security Sharing Agreement.

		13.2	Sale to Guarantor of Additional STEP Loans

With respect to Additional STEP Loans:

		(a)	as long as the Guarantor owns the First STEP Loan and/or any other Additional STEP Loans from the same STEP Borrower, then,
any other Additional STEP Loans made by the Seller to the same STEP Borrower will not be sold, nor any interest or security therein
granted, by the Seller to any other Person than the Guarantor;

		(b)	all Additional STEP Loans are to be sold to the Guarantor on or before the 90th day after the date on which each
Additional STEP Loan is advanced, subject to such Additional STEP Loans meeting the Eligibility Criteria and other requirements
of the Transaction Documents; and

		(c)	if the Seller does not sell an Additional STEP Loan to the Guarantor within the time limit specified in Section 13.2(b) (having
satisfied all applicable Eligibility Criteria and requirements of the Transaction Documents in regard thereto), (i) the Guarantor
will serve a Loan Repurchase Notice on the Seller in accordance with Section 8.6 (Loan Repurchases), requiring the Seller to repurchase
all related STEP Loans owned by the Guarantor that have been made to the same STEP Borrower, together with the Guarantor’s
right, title and interest in the Related Security in regard to such STEP Loans; and (ii) the Guarantor will not be required to
purchase any such related STEP Loans.

		13.3	Agreements, Modifications, Amendments to STEP Plan or other Actions

None of the Seller, any Other
STEP Creditor  or the Servicer will enter into any agreement with a STEP Borrower or make any modification,
amendment or waiver of a

    	 

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monetary or non-monetary term of any STEP Account
or the related STEP Plan or take or fail to take any other action, if such agreement, modification, amendment, waiver, act
or omission would reasonably be expected to result in any material and adverse change in or to any related STEP Loan,
the Related Security and/or the priority, enforcement and other provisions applicable to such STEP Loan and Related
Security under this Article 13 or otherwise contravene this Article 13, the provisions of the Servicing Agreement or this
Article 13, the provisions of the Servicing Agreement, or the CMHC Guide. Without limiting the provisions of Section 13.4
(Other STEP Creditors), the Guarantor, the Seller, the Servicer and Other STEP Creditor will observe and abide by the
provisions of this Article 13 and the provisions of the Servicing Agreement.

		13.4	Other STEP Creditors

		(1)	The Seller shall not sell, assign, transfer, pledge, syndicate, hypothecate, contribute, encumber, participate or otherwise
dispose of (in this Section 13.4, a “disposition”) any STEP Account that is secured by the related STEP Collateral
Mortgage and Related Security with respect to which a related STEP Loan is owned by the Guarantor to any person unless and until
(A) such Person has entered into a Security Sharing Agreement with the Seller, the Servicer, the Guarantor, the Bond Trustee, the
Custodian and any Other STEP Creditor, which Security Sharing Agreement shall (i) require that such party agree to be
bound by the provisions of this Article 13 and the related provisions of the Servicing Agreement, and (ii) comply with the requirements
of the CMHC Guide, and (B) such Person has delivered a fully executed Release of Security to the Custodian, which Release of Security
shall be held by the Custodian in trust, and the use thereof shall be subject to the terms of Section 13.9,
and (iii) the Seller shall have delivered to the Custodian, the Bond Trustee, the Guarantor and CMHC an opinion of legal counsel
to the Seller confirming that (i) the Security Sharing Agreement is enforceable by the Guarantor against the other parties thereto,
and (ii) such Release of Security is valid and enforceable against such Person.

		(2)	Without limiting the provisions of this Agreement or any
Security Sharing Agreement, each Other STEP Creditor will be required to ensure that any party to whom it may make a disposition
of all or any part of its interest in and to a STEP Account retained by it which is secured by the related STEP Collateral Mortgage
and Related Security shall (A) shall enter into a Security Sharing Agreement with the Seller, the Servicer, the Guarantor, the
Bond Trustee, the Custodian and any Other STEP Creditor, which Security Sharing Agreement shall (i) require that such
party agree to be bound by the provisions of this Article 13 and the related provisions of the Servicing Agreement, and (ii) comply
with the requirements of the CMHC Guide, and (B) deliver a fully executed Release of Security to the Custodian, which Release
of Security shall be held by the Custodian in trust, and the use thereof shall be subject to the terms of Section 13.9,
and (iii) deliver to the Custodian, the Bond Trustee, the Guarantor and CMHC an opinion of legal counsel of national repute confirming
that (i) the Security Sharing Agreement is enforceable by the Guarantor against the other parties thereto, and (ii) such Release
of Security is valid and enforceable against such Person. Upon completion of any such disposition and satisfaction of each of
the foregoing requirements, the transferring party will be released from future liability under this Article 13 solely in respect
of the transferred interest in the STEP Account (but in respect of the Seller, not in respect of any of its other obligations
and liabilities under this Agreement or any other Transaction

    	 

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Documents), but, specifically, the transferring party
is not released from any obligation under this Article 13 arising as a result of or prior to such disposition.

		(3)	The Seller and each Other STEP Creditor (i) is bound to observe and abide by the provisions of Article 6 (Actions Upon a
                                                           Registered Title Event and Related Matters) and will take no steps to delay or prevent any of the actions required to be
                                                           undertaken by any party under Article 6, and (ii) acknowledges and agrees that neither the Seller nor any Other STEP Creditor
                                                           shall be entitled to be registered on title in respect of any related Mortgaged Property. If reasonably required for purposes
                                                           of giving effect to the steps and actions to be undertaken in accordance with Article 6 (Actions Upon a Registered Title
                                                           Event and Related Matters), all such Other STEP Creditors will promptly grant their written consent, take any steps or
                                                           actions, or join in actions or proceedings, as may be reasonably required to give effect to such steps and actions
                                                           contemplated in regard to the STEP Loans and Related Security as set out in Article 6.

		(4)	Except as set out in this Article 13 and subject to any related Security Sharing Agreement, the Seller and any Other
                                                           STEP                                                            Creditor may make loans or otherwise extend credit to, and
                                                           generally engage in any kind of business with, a STEP Borrower,
                                                           and the Guarantor, the Seller and any Other STEP Creditor may receive payments on other loans or extensions of credit from
                                                           such STEP Borrower and otherwise act with respect thereto freely and without accountability in respect of such loans or
                                                           extensions of credit in the same manner as if this Article 13 and any applicable Security Sharing Agreement were not in
                                                           effect, provided that any such loans or other credit products are not secured by a STEP Collateral Mortgage or any other
                                                           Related Security that secures a STEP Loan owned by the Guarantor.

		13.5	Priority of STEP Loans and Other STEP Products

		(1)	A First STEP Loan and each related Additional STEP Loan with the same STEP Borrower owned by the Guarantor are of equal priority,
and no portion of any such STEP Loan will have priority or preference over any portion of any other related STEP Loan. A First
STEP Loan and any Additional STEP Loan owned by the Guarantor shall have priority over any Additional STEP Loan owned by the Seller.
Any payment (whether principal or interest) or prepayment or other amount received in respect of a First STEP Loan and each related
Additional STEP Loan will be distributed to the holders of such STEP Loans in accordance with Section 13.6.

		(2)	The Other STEP Products and the right of the Seller or Other STEP Creditors to receive payments of principal, interest and
all other amounts thereunder will at all times be junior, subject and subordinated to the STEP Loans made to the same STEP Borrower,
and the rights of the holders of the STEP Loans to receive payments of principal, interest and other amounts with respect to such
STEP Loans as and to the extent provided in this Article 13.

		(3)	If the Seller or any Other STEP Creditor receives any funds that are properly allocable to the related STEP Loan, the Seller
or such Other STEP Creditor shall promptly remit same to the Servicer or, if appropriate, the Bond Trustee or as either of them
will direct and until it does so, it will hold such monies in trust for the Guarantor in a segregated account.

    	 

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		13.6	Application of Payments and Losses under STEP Accounts

		(1)	Prior to a default by a STEP Borrower under any STEP Account, (i) the Guarantor, the Seller, the Servicer and each Other STEP
Creditor will follow a STEP Borrower’s instructions as to the allocation of payments between each of the STEP Accounts with
such STEP Borrower, and (ii) the Seller and each Other STEP Creditor shall be entitled to provide advice to (but shall not be entitled
to direct) the Servicer as to the application of all sums derived from the STEP Accounts owned by it (whether on account of principal,
interest or otherwise) and all other dealings with such STEP Accounts (but not, for greater certainty, as to dealings with the
related STEP Mortgage).

		(2)	Following a default by a STEP Borrower, the Servicer will allocate all monies received from such STEP Borrower and all
                                                           amounts                                                            realised from the enforcement of the security held for the
                                                           STEP Accounts with such STEP Borrower, including all proceeds of
                                                           insurance, after payment of all STEP Enforcement Costs of the Servicer relating to the STEP Loans (for the purposes of this
                                                           Section 13.6(2), “indebtedness” in (b) through (e) below includes individual collection and realisation costs of
                                                           the holder of the applicable Other STEP Product, except to the extent of any of the Guarantor’s costs otherwise
                                                           included in STEP Enforcement Costs), in the following order of priority:

		(a)	first, to pay all indebtedness owing under any STEP Loans owned by the Guarantor, on a pro rata and pari passu
basis as amongst such STEP Loans;

		(b)	second, to pay all indebtedness owing under any STEP Loans owned by the Seller, on a pro rata and pari passu
basis as amongst such STEP Loans

		(c)	third, to pay indebtedness owing under any STEP LOC;

		(d)	fourth, to pay indebtedness owing under any term loan made to such STEP Borrower under the STEP Plan;

		(e)	fifth, to pay indebtedness owing under any credit card issued to such STEP Borrower under the STEP Plan;

		(f)	sixth, to pay indebtedness owing under any overdraft protection provided to such STEP Borrower under the STEP Plan; and

		(g)	seventh, to pay any excess amount not otherwise applied pursuant to the foregoing (a) through (f) in accordance with the terms
of the STEP Plan and as may be required by applicable Law.

		(3)	Any losses suffered upon enforcement of security held for STEP Accounts with the same STEP Borrower will be allocated to reduce
the outstanding balance indebtedness of such STEP Accounts to zero (but not below zero) in the following order of priority:

		(a)	first, to the holders of STEP Accounts in the nature of overdraft protection provided to such STEP Borrower under the STEP
Plan;

    	 

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		(b)	second, to the holders of STEP Accounts in the nature of any credit card issued to such STEP Borrower under the STEP Plan;

		(c)	third, to the holders of STEP Accounts in the nature of any term loan made to such STEP Borrower under the STEP Plan;

		(d)	fourth, to the holders STEP Accounts in the nature of any STEP LOC; and

		(e)	fifth, to the STEP Loans held by the Seller, on a pro rata and pari passu basis as amongst such STEP Loans; and

		(f)	sixth, to the STEP Loans held by the Guarantor, on a pro rata and pari passu basis as amongst such STEP Loans.

		13.7	STEP Collateral Mortgage and Related Security

		(1)	Concurrently with the sale of the First STEP Loan relating
to a particular STEP Borrower to the Guarantor, the Seller will transfer and convey to the Guarantor all of its right, title and
interest in the Related Security (including its interest in the related STEP Collateral Mortgage (or, in the case of a STEP Loan
in Québec, an interest in the related STEP Collateral Mortgage to the extent of the First STEP Loan that is sold to the
Guarantor). The Guarantor will hold the Related Security in respect of each STEP Loan sold to the Guarantor as follows: (i) an
undivided interest in such Related Security for its own sole and absolute account and benefit, to the extent of all outstanding
indebtedness owing under all STEP Loans owned by the Guarantor in respect of the same STEP Borrower from time to time, which undivided
interest will have full priority over all other rights, claims and interests relating to other STEP Accounts (other than STEP
Enforcement Costs, which shall have the priority specified in Section 13.6(2)); and (ii) subject to the Guarantor’s priority
described in item (i) above (but in the case of the Seller, together with the right to pari passu and pro rata distributions
in respect of Additional STEP Loans owned by the Seller and not yet sold to the Guarantor) and the provisions of Sections 13.5
and 13.6, but only to the extent that any such Related Security also secures or otherwise relates to any other STEP Accounts owned
by the Seller, an undivided interest in such Related Security, as agent, nominee and bare trustee for the Seller and each Other
STEP Creditor from time to time, as their interests may appear, to the extent of all outstanding indebtedness owing under any
Additional STEP Loans and Other STEP Products owned by the Seller or such Other STEP Creditors from time to time; provided that,
for STEP Loans in the Province of Québec, the Seller will transfer and convey and the Guarantor will solely hold an interest
in the Related Security in respect of each STEP Loan sold by the Seller to the extent of all outstanding indebtedness owing under
all STEP Loans owned by the Guarantor in respect of the same STEP Borrower from time to time, which interest will have full priority
over all other rights, claims and interests relating to other STEP Accounts (other than STEP Enforcement Costs, which shall have
the priority specified in Section 13.6(2)). As well, for STEP Loans in the Province of Québec, the Seller and each Other
STEP Creditor will retain its interest in the STEP Collateral Mortgage to the extent of the outstanding indebtedness owing under
any related STEP Accounts, subject to the foregoing priority provisions in Sections 13.5

    	 

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(Priority
of STEP Loans and Other STEP Products) and 13.6 (Application of Payments and Losses under STEP Accounts) in favour of
the Guarantor; provided, however, that at no time shall the Seller or any Other STEP Creditor have a right to be registered
on title with respect to the related Mortgaged Property notwithstanding their interest in the STEP Collateral Mortgage and
other Related Security.

		(2)	With respect to any Mortgaged Property that stands as security for a STEP Loan, in which ownership of such Mortgaged Property
is acquired through enforcement proceedings by or on behalf of the Guarantor, the Guarantor will hold such Mortgaged Property in
the same manner, to the same extent and on the same basis as it held the STEP Collateral Mortgage and Related Security under Section
13.7(1) mutatis mutandis. Without limiting the foregoing, after payment of any related STEP Enforcement Costs of the Guarantor
and operating expenses relating to such Mortgaged Property, all proceeds arising from the ownership, leasing and sale thereof are
to be applied and/or distributed and all losses allocated in accordance with the priorities set out in Sections 13.5 (Priority
of STEP Loans and Other STEP Products) and 13.6 (Application of Payments and Losses under STEP Accounts) mutatis mutandis.

		13.8	Servicing and Enforcement

		(1)	Without limiting any other provision hereof and subject always to the provisions of the Servicing Agreement and the STEP
                                                           Plan (in each case to the extent not inconsistent with the provisions of this Article 13), the CMHC Guide and this Article 13, the Guarantor or the Servicer on its
behalf (prior to the occurrence of a Guarantor Event of Default and the service of a Guarantor Acceleration Notice on the Guarantor),
or the Bond Trustee (following the occurrence of a Guarantor Event of Default and the service of a Guarantor Acceleration Notice
on the Guarantor) has the sole and exclusive discretion and authority (and no other Person is to have the right to do so, nor will
the Servicer be obligated to follow the direction of any other Person in connection with):

		(a)	to service and administer the STEP Loans, the related Other STEP Products and the related STEP Collateral Mortgages and
                                                               Related Security in accordance with this Article 13 and the provisions of the Servicing Agreement, taking into account the
                                                               respective rights, interests and priorities of the Guarantor, the Seller and any Other STEP Creditors as set forth in this
                                                               Article 13;

		(b)	to modify or waive any of the terms of the STEP Loans and Other STEP Products, the related STEP Collateral Mortgages,
                                                               the other Related Security                                                                to such STEP Loans and Other STEP
                                                               Products, and the STEP Plan as it relates to such STEP Loans and Other STEP Products and the related Mortgaged Property;

    	 

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		(c)	to vote all claims (including the claims of the Seller and Other STEP Creditors) with respect to the STEP Loans, the related
STEP Collateral Mortgages and Other STEP Products in respect of the same STEP Borrower in any bankruptcy, insolvency or other similar
proceeding as it may determine in its sole discretion;

		(d)	to take any legal action to enforce or protect the Guarantor’s interests with respect to the STEP Loans and Other
                                                               STEP Products, the related STEP Collateral Mortgages, the other Related Security to such STEP Loans and Other STEP Products
                                                               and the related Mortgaged                                                                Property, or to refrain from
                                                               exercising any powers or rights under the Related Security and the STEP Plan, with regard to
                                                               such STEP Loans and Other STEP Products and the related Mortgaged Property, as it may determine in its sole discretion;
                                                               and

		(e)	allocate any monies received by it and otherwise realised from the enforcement of the security for all of the related
                                                               STEP Accounts and from the same STEP Borrower in accordance with the priority arrangements set out in this Article 13,
                                                               including                                                                the allocation of such monies and any losses to all
                                                               indebtedness owing under all STEP Accounts with the same STEP Borrower.

		 	In this regard, the Guarantor or the Servicer on its behalf and/or the Bond Trustee may exercise or refrain from
                                                              exercising any rights and remedies available to it under (i) the STEP Loans sold by such Servicer, as the Seller, to the
                                                              Guarantor or                                                               (ii) the related STEP Collateral Mortgages and the
                                                              Related Security to such STEP Loans in a manner adverse to the Seller or
                                                              any Other STEP Creditor and neither the Guarantor nor such Servicer will have any liability to the Seller or
                                                              any Other STEP Creditor in respect thereof.

		(2)	With respect to STEP Loans, in respect of which the related STEP Collateral Mortgage and Related Security remains as
                                                           security for Additional STEP Loans and Other STEP Products, after all of the STEP Loans secured by such STEP Collateral
                                                           Mortgage and Related Security included in the Portfolio are repaid in full, the Servicer will, and is hereby authorized by
                                                           the Seller and the 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
                                                           for                                                            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 Additional STEP Loans or 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. The Guarantor will have no further obligation or liability under this Article 13 or any Security
                                                           Sharing Agreement entered into pursuant hereto to any party arising on or after transfer of such STEP Collateral Mortgage
                                                           and                                                            Other Related Security.

		(3)	Neither the Seller nor any Other STEP Creditors will make any application to a court, or commence any action, for the partition
or sale of a STEP Plan, any STEP Collateral Mortgage, any other Related Security or other related rights, claims or documentation.

		(4)	Except for the Servicer, when acting in its capacity as paying agent of any proceeds under a STEP Plan, neither the Guarantor,
nor the Seller, nor any other Servicer, will have any fiduciary duty to the Guarantor, the Seller or Other STEP Creditors in connection
with the servicing, administration or enforcement of a STEP Collateral Mortgage and the related STEP Accounts, including the matters
set out in Section 13.8(1).

		(5)	The Seller and Other STEP Creditors irrevocably and unconditionally waive (for themselves and any Persons claiming through
them) any and all rights to initiate and direct collection or enforcement proceedings or to service or make any servicing decisions
under the STEP Collateral Mortgage in regard to STEP Accounts held by them and
any STEP Loan or Other STEP Product owned by them.

		(6)	The Seller and Other STEP Creditors will indemnify and save the Guarantor and the Bond Trustee harmless from and against all
losses and costs arising from any action or

    	 

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failure to act by the Seller, in its capacity as the
Seller or Servicer, or Other STEP Creditor in connection with other STEP Accounts held by the Seller or Other STEP Creditors, as
the case may be, that gives rise to a right of set off, deduction or other similar claim by such STEP Borrower against STEP Loans
sold by the Seller to the Guarantor.

		(7)	It is hereby acknowledged and agreed that nothing in this Agreement will be construed as giving rise to any relationship of
agency, save as expressly provided herein, or partnership amongst the Guarantor, the Bond Trustee, the Seller, any Other STEP Creditors
or any Servicer and that in fulfilling its obligations hereunder, each party will be acting entirely for its own account.

		(8)	For good and valuable consideration and as security for the obligations of the Seller and each Other STEP Creditor in
                                                           and                                                            to any STEP Loan owned by the Seller and Other STEP Products
                                                           owned by the Seller or any Other STEP Creditor, the Seller and Other STEP
                                                           Creditor hereby appoint 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 and doing all such acts and things, which, in the reasonable opinion of such Servicer, are
                                                               necessary or desirable for the efficient provision of the Services under the Servicing Agreement in regard to the STEP
                                                               Collateral Mortgage and any other Related Security in relation to a STEP Loan owned by the Seller or Other STEP Product
                                                               owned                                                                by the Seller or an Other STEP Creditor, including,
                                                               making                                                                all documents, instruments, consents and assurances
                                                               under Section 13.8
                                                               (Servicing and Enforcement); and

		(b)	exercising its rights, powers and discretion under the STEP Collateral Mortgages and/or any other Related Security relating
to any STEP Loan and/or Other STEP Products secured by such STEP Collateral Mortgage,

provided that, for the avoidance of doubt, such power
of attorney will be exercised in accordance with the Servicing Standard. For the avoidance of doubt, the Seller and/or Other STEP
Creditor will not be liable or responsible for the acts of such Servicer or any failure by such Servicer to act under or in respect
of this power of attorney. The appointment contained herein will be coupled with an interest and will be irrevocable unless and
until the termination of the appointment of such Servicer pursuant to Article 18 of the Servicing Agreement upon which the appointments
contained in herein will be automatically revoked.

		13.9	Security Sharing Arrangement Breach

Any Release of Security
delivered to the Custodian hereunder shall be effective only upon the earlier to occur of the following (each, a “Security
Sharing Agreement Breach”):

		(a)	the party which executed such Release of Security breaches or causes the breach of the requirements set forth in this Article
13 in relation to one or more STEP Loans or Other STEP Products secured by the same STEP Collateral Mortgage and fails to remedy
such breach (or re-acquire all related STEP Loans secured by

    	 

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such STEP Collateral Mortgage in accordance with this
Agreement) within 60 days (or, after an Issuer Event of Default, 10 Toronto Business days) of receiving notice of the breach;

		(b)	the party which executed such Release of Security sells, disposes of or transfers any Other STEP Product secured by the STEP
Collateral Mortgage and Related Security relating to a STEP Loan in a manner contrary to Section 13.4(1) or (2); and

		(c)	the party which executed such Release of Security challenges the validity, legality or enforceability of any provision contained
in this Agreement or any Security Sharing Agreement in relation to any STEP Loan or Other STEP Product secured by the STEP Collateral
Mortgage and Related Security relating to a STEP Loan that has been purchased by the Guarantor hereunder.

The Servicer shall provide immediate
written notice to the Seller, the Servicer, the Guarantor, the Bond Trustee, the Custodian and any other Person that is a party
to the related Security Sharing Agreement upon receiving advice of the occurrence of any Security Sharing Agreement Breach. Upon
the request of the Guarantor or the Bond Trustee accompanied by such notice from the Servicer (or such other evidence satisfactory
to the Custodian, acting reasonably, of circumstances properly the subject of such notice), the Custodian shall deliver to such
party the Release of Security in respect of the Loans and their Related Security that are the subject of the Security Sharing Agreement
Breach, provided that the Custodian shall only deliver the Release of Security upon receipt of an opinion confirming it is required
by the provisions of this Agreement or any other Security Sharing Agreement to so deliver such Release of Security (which legal
opinion may assume or rely upon the accuracy of factual matters set out in the Servicer’s notice or otherwise evidenced),
such opinion to be provided by a law firm of national repute that is not, and has not within the three years prior to the date
on which any opinion is delivered by such firm, been engaged in connection with the Program (except for the purposes of delivering
an opinion of Independent Legal Counsel (as defined in the CMHC Guide) in respect of a the Program) and is not otherwise generally,
typically or regularly engaged by any party to this Agreement or any Security Sharing Agreement to provide legal counsel or advice.

		13.10	Termination upon Sale of STEP Loans by Guarantor

The provisions of this Article
13 shall no longer apply to all related STEP Loans and Other STEP Products advanced to the same STEP Borrower following (i)
the sale of all such related STEP Loans and Other STEP Products to the Seller or any other Person, or (ii) the repayment in
full of all amounts owing under or in respect of all such related STEP Loans owned by the Guarantor.

Article 14

CUSTODIAN

		14.1	Appointment of Custodian

The Guarantor hereby appoints the Custodian
as its custodian with respect to the Custodial Information and all other data, documents and information provided to it hereunder

    	 

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and authorizes the Custodian to prepare and execute all such
acts, documents, matters and things which the Custodian may deem necessary or advisable to accomplish the purposes of this Agreement
and its duties pursuant to this Article 14. The Custodian hereby accepts such appointment.

		14.2	Representations, Warranties and Covenants of Custodian

The Custodian hereby represents, warrants
and covenants as follows:

		(a)	it is a federally chartered institution authorized to act in a fiduciary capacity with respect to valuable documents;

		(b)	it possess the necessary experience, qualifications, facilities and other resources to perform its responsibilities as Custodian;

		(c)	it will comply with the provisions of , and perform its obligations under, this Agreement, the other Transaction Documents
to which it is a party in any capacity, and the CMHC Guide;

		(d)	it is and will continue to be good standing with its regulator;

		(e)	it is and will continue to be in material compliance with, all Laws applicable to it, and is and will continue to be in material
compliance with its internal policies and procedures (including risk management policies), relevant to its duties as Custodian;

		(f)	it is equipped with secure, fireproof storage facilities, with adequate controls on access to assure the safety, confidentiality
and security of the documents, in accordance with customary standards for such storage facilities;

		(g)	it has employees who are knowledgeable in the handling of mortgage and security documents and in the duties of a mortgage and
security document custodian;

		(h)	it has computer systems that can accept electronic versions of asset details, and be able to transmit that data to CMHC, the
Cover Pool Monitor, the Guarantor or its representatives or a replacement Servicer in a form that is generally readable by computer
systems;

		(i)	it is at arm’s length from, and otherwise independent and not an Affiliate of, each of the Seller;

		(j)	it will take all necessary steps to comply with all applicable privacy legislation in connection with any information provided
to it hereunder.

		14.3	Provision of Documentation to Custodian

		(1)	On or prior to the tenth Business Day following the last day of February, May, August and November of each year, commencing
on the first of such dates to occur after the First Transfer Date, the Seller or the Cash Manager, as applicable, shall
(i) provide

    	 

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updated Custodial Information to the Custodian, and
(ii) confirm in writing that it is not aware of any change in Law affecting or reasonably expected to affect the validity or enforceability
of any Powers of Attorney previously provided to the Custodian by the Seller pursuant to this Agreement.

		(2)	Forthwith upon any change in Law affecting or reasonably expected to affect the validity or enforceability of any Powers of
Attorney previously provided to the Custodian by the Seller pursuant to this Agreement, the Seller shall deliver to the Custodian
updated irrevocable Powers of Attorney which satisfy the requirements of Section 3.6.8(c) of the CMHC Guide, together with an opinion
of legal counsel to the Seller confirming that such Powers of Attorney are sufficient to allow the Guarantor (or a nominee on its
behalf) to effect the transfer of registered title to the Loans and Related Security included in the Portfolio. A copy of such
opinion shall contemporaneously be delivered to CMHC.

		(3)	Upon each anniversary of the Program Date, the Seller shall deliver to the Custodian an opinion of legal counsel to the Seller
confirming that the Powers of Attorney previously provided to the Custodian pursuant to Sections 3.1(a)(i), 4.5(a)(ii) or 14.3(2)
continue to be valid and enforceable and are sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer
of registered title to the Loans and Related Security included in the Portfolio. A copy of such opinion shall contemporaneously
be delivered to CMHC.

		(4)	On the date of each transfer of Loans and their Related Security and/or Substitute Assets from the Guarantor to any Person,
the Seller, or the Servicer or the Cash Manager, as applicable,  shall deliver to the Custodian for safekeeping (a) Eligible
Loan Details, and (b) Substitute Asset Details in respect of the Loans and Related Security and Substitute Assets, if any, transferred
by the Guarantor on such date.

		(5)	On the date of each transfer of Substitute Assets from the Seller to the Guarantor and on each date on which the Cash Manager
makes an investment in Substitute Assets, the Seller or the Cash Manager, as applicable,  shall deliver to the Custodian for safekeeping
Substitute Asset Details in respect of such Substitute Assets on such date.

		(6)	Forthwith upon the occurrence of a Registered Title Event, the Seller or the Cash Manager, as applicable,  shall deliver
to the Custodian updated Custodial Information in relation to all Loans and Related Security and Substitute Assets included in
the Portfolio and, to the extent necessary, any information required to update the Powers of Attorney previously delivered by the
Seller to the Custodian, together with documentary evidence of chain of title to such Loans and Related Security and Substitute
Assets, together with Registrable Transfers in relation to such Loans and Related Security.

If any of the Loans that
have been sold to the Guarantor hereunder were originated in the Province of Québec, upon the earlier of (i) the
occurrence of a Registered Title Event, and (ii) a downgrade of the senior long-term rating assigned to the Issuer by one or
more of DBRS, Moody’s or Fitch below BBB(high), BBB+ or Baa1, respectively, the Seller will notify the Borrowers
(and their guarantors) and deliver Registrable

    	 

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Transfers to the Custodian in relation to each such
Loan and hypothecs included in the Québec Purchased Assets, make all registrations and generally complete all formalities
required under the laws of the Province of Québec in order to render the sale and assignment of the Québec Purchased
Assets opposable against the Borrowers (and their guarantors) and all third persons, in accordance with Articles 1641, 1645 and
3003 of the Civil Code of Québec. The Seller will act upon the Guarantor’s instructions under this Section
14.3(7).

		(7)	Upon the occurrence of a Servicer Termination Event, the Seller shall deliver to the Custodian in electronic form (where available),
or provide the Guarantor reasonable access to, all of its mortgage loan servicing files (and cause each of its Affiliates acting
as a servicer of any Loans to similarly deliver or afford reasonable access to all of its mortgage loan servicing files) relating
to the Covered Pool Collateral including, in the case of each Loan, affording reasonable access to the Servicing Records for each
Loan included in the Portfolio.

		(8)	The Seller shall make available to CMHC, upon reasonable request, all Custodial Information that has been provided to the Custodian
by the Seller and all such other accounts and records of the Seller relating to the Loans and Related Security included in the
Portfolio, as may be required by CMHC to verify compliance by any party to the Transaction Documents with the requirements of the
CMHC Guide and Part I.1 of the National Housing Act (Canada).

		(9)	The Seller shall make available to the Cover Pool Monitor, upon reasonable request, all data and documentation provided by
the Seller to the Custodian hereunder, as may be required for the Covered Pool Monitor to perform its duties under the Covered
Pool Monitor Agreement.

		14.4	Responsibilities of Custodian

The Custodian shall remain responsible
for the data and documents delivered to it in accordance with this Agreement until the earlier of:

		(a)	the time of their release to a replacement Custodian (it being acknowledged that the replacement Custodian shall be responsible
for the safe transfer of the data and documents to its premises and systems);

		(b)	the termination of the Program, whereupon the Custodian shall either (i) release the data and documents to the Seller or as
the Seller may direct or (ii) destroy the data and documents in accordance with procedures satisfactory to the Seller, all in accordance
with the Seller’s instructions; and

		(c)	in relation to a particular Loan or Substitute Asset included in the Portfolio, its disposition by the Guarantor or its maturity,
whereupon the Custodian shall either (i) release the particular data and documents related to such Loan or Substitute Asset to
the Seller or as it may direct, or (ii) destroy such data and documents in accordance with procedures satisfactory to the Seller,
all in accordance with the Seller’s instructions.

    	 

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		14.5	Resignation, Removal and Replacement of Custodian

		(1)	The Custodian may resign at any time upon giving not less than three calendar months’ prior notice in writing to the
Guarantor, the Seller and the Bond Trustee without assigning any reason therefor and without being responsible for any Liabilities
incurred by reason of such resignation.

		(2)	The Guarantor may, at any time, but subject to the prior written consent of the Bond Trustee (if the Custodian is not the Bond
Trustee), terminate the appointment of the Custodian hereunder upon providing the Custodian with at least 60 days’ prior
written notice, provided that, subject to Section 14.5(3) below, such termination may not be effected unless and until a replacement
approved by the Bond Trustee, acting reasonably, has been found by the Guarantor which agrees to perform the duties (or substantially
similar duties) of the Custodian set out in this Agreement. Notwithstanding the foregoing, the Guarantor may unilaterally remove
the Custodian by notice to the Custodian and the Issuer in the event of a default by the Custodian in the performance or observance
of its covenants and obligations, or a breach by the Custodian of its representations and warranties, respectively, under Section
14.2.

		(3)	Notwithstanding the foregoing, except when removed as a result of a default by the Custodian in the performance or observance
of its covenants and obligations, or a breach by the Custodian of its representations and warranties, respectively, under Section
14.2, where such removal shall be effective immediately, the resignation or removal of the Custodian will not become effective
unless a replacement Custodian has been appointed which has agreed to the terms of this Agreement and with respect to which appointment
the Rating Agency Condition has been satisfied. The Guarantor covenants that, in the event of a Custodian giving notice under Section
14.5(1) or being removed as referred to in Section 14.5(2), it will use all commercially reasonable endeavours to procure a new
Custodian to be appointed as soon as reasonably practicable thereafter. If within 60 days of having given notice of its intention
to retire, no appointment of such replacement Custodian has become effective, the outgoing Custodian will be entitled to appoint
its successor; provided that such successor will agree to the terms of this Agreement and that the Rating Agency Condition shall
have been satisfied in respect of such appointment.

		(4)	Upon any termination or resignation of the Custodian hereunder, the Guarantor shall provide notice to CMHC of such termination
or resignation and of the Custodian’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 Custodian has yet to be identified at that time, in which case notice of the replacement
Custodian 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 Custodian, and all information relating to the replacement Custodian required
by the CMHC Guide to be provided to CMHC in relation to the Custodian and this Agreement, including without limitation a revised
and amended copy of this Agreement with such replacement.

    	 

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		(5)	Any replacement Custodian appointed hereunder shall satisfy the requirements of the CMHC Guide applicable to custodians.

		14.6	Remuneration; Costs and Expenses; Liability and Indemnification

		(1)	The parties to this Agreement acknowledge and agree that the Custodian acts hereunder as a custodian only and (i) shall not
be responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of any materials deposited
with it, for the form or execution of such instruments, for the identity, authority or right of any Person or party executing or
depositing such instruments or for determining or compelling compliance therewith, and shall not otherwise be bound thereby; (ii)
shall be obligated only for the performance of such duties as are expressly and specifically set forth in this Agreement on its
part to be performed, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part
of the Custodian; (iii) shall not be required to take notice of any default or to take any action with respect to such default
involving any expense or liability, unless notice in writing of such default is formally given to the Custodian, and unless it
is indemnified and funded, in a manner satisfactory to it, against such expense or liability; (iv) may rely on and shall be protected
in acting or refraining from acting upon any written notice, instruction, instrument, statement, certificate, request or other
document furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper Person,
and shall have no responsibility for determining the accuracy thereof; (v) may employ and consult legal counsel satisfactory to
it, including in-house counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion of such counsel; and
(vi) shall not be responsible for delays or failures in performance resulting from acts beyond its control, including without limitation,
acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication
line failures, computer viruses, power failures, earthquakes or other disasters.

		(2)	The Custodian may employ such counsel, accountants, appraisers, other experts, agents, agencies and advisors as it may reasonably
require for the purpose of discharging its duties under this Agreement, and the Custodian may act and shall be protected in acting
in good faith on the opinion or advice or on information obtained from any such parties and shall not be responsible for any misconduct
on the part of any of them. The reasonable costs of such services shall be added to and be part of the Custodian’s fee hereunder.

		(3)	The Custodian shall retain the right not to act and shall not be held liable for refusing to act unless it has received clear
and reasonable documentation which complies with the terms of this Agreement. Such documentation must not require the exercise
of any discretion or independent judgment.

		(4)	No provision of this Agreement shall require the Custodian to expend or risk its own funds or otherwise incur financial liability
in the performance of its duties or the exercise of any of its rights or powers unless indemnified as provided for herein, other
than as a result of its own negligence or bad faith.

    	 

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		(5)	The Custodian shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith,
or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except for its
own negligence or bad faith.

		(6)	The Issuer shall pay to the Custodian as consideration for its services provided pursuant to this Agreement an annual fee of
such amount as may be agreed to from time to time by the parties hereto payable on the date hereof and thereafter at least 30 days
prior to each anniversary of the date hereof.

		(7)	The Seller shall pay the costs and expenses of the Custodian’s services hereunder, and the costs and expense reasonably
incurred by the Custodian in connection with the administration of its duties created hereby or the performance or observance of
its duties hereunder which are in excess of its compensation for normal services hereunder and covered by the remuneration, including
without limitation, all out-of-pocket expenses and disbursements incurred or made by the Custodian in the administration of its
services and duties created hereby (including the reasonable fees and disbursements of its legal counsel and other outside advisors
required for discharge of its duties hereunder).

		(8)	The Seller hereby agrees to indemnify the Custodian and its officers, directors, employees, agents, successors and assigns
and hold it and them harmless from and against any loss, fee, claim, demand, penalty, liability, damage, cost and expense of any
nature incurred by the Custodian and its officers, directors, employees, agents, successors and assigns arising out of or in connection
with this Agreement or with the administration of its duties hereunder, including but not limited to, reasonable legal fees and
other costs and expenses of defending or preparing to defend against any claim of liability, unless and except to the extent such
loss, liability, damage, cost and expense shall be caused by the Custodian’s or its officers’, directors’, employees’,
agents’, successors’ or assigns’ negligence or bad faith. The foregoing indemnification and agreement to hold
harmless shall survive the resignation or removal of the Custodian or the termination of this Agreement.

		(9)	The Custodian accepts the duties and responsibilities under this Agreement as agent, and no trust is intended to be, or is
or will be, created hereby and the Custodian (in such capacity) shall owe no duties hereunder as trustee.

Article 15

Non-Merger

		15.1	Non-Merger

Any term of this Agreement to which effect
is not given on the First Transfer Date or on any Transfer Date (including in particular, but without limitation, the liability
of the Seller under the Representations and Warranties and the indemnity in Section 7.2 (Undertaking of Seller) and the provisions
of Article 4 (Sale and Purchase of Additional Loans)) will not merge and will remain in full force and effect notwithstanding
the sale and purchase contemplated by this Agreement.

    	 

    	41

    

Article 16

NO AGENCY OR PARTNERSHIP

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

Article 17

Payments

		17.1	Payments

Except as otherwise specifically provided,
all payments to be made pursuant to this Agreement will be made in Canadian Dollars in immediately available funds without exercising
or seeking to exercise any right of set-off, abatement or deduction as may otherwise exist and will be deemed to be made when they
are received by the payee and will be accounted for accordingly unless failure to receive any payment is due to an error by the
payee’s bank.

Article 18

Amendments, Variation and Waiver

		18.1	Amendments, Variation and Waiver

Subject to the terms of the Security
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 authorized 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. The Guarantor will deliver notice to the Rating Agencies from time to time of any
amendment, variations or waivers with respect to 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, variations or waivers which are material, provided that failure
to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

    	 

    	42

    

Article 19

NOTICES AND OPINION DELIVERY

		19.1	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 registered mail) when it would be received in the ordinary course of the mail, or (in the case of e-mail) upon
confirmation of receipt thereof, and will be sent:

		(a)	in the case of the Seller, to The Bank of Nova Scotia,
Scotia Plaza, 44 King Street West, Toronto, ON 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 Guarantor, to Scotiabank Covered Bond Guarantor Limited Partnership, c/o The Bank of Nova Scotia, Scotia
Plaza, 44 King Street West, Toronto, ON 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 or the Custodian, to Computershare Trust Company of Canada,
100 University Avenue, 11th Floor, Toronto, ON M5J 2Y1 (facsimile number (416) 981-9777) for the attention
of Manager, Corporate Trust, E-mail: corporatetrust.toronto@computershare.com,

or to such other physical or e-mail address or facsimile
number or for the attention of such other Person 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 19.

		19.2	Delivery of Opinions

Any opinion delivered hereunder to any party shall also be
delivered to each of DBRS and Fitch.

Article 20

Assignment

		20.1	Assignment

Subject always to the provisions of Article
13 (STEP Plan and Intercreditor Arrangements) and Section 20.2 (Assignment under Security Agreement), 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 without such 

    	 

    	43

    

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.

		20.2	Assignment under Security Agreement

The Seller 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 hereby waives) and the Seller hereby waives as against the Bond Trustee any rights or equities in its favour arising
from any course of dealing between the Seller and the Guarantor.

Article 21

Bond Trustee

		21.1	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
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.

		21.2	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 Seller
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 18 (Amendments, Variation and 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 22

LIMITATION OF LIABILITY

    	 

    	44

    

		22.1	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 23

Non-Petition Covenant

		23.1	Non-Petition Covenant

The Seller covenants and agrees that
it 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 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 party.

Article 24

Governing Law

		24.1	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.

		24.2	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.

Article 25

EXECUTION IN COUNTERPARTS

		25.1	Execution in 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.

[The remainder
of this page left intentionally blank]

    	 

    	45

    

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

	 	 	THE BANK OF NOVA SCOTIA, as Seller, as Servicer and as 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 GP SCOTIABANK COVERED BOND GP INC.
	 	 	 
	 	 	 
	 	 	 	By:	/s/ Jake Lawrence
	 	 	 	 	Name:  Jake Lawrence
	 	 	 	 	Title: President and Secretary
	 	 	 
	 	 	COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee and Custodian
	 	 	 
	 	 	 
	 	 	 	By:	/s/ Sean Pigott
	 	 	 	 	Name:  Sean Pigott
	 	 	 	 	Title: Corporate Trust Officer
	 	 	 
	 	 	 	By:	/s/ Stanley Kwan
	 	 	 	 	Name:   Stanley Kwan
	 	 	 	 	Title:  Associate Trust Officer
	 	 	 

 

    	 

    	46

    

FOR GOOD AND VALUABLE CONSIDERATION (the receipt and
sufficiency of which are hereby acknowledged), the undersigned hereby acknowledge and agree to the limitations set out in
Section 4.13 of this Agreement as of the date first above written.

8429057
CANADA INC.

 

 

By: /s/ Stuart Swartz                                

Name: Stuart Swartz

Title: President

 

Per: /s/ Charles Eric
Gauthier                   

Name: Charles Eric Gauthier

Title: Vice-President

 

SCOTIABANK COVERED BOND GP INC.

 

 

By: /s/ Jake Lawrence                             

Name: Jake Lawrence

Title: President and Secretary

 

 

    	 

    	 

    

SCHEDULE
1

Representations and Warranties

		1.	Corporate Representations and Warranties

		1.1	The Bank is a Canadian chartered bank under the Bank Act
and has, in all material respects, full power and authority to own its properties and conduct its business as presently owned
or conducted, and to execute, deliver and perform its obligations under this Agreement.

		1.2	The Seller is duly qualified to do business, is in good
standing and has obtained all necessary licenses and approvals, in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would render any Mortgage unenforceable by it, the Guarantor, the Bond Trustee or a Purchaser, as
applicable, or would have a material adverse effect on the Guarantor’s rights hereunder.

		1.3	The execution and delivery of this Agreement and each of
the documents, agreements or instruments to be executed and delivered hereunder by the Seller, and the performance by the Seller
of its obligations hereunder and thereunder, have been duly authorized by it by all necessary corporate action on its part and
are enforceable against it in accordance with their terms.

		1.4	The execution and delivery by the Seller of this Agreement
and each of the documents, agreements or instruments to be executed and delivered hereunder, the performance of the transactions
contemplated hereunder and thereunder, and the fulfilment of the terms hereof and thereof applicable to it, will not (i) conflict
with or violate its constating documents or by-laws, any resolution of the board of directors (or any committee thereof) or shareholders
of the Bank or any Law applicable to it, or (ii) conflict with, or result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which it is a party or by which it or its properties are bound.

		1.5	There are no proceedings or investigations, pending or,
to the best of the knowledge of the Seller, threatened against it before any Governmental Authority: (i) asserting the invalidity
of this Agreement; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement; (iii) seeking
any determination or ruling that, in its reasonable judgment, would materially and adversely affect the performance by it of its
obligations under this Agreement; or (iv) seeking any determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement.

		1.6	All authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Seller in connection
with the execution and delivery by it of this Agreement and the performance of the transactions contemplated by this Agreement
have been duly obtained, effected or given and are in full force and effect.

		1.7	The Seller is not a non-resident of Canada for purposes
of the Income Tax Act (Canada).

    	 

    	- 2 -

    

		1.8	The Seller is a member of the Scotiabank Group.

		1.9	None of the transactions contemplated hereunder require
compliance with any applicable bulk sales legislation.

		2.	Loan Representations and Warranties

		2.1	The Seller is the legal and beneficial owner of the Loans and their Related Security to be sold to the Guarantor;

		2.2	Each Loan was originated by the Seller in the ordinary course of business (and kept on the Seller’s books for a minimum
of one month prior to the Cut-off Date);

		2.3	Each Loan satisfies the Eligibility Criteria and is an “Eligible Loan” as defined in the CMHC Guide from time to
time;

		2.4	The Mortgage Terms for the Loan expressly permit its assignment without the consent of the mortgagor;

		2.5	No Loan has a remaining amortisation period of more than 50 years as at the relevant Cut-off Date;

		2.6	All of the Borrowers are individuals or have guarantees from individuals for the Loans (which guarantees and any security related
to such guarantees are assignable and will be sold, transferred and assigned to the Guarantor as Related Security for the Loans
in accordance with the terms of the Mortgage Sale Agreement);

		2.7	The Outstanding Principal Balance on each Loan is secured by a Mortgage over residential property;

		2.8	The Outstanding Principal Balance on each Loan constitutes a legal, valid, binding and enforceable debt due to the Seller from
the relevant Borrower and, if applicable, guarantor and the terms of each Loan and its related Mortgage constitute valid and binding
obligations of the relevant Borrower and, if applicable, guarantor enforceable in accordance with their terms except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganisation, moratorium or similar laws affecting the enforcement of creditors’
rights generally or by general principles of equity;

		2.9	Other than (i) registrations in the appropriate land registry or land titles offices in respect of the sale, transfer and assignment
of the relevant Loans from the Seller to the Guarantor pursuant to the Mortgage Sale Agreement, (ii) the provision to Borrowers
under the related Loans or the obligors under their Related Security of actual notice of the sale, transfer and assignment thereof
to the Guarantor, (iii) the notices to the Borrowers (and their guarantors) provided for in Articles 1641 and 1645 of the Civil
Code of Québec in respect of the sale and assignment of the Québec Loans to the Guarantor, and (iv) registrations
and the other formalities provided for in Article 3003 of the Civil Code of Québec in respect of the transfer of
the hypothecs to the Guarantor for Mortgaged Properties located in the Province of Québec, all material filings,

    	 

    	- 3 -

    

recordings, notifications, registrations or other actions
under all applicable laws have been made or taken in each jurisdiction where necessary or appropriate (and where permitted by applicable
law) to preserve, perfect and protect the Guarantor’s legal and beneficial ownership interest in and rights to collect any
and all of the related Loans and their Related Security being purchased on the relevant Transfer Date, including the right to service
and enforce such Loans and their Related Security;

		2.10	There is no requirement in order for a sale, transfer and assignment of the Loans and their Related Security to be effective
to obtain the consent of a Borrower or any other Person to such sale, transfer or assignment and such sale, transfer and assignment
will not give rise to any claim by a Borrower against the Guarantor, the Bond Trustee or any of their successors in title or assigns;

		2.11	All of the Mortgaged Properties are situated in Canada;

		2.12	Not more than 12 months (or such longer period as would be acceptable to reasonable and prudent institutional mortgage lenders
in the Seller’s market) prior to the granting of each Loan (or in the case of any STEP Loan, prior to the granting of the
relevant First STEP Loan), the Seller obtained information on the relevant Mortgaged Property from an independently-maintained
valuation model that would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market,
or received a Valuation Report on the relevant Mortgaged Property that would be, and the contents or confirmation, as applicable,
of which would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market or obtained
such other form of valuation of the relevant Mortgaged Property which has satisfied the Rating Agency Condition;

		2.13	Prior to the taking of Related Security in respect of each Loan, the Seller either instructed lawyers or a notary to conduct
a search of title to the relevant Mortgaged Property and to undertake such other searches, investigations, enquiries and actions
on behalf of the Seller as would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market
(and the Seller was satisfied with the results of same) or the relevant Borrower was required as a condition to granting the relevant
Loan to obtain a lender’s title insurance policy in respect of the relevant Mortgaged Property from an insurer as would be
acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market;

		2.14	Each Loan contains a requirement that the relevant Mortgaged Property be covered by an insurance policy maintained covering
all risks of physical loss or damage that would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s
market;

		2.15	All of the Mortgaged Properties are covered by an insurance policy maintained by the Seller covering all risks of physical
loss or damage which applies when a Borrower fails to maintain such an insurance policy on the relevant Mortgaged Property that
would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market and, so long as such
policy (or equivalent replacement policy) is maintained by the Seller, such policy (or replacement policy) will apply to the Mortgaged
Properties following the sale of the related Loan to the Guarantor;

    	 

    	- 4 -

    

		2.16	Except as otherwise approved by the Rating Agencies in connection with the approval of a New Loan Type, the principal amount
of each Loan is fully advanced and there is no requirement for future advances thereunder;

		2.17	As a warranty only, there are no claims under applicable Laws of any Person having supplied work or materials to a Mortgaged
Property that would have a material and adverse effect on the priority of the related Mortgage;

		2.18	The Seller has, since the making of each Loan, kept or procured the keeping of full and proper accounts, books and records
showing clearly all transactions, payments, receipts, proceedings and notices relating to such Loans;

		2.19	There are no governmental authorizations, approvals, licences or consents required for the Seller to enter into or to perform
their obligations under the Mortgage Sale Agreement or to make the Mortgage Sale Agreement legal, valid, binding, and enforceable
against the Seller and admissible in evidence; and

		2.20	No documentation relating to such Loan or Related Security is missing or incomplete in any material respect that has a material
adverse impact on the realisable value of the relevant Mortgaged Property.

		2.21	The Lending Criteria is consistent with the criteria that would be used by reasonable and prudent institutional mortgage lenders
in the Seller’s market.

 

    	 

    	 

    

Schedule
2

Power of Attorney

THIS POWER OF ATTORNEY is made on the ______ day
of _______________, 20__ by THE BANK OF NOVA SCOTIA (the “Seller”) in favour of each of:

		(1)	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, in its capacity as Managing GP, SCOTIABANK COVERED BOND GP
INC. (the “Guarantor”); and

		(2)	COMPUTERSHARE TRUST COMPANY OF CANADA, in its capacity as Bond Trustee (the “Bond
Trustee”).

WHEREAS:

		(A)	By virtue of a mortgage sale agreement dated as of July 19,
2013 made between the Seller, the Guarantor, the Custodian and the Bond Trustee, as the same may be supplemented, modified, restated
or replaced from time to time (the “Mortgage Sale Agreement”), provision was made for the execution by the
Seller of this Power of Attorney.

		(B)	By virtue of a seller assignment dated  _________________ 20__ and made between the
                                                           Seller, the Guarantor and the Bond Trustee and any seller assignment made between the Guarantor and the Bond Trustee after
                                                           the date hereof (collectively, the “Seller Assignment”), the Loans and their Related Security situated in
                                                           the Province of l and listed in Annex A attached hereto (collectively, the “Purchased Assets”) were
                                                           assigned to the Guarantor.

NOW THIS DEED WITNESSETH as follows:

		(1)	Definitions:

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

		(b)	“Bond Trustee” Computershare Trust Company of Canada, in its capacity
as bond trustee under the Trust Deed together with any successor or additional bond trustee appointed from time to time thereunder.

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

		(d)	“CMHC” Canada Mortgage and Housing Corporation or its successors.

		(e)	“CMHC Guide” The Canadian Global Registered Covered Bond Programs Guide issued by CMHC on June 12, 2013,
as the same may be supplemented, amended or replaced by CMHC from time to time.

    	 

    	- 2 -

    

		(f)	“Customer File” The file or files relating to each Loan and its Related Security containing, inter alia:

		(i)	All material correspondence relating to that Loan; and

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

whether original documentation, or in electronic
form or otherwise.

		(g)	“DBRS” DBRS Limited or its successors.

		(h)	“First STEP Loan” The first STEP Loan made by the Seller to a particular STEP Borrower under the STEP Plan,
which is sold to the Guarantor.

		(i)	“Fitch” Fitch Ratings Inc. or its successors.

		(j)	“Governmental Authority” Includes any domestic or foreign legislative, executive, judicial or administrative
body having or purporting to have jurisdiction in the relevant circumstances.

		(k)	“Guarantor Agreement” The Limited Partnership Agreement dated as of July 19,
2013 made between, inter alia, Scotiabank Covered Bond GP INC., 8429057 Canada Inc.
and The Bank of Nova Scotia, as the same may be supplemented, modified, restated or replaced from time to time.

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

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

		(n)	“Moody’s” Moody’s Investors Service, Inc. or its successors.

		(o)	“Mortgage” The legal charge, mortgage, hypothec, standard security or charge securing a Loan and includes
a STEP Collateral Mortgage.

		(p)	“Mortgage Terms” All the terms and conditions applicable to the Loans as contained in the Seller’s
“Mortgage Terms” booklets for Canadian mortgage loans, applicable from time to time and including, in respect of STEP
Loan, the STEP Plan.

    	 

    	- 3 -

    

		(q)	“Mortgage Terms” All of the terms and conditions applicable to a Loan, including the applicable Mortgage
Terms and Offer Conditions and in respect of STEP Loan, the STEP Plan.

		(r)	“Mortgaged Property” Freehold or leasehold residential property located in Canada that is subject
to a Mortgage.

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

		(t)	“New Servicer” Any member of the Scotiabank Group (other than the Bank) appointed as a new servicer in accordance
with the Servicing Agreement.

		(u)	“Offer Conditions” The terms and conditions applicable to a specified Loan as set out in the relevant offer
letter to the Borrower.

		(v)	“Other STEP Creditor” Any owner of any STEP Account outstanding from time to time under the STEP Plan, or
any interest therein, including any Person holding and/or having the benefit of a security interest therein, other than the Seller
and the Guarantor.

		(w)	“Other STEP Products” All STEP Accounts that may be extended by the Seller to a particular STEP Borrower
from time to time, except for STEP Loans.

		(x)	“Person” Includes individuals, corporations, limited and unlimited liability companies, general and limited
partnerships, associations, trusts, unincorporated organisations, joint ventures and Governmental Authority.

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

		(z)	“Rating Agencies” Fitch, Moody’s and DBRS, each, a “Rating Agency”, and any other
internationally recognised rating agency that may rate the covered bonds issued by The Bank of Nova Scotia from time to time.

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

		(bb)	“Registrable Transfer” Each transfer, assignment or conveyance in appropriate form that is required to assign
the relevant Loan and its Related Security included in the Portfolio to the Guarantor or as the Guarantor directs, containing
all necessary information (including mortgage registration number and legal description of the

    	 

    	- 4 -

    

Mortgaged Property subject to the Mortgage that complies
with local law) and executed as necessary (including witnessed and under seal, if necessary) and accompanied by all required affidavits
and certificates, for registration in the land registry or land titles office for the location where the real or immovable property
subject thereto is situate or filing under the PPSA, as the case may be.

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

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

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

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

		(ii)	the related Customer File;

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

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

and in relation to a STEP Loan:

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

    	 

    	- 5 -

    

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

		(dd)	“Scotiabank Group” The Bank of Nova Scotia and its Subsidiaries collectively.

		(ee)	“Servicer” The Seller in its capacity as servicer under the Servicing Agreement and any New Servicer and/or
any Successor Servicers.

		(ff)	“Servicing Agreement” The servicing agreement dated as of July 19,
2013 between the Servicer, the Seller, The Bank of Nova Scotia in its capacity as cash manager, the Bond Trustee and the Guarantor
(as amended, modified, supplemented or restated from time to time).

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

		(hh)	“STEP Borrower” A Borrower under a STEP Loan.

		(ii)	“STEP Collateral Mortgage” The Mortgage that secures indebtedness owing in respect of outstanding STEP Accounts
extended by the Seller to the same STEP Borrower.

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

		(kk)	“STEP LOC” A home equity line of credit extended to a STEP Borrower under the STEP Plan, being those STEP
Accounts described in the documentation for STEP Plans at the date hereof as a “ScotiaLine” and includes a STEP Account
under a successor

    	 

    	- 6 -

    

description from time to time where the STEP Account
under such successor description has the same priority and in all other respects has substantially the same attributes as a “ScotiaLine”
possesses under the documentation presently used in STEP Plans at the date hereof. STEP LOCS are not to be included in the Portfolio
until approved by the Rating Agencies as a New Loan Type.

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

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

		(nn)	“Successor Servicer” A successor servicer to the Servicer in respect of Loans and their Related Security
included in the Portfolio other than a member of the Scotiabank Group.

		(oo)	“Trust Deed” The trust deed dated as of July 19,
2013, made between The Bank of Nova Scotia, the Guarantor, Computershare Trust Company of Canada,
as Bond Trustee and as Bond Trustee (as amended and/or supplemented and/or restated from time to time).

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

		(2)	In this Power of Attorney words importing the singular number only include the plural and vice versa, words importing
any gender include all genders and words importing Persons.

		(3)	The Seller HEREBY IRREVOCABLY APPOINTS each of the Guarantor and the Bond Trustee and any liquidator, receiver or similar
official appointed from time to time in respect of the Guarantor or its assets (each an “Attorney”) severally
to be its true and lawful attorney for the Seller and in the Seller’s name or otherwise to do any act, matter or thing which
any Attorney considers necessary or desirable for the protection, preservation or enjoyment of that Attorney’s (and at the
request of any other Attorney, such other Attorney’s) interest in the Loans and their Related Security included in the Purchased
Assets and/or which ought to be done under the covenants, undertakings and provisions contained in the Mortgage Sale Agreement
or Seller Assignment including (without limitation) any or all of the following:

		(a)	to execute, sign, seal and deliver (using the company seal of the Seller where appropriate) a conveyance, assignment or transfer
of such Loans and their Related Security or any of them to the Guarantor and its successors in title or other Person or Persons
entitled to the benefit thereof from time to time;

		(b)	to do every other act or thing which the Seller is obliged to do under the Mortgage Sale Agreement, the Seller Assignment or
which that Attorney may otherwise consider to be necessary, proper or expedient for fully and effectually vesting or transferring
the interests now or at any time hereafter sold thereunder in such Loans and their Related

    	 

    	- 7 -

    

Security or any or each of them and/or the Seller’s
estate right and title therein or thereto in the Guarantor or other Person or Persons entitled to the benefit thereof (as the case
may be) in the same manner and as fully and effectually in all respects as the Seller could have done, including:

		(i)	giving notice of the Guarantor’s ownership interest in such Loans and their Related Security to each Borrower or any
guarantor of a Borrower thereunder, which notice will direct, at the expense of the Seller, that payments be made directly to the
Guarantor in its name or the name of such other Person as it may decide;

		(ii)	direct the Borrowers or any guarantor of such Borrowers, at the expense of the Seller, to pay all amounts payable under such
Loans and their Related Security directly to the Guarantor in its name or the name of such other Person as it may decide;

		(iii)	cause Registrable Transfers for such Loans and their Related Security to be prepared, executed and delivered by the Seller
to the Guarantor and registered in the appropriate land registry or land titles office;

		(iv)	assemble all of the records then in the possession of the Seller (including Customer Files, computer records and files) and
which are necessary or desirable to collect upon such Loans and their Related Security;

		(v)	segregate all cash, cheques and other instruments received by the Seller from time to time constituting payments with respect
to such Loans and their Related Security in a manner acceptable to the Guarantor and, promptly upon receipt thereof, remit all
such cash, cheques and instruments, duly endorsed or with duly executed instruments of transfer, to the Guarantor or its designee;
and

		(vi)	name the Guarantor (or its designee) as loss payee on any applicable related insurance policies maintained by the Borrower
or the Seller in respect of such Loans and their Related Security assigned to the Guarantor in the place of the Seller;

		(c)	to exercise its rights, powers and discretions under such Loans and their Related Security including the right to fix the rate
or rates of interest payable under such Loans and their Related Security in accordance with the terms thereof;

		(d)	to discharge the Mortgages relating to such Loans and their Related Security or any of them and to sign, seal, deliver and
execute such discharges, receipts, releases, surrenders, instruments, retrocessions and deeds as may be requisite or advisable
in order to discharge the relevant Mortgaged Property or Mortgaged Properties from such Mortgages or any of them;

		(e)	to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for funds due and to become
due in connection with such Loans and their Related Security or otherwise owed to the Guarantor;

    	 

    	- 8 -

    

		(f)	to receive, endorse and collect any cheques, drafts or other instruments in connection with such Loans and their Related Security
or otherwise owed to the Guarantor;

		(g)	to file any claims or take any action or institute any proceedings that the Guarantor may deem to be necessary or desirable
for the collection of any of such Loans and their Related Security;

		(h)	to exercise all of the powers of the Seller in relation to such Loans and their Related Security;

		(i)	to take all necessary actions required to comply with the requirements of the CMHC Guide; and

		(j)	to execute and deliver such instruments and documents (including assignments) necessary or desirable in furtherance of the
foregoing.

		(4)	The Power of Attorney granted hereby is coupled with an interest. The Power of Attorney and other rights and privileges granted
hereby will survive any bankruptcy, dissolution, liquidation, winding up and re-organisation of the Seller and any Attorney.

		(5)	Each Attorney will have the power by writing under its hand by an officer of the Attorney from time to time to appoint a substitute
who will have power to act on behalf of the Seller as if that substitute will have been originally appointed Attorney by this Power
of Attorney (including, without limitation, the power of further substitution) and/or to revoke any such appointment at any time
without assigning any reason therefor.

		(6)	The Seller hereby agrees at all times hereafter to ratify and confirm whatsoever the said Attorney or its attorneys will lawfully
do or cause to be done in and concerning such Loans or their Related Security by virtue of this Power of Attorney.

		(7)	The laws of the Province of l and the federal laws of Canada applicable therein will apply to this Power of Attorney
and the interpretation thereof.

    	 

    	- 9 -

    

The Seller has executed and delivered this Power of Attorney
as of the date first above written.

	 	 	THE BANK OF NOVA SCOTIA 
	 	By:	 
	 	 	Name:

Title:
	 	 	 
	 	By:	 
	 	 	Name:

Title:

 

I have verified the identity and signature of the grantor
of the foregoing Power of Attorney, signed in _____________, this ____ day of ________ 20____.

 

	●

Notary Public for the Province of l

 

    	 

    	- 10 -

    

ANNEX A

PURCHASED
ASSETS

-Attached-

    	 

    	 

    

Schedule
3

Power of Attorney

THIS POWER OF ATTORNEY is made on the ______ day of
___________, 20__ by THE BANK OF NOVA SCOTIA (the “Seller”) in favour of each of:

		(1)	SCOTIABANK COVERED BOND GP INC., in its capacity as Managing GP of SCOTIABANK COVERED BOND GUARANTOR LIMITED
PARTNERSHIP (the “Guarantor”); and

		(2)	COMPUTERSHARE TRUST COMPANY OF CANADA, in its capacity as Bond Trustee (the “Bond
Trustee”).

WHEREAS:

		(A)	By virtue of a mortgage sale agreement dated as of July 19,
2013 made between the Seller, the Guarantor, the Bond Trustee and the Custodian, as the same may be supplemented, modified, restated
or replaced from time to time (the “Mortgage Sale Agreement”), provision was made for the execution by the
Seller of this Power of Attorney.

		(B)	By virtue of a Québec seller assignment dated  ___________ 20__ made between the
                                                           Seller, the Guarantor and the Bond Trustee and any Québec seller assignment made between the Seller, the Guarantor and
                                                           the Bond Trustee after the date hereof (collectively, the “Québec Seller Assignment”), the Loans
                                                           and their Related Security (or, in the case of STEP Loans subject to a STEP Plan, their right, title and interest in their
                                                           Related Security up to the amount of the related STEP Loan) secured by a hypothec on real (immovable) property situated in
                                                           the Province of Québec and listed in Annex A attached hereto (collectively, the “Québec Purchased
                                                           Assets”) were assigned to the Guarantor.

		(C)	By virtue of a seller assignment dated  ___________ 20__ made between the Seller, the
                                                           Guarantor and the Bond Trustee and any seller assignment made between the Seller, the Guarantor and the Bond Trustee after
                                                           the date hereof (collectively, the “Seller Assignment”), the Loans and their Related Security situated in
                                                           the Province of Ontario and listed in Annex B attached hereto (collectively, the “Purchased Assets”) were
                                                           assigned to the Guarantor.

NOW THIS DEED WITNESSETH as follows:

		(1)	Definitions:

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

		(b)	“Bond Trustee” Computershare Trust Company of Canada, in its capacity
as bond trustee under the Trust Deed together with any successor or additional bond trustee appointed from time to time thereunder.

    	 

    	- 2 -

    

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

		(d)	“CMHC” Canada Mortgage and Housing Corporation or its successors.

		(e)	“CMHC Guide” The Canadian Global Registered Covered Bond Programs Guide issued by CMHC on June 12, 2013,
as the same may be supplemented, amended or replaced by CMHC from time to time.

		(f)	“Customer File” The file or files relating to each Loan and its Related Security containing, inter alia:

		(i)	All material correspondence relating to that Loan; and

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

whether
original documentation, or in electronic form or otherwise.

		(g)	“DBRS” DBRS Limited or its successors.

		(h)	“First STEP Loan” The first STEP Loan made by the Seller to a particular STEP Borrower under the STEP Plan,
which is sold to the Guarantor.

		(i)	“Fitch” Fitch Ratings Ltd. or its successors.

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

		(k)	“Guarantor Agreement” The Limited Partnership Agreement dated as of July 19,
2013 made between, inter alia, Scotiabank Covered Bond GP INC., 8429057 Canada Inc.
and The Bank of Nova Scotia, as the same may be supplemented, modified, restated or replaced from time to time.

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

		(m)	“Loan” Each mortgage loan or (if approved by the Rating Agencies as a New Loan Type) home equity line of
credit secured, in each case, by a Mortgage on Mortgaged Property, referenced by its mortgage loan identifier number and comprising
the aggregate of all principal sums, interest, costs, charges, expenses and other funds due or

    	 

    	- 3 -

    

owing by the related Borrower from time to time with
respect to that mortgage loan or home equity line of credit under the relevant Mortgage Terms and all of the related Borrower’s
obligations in respect of the same.

		(n)	“Moody’s” Moody’s Investors Service, Inc. or its successors.

		(o)	“Mortgage” The legal charge, mortgage, hypothec, standard security or charge securing a Loan and includes
a STEP Collateral Mortgage.

		(p)	“Mortgage Terms” All of the terms and conditions applicable to a Loan, including the applicable Mortgage
Terms and Offer Conditions and in respect of STEP Loan, the STEP Plan.

		(q)	“Mortgaged Property” Residential property located in Canada that is subject to a Mortgage.

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

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

		(t)	“Offer Conditions” The terms and conditions applicable to a specified Loan as set out in the relevant offer
letter to the Borrower.

		(u)	“Other STEP Creditor” Any owner of any STEP Account outstanding from time to time under the STEP Plan, or
any interest therein, including any Person holding and/or having the benefit of a security interest therein, other than the Seller
and the Guarantor.

		(v)	“Other STEP Products” All STEP Accounts that may be extended by the Seller to a particular STEP Borrower
from time to time, except for STEP Loans.

		(w)	“Person” Includes individuals, corporations, limited and unlimited liability companies, general and limited
partnerships, associations, trusts, unincorporated organisations, joint ventures and Governmental Authority.

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

    	 

    	- 4 -

    

		(y)	“Rating Agencies” Fitch, Moody’s and DBRS, each, a “Rating Agency”, and any other
internationally recognised rating agency that may rate the covered bonds issued by The Bank of Nova Scotia from time to time.

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

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

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

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

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

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

		(ii)	the related Customer File;

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

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

and in relation to a STEP Loan:

		(A)	as to (i), (ii), (iii) and (iv) above, all of the Seller’s right, title and interest therein, provided that upon the
transfer and/or assignment of which

    	 

    	- 5 -

    

(excluding any
such property relating solely to such STEP Loan or any related STEP Loan owned by the Guarantor from time to time) to the
Guarantor, the Guarantor will hold (i) an undivided interest in such property for the sole and absolute account and benefit of
the Guarantor to the extent of the indebtedness owing under such Loan or any related STEP
Loan owned by the Guarantor from time to time, and (ii) an undivided interest in such property as agent, nominee and bare
trustee for the Seller and each related Other STEP Creditor to the extent of any amounts of indebtedness owing under any Additional
STEP Loans and Other STEP Products outstanding under the STEP Plan from time to time, in each case, subject to the applicable priority
arrangements described in Article 13 (STEP Plan and Intercreditor Arrangements) of the Mortgage Sale Agreement; and

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

		(cc)	“Scotiabank Group” The Bank of Nova Scotia and its Subsidiaries collectively.

		(dd)	“Servicer” The Seller in its capacity as servicer under the Servicing Agreement and any New Servicer and/or
any Successor Servicers.

		(ee)	“Servicing Agreement” The servicing agreement as of July 19,
2013, between the Servicer, the Seller, The Bank of Nova Scotia, in its capacity as cash manager, the Bond Trustee and the Guarantor
(as amended, modified, supplemented or restated from time to time).

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

		(gg)	“STEP Borrower” A Borrower under a STEP Loan.

    	 

    	- 6 -

    

		(hh)	“STEP Collateral Mortgage” The Mortgage that secures indebtedness owing in respect of outstanding STEP Accounts
extended by the Seller to the same STEP Borrower.

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

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

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

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

		(mm)	“Successor Servicer” A successor servicer to the Servicer in respect of Loans and their Related Security
included in the Portfolio other than a member of the Scotiabank Group.

		(nn)	“Superintendent” The Superintendent of Financial Institutions appointed pursuant to the Office of the
Superintendent of Financial Institutions Act (Canada).

		(oo)	“Trust Deed” The trust deed dated as of July 19,
2013, made between The Bank of Nova Scotia, the Guarantor, and Computershare Trust Company of Canada,
as Bond Trustee (as amended and/or supplemented and/or restated from time to time).

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

		(2)	In this Power of Attorney words importing the singular number only include the plural and vice versa, words importing
any gender include all genders and words importing Persons.

    	 

    	- 7 -

    

		(3)	The Seller HEREBY IRREVOCABLY APPOINTS each of the Guarantor and the Bond Trustee and any liquidator, receiver or similar
official appointed from time to time in respect of the Guarantor or its assets (each an “Attorney”) severally
to be its true and lawful attorney for the Seller and in the Seller’s name or otherwise to do any act, matter or thing which
any Attorney considers necessary or desirable for the protection, preservation or enjoyment of that Attorney’s (and at the
request of any other Attorney, such other Attorney’s) interest in the Loans and their Related Security included in the Purchased
Assets and/or which ought to be done under the covenants, undertakings and provisions contained in the Mortgage Sale Agreement
(including the matters referred to in Section 6.1(a) thereof), the Québec Seller Assignment or the Seller Assignment including
(without limitation) any or all of the following:

		(a)	to execute, sign, seal and deliver (using the company seal of the Seller where appropriate) a conveyance, assignment or transfer
of such Loans and their Related Security or any of them to the Guarantor and its successors in title or other Person or Persons
entitled to the benefit thereof from time to time;

		(b)	to do every other act or thing which the Seller is obliged to do under the Mortgage Sale Agreement, the Québec Seller
Assignment, the Seller Assignment or which that Attorney may otherwise consider to be necessary, proper or expedient for fully
and effectually vesting or transferring the interests now or at any time hereafter sold thereunder in such Loans and their Related
Security or any or each of them and/or the Seller’s estate right and title therein or thereto in the Guarantor or other Person
or Persons entitled to the benefit thereof (as the case may be) in the same manner and as fully and effectually in all respects
as the Seller could have done, including:

		(i)	giving notice of the Guarantor’s ownership interest in such Loans and their Related Security to each Borrower or any
guarantor of a Borrower thereunder, which notice will direct, at the expense of the Seller, that payments be made directly to the
Guarantor in its name or the name of such other Person as it may decide;

		(ii)	direct the Borrowers or any guarantor of such Borrowers, at the expense of the Seller, to pay all amounts payable under such
Loans and their Related Security directly to the Guarantor in its name or the name of such other Person as it may decide;

		(iii)	cause Registrable Transfers for such Loans and their Related Security, to be prepared, executed and registered in the appropriate
land registry or land titles office;

		(iv)	assemble all of the records then in the possession of the Seller (including Customer Files, computer records and files) and
which are necessary or desirable to collect upon such Loans and their Related Security;

		(v)	segregate all cash, cheques and other instruments received by the Seller from time to time constituting payments with respect
to such Loans and their Related Security in a manner acceptable to the Guarantor and, promptly upon receipt

    	 

    	- 8 -

    

thereof, remit all such cash, cheques and instruments,
duly endorsed or with duly executed instruments of transfer, to the Guarantor or its designee; and

		(vi)	name the Guarantor (or its designee) as loss payee on any applicable related insurance policies maintained by the Borrower
or the Seller in respect of such Loans and their Related Security assigned to the Guarantor in the place of the Seller;

		(c)	to exercise its rights, powers and discretions under such Loans and their Related Security including the right to fix the rate
or rates of interest payable under such Loans and their Related Security in accordance with the terms thereof;

		(d)	to discharge the Mortgages relating to such Loans and their Related Security or any of them and to sign, seal, deliver and
execute such discharges, receipts, releases, surrenders, instruments, retrocessions and deeds as may be requisite or advisable
in order to discharge the relevant Mortgaged Property or Mortgaged Properties from such Mortgages or any of them;

		(e)	to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for funds due and to become
due in connection with such Loans and their Related Security or otherwise owed to the Guarantor;

		(f)	to receive, endorse and collect any cheques, drafts or other instruments in connection with such Loans and their Related Security
or otherwise owed to the Guarantor;

		(g)	to file any claims or take any action or institute any proceedings that the Guarantor may deem to be necessary or desirable
for the collection of any of such Loans and their Related Security;

		(h)	to exercise all of the powers of the Seller in relation to such Loans and their Related Security;

		(i)	to execute and deliver such instruments and documents (including assignments) necessary or desirable in furtherance of the
foregoing;

		(j)	to take all necessary actions required to comply with the requirements of the CMHC Guide; and

		(k)	in respect of the Québec Purchased Assets, to prepare, execute, deliver and register at the Register of Personal and
Movable Property Real Rights (Québec) and at the land registry office for the relevant registration divisions, deeds of
assignment, notices of assignment, applications for registration and such further documents and instruments and take any other
actions or measures as may be necessary or desirable to render the assignment of such Québec Purchased Assets by the Seller
opposable against third parties, including without limitation, the formalities prescribed by Article 3003 of the Civil Code
of Québec.

    	 

    	- 9 -

    

		(4)	The Power of Attorney granted hereby is coupled with an interest. The Power of Attorney and other rights and privileges granted
hereby will survive any bankruptcy, dissolution, liquidation, winding up and re-organisation of the Seller and any Attorney.

		(5)	Each Attorney will have the power by writing under its hand by an officer of the Attorney from time to time to appoint a substitute
who will have power to act on behalf of the Seller as if that substitute will have been originally appointed Attorney by this Power
of Attorney (including, without limitation, the power of further substitution) and/or to revoke any such appointment at any time
without assigning any reason therefor.

		(6)	The Seller hereby agrees at all times hereafter to ratify and confirm whatsoever the said Attorney or its attorneys will lawfully
do or cause to be done in and concerning such Loans or their Related Security by virtue of this Power of Attorney.

		(7)	The laws of the Province of Ontario and the federal laws of Canada applicable therein will apply to this Power of Attorney
and the interpretation thereof.

The Seller has executed and delivered this Power of Attorney
as of the date first above written.

	 	 	THE BANK OF NOVA SCOTIA
	 	By:	 
	 	 	Name:

Title:
	 	 	 
	 	By:	 
	 	 	Name:

Title:

 

I have verified the identity and signature of the grantor
of the foregoing Power of Attorney, signed in ____________, this ______ day of __________ 20____.

 

	●

Notary Public for the Province of l

 

    	 

    	- 10 -

    

ANNEX A

QUÉBEC
PURCHASED ASSETS

-Attached-

    	 

    	- 11 -

    

ANNEX B

PURCHASED
ASSETS

-Attached-

    	 

    	 

    

SCHEDULE
4

Loan Repurchase Notice

 

	To:	THE BANK OF NOVA SCOTIA (the “Seller”)
	From:	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP (the “Guarantor”) 

 

		1.	It is hereby agreed that for the purpose of this notice, the “Mortgage Sale Agreement” will mean the mortgage
sale agreement dated as of July 19, 2013 made between
the Seller, the Guarantor, the Bond Trustee and the Custodian (as the same may be or have been amended, restated or supplemented
from time to time with the consent of those parties).

		2.	Save where the context otherwise requires, words and expressions
in this notice will have the same meanings respectively as when used in the Mortgage Sale Agreement.

		3.	In accordance with Section 8.6 (Loan Repurchases)
of the Mortgage Sale Agreement, upon receipt of this Loan Repurchase Notice by the Seller there will exist between the Seller,
the Guarantor, the Bond Trustee and [any Other STEP Creditor] an agreement (the “Agreement for Sale”) for the
sale, transfer, assignment and conveyance by the Guarantor to the Seller of the Loans and their Related Security more particularly
described in the Annex hereto free and clear of the Security created by or pursuant to the Security Agreement and all related
rights of the Bond Trustee, the Guarantor and [any Other STEP Creditor] in respect thereof. Completion of such sale will take
place on l, 20l.

		4.	The Agreement for Sale will incorporate, mutatis mutandis,
the relevant provisions of the Mortgage Sale Agreement.

[The remainder of this page left
intentionally blank]

    	 

    	- 2 -

    

Dated l, 20l.

	 	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP SCOTIABANK COVERED BOND GP INC.
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

[On triplicate]

We hereby acknowledge receipt of and confirm and agree to
the contents of the Loan Repurchase Notice dated l, 20l.

	 	 	THE BANK OF NOVA SCOTIA 
	 	By:	 
	 	 	Name:

Title:
	 	 	 
	 	By:	 
	 	 	Name:

Title:

 

    	 

    	- 3 -

    

 

	 	 	COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee, on its own behalf and on behalf of [each Other STEP Creditor]
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

 

 

    	 

    	 

    

Annex

 

[List of Loans with appropriate details.]

    	 

    	 

    

schedule
5

Additional Loan Notice

 

	To:	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP (the “Guarantor”)
	From:	THE BANK OF NOVA SCOTIA (the “Seller”)

		1.	It is hereby agreed that for the purpose of this notice, the “Mortgage Sale Agreement” will mean the mortgage
sale agreement dated as of July 19, 2013 made between the Seller, the
Guarantor, the Bond Trustee and the Custodian (as the same may be or have been amended, restated or supplemented from time to time
with the consent of those parties).

		2.	Save where the context otherwise requires, words and expressions
in this notice will have the same meanings respectively as when used in the Mortgage Sale Agreement.

		3.	In accordance with and subject to Section 4.1 (Sale
of Additional Loans) of the Mortgage Sale Agreement, upon receipt by the Seller of this notice signed by the Guarantor, there
will exist between the Seller and the Guarantor an agreement (the “Agreement for Sale”) for the sale by the
Seller to the Guarantor of the Additional Loans and their Related Security more particularly described in the Annex hereto (other
than any Additional Loans and their Related Security which have been redeemed in full prior to completion). Completion of such
sale will take place on l, 20l.

		4.	The Agreement for Sale will incorporate, mutatis mutandis,
the relevant provisions of the Mortgage Sale Agreement subject to any amendment as may be agreed between the parties to the Agreement
for Sale provided the parties to such agreement have substantially the same rights and obligations as under the Mortgage Sale
Agreement.

[The remainder of this page left
intentionally blank]

    	 

    	- 2 -

    

Dated l, 20l.

	 	 	THE BANK OF NOVA SCOTIA 
	 	By:	 
	 	 	Name:

Title:
	 	 	 
	 	By:	 
	 	 	Name:

Title:

 

[On duplicate:]

We hereby acknowledge receipt of the Additional Loan Notice
dated l, 20l, and confirm that we are prepared to purchase Additional Loans as set out in that notice.

	 	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP SCOTIABANK COVERED BOND GP INC.
	 	By:	 
	 	 	Name:

Title:
	 	 	 
	 	By:	 
	 	 	Name:

Title:

 

    	 

    	 

    

Annex

[List of Loans and their Related Security
with appropriate details.]

 

    	 

    	 

    

schedule
6

Selected Loan Offer Notice

 

	To:	THE BANK OF NOVA SCOTIA (the “Seller”)
	From:	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP (the “Guarantor”)  

It is hereby agreed that for the purpose
of this notice, the “Mortgage Sale Agreement” will mean the mortgage sale agreement dated as of July 19,
2013 made between the Seller, the Guarantor, the Bond Trustee and the Custodian (as the same may be or have been amended, restated
or supplemented from time to time with the consent of those parties).

Save where the context otherwise requires,
words and expressions in this notice will have the same meanings respectively as when used in the Mortgage Sale Agreement.

In accordance with and subject to Article 11
(Sale of Selected Loans) of the Mortgage Sale Agreement we make an offer to you on the following terms:

		1.	This Selected Loan Offer Notice constitutes an offer to sell the Selected Loans more particularly described in the Schedule
hereto to you at the offer price of $l payable in cash on the earlier to occur of the date which is (a) ten (10) Toronto
Business Days after receipt by the Guarantor of the returned Selected Loan Repurchase Notice or (b) the Final Maturity Date of
the Earliest Maturing Covered Bonds on the terms set out in Article 11 (Sale of Selected Loans) of the Mortgage Sale Agreement.

		2.	This offer is capable of acceptance by you within ten (10)
Toronto Business Days from and including the date of this Selected Loan Offer Notice. If you do not accept this offer, we intend
to sell the Selected Loans to a third party or third parties.

		3.	This Selected Loan Offer Notice will incorporate, mutatis
mutandis, the relevant provisions of the Mortgage Sale Agreement, including, without limitation, the requirement that the
Security created by or pursuant to the Security Agreement and all related rights of the Bond Trustee, the Guarantor and any Other
STEP Creditors be released in respect of the Selected Loans more particularly described in the Schedule hereto.

You may accept this offer to you by signing
the duplicate of this Selected Loan Offer Notice in a manner indicating acceptance and delivering it to the Guarantor with a copy
to the Bond Trustee.

We refer you to the Mortgage Sale Agreement
as to your rights, and the consequences of failure to accept this offer in time or at all or of doing so in a manner other than
that specified in the Mortgage Sale Agreement.

    	 

    	- 2 -

    

Dated l, 20l.

	 	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP SCOTIABANK COVERED BOND GP INC.
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

 

We accept the offer contained in this Selected Loan Offer
Notice and hereby accept the sale, transfer and assignment of the Selected Loans by the Guarantor to us.

Dated l, 20l.

	 	 	THE BANK OF NOVA SCOTIA 
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

 

    	 

    	- 3 -

    

schedule

[List
Selected Loans]

    	 

    	 

    

schedule
7

Selected Loan Repurchase Notice

 

	To:	THE BANK OF NOVA SCOTIA (the “Seller”)
	From:	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP (the “Guarantor”) 

		1.	It is hereby agreed that for the purpose of this notice, the “Mortgage Sale Agreement” will mean the mortgage
sale agreement dated as of July 19, 2013 made between the Seller, The
Bank of Nova Scotia, the Guarantor, the Custodian and the Bond Trustee (as the same may be or have been amended, restated or supplemented
from time to time with the consent of those parties).

		2.	Save where the context otherwise requires, words and expressions
in this notice will have the same meanings respectively as when used in the Mortgage Sale Agreement.

		3.	In accordance with Article 11 (Sale of Selected Loans)
of the Mortgage Sale Agreement, upon receipt of this Selected Loan Repurchase Notice by the Seller there will exist between the
Seller, the Guarantor, the Bond Trustee and [any Other STEP Creditor] an agreement (the “Agreement for Sale”)
for the sale by the Guarantor to the Seller of the Selected Loans more particularly described in the Schedule hereto free and
clear of the Security created by or pursuant to the Security Agreement and all related rights of the Bond Trustee, the Guarantor
and [any Other STEP Creditor] in respect thereof. Completion of such sale will take place on l, 20l
and the price payable by the Seller for the Selected Loans more particularly described in the Schedule hereto will be $l.

		4.	The Agreement for Sale will incorporate, mutatis mutandis,
the relevant provisions of the Mortgage Sale Agreement.

[The remainder
of this page left intentionally blank]

    	 

    	- 2 -

    

Dated l, 20l.

	 	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP SCOTIABANK COVERED BOND GP INC.
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

 

[On triplicate]

We hereby acknowledge receipt of and
confirm and agree to the contents of the Selected Loan Repurchase Notice dated l, 20l.

Dated l, 20l.

	 	 	THE BANK OF NOVA SCOTIA 
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

 

    	 

    	- 3 -

    

 

	 	 	COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee, on its own behalf and on behalf of [each Other STEP Creditor]
	 	By:	 
	 	 	Name:

Title:
	 	By:	 
	 	 	Name:

Title:

 

    	 

    	- 4 -

    

schedule

[List
Selected Loans]

    	 

    	 

    

SCHEDULE
8

FORM OF SELLER ASSIGNMENT

 

THIS ASSIGNMENT made this l day of
l, 20l.

BETWEEN:

THE BANK OF NOVA SCOTIA,
a bank named in Schedule I to the Bank Act,

- and -

SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP,
a limited partnership formed under the laws of the Province of Ontario, by its Managing GP SCOTIABANK COVERED BOND GP INC.,
(in its capacity as the Guarantor)

WHEREAS The
Bank of Nova Scotia, as Seller, the Guarantor, the Custodian and the Bond Trustee have entered into the Mortgage Sale Agreement.

NOW THIS AGREEMENT WITNESSES that
in consideration of the premises and for valuable consideration the parties hereto covenant and agree as follows:

		(1)	Defined Terms

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, with the consent of the parties thereto) (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.

		(2)	Sale and Purchase of Purchased Assets

The Seller hereby sells, transfers, assigns
and conveys unto the Guarantor and the Guarantor hereby purchases from the Seller, without any legal warranty except
and subject to the representations and warranties expressly provided for in the Mortgage Sale Agreement, and together with the
full benefit of the rights, priorities and covenants contained in Article 13 thereof, all of the Seller's right all of the
Seller’s right, title and interest and benefit in and to the Loans and their Related Security (excluding registered or recorded
title to the Related Security related to the Loans which will continue to be held by the Seller) described in Annex A attached
hereto (the “Purchased Assets”).

    	 

    	- 2 -

    

		(3)	Purchase Price

The purchase price
for the sale by the Seller to the Guarantor of the Purchased Assets will be calculated and paid in accordance with the terms of
the Mortgage Sale Agreement and the Transaction Documents.

		(4)	Confirmation

The Seller hereby confirms to the Guarantor
that:

		(a)	the representations and warranties of the Seller contained in the Mortgage Sale Agreement are true
and correct as of the date hereof; and

		(b)	it has made a notation in its records that the Purchased Assets have been sold to the Guarantor.

		(5)	Mortgage Sale Agreement

This Seller Assignment
will be construed as having been executed in furtherance of the Mortgage Sale Agreement and will form an integral part thereof.

		(6)	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.

		(7)	Number and Gender

Words importing the singular include
the plural and vice versa, and words importing gender include all genders.

		(8)	Counterparts

This Agreement may be executed in any
number of 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 agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile will
be as effective as delivery of a manually executed counterpart of such signature page.

		(9)	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.

    	 

    	 

    

IN WITNESS WHEREOF the Seller has executed this Seller
Assignment.

 

	 	THE BANK OF NOVA SCOTIA
	 	By: 	 
	 	 	Name:  
	 	 	Title:    

 

	 	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP SCOTIABANK COVERED BOND GP INC.
	 	By: 	 
	 	 	Name:  
	 	 	Title:    

 

The foregoing is hereby acknowledged by the undersigned.

 

	 	COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee

 

	 	By: 	 
	 	 	Name:  
	 	 	Title:    
	 	 	 
	 	By: 	 
	 	 	Name:  
	 	 	Title:    

 

    	 

    	- 4 -

    

ANNEX A

[List of Purchased Assets]

    	 

    	 

    

SCHEDULE
9

FORM OF QUÉBEC SELLER ASSIGNMENT

THIS QUÉBEC SELLER ASSIGNMENT made this l
day of l, 20l.

BETWEEN:

THE BANK OF NOVA SCOTIA,
a bank named in Schedule I to the

Bank Act

(the “Seller”)

- and -

SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP,
a limited partnership formed under the laws of the Province of Ontario, by its Managing GP SCOTIABANK COVERED BOND GP INC.,
(in its capacity as the Guarantor) 

(the “Guarantor”)

WHEREAS the
Seller, the Guarantor, as purchaser, and Computershare Trust Company of Canada, as
Bond Trustee and Custodian, have entered into the Mortgage Sale Agreement (as hereinafter defined).

NOW THIS AGREEMENT WITNESSES that
in consideration of the premises and for valuable consideration the parties hereto covenant and agree as follows:

		(1)	Defined Terms 

Unless otherwise defined herein or unless
the context requires otherwise, capitalized terms will have the same meanings herein as in the Mortgage
Sale Agreement. In this Québec Assignment the following terms will have the meanings assigned to them below (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):

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

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

“Credit and Collection Policy”
means the customary credit and collection policies and practices of the Seller, relating to the granting of credit on the security
of Loans and the collection and enforcement of Loans, as in effect on the date on the Program Date, as modified in compliance with
the Mortgage Sale Agreement from time to time.

    	 

    	- 2 -

    

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

“Customer Files” means
the file or files relating to each Loan and its Related Security containing, inter alia:

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

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

whether original documentation, or in electronic form or
otherwise.

“Eligibility Criteria”
means the following criteria:

		(a)	no Loan has an Outstanding Principal Balance of more than $3,000,000.00
or, in the case of any STEP Loans, all such STEP Loans made to the same STEP Borrower do not have an Outstanding Principal Balance
of more than $3,000,000.00 in the aggregate;

		(b)	if the Loan constitutes a New Loan Type, the Rating Agency Condition
has been satisfied in accordance with the terms of the Mortgage Sale Agreement with respect to the sale of such Loans to the Guarantor;

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

		(d)	if the Loan is secured by a Mortgage that also secures one
                                                               or more other loans, the Mortgage Terms, the terms of the related Mortgage or some other documentation applicable to such
                                                               Loan or any such other loan and enforceable against the Borrower contains cross-default provisions such that a default under
                                                               such                                                                Loan
                                                               or                                                                                                                    any
                                                               other                                                                such loan shall constitute a default under the Loan
                                                               and                                                                   each other such loan or, in the case of a Loan or other
                                                               loan
                                                               not having the benefit of cross-default provisions but repayable on demand, the Seller or the Guarantor (and any other
                                                               mortgage lender on title) shall have covenanted in writing to demand repayment of the Loan or any other such loan upon
                                                               default under such Loan or other loan, as applicable;

		(e)	no payments of principal or interest in respect of the Loan are in arrears;

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

		(g)	the related Mortgage constitutes a valid first mortgage lien or a valid first-ranking hypothec
over the related Mortgaged Property, subject to Permitted Encumbrances;

		(h)	the Loan is not subject to any dispute proceeding, set-off, counterclaim or defence whatsoever;
[and]

    	 

    	- 3 -

    

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

		(j)	[to the extent the Loan is extended, advanced or renewed on or after July 1,2014, the Mortgage
Terms for the Loan or the provisions of any other documentation applicable to the Loan and enforceable against the Borrower contain
an express waiver of set-off rights on the part of the Borrower.][NTD: TO BE INSERTED IN QUÉBEC SELLER ASSIGNMENTS EXECUTED
AFTER JULY 1, 2014]

“Eligible
Loans” means a Loan which at the Transfer Date satisfies each of the Eligibility Criteria.

“First STEP Loan” means
the first STEP Loan made by the Seller to a particular STEP Borrower under the STEP Plan, which is sold to the Guarantor.

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

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

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

“Mortgage” means a
first mortgage lien or a first-ranking hypothec securing a Loan, and includes a STEP Collateral Mortgage.

“Mortgage Sale Agreement”
means the mortgage sale agreement made as of July 19, 2013 between the
Seller, Servicer, the Bond Trustee, the Custodian and the Guarantor (as amended, modified, supplemented or restated from time to
time).

“Mortgage Terms” means
all the terms and conditions applicable to a Loan, including, the applicable Mortgage Terms and Offer Conditions and, in respect
of a STEP Loan, the STEP Plan.

    	 

    	- 4 -

    

“Mortgaged Property”
means a freehold or leasehold residential property located in Canada (or owned residential immovable property situated in the Province
of Québec) that is subject to a Mortgage.

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

“Offer Conditions”
means the terms and conditions applicable to a specified Loan as set out in the relevant offer letter to the Borrower.

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

“Other STEP Products”
means all STEP Accounts that may be extended by the Seller to a particular STEP Borrower from time to time, except for STEP Loans.

“Person” includes
individuals, corporations, limited and unlimited liability companies, general and limited partnerships, associations, trusts, unincorporated
organisations, joint ventures and Governmental Authority.

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

“Program Date” means
July 19, 2013.

“Québec Eligible Loans”
means all Eligible Loans (i) which are repayable by a Borrower resident in the Province of Québec, or (ii) which are subject
to loan documentation which requires that payments of interest or principal in respect thereof be made at a location or an account
situated or maintained in the Province of Québec, or (iii) where the related Mortgaged Properties are situated in the Province
of Québec.

“Québec Purchased Assets”
means the universality of all present and future claims and rights of action arising from all Québec Eligible Loans of the
Seller described in Annex A hereto and their Related Security.

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

“Related Security”
means, with respect to any Loan, subject to paragraphs (A), (B) and (C) of this definition in respect of any STEP Loan, all of
the Seller’s right, title and interest in:

    	 

    	- 5 -

    

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

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

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

		(b)	the related Customer File;

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

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

and in relation to a STEP Loan:

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

    	 

    	- 6 -

    

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

“Scotiabank Group”
means The Bank of Nova Scotia and its Subsidiaries collectively.

“Servicer” means
the Seller in its capacity as servicer under the Servicing Agreement and any New Servicer and/or Successor Servicer.

“Servicing Agreement”
means the servicing agreement made as of July 19, 2013 between the Servicer,
the Seller, the Cash Manager, the Bond Trustee and the Guarantor (as amended, modified, supplemented or restated from time to time).

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

“STEP Borrower” means
a Borrower under a STEP Loan.

“STEP Collateral Mortgage”
means, the Mortgage that secures indebtedness owing in respect of outstanding STEP Accounts extended by the Seller to the same
STEP Borrower.

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

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

    	 

    	- 7 -

    

“Subsidiary” means
any company which is for the time being a subsidiary (within the meaning of Section 2 of the Bank Act (Canada))

“Successor Servicer”
means a successor servicer to the Servicer in respect of Loans and their Related Security included in the Portfolio other than
a member of the Scotiabank Group.

“Superintendent”
means the Superintendent of Financial Institutions appointed pursuant to the Office of the Superintendent of Financial Institutions
Act (Canada).

“Transfer
Date” means l, 20l.

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

		(2)	Sale and Purchase of Québec Purchased Assets

For the purposes of the laws of the Province
of Québec and in furtherance of the Mortgage Sale Agreement, the Seller hereby sells, transfers and assigns unto the Guarantor
and the Guarantor hereby purchases from the Seller, without any legal warranty except and subject
to the representations and warranties expressly provided for in the Mortgage Sale Agreement and below, and together with the full
benefit of the rights, priorities and covenants contained in Article 13 thereof, all of the Seller’s right, title,
interest and benefit in and to the Québec Purchased Assets.

		(3)	Purchase Price

The purchase price for the sale by the
Seller to the Guarantor of the Québec Purchased Assets hereunder will be calculated and paid in accordance with the terms
of the Mortgage Sale Agreement.

		(4)	Seller Representations and Warranties

The Seller represents and warrants to
the Guarantor as of the Transfer Date that:

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

		(b)	the Guarantor, acting on the advice of the Cash Manager, is not aware,
and could not reasonably be expected to be aware, that the purchase by the Guarantor of the Québec Purchased Assets on the
Transfer Date would result in a downgrade or a withdrawal of the then current ratings by the Rating Agencies of the Covered Bonds;

		(c)	each Loan included in the Québec Purchased Assets satisfies the
eligibility criteria prescribed by the CMHC Guide from time to time;

    	 

    	- 8 -

    

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

		(e)	prior to the making of each advance under such Loan, the Lending Criteria and all preconditions
to the making of that Loan were satisfied in all material respects subject only to such exceptions as would be acceptable to reasonable
and prudent institutional mortgage lenders in the Seller’s market.

		(5)	Additional Actions Upon a Title Trigger Event

Without limiting the provisions of the
Mortgage Sale Agreement, upon the earlier of (i) the occurrence of a Registered Title Event, and (ii) the senior long-term rating
assigned to the Issuer by DBRS, Moody’s or Fitch falls below BBB(high), BBB+ or Baa1, respectively, the Guarantor will (or
will instruct the Seller to) notify the Borrowers (and their guarantors) and deliver Registrable Transfers to the Custodian in
relation to each Québec Eligible Loan and hypothecs included in the Québec Purchased Assets, make all registrations
and generally complete all formalities required under the laws of the Province of Québec in order to render the sale and
assignment of the Québec Purchased Assets opposable against the Borrowers (and their guarantors) and all third persons,
in accordance with Articles 1641, 1645 and 3003 of the Civil Code of Québec. The Seller will act upon the Guarantor’s
instructions under this Article 5.

Without limiting any of the powers of
the Guarantor hereunder or under the Mortgage Sale Agreement, the Guarantor will be entitled to discharge the Mortgages and give
acquittance and receipts for amounts due, including with respect to amounts due to the Seller before the date of this Agreement.

		(6)	Power of Attorney

The Seller will execute and deliver to
the Guarantor, concurrently herewith, two originals of the Power of Attorney substantially in the form set out in Schedule 3 to
the Mortgage Sale Agreement.

		(7)	Confirmation

The Seller hereby confirms to the Guarantor
that:

		(a)	the representations and warranties of the Seller contained in the Mortgage Sale Agreement are true and correct as of the date
hereof; and

		(b)	it has made a notation in its records that the Québec Purchased Assets have been sold to
the Guarantor.

    	 

    	- 9 -

    

		(8)	Mortgage Sale Agreement

This Québec Assignment will be
construed as having been executed in furtherance of the Mortgage Sale Agreement and will form an integral part thereof.

		(9)	Governing Law

This Agreement will be governed by, and
construed in accordance with, the laws of the Province of Ontario (without giving effect to the conflict of laws principles thereof).

		(10)	Number and Gender

Words importing the singular include
the plural and vice versa, and words importing gender include all genders.

		(11)	Counterparts

This Agreement may be executed in any
number of 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 agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile will
be as effective as delivery of a manually executed counterpart of such signature page.

		(12)	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.

		(13)	Language

The parties confirm that it is their
wish that this Agreement, as well as any other documents relating to this Agreement, including notices, schedules and authorizations,
have been and will be drawn up in the English language only. Les signataires confirment leur volonté que la présente
convention, de même que tous les documents s’y rattachant, y compris tout avis, annexe et autorisation, soient rédigés
en anglais seulement.

[The
remainder of this page left intentionally blank]

    	 

    	 

    

IN WITNESS WHEREOF the parties hereto have executed
this Québec Seller Assignment.

 

	 	THE BANK OF NOVA SCOTIA

 

	 	By: 	 
	 	 	Name:  
	 	 	Title:    

 

	 	SCOTIABANK COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP SCOTIABANK COVERED BOND GP INC.
	 	By:	 
	 	 	Name:  
	 	 	Title:    

 

The foregoing is hereby acknowledged by the undersigned.

	 	COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee

 

	 	By:	 
	 	 	Name:  
	 	 	Title:    
	 	 	 
	 	By:	 
	 	 	Name:  
	 	 	Title:    

 

    	 

    	- 11 -

    

* * *

CERTIFICATION

 

I, ______________________________, advocate, certify that:

1.This certificate concerns an application for the Québec
Seller Assignment and the Annex A thereto (the “Assignment”) entered into between The Bank of Nova Scotia, as
Seller, and Scotiabank Covered Bond GP INC. in its capacity as managing general partner of Scotiabank Covered Bond Guarantor Limited
Partnership (the “Guarantor”) executed under private signature at l, Province of l, on l,
20l;

2.I have verified the identity, quality and capacity
of The Bank of Nova Scotia and the Guarantor to the said Assignment;

3.Such Assignment represents the will expressed by The
Bank of Nova Scotia and the Guarantor; and

4.Such Assignment is valid as to form.

 

CERTIFIED at l, Province l on the l day
of the month of l, 20l.

 

Name:l

Quality:Advocate

Address:l

 

l, advocate

 

	 

 

 

    	 

    	 

    

ANNEX A

[List of Québec Eligible Loans
Comprised in Québec Purchased Assets]

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