Document:

EX-4.11

 Exhibit 4.11 
 CASH MANAGEMENT AGREEMENT 
 BMO COVERED BOND GUARANTOR LIMITED
PARTNERSHIP, 
 as Guarantor 
 - and - 
 BANK OF MONTREAL, 

as Cash Manager, GDA Provider, Seller, Servicer and Issuer 
 - and - 
 COMPUTERSHARE TRUST COMPANY OF CANADA, 

as Bond Trustee 

DATED AS OF SEPTEMBER 30, 2013 

 CONTENTS 

 

							
	 ARTICLE 1 DEFINITIONS AND INTERPRETATION
	  	 	2	  
			
	         1.1
	 	     Definitions
	  	 	2	  
	         1.2
	 	     Interpretation
	  	 	2	  
	         1.3
	 	     Schedules
	  	 	2	  
		
	 ARTICLE 2 APPOINTMENT OF CASH MANAGER
	  	 	2	  
			
	         2.1
	 	     Appointment
	  	 	2	  
	         2.2
	 	     Duties prescribed by Transaction Documents
	  	 	3	  
		
	 ARTICLE 3 THE CASH MANAGEMENT SERVICES
	  	 	3	  
			
	         3.1
	 	     General
	  	 	3	  
	         3.2
	 	     Approvals and Authorizations
	  	 	3	  
	         3.3
	 	     Compliance with Transaction Documents
	  	 	3	  
	         3.4
	 	     Compliance with the Asset Coverage Test, the Amortization Test, the Pre-Maturity Test and the
Valuation
     Calculation
	  	 	4	  
	         3.5
	 	     Indemnification
	  	 	5	  
		
	 ARTICLE 4 PAYMENTS, ACCOUNTS, LEDGERS
	  	 	5	  
			
	         4.1
	 	     Establishment of Bank Accounts
	  	 	5	  
	         4.2
	 	     Ledgers
	  	 	7	  
	         4.3
	 	     Cash Flows
	  	 	8	  
	         4.4
	 	     Withdrawals
	  	 	10	  
	         4.5
	 	     Bank Account Statements
	  	 	11	  
	         4.6
	 	     Payments to Paying Agents
	  	 	11	  
	         4.7
	 	     Deposits
	  	 	11	  
		
	 ARTICLE 5 THIRD PARTY AMOUNTS
	  	 	11	  
			
	         5.1
	 	     Third Party Amounts
	  	 	11	  
		
	 ARTICLE 6 INTEREST RATE SWAP AGREEMENT
	  	 	12	  
			
	         6.1
	 	     Computations
	  	 	12	  
	         6.2
	 	     Termination of the Interest Rate Swap Agreement
	  	 	12	  
		
	 ARTICLE 7 COVERED BOND SWAP AGREEMENT
	  	 	12	  
			
	         7.1
	 	     Computations
	  	 	12	  
	         7.2
	 	     Termination of the Covered Bond Swap Agreement
	  	 	13	  
		
	 ARTICLE 8 NO LIABILITY
	  	 	13	  
			
	         8.1
	 	     No Liability
	  	 	13	  
		
	 ARTICLE 9 INFORMATION
	  	 	13	  

							
	         9.1
	 	     Use of I.T. Systems
	  	 	13	  
	         9.2
	 	     Access to Books and/or Records
	  	 	14	  
	         9.3
	 	     Statutory Obligations
	  	 	14	  
	         9.4
	 	     Information Covenants
	  	 	15	  
	         9.5
	 	     Notice of Events of Default and Cash Manager Termination Event
	  	 	16	  
	         9.6
	 	     Notification under Mortgage Sale Agreement
	  	 	16	  
		
	 ARTICLE 10 REMUNERATION
	  	 	16	  
			
	         10.1
	 	     Fee Payable
	  	 	16	  
	         10.2
	 	     Payment of Fee
	  	 	17	  
		
	 ARTICLE 11 COSTS AND EXPENSES
	  	 	17	  
			
	         11.1
	 	     General
	  	 	17	  
	         11.2
	 	     Responsibility
	  	 	17	  
		
	 ARTICLE 12 REPRESENTATIONS, WARRANTIES AND COVENANTS OF CASH MANAGER
	  	 	17	  
			
	         12.1
	 	     Representations, Warranties and Covenants
	  	 	17	  
	         12.2
	 	     Duration of Covenants
	  	 	19	  
	         12.3
	 	     Undertaking
	  	 	19	  
		
	 ARTICLE 13 SERVICES NON-EXCLUSIVE
	  	 	19	  
			
	         13.1
	 	     Services Non-Exclusive
	  	 	19	  
		
	 ARTICLE 14 TERMINATION
	  	 	19	  
			
	         14.1
	 	     Cash Manager Termination Events
	  	 	19	  
	         14.2
	 	     Resignation of Cash Manager
	  	 	21	  
	         14.3
	 	     Effect of Termination or Resignation
	  	 	21	  
	         14.4
	 	     General Provisions Relating to Termination or Resignation
	  	 	22	  
		
	 ARTICLE 15 FURTHER ASSURANCE, NO SET-OFF
	  	 	23	  
			
	         15.1
	 	     Co-operation, etc.
	  	 	23	  
	         15.2
	 	     Powers of Attorney
	  	 	23	  
	         15.3
	 	     No Set-Off
	  	 	24	  
	         15.4
	 	     Acknowledgement of Servicer and Seller
	  	 	24	  
	         15.5
	 	     New Sellers, New Servicers and Successor Servicers
	  	 	24	  
		
	 ARTICLE 16 BOND TRUSTEE
	  	 	24	  
			
	         16.1
	 	     Change of Bond Trustee
	  	 	24	  
	         16.2
	 	     Limitation of Liability of Bond Trustee
	  	 	24	  
		
	 ARTICLE 17 LIMITATION OF LIABILITY
	  	 	25	  
			
	         17.1
	 	     Limitation of Liability
	  	 	25	  

  
 - ii -

							
	 ARTICLE 18 CONFIDENTIALITY
	  	 	25	  
			
	         18.1
	 	     Confidentiality
	  	 	25	  
		
	 ARTICLE 19 NOTICES
	  	 	26	  
			
	         19.1
	 	     Notices
	  	 	26	  
		
	 ARTICLE 20 AMENDMENTS, VARIATION AND WAIVER
	  	 	27	  
			
	         20.1
	 	     Amendments, Variation and Waiver
	  	 	27	  
		
	 ARTICLE 21 NON-PETITION
	  	 	28	  
			
	         21.1
	 	     Non-Petition
	  	 	28	  
		
	 ARTICLE 22 NO AGENCY OR PARTNERSHIP
	  	 	28	  
			
	         22.1
	 	     No Agency or Partnership
	  	 	28	  
		
	 ARTICLE 23 ASSIGNMENT
	  	 	28	  
			
	         23.1
	 	     Assignment
	  	 	28	  
	         23.2
	 	     Assignment under Security Agreement
	  	 	29	  
		
	 ARTICLE 24 GOVERNING LAW
	  	 	29	  
			
	         24.1
	 	     Governing Law
	  	 	29	  
	         24.2
	 	     Submission to Jurisdiction
	  	 	29	  
		
	 ARTICLE 25 EXECUTION IN COUNTERPARTS
	  	 	29	  
			
	         25.1
	 	     Execution in Counterparts
	  	 	29	  
		
	 SCHEDULE 1
	  	 	1	  
		
	 SCHEDULE 2
	  	 	1	  
		
	 SCHEDULE 3
	  	 	1	  

  
 - iii -

 THIS CASH MANAGEMENT AGREEMENT is made as of September 30,
2013 
 BETWEEN: 
  

	 (1)
	 BMO 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, BMO COVERED BOND GP, INC. (in its capacity as the Guarantor); 

 

	 (2)
	 BANK OF MONTREAL, a bank named in Schedule I to the Bank Act, whose executive office is at 100 King Street West, 18th Floor, Toronto, Ontario, M5X 1A1, in its capacity as Cash Manager,
GDA Provider, Seller, Servicer and Issuer; and 

  

	 (3)
	 COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated under the laws of Canada, whose registered office is at 100 University
Avenue, 11th Floor, Toronto, Ontario, Canada M5J 2Y1, in its capacity as Bond Trustee. 

 WHEREAS:

  

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

 

	 (B)
	 The net proceeds from the issuance of each Tranche of Covered Bonds will be added to the general funds of the Issuer. 

 

	 (C)
	 The Guarantor will borrow funds under the Intercompany Loan Agreement, subject to the terms of the Intercompany Loan Agreement.

  

	 (D)
	 The Guarantor will use proceeds from the Intercompany Loan (i) to purchase Loans and their Related Security for inclusion in the Covered Bond
Collateral pursuant to the terms of the Mortgage Sale Agreement; and/or (ii) to invest in Substitution Assets in an amount not exceeding the prescribed limit; and/or (iii) subject to complying with the Asset Coverage Test to make Capital
Distributions to the Limited Partner; and/or (iv) to make deposits of the proceeds in the Guarantor Accounts (including, without limitation, to fund the Reserve Fund to an amount not exceeding the prescribed limit);

  

	 (E)
	 The Guarantor has provided a guarantee pursuant to which it has agreed to pay an amount equal to the Guaranteed Amounts when the same become Due for
Payment but which would otherwise be unpaid by the Issuer. 

  

	 (F)
	 The Cash Manager will provide Cash Management Services (as hereinafter defined) to the Guarantor and the Bond Trustee pursuant to the terms and
subject to the conditions contained in this Agreement. 

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

 ARTICLE 1 
 DEFINITIONS AND INTERPRETATION 
  

	 1.1
	 Definitions 

 The Master Definitions and Construction Agreement made between the parties to the Transaction Documents on the date hereof (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 of the Master Definitions and Construction Agreement. 
  

	 1.2
	 Interpretation 

  

	 	 (a)
	 For purposes of this Agreement, “this Agreement” has the same meaning as Cash Management Agreement in the Master Definitions and
Construction Agreement. 

  

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

  

	 1.3
	 Schedules 

 The Schedules attached to this Agreement will, for all purposes of this Agreement, form an integral part of it. 
 ARTICLE 2 
 APPOINTMENT OF CASH MANAGER 

 

	 2.1
	 Appointment 

 From the date hereof, until termination of this Agreement pursuant to Article 14 (Termination) hereof, the Guarantor hereby appoints the Cash Manager as its lawful agent to provide the cash
management services set out in this Agreement (including without limitation Section 3.4) and in Schedule 1 and 2 hereto (together as, the “Cash Management Services”) and the Cash Manager hereby accepts such appointment on the
terms and subject to the conditions of this Agreement. The Bond Trustee hereby consents to the appointment of the Cash Manager on the terms and conditions set out herein. 

From the date hereof until the earlier of the termination of this Agreement pursuant to Article 14 (Termination)
hereof and the occurrence of an Issuer Event of Default, the Issuer 

  
 2 

 
hereby appoints the Cash Manager as its lawful agent solely for the purpose of the preparation of Investor Reports pursuant to Section 9.4(b) and acknowledges the role of the Servicer in
preparing such Investor Reports. The Cash Manager hereby accepts such appointment on the terms and subject to the conditions of this Agreement. 
  

	 2.2
	 Duties prescribed by Transaction Documents 

For the avoidance of doubt and in connection with the appointment made pursuant to Section 2.1 hereof, save as
expressly provided elsewhere in this Agreement, nothing herein will be construed so as to give the Cash Manager any powers, rights, authorities, directions or obligations other than as specified in this Agreement and any other Transaction Documents.

 ARTICLE 3 
 THE CASH MANAGEMENT SERVICES 
  

	 3.1
	 General 

 The Cash Manager will provide the Cash Management Services set out in this Agreement. Unless otherwise agreed by the Bond Trustee, the Cash Management Services will be performed in the Province of Ontario
and in the performance thereof the Cash Manager will not take or permit any action which would result in any Charged Property that is personal property to be located outside of the Province of Ontario. 

 

	 3.2
	 Approvals and Authorizations 

 The Cash Manager will maintain, or procure the maintenance of, all approvals, authorizations, consents and licences required in connection with the activities of the Guarantor that is the subject of this
Agreement and will prepare and submit, or procure the preparation and submission of, on behalf of the Guarantor, all necessary applications and requests for any further approvals, authorizations, consents or licences which may be required in
connection with the activities of the Guarantor that is the subject of this Agreement and will, so far as it is reasonably able to do so, perform the Cash Management Services in such a way as not to prejudice the continuation of any such approvals,
authorizations, consents or licences. 
  

	 3.3
	 Compliance with Transaction Documents 

The Cash Management Services shall include the Cash Manager using all reasonable efforts to cause the Guarantor to comply
with all applicable legal requirements and with the terms of the Transaction Documents to which the Guarantor is a party, provided always that the Cash Manager, solely in its capacity as cash manager, shall not be required to lend or provide any sum
to the Guarantor and shall have no liability whatsoever to the Guarantor, the Bond Trustee or any other person, in its capacity as cash manager, other than to the extent arising under this Agreement or from any failure by the Guarantor to make any
payment due under any of the Transaction Documents. For greater certainty, the foregoing shall not relieve BMO from any failure to make or direct any payment due by BMO under any of the Transaction Documents, in any capacity other than as Cash
Manager, including without limitation in its capacity as Issuer, Servicer, Seller, Intercompany Loan Provider, Interest Rate Swap Provider, Covered Bond Swap Provider or Limited Partner of the Guarantor. 

  
 3 

	 3.4
	 Compliance with the Asset Coverage Test, the Amortization Test, the Pre-Maturity Test and the Valuation Calculation

 Without limitation to the Cash Management Services described elsewhere in this Agreement,
the Cash Manager hereby agrees: 
  

	 	 (i)
	 on each Canadian Business Day, to determine whether the Pre-Maturity Test (as set out in the Guarantor Agreement) for each series of Hard Bullet
Covered Bonds, if any, is satisfied; 

  

	 	 (ii)
	 to do all calculations that are required to determine whether the Guarantor is in compliance with the Asset Coverage Test on each Calculation Date
and to determine, on each Cash Flow Model Calculation Date, the Asset Percentage; 

  

	 	 (iii)
	 following an Issuer Event of Default, to do all calculations that are required to determine whether the Guarantor is in compliance with the
Amortization Test on each Calculation Date; 

  

	 	 (iv)
	 at any time the Cash Manager is required to do so by the terms of the Intercompany Loan Agreement or requested to do so by the Issuer, to do all
calculations which are required to determine (a) the balances outstanding on the Guarantee Loan and the Demand Loan, and (b) compliance with the Asset Coverage Test, in accordance with the terms of the Intercompany Loan Agreement as of the
date reasonably requested or required in respect thereof; 

  

	 	 (v)
	 to do all calculations which are required to determine the Valuation Calculation as of each Calculation Date on or before the Canadian Business Day
at least two Canadian Business Days prior to the immediately following Guarantor Payment Date; and 

  

	 	 (vi)
	 on or prior to each Calculation Date, to determine whether the Guarantor is in compliance with the Prescribed Cash Limitation,

 and where required in connection therewith to give any and all notices to CMHC, the Guarantor, the Issuer
and/or the Bond Trustee in the time and in the manner prescribed in the Guarantor Agreement, the Intercompany Loan Agreement, the Security Agreement or the CMHC Guide. 

Not later than fifteen days following any Calculation Date in respect of which the Cover Pool Monitor is obliged, in
accordance with Article 2 of the Cover Pool Monitor Agreement, to conduct tests of the calculations performed by the Cash Manager or in respect of a prior Calculation Date identified by the Cover Pool Monitor, the Cash Manager will provide the Cover
Pool Monitor with the information described in Article 2 or Article 3, as applicable, of the Cover Pool Monitor Agreement. 

  
 4 

	 3.5
	 Indemnification 

 The Cash Manager will indemnify each of the Guarantor and the Bond Trustee on demand for any loss, liability, claim, expense or damage suffered or incurred by either of them in respect of the dishonesty,
bad faith, wilful misconduct, negligence or reckless disregard by the Cash Manager or any of its officers, employees or agents in carrying out its functions as Cash Manager under this Agreement or any other Transaction Document to which the Cash
Manager is a party (in its capacity as such) in relation to such functions or as a result of a breach by the Cash Manager of any covenant, obligation, term or condition of this Agreement or any other Transaction Document to which the Cash Manager is
a party (in its capacity as such) in relation to such functions. 
 ARTICLE 4 

PAYMENTS, ACCOUNTS, LEDGERS 
  

	 4.1
	 Establishment of Bank Accounts 

 The Cash Manager hereby represents, warrants and covenants to the Bond Trustee and Guarantor as follows: 
  

	 	 (a)
	 that the GDA Account has been established on or before the date hereof pursuant to the Bank Account Agreement, Guaranteed Deposit Account Contract
and the Security Agreement in the agreed form and will apply thereto as at the Program Date; 

  

	 	 (b)
	 that the Transaction Account has been established on or before the date hereof pursuant to the Bank Account Agreement and the Security Agreement in
the agreed form and will apply thereto as at the Program Date; 

  

	 	 (c)
	 that it will use its best reasonable efforts to cause the GDA Account and the Transaction Account to be operative as at the Program Date;

  

	 	 (d)
	 that it will not knowingly create or permit to subsist any Security Interest in relation to the GDA Account or the Transaction Account, other than
as created under or permitted pursuant to the terms of the Security Agreement or any other Transaction Document; 

  

	 	 (e)
	 that it has entered into, on or before the date hereof, the Stand-By Guaranteed Deposit Account Contract and the Stand-By Bank Account Agreement;

  

	 	 (f)
	 that if one or more Rating Agencies downgrades or withdraws the ratings of the unsecured, unsubordinated and unguaranteed debt obligations of the
Account Bank, or the issuer default rating of the Account Bank, as applicable, below the Account Bank Required Ratings (such an event an “Account Bank Ratings Downgrade”) or if the Bank Account Agreement is otherwise terminated for
any reason except pursuant to Section 7.4(a) of the Bank Account Agreement, or an Issuer Event of Default occurs (provided that the Account Bank is the Issuer or an Affiliate thereof), it will: 

  
 5 

	 	 (i)
	 within two (2) Canadian Business Days: 

  

	 	 A.
	 serve a Stand-By Account Bank Notice on the Stand-By Account Bank with a copy to the Stand-By GDA Provider (if different than the Stand-By Account
Bank); and 

  

	 	 B.
	 establish the Stand-By GDA Account and the Stand-By Transaction Account in accordance with the terms of the Stand-By Guaranteed Deposit Account
Agreement and the Stand-By Account Agreement and cause the amounts standing to the credit of the GDA Account held with the Account Bank to be transferred to the Stand-By GDA Account and the amounts standing to the credit of the Transaction Account,
if any, to be transferred to the Stand-By Transaction Account in each case, promptly upon the establishment of such accounts and, in any event, within five (5) Canadian Business Days of the occurrence of any event requiring the serving of the
Stand-By Account Bank Notice; and 

  

	 	 (ii)
	 to the extent required but not practicable within the five (5) Canadian Business Day period referred to in Section 4.1(f)(i)(B), within 30
days, re-direct to the Stand-By GDA Account or the Stand-By Transaction Account, as applicable, all payments of principal, interest and other amounts under Loans and Substitution Assets that would have otherwise been payable to the GDA Account or
the Transaction Account, as applicable; provided that during such 30 day period any such amounts received into the GDA Account or the Transaction Account, as applicable shall be transferred or otherwise deposited to the Stand-By GDA Account or the
Stand-By Transaction Account, as applicable, within five (5) Canadian Business Days of receipt. 

  

	 	 (g)
	 that if one or more Rating Agencies downgrades or withdraws the ratings of the unsecured, unsubordinated and unguaranteed debt obligations of the
Stand-By Account Bank, or the issuer default rating of the Stand-By Account Bank, as applicable, below the Stand-By Account Bank Required Ratings (such an event a “Stand-By Account Bank Required Ratings Downgrade”) or if the
Stand-By Bank Account Agreement is otherwise terminated for any reason except pursuant to Section 7.3(a) of the Stand-By Bank Account Agreement, it will within five (5) Canadian Business Days: 

 
  

	 	 (i)
	 engage a replacement Stand-By Account Bank with ratings by the Rating Agencies equal to or greater than each of the Stand-By Account Bank Required
Ratings and enter into a new bank account 

  
 6 

	 	
agreement (the “New Stand-By Bank Account Agreement”) and a new guaranteed deposit account contract (the “New Stand-By GDA Agreement”) substantially on the same
terms as the Stand-By Bank Account Agreement and the Stand-By GDA Agreement; and 

  

	 	 (ii)
	 direct the Stand-By Account Bank to transfer all funds held in the Guarantor Accounts to replacement accounts under the terms of the New Stand-By
Bank Account Agreement and the New Stand-By GDA Agreement (it being understood that all such funds must be transferred within the five (5) Canadian Business Day period to such replacement accounts. 

 

	 4.2
	 Ledgers 

  

	 	 (a)
	 The Cash Manager will open and maintain in the books or records of the Guarantor certain Ledgers to be known as: 

 

	 	 (i)
	 the Revenue Ledger; 

  

	 	 (ii)
	 the Principal Ledger; 

  

	 	 (iii)
	 the Reserve Ledger, if applicable; 

  

	 	 (iv)
	 the Intercompany Loan Ledger; 

  

	 	 (v)
	 the Payment Ledger; 

  

	 	 (vi)
	 the Capital Account Ledgers; and 

  

	 	 (vii)
	 the Pre-Maturity Liquidity Ledger; 

  
 7 

 and all the foregoing Ledgers will together reflect the aggregate of:
(A) all amounts held by the Cash Manager for and on behalf of the Guarantor; (B) all amounts standing to the credit of the GDA Account (or, as applicable, the Stand-By GDA Account); and (C) all amounts invested in Substitution Assets
for and on behalf of the Guarantor. 
  

	 	 (b)
	 The Cash Manager will open and maintain in the books or records of the Guarantor the Intercompany Loan Ledger which will record amounts repaid in
respect of each Advance borrowed under the Intercompany Loan in accordance with the terms and conditions of the Intercompany Loan Agreement. 

  

	 	 (c)
	 The Cash Manager will make credits and debits to the Ledgers in accordance with Schedule 2 (Cash Management and Maintenance of Ledgers) hereto.

  

	 	 (d)
	 Without limiting any other provision, it will hold all cash solely in the Guarantor Accounts on a segregated basis and will not commingle with other
funds. 

  

	 4.3
	 Cash Flows 

  

	 	 (a)
	 Subject to Section 4.3(b) below, the Cash Manager is hereby authorized to collect, receive and hold the following amounts for and on behalf of
the Guarantor and the Bond Trustee: 

  

	 	 (i)
	 all Revenue Receipts; 

  

	 	 (ii)
	 all Principal Receipts; 

  

	 	 (iii)
	 all Cash Capital Contributions; 

  

	 	 (iv)
	 all amounts received by the Guarantor pursuant to the Interest Rate Swap Agreement; and any other amounts whatsoever received by or on behalf of the
Guarantor after the date hereof (including, without limitation, the proceeds of any Advances made to the Guarantor under the Intercompany Loan where such proceeds have not been applied to acquire Loans and their Related Security, fund Additional
Advances in respect of Loans sold by the Seller to the Guarantor, invest in Substitution Assets or make a Capital Distribution pursuant to the terms of the Guarantor Agreement). 

 

	 	 (b)
	 The Cash Manager will cause all transfers, payments and/or withdrawals, as applicable, of amounts held by the Cash Manager for and on behalf of the
Guarantor and the Bond Trustee and amounts standing to the credit of the Transaction Account (or, as applicable, the Stand-By Transaction Account) and the GDA Account (or, as applicable, the Stand-By GDA Account) to be made in accordance with the
provisions of this Agreement and any other Transaction Documents. 

  

	 	 (c)
	 The Cash Manager will procure that: 

  
 8 

	 	 (i)
	 amounts received by the Guarantor under the Interest Rate Swap are promptly paid into the GDA Account (or, as applicable, the Stand-By GDA Account);
and 

  

	 	 (ii)
	 amounts payable by the Guarantor under the Interest Rate Swap are promptly paid from the GDA Account (or, as applicable, the Stand-By GDA Account).

  

	 	 (d)
	 The Cash Manager will procure that all interest earned on the Guarantor Accounts and all investment proceeds from any Substitution Assets purchased
from amounts standing to the credit of the GDA Account (or, as applicable, the Stand-By GDA Account), are promptly credited to the GDA Account (or, as applicable, the Stand-By GDA Account). 

 

	 	 (e)
	 The Cash Manager will procure that the proceeds of each Advance under the Intercompany Loan are applied in accordance with the Intercompany Loan
Agreement and any other Transaction Documents. 

  

	 	 (f)
	 Each of the payments into the GDA Account (or, as applicable, the Stand-By GDA Account) will be made forthwith upon receipt by the Guarantor (or the
Cash Manager on its behalf) of the amount in question. 

  

	 	 (g)
	 For the avoidance of doubt, as soon as reasonably practicable after becoming aware of the same, the Cash Manager will withdraw funds from any
Guarantor Account if and to the extent that such funds were credited thereto in error and will use its commercially reasonable endeavours to ensure that such funds are applied correctly thereafter. 

 

	 	 (h)
	 The Cash Manager will promptly notify each of the Guarantor and the Bond Trustee of any additional account permitted by the Transaction Documents
which supplements or replaces any of the Guarantor Accounts and each of the parties hereto agrees to make any amendments to this Agreement that are required as a result of the establishment of any supplemental account. 

 

	 	 (i)
	 Each of the Cash Manager and the Guarantor undertakes that, so far as it is able to procure the same, each of the Guarantor Accounts and all
instructions and any applicable Mandate in relation thereto will continue to be operative and will not, save as permitted pursuant to the Bank Account Agreement, be changed without the prior written consent of the Bond Trustee (such consent not to
be unreasonably withheld or delayed provided that each supplemental or replacement account will be subject at all times to a valid, perfected and first priority Security Interest in favour of the Bond Trustee on substantially the same terms as the
security over the Guarantor Accounts granted to the Bond Trustee pursuant to the Security Agreement). For the avoidance of doubt, the Cash Manager may change the authorized signatories in respect of any instructions or any applicable Mandate
relating to the Guarantor Accounts, without the prior written consent of the Bond Trustee, in accordance with Section 3.2 of the Bank Account Agreement. 

  
 9 

	 	 (j)
	 Prior to (i) a Rating Agency withdrawing or downgrading the issuer default rating or the ratings of the unsecured, unsubordinated and
unguaranteed debt obligations of the Cash Manager, as applicable, below the Cash Management Deposit Ratings, or (ii) a Covered Bond Guarantee Activation Event, funds held by the Cash Manager for or on behalf of the Guarantor will be used to
make payments on or before the next following Guarantor Payment Date in accordance with Article 6 (Priorities of Payments) of the Guarantor Agreement and following any such payments to be made on the Guarantor Payment Date any remaining amounts held
by the Cash Manager for or on behalf of the Guarantor will be deposited in the GDA Account (or the Stand-By GDA Account, as applicable). 

  

	 	 (k)
	 At any time following (i) a Rating Agency withdrawing or downgrading the issuer default rating or the ratings of the unsecured, unsubordinated and
unguaranteed debt obligations of the Cash Manager, as applicable, below the Cash Management Deposit Ratings, or (ii) a Covered Bond Guarantee Activation Event, the Cash Manager will be required to immediately direct the Servicer to deposit all
Revenue Receipts and all Principal Receipts received by the Servicer directly into the GDA Account (or, as applicable, the Stand-By GDA Account) within the applicable time period specified for such deposit by the Servicer in accordance with the
terms of the Servicing Agreement, and shall immediately remit any funds held by the Cash Manager for or on behalf of the Guarantor at such time directly into the GDA Account. 

 

	 4.4
	 Withdrawals 

 The Cash Manager may make withdrawals: 
  

	 	 (a)
	 on behalf of the Guarantor from the GDA Account (or, as applicable, the Stand-By GDA Account), but only: 

 

	 	 (i)
	 if the Account Bank (or, as applicable, the Stand-By Account Bank) has confirmed to the Cash Manager that there are sufficient amounts standing to
the credit of the GDA Account (or, as applicable, the Stand-By GDA Account) to make such withdrawal on such date; 

  

	 	 (ii)
	 for payment of the funds to the Transaction Account (or, as applicable, the Stand-By Transaction Account) and application thereof in accordance with
the applicable Priorities of Payments or in accordance with Schedule 2 (Cash Management and Maintenance of Ledgers) hereto or otherwise in accordance with the Transaction Documents; and 

 

	 	 (iii)
	 until the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice on the Guarantor of which the Cash Manager has
received notice; 

  

	 	 (b)
	 on behalf of the Guarantor from the Transaction Account (or, as applicable, the Stand-By Transaction Account) for application in accordance with the
applicable Priorities of Payments and in accordance with Schedule 2 (Cash Management and Maintenance of Ledgers) hereto or otherwise in accordance with any other Transaction Documents, but only until the occurrence of a Guarantor Event of Default
and service of a Guarantor Acceleration Notice on the Guarantor of which the Cash Manager has received notice; and 

  
 10 

	 	 (c)
	 solely upon the direction of the Bond Trustee in accordance with the Security Agreement, from the GDA Account (or, as applicable, the Stand-By GDA
Account) and the Transaction Account (or, as applicable, the Stand-By Transaction Account) following the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice on the Guarantor of which the Cash Manager has
received notice, 

 but will not in carrying out its functions as Cash Manager under this
Agreement otherwise make withdrawals from the Guarantor Accounts. 
  

	 4.5
	 Bank Account Statements 

 The Cash Manager will take all reasonable steps to ensure that it receives a monthly bank statement from the Account Bank (or, as applicable, the Stand-By Account Bank) in relation to each of the
Guarantor Accounts and that it furnishes a copy of such statements to the Guarantor and the Bond Trustee. 
  

	 4.6
	 Payments to Paying Agents 

 Each of the Bond Trustee and the Guarantor agree that all amounts payable by the Covered Bond Swap Provider to the Guarantor under the Covered Bond Swap Agreement and in accordance with the applicable
Priorities of Payments, will be paid directly to the Paying Agents, and the Guarantor (or the Cash Manager on its behalf) will direct the Covered Bond Swap Provider accordingly. 

 

	 4.7
	 Deposits 

 Amounts (if any) held by the Cash Manager for and on behalf of the Guarantor or standing to the credit of the Transaction Account (or, as applicable, the Stand-By Transaction Account) which are not
required to be applied in accordance with paragraphs (a) to (i) of the Pre-Acceleration Revenue Priority of Payments or paragraphs (a) to (f) of the Pre-Acceleration Principal Priority of Payments will, if applicable, be
deposited by the Cash Manager and, in each case be credited to the appropriate ledger in the GDA Account on the Guarantor Payment Date. 
 ARTICLE 5 
 THIRD PARTY AMOUNTS 

 

	 5.1
	 Third Party Amounts 

 The Cash Manager will withdraw any Third Party Amounts received by the Guarantor and standing to the credit of a Guarantor Account and pay the same to the Seller provided that there are sufficient amounts
standing to the credit of the relevant Guarantor Account to meet such payment. Third Party Amounts due to the Seller will be paid by wire transfer to such account as may be specified by the Seller from time to time, promptly following a request for
such withdrawal being received from the Seller. The Seller will pay such Third Party Amounts to the relevant third party. 

  
 11 

 ARTICLE 6 
 INTEREST RATE SWAP AGREEMENT 
  

	 6.1
	 Computations 

 The Cash Manager will determine, in accordance with the terms of the Interest Rate Swap Agreement, the Receipt Ratio and the Average Loan Balance (each as defined in the Interest Rate Swap Agreement) in
respect of the relevant Calculation Period and will notify the Guarantor and the Bond Trustee of such amounts and balances on the Canadian Business Day that is at least two days prior to the first Guarantor Payment Date following the relevant
Calculation Period. 
  

	 6.2
	 Termination of the Interest Rate Swap Agreement 

If on or prior to the repayment in full of the final Tranche of the Covered Bonds then outstanding, the Interest Rate Swap
Agreement is terminated other than as a result of an Event of Default (as defined in the Interest Rate Swap Agreement) where the Guarantor is the Defaulting Party (as defined in the Interest Rate Swap Agreement) or the delivery of a Guarantor
Acceleration Notice to the Guarantor of which the Cash Manager has received notice or a partial termination of the Interest Rate Swap Agreement as a result of a sale of Loans and their Related Security by the Guarantor, then the Cash Manager (on
behalf of the Guarantor) will enter into one or more new swaps with one or more third party swap provider(s) and the Bond Trustee, to hedge the risks being hedged under the terms of the Interest Rate Swap Agreement; provided that at any time that
the Guarantor is Independently Controlled and Governed, the Guarantor shall have the discretion to refrain from hedging such risks. The Cash Manager may apply any termination payment received in respect of the foregoing from the Interest Rate Swap
Provider for such purpose in accordance with Article 6 (Priorities of Payment) of the Guarantor Agreement. 
 ARTICLE 7

 COVERED BOND SWAP AGREEMENT 
  

	 7.1
	 Computations 

 Following the Covered Bond Swap Effective Date, the Cash Manager will determine, in accordance with the terms of the Covered Bond Swap Agreement, in respect of the relevant Calculation Period, the amount
of principal payments to be made with respect to the Covered Bonds and will notify the Guarantor and the Bond Trustee of such amounts, balances and rates on the Canadian Business Day that is at least two days prior to the first Guarantor Payment
Date following the relevant Calculation Period. 

  
 12 

	 7.2
	 Termination of the Covered Bond Swap Agreement 

If the Covered Bond Swap Agreement is terminated in respect of any Tranche of Covered Bonds on or prior to the repayment
in full of such Tranche of Covered Bonds (other than as a result of an Event of Default (as defined in the Covered Bond Swap Agreement) where the Guarantor is the Defaulting Party (as defined in the Covered Bond Swap Agreement)) or the delivery of a
Guarantor Acceleration Notice to the Guarantor or a partial termination of the Covered Bond Swap Agreement as a result of a sale of Loans and their Related Security by the Guarantor, then the Cash Manager (on behalf of the Guarantor and the Bond
Trustee) will enter into a new swap to hedge the risks being hedged under the terms of the Covered Bond Swap Agreement; provided that at any time that the Guarantor is Independently Controlled and Governed, the Guarantor shall have the discretion to
refrain from hedging such risks. The Cash Manager may apply any termination payment received in respect of the foregoing from the Covered Bond Swap Provider pursuant to the Covered Bond Swap Agreement for such purpose in accordance with Article 6
(Priorities of Payment) of the Guarantor Agreement. 
 ARTICLE 8 

NO LIABILITY 
  

	 8.1
	 No Liability 

  

	 	 (a)
	 Save as otherwise provided in this Agreement, the Cash Manager will have no liability for the obligations of the Guarantor, the Bond Trustee and/or
any other Person under any other Transaction Document or otherwise and nothing herein will constitute a guarantee, indemnity or similar obligation by or of the Cash Manager of or in relation to the obligations of either the Guarantor, the Bond
Trustee and/or any other Person under any other Transaction Document. 

  

	 	 (b)
	 For greater certainty, the Cash Manager will not be liable in respect of any loss, liability, claim, expense or damage suffered or incurred by the
Guarantor, the Bond Trustee and/or any other Person as a result of the proper performance of the Cash Management Services by the Cash Manager save to the extent that such loss, liability, claim, expense or damage is suffered or incurred as a result
of any dishonesty, bad faith, wilful misconduct, negligence or reckless disregard by the Cash Manager or any of its officers, employees or agents or as a result of a breach by the Cash Manager of any covenant, obligation, term or condition of this
Agreement or any other Transaction Document to which the Cash Manager is a party (in its capacity as such) in relation to such functions. 

 ARTICLE 9 
 INFORMATION 

 

	 9.1
	 Use of I.T. Systems 

  

	 	 (a)
	 The Cash Manager represents and warrants that at the date hereof in respect of the software that is to be used by the Cash Manager in providing the
Cash Management Services it has in place all necessary licences and/or consents from the respective licensor or licensors (if any) of such software. 

  
 13 

	 	 (b)
	 The Cash Manager undertakes that it will for the duration of this Agreement, use commercially reasonable endeavours to:

  

	 	 (i)
	 ensure that the licences and/or consents referred to in paragraph (a) are maintained in full force and effect; and 

 

	 	 (ii)
	 except in so far as it would breach any other of its legal obligations, grant to any Person to whom it may sub-contract or delegate the performance
of all or any of its powers and obligations under this Agreement and/or to such Person as the Guarantor elects as a substitute cash manager (a “Substitute Cash Manager”) in accordance with the terms of this Agreement a licence to
use any proprietary software together with any updates which may be made thereto from time to time. 

  

	 	 (c)
	 The Cash Manager will use all commercially reasonable efforts to maintain in working order the information technology systems used by the Cash
Manager in providing the Cash Management Services. 

  

	 	 (d)
	 The Cash Manager will pass to any Person to whom it may sub-contract or delegate the performance of all or any of its powers and obligations under
this Agreement and/or to such Person as the Guarantor and the Bond Trustee may select as a Substitute Cash Manager in accordance with the terms of this Agreement the benefit of any warranties in relation to the software insofar as the same are
capable of assignment. 

  

	 9.2
	 Access to Books and/or Records 

 Subject to all applicable laws, the Cash Manager will permit the Auditors, the Bond Trustee, the Custodian and any other Person nominated by the Bond Trustee or the Guarantor (in each case, to whom the
Cash Manager has no reasonable objection) at any time during normal office hours upon reasonable notice to have access, or procure that such Person or Persons are granted access, to all books, records and accounts relating to the Cash Management
Services provided by the Cash Manager and related matters in accordance with this Agreement. 
  

	 9.3
	 Statutory Obligations 

 The Cash Manager will use commercially reasonable efforts, on behalf of the Guarantor, to prepare or cause to be prepared and filed all reports, annual returns, financial statements, statutory forms and
other returns which the Guarantor is required by Law (including the CMHC Guide) or any regulatory authority having jurisdiction to prepare and file. If directed by the Guarantor, or requested by the Bond Trustee and consented to by the Guarantor (in
its sole discretion), the Cash Manager will cause such accounts to be audited by the auditor appointed by the Guarantor in accordance with the terms of the Guarantor Agreement, and will procure so far as it is able so to do that the auditor will
make a report thereon and copies of all such documents will be delivered to the Guarantor and the Bond Trustee as soon as practicable after the end of each accounting reference period of the Guarantor. 

  
 14 

	 9.4
	 Information Covenants 

  

	 	 (a)
	 With the assistance of the Issuer, the Cash Manager will establish and maintain a website for the Program (the “Program
Website”) in accordance with, and the Cash Manager will post on the Program Website all information concerning the Program required by, the applicable requirements of the CMHC Guide. 

 

	 	 (b)
	 Within 15 Canadian Business Days after the end of each month following the later of (i) the Program Date, and (ii) the First Issue Date,
with the assistance of the Servicer, the Cash Manager will, prior to the occurrence of an Issuer Event of Default, on behalf of the Issuer, and following the occurrence of an Issuer Event of Default, on behalf of the Guarantor, prepare and provide
the Guarantor, the Bond Trustee, the Seller and the Rating Agencies with the Investor Report, the form of which is attached hereto as Schedule 3 (Form of Investor Report), and, in the case of each Investor Report other than the Investor Report
prepared in respect of the First Issue Date, make available on the Program Website. The Investor Report prepared in respect of the First Issue Date may be prepared on a pro forma basis (assuming an offering size).

  

	 	 (c)
	 The Cash Manager will provide, or cause to be provided, to the Guarantor and the Bond Trustee copies of any annual returns or financial statements
referred to in Section 9.3 as soon as reasonably practicable after the preparation thereof. 

  

	 	 (d)
	 The Cash Manager will (i) notify the Rating Agencies, CMHC and the Bond Trustee in writing as soon as reasonably practicable of the details of
any material amendment to the Transaction Documents, of which the Cash Manager has notice, and (ii) provide the Rating Agencies, CMHC and/or Bond Trustee, as applicable, any other information relating to the Cash Manager, solely in its capacity
as Cash Manager and in connection with its obligations under this Agreement, as the Rating Agencies and/or the Bond Trustee may reasonably request, provided that the Bond Trustee will not make such a request more than once every three months unless,
in the reasonable belief of the Bond Trustee, an Issuer Event of Default or Potential Issuer Event of Default or a Guarantor Event of Default or Potential Guarantor Event of Default or a Cash Manager Termination Event (as defined in
Section 14.1 hereof) has occurred and is continuing, and provided further that such request does not adversely and unreasonably interfere with the Cash Manager’s day-to-day provision of the Cash Management Services under the terms of this
Agreement. 

  

	 	 (e)
	 The Cash Manager will, at the request of the Bond Trustee, furnish the Bond Trustee and the Rating Agencies with such other information relating to
its business and financial condition as it may be reasonable for the Bond Trustee to request in connection with this Agreement, provided that such request does not adversely interfere with the Cash Manager’s day-to-day provision of the Cash
Management Services under the terms of this Agreement. 

  
 15 

	 9.5
	 Notice of Events of Default and Cash Manager Termination Event 

The Cash Manager will deliver to the Guarantor, the Bond Trustee, CMHC and the Rating Agencies as soon as reasonably
practicable thereafter, but in any event within three (3) Canadian Business Days of becoming aware thereof, notice of any: 
  

	 	 (a)
	 Cash Manager Termination Event or any event which, with the lapse of time and/or the issue, making or giving of any notice, certification,
declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfilment of any similar condition, would constitute a Cash Manager Termination Event; 

 

	 	 (b)
	 Issuer Event of Default or Potential Issuer Event of Default; or 

 

	 	 (c)
	 Guarantor Event of Default or any Potential Guarantor Event of Default. 

 

	 9.6
	 Notification under Mortgage Sale Agreement 

The Cash Manager will notify the Guarantor and the Bond Trustee if it is aware that the purchase of any Loans and their
Related Security on a Purchase Date would not satisfy the Rating Agency Condition. 
 ARTICLE 10 

REMUNERATION 
  

	 10.1
	 Fee Payable 

  

	 	 (a)
	 Subject to paragraph (b) below, the Cash Manager will perform the Cash Management Services at no additional cost to the Guarantor and will not be
entitled to compensation or reimbursement for performance of the Cash Management Services. 

  

	 	 (b)
	 If the Cash Manager is replaced by a Substitute Cash Manager that is not a member of the BMO Group, such Substitute Cash Manager will be paid a cash
management fee which will be agreed in writing between the Guarantor and such Substitute Cash Manager from time to time. 

  

	 	 (c)
	 Unless and until otherwise agreed by the Guarantor and the Substitute Cash Manager in writing, the Guarantor is solely responsible for paying the
cash management fee to the Substitute Cash Manager which is referred to in paragraph (b) above. 

  
 16 

	 10.2
	 Payment of Fee 

 The cash management fee referred to in Article 10 (Remuneration) hereof, plus GST due thereon, will be paid to the Substitute Cash Manager, where applicable, in arrears on each Guarantor Payment Date
in the manner contemplated by and in accordance with the provisions of the applicable Priorities of Payments. 

ARTICLE 11 
 COSTS AND EXPENSES 
  

	 11.1
	 General 

 Subject to and in accordance with the applicable Priorities of Payments and subject to Section 12.1(d), the Guarantor will on each Guarantor Payment Date reimburse the Cash Manager for all costs,
expenses and charges (together with any applicable Taxes, due thereon) properly incurred by the Cash Manager in the performance of the Cash Management Services including any such costs, expenses or charges not reimbursed to the Cash Manager on any
previous Guarantor Payment Date, and the Cash Manager will supply the Guarantor with an appropriate invoice with respect to such Taxes issued by it, or, if the Cash Manager has treated the relevant cost, expense or charge as a disbursement for GST
purposes, by the Person making the supply. 
  

	 11.2
	 Responsibility 

 Unless and until otherwise agreed by the Guarantor and the Cash Manager in writing, the Guarantor will be solely responsible for reimbursing the Cash Manager for the out-of-pocket costs, expenses and
charges referred to in Article 11 (Costs and Expenses) hereof. 
 ARTICLE 12 

REPRESENTATIONS, WARRANTIES AND COVENANTS OF CASH MANAGER 

 

	 12.1
	 Representations, Warranties and Covenants 

The Cash Manager hereby represents and warrants to, and covenants with, each of the Guarantor and the Bond Trustee that
without prejudice to any of its specific obligations hereunder: 
  

	 	 (a)
	 it will exercise and carry out its powers and obligations under this Agreement solely in the best interests of the Guarantor and the Bond Trustee,
and in connection therewith, it will devote the degree of care, diligence and skill that a reasonable and prudent person would exercise in comparable circumstances; 

 

	 	 (b)
	 it will comply with any proper directions, orders and instructions which the Guarantor or the Bond Trustee may from time to time give to it in
accordance with the provisions of this Agreement and, in the event of any conflict, those of the Bond Trustee will prevail; 

  
 17 

	 	 (c)
	 it will keep in force all licences, approvals, authorizations and consents which may be necessary in connection with the performance of the Cash
Management Services and prepare and submit all necessary applications and requests for any further approval, authorization, consent or licence required in connection with the performance of the Cash Management Services; 

 

	 	 (d)
	 save as otherwise agreed with the Guarantor and the Bond Trustee, it will provide free of charge to the Guarantor during normal office hours space,
facilities, equipment and staff sufficient to fulfil the obligations of the Guarantor under this Agreement; 

  

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

  

	 	 (f)
	 it will not, in its capacity as Cash Manager, without the prior written consent of the Bond Trustee (such consent not to be unreasonably withheld or
delayed) and subject to any restrictions under other Transaction Documents and the CMHC Guide, agree to any amendments to or termination of any of the Transaction Documents, to which it is a party in its capacity as Cash Manager, save in accordance
with their terms; 

  

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

  

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

  

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

  

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

  

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

  

	 	 (l)
	 the unsecured, unsubordinated and unguaranteed debt obligations or the issuer default rating, as applicable, of the Cash Manager rated by each of
the Rating Agencies are at or above each of the Cash Manager Required Ratings. 

  
 18 

	 12.2
	 Duration of Covenants 

 The covenants of the Cash Manager in Section 12.1 hereof will remain in force until this Agreement is terminated but without prejudice to any right or remedy of the Guarantor and/or the Bond Trustee
arising from breach of any such covenant prior to the date of termination of this Agreement. 
  

	 12.3
	 Undertaking 

 The Cash Manager undertakes to notify the Guarantor and the Bond Trustee immediately if, at any time during the term of this Agreement, any of the statements contained in Section 12.1 ceases to be
true. The representations, warranties and covenants set out in Section 12.1 will survive the signing and delivery of this Agreement. 
 ARTICLE 13 
 SERVICES NON-EXCLUSIVE 

 

	 13.1
	 Services Non-Exclusive 

 Nothing in this Agreement will prevent the Cash Manager from rendering or performing services similar to those provided for in this Agreement to or for itself or other Persons, or from carrying on
business similar to or in competition with the activities of the Guarantor, or the business of the Bond Trustee or any other Person party to any Transaction Document to which the Cash Manager is a party. 

ARTICLE 14 
 TERMINATION 
  

	 14.1
	 Cash Manager Termination Events 

  

	 	 (a)
	 If any of the following events (each a “Cash Manager Termination Event”) occurs: 

 

	 	 (i)
	 the Cash Manager defaults in the payment on the due date of any payment due and payable by it under this Agreement or in the performance of its
obligations under Sections 4.3 and 4.4 hereof and such default continues unremedied for a period of five (5) Canadian Business Days after the earlier of the Cash Manager becoming aware of such default and receipt by the Cash Manager of written
notice from the Bond Trustee requiring the same to be remedied; or 

  

	 	 (ii)
	 the Cash Manager defaults in the performance or observance of any of its other covenants and obligations under this Agreement, or any representation
or warranty of the Cash Manager is incorrect and such default continues unremedied for a period of thirty (30) days after the Cash Manager becoming aware of such default or misrepresentation; or 

 

	 	 (iii)
	 an Insolvency Event occurs in respect of the Cash Manager; 

  
 19 

	 	 (iv)
	 a Rating Agency downgrading or withdrawing the issuer default rating or the ratings of the unsecured, unsubordinated and unguaranteed debt
obligations of the Cash Manager, as applicable, below the Cash Manager Required Ratings (unless the Cash Manager obtains an unconditional and unlimited guarantee of its obligations under this Agreement from a credit support provider whose unsecured,
unguaranteed and unsubordinated debt ratings and issuer default ratings, as applicable, meet the requirements of the relevant Rating Agencies (including the Cash Manager Required Ratings) within thirty (30) days of the first downgrade below any
of the Cash Manager Required Ratings); or 

  

	 	 (v)
	 an Issuer Event of Default (A) occurs and is continuing, or (B) has previously occurred and is continuing, at any time that the Guarantor
is Independently Controlled and Governed (provided that the Cash Manager is the Issuer or an Affiliate thereof), 

 then the Guarantor and/or the Bond Trustee (x) may at once or at any time thereafter while such default continues by notice in writing to the Cash Manager or (y) in the case of an occurrence of
a Cash Manager Termination Event described in paragraph 14.1(a)(iv) above at any time that the Guarantor is not Independently Controlled and Governed, shall, terminate its appointment as Cash Manager under this Agreement with effect from a date (not
earlier than the date of the notice) specified in the notice; provided that any termination resulting from the occurrence of a Cash Manager Termination Event described in paragraph 14.1(a)(ii) above in respect of the Cash Manager’s default in
the performance or observance of any of its covenants and obligations under this Agreement shall be subject to the consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that such termination would be
materially prejudicial to the interests of the Covered Bondholders. 
  

	 	 (b)
	 Upon the occurrence of a Cash Manager Termination Event described in paragraph 14.1(a)(iv) that is cured as provided for therein, the Guarantor
shall forthwith notify CMHC of the identity of the guarantor of the Cash Manager’s obligations and the ratings by each of the Rating Agencies of the short-term, unsecured, unsubordinated and unguaranteed debt obligations of such guarantor or
its issuer default rating, as applicable. 

  

	 	 (c)
	 Upon termination of the appointment of the Cash Manager pursuant to this Section 14.1, the Guarantor will use commercially reasonable efforts to
appoint a Substitute Cash Manager (but will have no liability to any Person in the event that, having used commercially reasonable endeavours, it is unable to appoint a Substitute Cash Manager). 

 

	 	 (d)
	 Any Substitute Cash Manager: 

  

	 	 (i)
	 must agree to enter into an agreement substantially on the same terms as the relevant provisions of this Agreement or on such terms as are
satisfactory to the Guarantor and the Bond Trustee; 

  
 20 

	 	 (ii)
	 must have cash management experience and is subject to the prior written approval of the Guarantor and the Bond Trustee (such consent not to be
unreasonably withheld, delayed or made subject to conditions); and 

  

	 	 (iii)
	 must be a party with respect to which the Rating Agency Condition has been satisfied. 

 

	 14.2
	 Resignation of Cash Manager 

 The Cash Manager may resign and terminate its appointment as Cash Manager under this Agreement upon the expiry of not less than 12 months’ notice of termination given by the Cash Manager to the
Guarantor and the Bond Trustee (or such shorter time as may be agreed between the Cash Manager, the Guarantor and the Bond Trustee) provided that: 
  

	 	 (a)
	 a Substitute Cash Manager will be appointed, such appointment to be effective not later than the date of such resignation;

  

	 	 (b)
	 such Substitute Cash Manager has cash management experience and is approved by each of the Guarantor and the Bond Trustee, and has at least the Cash
Manager Required Ratings; 

  

	 	 (c)
	 the Substitute Cash Manager enters into an agreement substantially on the same terms as the relevant provisions of this Agreement (or on such terms
as are satisfactory to the Guarantor and the Bond Trustee) and the Cash Manager will not be released from its obligations under the relevant provisions of this Agreement until such Substitute Cash Manager has entered into such new agreement and the
rights of the Guarantor under such agreement are charged in favour of the Bond Trustee on terms satisfactory to the Bond Trustee. Any such agreement shall comply with the CMHC Guide and shall include a covenant on the part of the Substitute Cash
Manager to comply with the CMHC Guide in the performance of its duties and obligations thereunder; and 

  

	 	 (d)
	 the Rating Agency Condition has been satisfied with respect to such resignation and the appointment of the Substitute Cash Manager, unless otherwise
agreed by an Extraordinary Resolution of the Covered Bondholders. 

  

	 14.3
	 Effect of Termination or Resignation 

  

	 	 (a)
	 On and after termination of the appointment or resignation of the Cash Manager under this Agreement pursuant to this Article 14, all authority
and power of the Cash Manager under this Agreement will be terminated and be of no further effect and the Cash Manager will not thereafter hold itself out in any way as the agent of the Guarantor pursuant to this Agreement.

  

	 	 (b)
	 Upon termination of the appointment or resignation of the Cash Manager under this Agreement pursuant to this Article 14, the Cash Manager will:

  

	 	 (i)
	 forthwith deliver (and in the meantime hold on trust for, and to the order of, the Guarantor or the Bond Trustee, as the case may be) to the
Guarantor or the Bond Trustee, as the case may be, or as the Guarantor or the Bond Trustee will direct (and in the event of a conflict between directions from the Guarantor and directions from the Bond Trustee, the 

  
 21 

	 	
directions of the Bond Trustee will prevail), all books of account, papers, records, registers, correspondence and documents in its possession or under its control relating to the affairs of or
belongings of the Guarantor or the Bond Trustee, as the case may be (if practicable, on the date of receipt), any funds then held by the Cash Manager on behalf of the Guarantor or the Bond Trustee and any other assets of the Guarantor and the Bond
Trustee; 

  

	 	 (ii)
	 take such further action as the Guarantor or the Bond Trustee, as the case may be, may reasonably direct at the expense of the Cash Manager
(including in relation to the appointment of a Substitute Cash Manager), provided that the Guarantor or the Bond Trustee, as the case may be, will not be required to take or direct to be taken such further action unless it has been indemnified to
its satisfaction (and in the event of a conflict between the directions of the Guarantor and the directions of the Bond Trustee, the directions of the Bond Trustee will prevail); 

 

	 	 (iii)
	 provide all relevant information contained on computer records in the form of a flat file and/or upon electronic media (including, but not limited
to, CD-ROM) together with details of the layout of the files set out in such flat file and/or such electronic media; and 

  

	 	 (iv)
	 co-operate and consult with and assist the Guarantor or the Bond Trustee or its nominee, as the case may be (which will, for the avoidance of doubt,
include any Receiver appointed by it), for the purposes of explaining the file layouts and the format of the flat file/electronic media containing such computer records on the computer system of the Guarantor or the Bond Trustee or such nominee, as
the case may be. 

  

	 14.4
	 General Provisions Relating to Termination or Resignation 

 

	 	 (a)
	 Termination of this Agreement, the termination or resignation of the Cash Manager and/or the appointment of a Substitute Cash Manager under this
Agreement will be without prejudice to the liabilities of the Guarantor and the Bond Trustee to the Cash Manager or vice versa incurred befofre the date of such termination. No Cash Manager will have any right of set-off or any lien in
respect of such amounts against amounts held by it on behalf of the Guarantor or the Bond Trustee. 

  

	 	 (b)
	 This Agreement, except as otherwise agreed between the Guarantor and the Cash Manager and consented to by the Bond Trustee, will terminate
automatically at such time as the Guarantor’s obligations under the Covered Bond Guarantee have been discharged and the Charged Property constituted by the Security Agreement has been released. 

 

	 	 (c)
	 On termination of the appointment of the Cash Manager or resignation of the Cash Manager under the provisions of this Article 14, the Cash
Manager will be 

  
 22 

	 	
entitled to receive all fees and other funds accrued up to (but excluding) the date of termination or resignation but will not be entitled to any other or further compensation. Such funds so
receivable by the Cash Manager solely in its capacity as cash manager, will be paid by the Guarantor, on the dates on which they would otherwise have fallen due hereunder and under the terms of the Guarantor Agreement and the Security Agreement. For
the avoidance of doubt, such termination or resignation will not affect the BMO’s rights to receive payment of all amounts (if any) due to it from the Guarantor other than in its capacity as cash manager under this Agreement.

  

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

  

	 	 (e)
	 Upon any termination or resignation of the Cash Manager hereunder, the Guarantor shall provide notice to CMHC of such termination or resignation and
of the Cash Manager’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) Canadian Business Days following such termination or resignation and replacement (unless the replacement Cash Manager has yet to be identified at that time, in which
case notice of the replacement Cash Manager may be provided no later than 10 Canadian Business Days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Cash Manager, all information relating to
the replacement Cash Manager required by the CMHC Guide and the new agreement or revised and amended copy of this Agreement to be entered into with the replacement Cash Manager. 

ARTICLE 15 
 FURTHER ASSURANCE, NO SET-OFF 
  

	 15.1
	 Co-operation, etc. 

 The parties hereto agree that they will co-operate fully to do all such further acts and things and execute any further documents as may be necessary or desirable to give full effect to the arrangements
contemplated by this Agreement. 
  

	 15.2
	 Powers of Attorney 

 Without prejudice to the generality of Section 15.1 above, the Guarantor will upon request by the Cash Manager forthwith give to the Cash Manager such further powers of attorney or other written
authorizations, mandates or instruments as are necessary to enable the Cash Manager to perform the Cash Management Services. 

  
 23 

	 15.3
	 No Set-Off 

 BMO, as Cash Manager, as Seller, as Servicer and as GDA Provider agrees that it will not: 
  

	 	 (a)
	 set-off or purport to set-off any amount which the Guarantor is or will become obliged to pay to it under this Agreement or any other Transaction
Document against any amount from time to time standing to the credit of or to be credited to any of the Guarantor Accounts or any replacement or additional bank account of the Guarantor; or 

 

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

 

	 15.4
	 Acknowledgement of Servicer and Seller 

Each of the Servicer and Seller acknowledge the Cash Management Services to be provided by the Cash Manager and agree to
provide all information and assistance reasonably required by the Cash Manager in a timely fashion in order for the Cash Manager to comply with its obligations under this Agreement. 

 

	 15.5
	 New Sellers, New Servicers and Successor Servicers 

Each of the parties hereto agrees to make all changes that are reasonably necessary or desirable to this Agreement
following the accession of a New Seller, New Servicer and/or Successor Servicer, as the case may be, to any one or more of the Transaction Documents. 
 ARTICLE 16 
 BOND TRUSTEE 

 

	 16.1
	 Change of Bond Trustee 

 In the event that there is any change in the identity of the Bond Trustee or an additional Bond Trustee is appointed in accordance with the Security Agreement, as the case may be, the Cash Manager, solely
in its capacity as cash manager, 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. 
  

	 16.2
	 Limitation of Liability of Bond Trustee 

  

	 	 (a)
	 For the avoidance of doubt, the Bond Trustee will, without prejudice to the obligations of the Guarantor, as the case may be, or any Receiver
appointed pursuant to the Security Agreement in respect of such amounts, not be liable to pay any amounts due under Article 10 (Remuneration) and Article 11 (Costs and Expenses) hereof. 

  
 24 

	 	 (b)
	 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 Cash Manager 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 20 (Amendments, Variation and Waiver). For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and obligations of the Bond Trustee are governed by the terms of 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 of the Security Agreement. 

ARTICLE 17 
 LIMITATION OF LIABILITY 
  

	 17.1
	 Limitation of Liability 

 BMO 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 18 
 CONFIDENTIALITY 
  

	 18.1
	 Confidentiality 

 During the continuance of this Agreement or after its termination, each of the Guarantor, the Cash Manager, the Seller, the Servicer, the GDA Provider and the Bond Trustee (in their respective capacities)
will use their best endeavours not to disclose to any Person, firm, or company whatsoever any information relating to the business, finances or other matters of a confidential nature of any other party hereto of which it may exclusively by virtue of
being party to the Transaction Documents have become possessed and will use all reasonable endeavours to prevent any such disclosure as aforesaid, provided however that the provisions of this Article 18 will not apply: 

 

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

  
 25 

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

 

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

 

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

  

	 	 (e)
	 to the extent that the recipient needs to disclose the same for determining the existence of, or declaring, an Issuer Event of Default, a Guarantor
Event of Default or a Cash Manager Termination Event, the protection or enforcement of any of its rights under any of the Transaction Documents or in connection herewith or therewith or for the purpose of discharging, in such manner as it thinks
fit, its duties under or in connection with such agreements in each case to such Persons as require to be informed of such information for such purposes; or 

 

	 	 (f)
	 in relation to any information disclosed to the professional advisers of the recipient, a Purchaser of any Loans and their Related Security in
accordance with the terms of the Transaction Documents, or (in connection with the review of current ratings of any Covered Bonds issued under the Program or with a prospective rating of any debt to be issued by the Issuer) to any Rating Agency or
any prospective Substitute Cash Manager or prospective new Bond Trustee. 

 ARTICLE 19 

NOTICES 
  

	 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 first class mail, by hand or by e-mail or facsimile
transmission and will be deemed to be given (if by facsimile transmission) when dispatched, (if by e-mail), when confirmation of receipt is received, (if delivered by hand) on the day of delivery if delivered before 5:00 p.m. (Eastern time) on a
Canadian Business Day or on the next Canadian Business Day if delivered thereafter or on a day which is not a Canadian Business Day or (if by first class mail) when it would be received in the ordinary course of the post and will be sent:

  

	 	 (a)
	 in the case of Bank of Montreal in its capacity as Cash Manager, a Seller and a Servicer, to Bank of Montreal, at 100 King Street West, 18th Floor, Toronto, Ontario, M5X 1A1 (facsimile number 416-867-7193) for
the attention of Senior Manager, Securitization Structuring; 

  
 26 

	 	 (b)
	 in the case of the Guarantor, to BMO Covered Bond Guarantor Limited Partnership, c/o Bank of Montreal, at 100 King Street West, 18th Floor, Toronto, Ontario, M5X 1A1 (facsimile number 416-867-4166) for
the attention of Senior Manager, Securitization Finance and Operations; and 

  

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

 or to such other physical or e-mail address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written notice in
accordance with the provisions of this Article 19. 
 ARTICLE 20 

AMENDMENTS, VARIATION AND WAIVER 
  

	 20.1
	 Amendments, Variation and Waiver 

  

	 	 (a)
	 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 shall 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 shall constitute a waiver or preclude any other or further exercise of that or any other right. 

  

	 	 (b)
	 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, shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (i) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (ii) 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 shall deliver notice to the Rating Agencies from time to time of any amendment,
variation 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.

  

	 	 (c)
	 The Guarantor (or the Cash Manager on its behalf) will deliver notice to CMHC from time to time of any amendment, restatement or waiver with respect
to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement. 

 

	 	 (d)
	 Notwithstanding the foregoing, any amendment to this Agreement for the purposes of addressing changes to the CMHC Guide referenced in the proviso to
the definition of “Latest Valuation” shall not require the consent of any party nor shall it require satisfaction of the Rating Agency Condition. 

  
 27 

 ARTICLE 21 

NON-PETITION 
  

	 21.1
	 Non-Petition 

 The Cash Manager, the GDA Provider, the Seller and the Servicer agree that they will not institute against, or join any other party in instituting against, the Guarantor, or any general partners 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 22

 NO AGENCY OR PARTNERSHIP 
  

	 22.1
	 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 23 
 ASSIGNMENT 
  

	 23.1
	 Assignment 

 Subject always to the provisions of Section 23.2 herein, no party hereto will be entitled to assign all or any part of its rights or obligations hereunder to any other party without the prior written
consent of each of the other parties hereto (which will not, if requested, be unreasonably withheld or delayed or made subject to conditions) save that the Guarantor will be entitled to assign whether by way of security or otherwise all or any of
its rights under this Agreement and all or any of its interest in the Loans and their Related Security without such consent to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign all or any of
its rights under or in respect of this Agreement and all or any of its interest in the Loans and their Related Security without such consent in exercise of its rights under the Security Agreement. If any party assigns any of its obligations under
this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS. 

  
 28 

	 23.2
	 Assignment under Security Agreement 

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

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 pdf format), 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. 
 [The remainder of this page left intentionally blank] 

  
 29 

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

					
	 BANK OF MONTREAL, as Cash
 Manager, GDA Provider, Seller, Servicer and
 Issuer

		
	 By:
	 	 /s/ Cathy Cranston

		 	  Name:
	 	 Cathy Cranston

		 	  Title: 
	 	 Senior Vice President, Finance &
 Treasurer

	
	 BMO COVERED BOND GUARANTOR
 LIMITED PARTNERSHIP by its
 managing general partner BMO

COVERED BOND GP, INC.

		
	 By:
	 	 /s/ Chris Hughes

		 	  Name:
	 	 Chris Hughes

		 	  Title: 
	 	 President and Secretary

	
	 COMPUTERSHARE TRUST COMPANY
 OF CANADA, as Bond Trustee

		
	 By:
	 	 /s/ Sean Pigott

		 	  Name:
	 	 Sean Pigott

		 	  Title:
	 	 Corporate Trust Officer

		
	 By:
	 	 /s/ Stanley Kwan

		 	  Name:
	 	 Stanley Kwan

		 	  Title:
	 	 Associate Trust Officer

 SCHEDULE 1 
 THE CASH MANAGEMENT SERVICES 
 The Cash Manager will: 

 

	 	 (a)
	 use amounts held for and on behalf of the Guarantor, and operate the Guarantor Accounts and ensure that payments are made into and from such
accounts in accordance with this Agreement and any other applicable Transaction Document provided however that nothing herein will require the Cash Manager to make funds available to the Guarantor to enable such payments to be made other than as
expressly required by the provisions of this Agreement and nothing herein will constitute a guarantee, indemnity or other similar obligation by or of the Cash Manager of or in relation to all or any of the obligations of the Guarantor under any of
the Transaction Documents; 

  

	 	 (b)
	 keep any records necessary for all Taxation purposes; 

 

	 	 (c)
	 provide accounting services, including reviewing receipts and payments, supervising and assisting in the preparation of interim statements and final
accounts and supervising and assisting in the preparation of Tax returns; 

  

	 	 (d)
	 on behalf of the Guarantor, provided that such funds are at the relevant time available to the Guarantor, pay all the out-of-pocket expenses of the
Guarantor, properly incurred by the Cash Manager on behalf of the Guarantor in the performance of the Cash Manager’s duties hereunder, including without limitation: 

 

	 	 (i)
	 all Taxes which may be due or payable by the Guarantor; 

 

	 	 (ii)
	 all registration, transfer, filing and other fees and other charges payable in respect of the sale by the Seller of the Initial Portfolio and any
Additional Loans and their Related Security to the Guarantor; 

  

	 	 (iii)
	 all necessary filing and other fees in compliance with regulatory requirements; 

 

	 	 (iv)
	 all legal and audit fees and other professional advisory fees; 

 

	 	 (v)
	 all communication expenses including postage, courier and telephone charges; 

 

	 	 (vi)
	 all premiums payable by the Guarantor in respect of any insurance policies relating to the Loans in the Portfolio; and 

 

	 	 (vii)
	 following the occurrence of an Issuer Event of Default and service of a Notice to Pay on the Guarantor, all fees payable to any stock exchange on
which the Covered Bonds are listed but only if the Issuer has not otherwise paid those fees; 

	 	 (e)
	 at the written request of the Guarantor or with the prior written consent of the Bond Trustee, invest funds standing from time to time to the credit
of the GDA Account (or, as applicable, the Stand-By GDA Account) in Substitution Assets up to the limit prescribed in the Guarantor Agreement (any such purchase to be at the sole discretion of the Cash Manager), subject to the following provisions:

  

	 	 (i)
	 any such Substitution Assets will be purchased in the name of the Guarantor; 

 

	 	 (ii)
	 if required by the Bond Trustee on or prior to purchasing any Substitution Assets, the Guarantor has entered into appropriate hedging arrangements
with a hedge provider that has the requisite ratings to hedge against the interest rate risk (if any) associated with such Substitution Assets, in each case on terms that are satisfactory to the Bond Trustee; 

 

	 	 (iii)
	 the Bond Trustee has at all times, a valid, perfected first priority Security Interest in any such Substitution Assets, including all hedge
arrangements referred to in (ii) above; 

  

	 	 (iv)
	 any costs properly and reasonably incurred in investing in, holding or disposing of any Substitution Assets will be reimbursed to the Cash Manager
and the Bond Trustee by the Guarantor; 

  

	 	 (v)
	 all income or other distributions arising on, or proceeds following the disposal or maturity of, any Substitution Assets will be credited to the GDA
Account (or, as applicable, the Stand-By GDA Account); 

  

	 	 (vi)
	 the Cash Manager will not be responsible (save where any loss, liability, claim, expense or damage suffered or incurred results from the Cash
Manager’s own dishonesty, bad faith, wilful misconduct, gross negligence or reckless disregard or that of its officers, employees or agents) for any loss, liability, claim, expense or damage suffered or incurred by reason of any such
Substitution Assets whether by depreciation in value or otherwise provided that such Substitution Assets were made in accordance with the above provisions; and 

 

	 	 (vii)
	 following service of an Asset Coverage Test Breach Notice (until revoked) or a Notice to Pay on the Guarantor, the Cash Manager will take all
commercially reasonable steps to sell the Substitution Assets then held in the name of the Guarantor and the Bond Trustee as quickly as reasonably practicable and for the best price then reasonably available and credit the proceeds thereof to the
GDA Account (or, as applicable, the Stand-By GDA Account); 

  
 - 2 -

	 	 (f)
	 procure (so far as the Cash Manager, using all commercially reasonable endeavours, is able so to do) compliance by the Guarantor with all applicable
legal requirements and with the terms of the Transaction Documents to which the Guarantor is a party, provided always that the Cash Manager will not lend or provide any sum to the Guarantor and the Cash Manager will have no liability whatsoever to
the Guarantor, the Bond Trustee or any other Person for any failure by the Guarantor to make any payment due, or to perform its other obligations, under any of the Transaction Documents other than to the extent arising from the Cash Manager failing
to perform any of its obligations under this Agreement (but without prejudice to the obligations of BMO in its separate capacities as a Servicer, a Seller, lender under the Intercompany Loan Agreement and as a Partner of the Guarantor);

  

	 	 (g)        (i)
	 act as calculation agent pursuant to the terms of the Interest Rate Swap Agreement and make the calculations referred to therein and notify the
Guarantor and the Bond Trustee of all amounts, balances and rates; and 

  

	 	             (ii)
	 if on or prior to the repayment in full of the relevant Series of Covered Bonds, the Interest Rate Swap Agreement is terminated (other than as a
result of an Event of Default (as defined in the Interest Rate Swap Agreement) where the Guarantor is the Defaulting Party (as defined in the Interest Rate Swap Agreement) or the service of an Guarantor Acceleration Notice on the Guarantor) or a
partial termination of the Interest Rate Swap Agreement as a result of a sale of Loans and their Related Security by the Guarantor, purchase (on behalf of the Guarantor and the Bond Trustee) a new hedge against possible variances in the rate of
interest payable on the Loans in the Portfolio (which may, for instance, include variable rates of interest or fixed rates of interest) and the amounts payable on the Intercompany Loan and (following the Covered Bond Swap Effective Date) the Covered
Bond Swap Agreement (in each case, to the extent related to the Interest Rate Swap Agreement so terminated). The Cash Manager may apply any early termination payment received from the Interest Rate Swap Provider pursuant to the Interest Rate Swap
Agreement for such purpose; 

  

	 	 (h)        (i)
	 act as calculation agent pursuant to the terms of the Covered Bond Swap Agreement and make the calculations referred to therein and notify the
Guarantor and the Bond Trustee of all amounts, balances and rates, and 

  

	 	             (ii)
	 if on or prior to the repayment in full of the relevant Series of Covered Bonds, the Covered Bond Swap Agreement is terminated (other than as a
result of an Event of Default (as defined in the Covered Bond Swap Agreement) where the Guarantor is the Defaulting Party (as defined in the Covered Bond Swap Agreement) or the service of a Guarantor Acceleration Notice on the Guarantor), or a
partial termination of the Covered Bond Swap Agreement as a result of a sale of Loans and their Related Security by the Guarantor, purchase (on behalf of the Guarantor 

  
 - 3 -

	 	
and the Bond Trustee) a new swap to hedge against currency and/or other risks arising, following the Covered Bond Swap Effective Date, in respect of amounts received by the Guarantor under the
Interest Rate Swap Agreement and amounts payable in respect of its obligations under the Covered Bond Guarantee. The Cash Manager may apply an early termination payment received from the Covered Bond Swap Provider pursuant to the relevant Covered
Bond Swap Agreement for such purpose; 

  

	 	 (i)
	 if an Investor Put is specified in the Final Terms Document for a Covered Bond, then and if to the extent specified in the applicable Final Terms
Document, upon the Covered Bondholder giving the required notice in accordance with the Terms and Conditions, prior to the expiry of such notice, notify the Bond Trustee in writing whether there are sufficient funds available to pay any termination
payment due to the Covered Bond Swap Provider; 

  

	 	 (j)
	 assist the Auditors, if applicable, of the Guarantor and provide such information to the Auditors as the Auditors may reasonably request for the
purpose of carrying out its duties as Auditors; 

  

	 	 (k)
	 make all filings, give all notices and make all registrations and other notifications required in the day-to-day operation of the Guarantor or
required to be given by the Guarantor pursuant to the Transaction Documents; 

  

	 	 (l)
	 provide or procure the provision of secretarial and administration services to the Guarantor, including the keeping of all registers and the making
of all returns and filings required by applicable law or regulatory authorities; and 

  

	 	 (m)
	 at any time the Guarantor makes a repayment on the Demand Loan, in whole or in part, calculate the Asset Coverage Test, as of the date of repayment
to confirm the then outstanding balance on the Demand Loan and that the Asset Coverage Test will be met on the date of repayment after giving effect to such repayment. 

  
 - 4 -

 SCHEDULE 2 
 CASH MANAGEMENT AND MAINTENANCE OF LEDGERS 
  

	 1.
	 Determination 

  

	 	 (a)
	 The Managing GP (or the Cash Manager on its behalf) shall, on or before the Canadian Business Day that is at least two days prior to any Guarantor
Payment Date, calculate the amount of Available Revenue Receipts and Available Principal Receipts available for distribution on the immediately following Guarantor Payment Date and the Reserve Fund Required Amount (if applicable).

  

	 	 (b)
	 Without prejudice to the obligations of the Calculation Agent, the Cash Manager will, if necessary, perform all currency conversions free of charge,
cost or expense at the relevant exchange rate (for the purposes of any calculations referred to above, (i) all percentages resulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point (e.g. 9.876541% being rounded down to 9.87654% and (ii) any currency amounts used in or resulting from such calculations will be rounded in accordance with the relevant market practice). 

 

	 	 (c)
	 Each determination made in accordance with this paragraph 1 will (in the absence of demonstrable error) be final and binding on all Persons.

  

	 2.
	 Notification of Determinations 

  

	 	 (a)
	 The Cash Manager may make all the determinations referred to in paragraph 1(a) on the basis that the amount of any Losses will not increase and on
the basis of any other reasonable and proper assumptions as the Cash Manager considers appropriate (including without limitation as to the amount of any payments to be made or amounts received under the applicable Priorities of Payments during the
period from and including the Guarantor Payment Date following the relevant Calculation Date to but excluding the next following Guarantor Payment Date). 

 

	 	     
	 The Cash Manager will notify the Guarantor and the Bond Trustee on request of any such other assumptions and will take account of any
representations made by the Issuer and the Bond Trustee (as the case may be) in relation thereto. 

  

	 	 (b)
	 Each determination made in accordance with this paragraph 2 will (in the absence of demonstrable error) be final and binding on all Persons.

  

	 	 (c)
	 The Cash Manager will procure that the determinations and notifications required to be made by the Guarantor pursuant to the Terms and Conditions of
the Covered Bonds are made. 

	 3.
	 Pre-Acceleration Revenue and Principal Priority of Payments 

 

	 	 (a)
	 On each Guarantor Payment Date, the Guarantor or the Cash Manager on its behalf will transfer funds from the GDA Account (or, as applicable, the
Stand-By GDA Account) to the Transaction Account (or, as applicable, the Stand-By Transaction Account) in accordance with Article 6 (Priorities of Payments) of the Guarantor Agreement. 

 

	 	 (b)
	 Subject to Section 4.4 of the Cash Management Agreement, prior to a Covered Bond Swap Effective Date, the Cash Manager will cause the Available
Principal Receipts and Available Revenue Receipts held by it for and on behalf of the Guarantor and standing to the credit of the Transaction Account to be applied on each Guarantor Payment Date in accordance with the Pre-Acceleration Revenue
Priority of Payments or Pre-Acceleration Principal Priority of Payments, as applicable. 

  

	 4.
	 Other Payments 

 Subject to Section 4.4 of the Cash Management Agreement, the Cash Manager agrees, and the Guarantor concurs, that (save as otherwise specified below) amounts may be transferred from the GDA Account
(or, as applicable, the Stand-By GDA Account) to the Transaction Account (or, as applicable, the Stand-By Transaction Account), and the following payments may be made from the Transaction Account (or, as applicable, the Stand-By Transaction Account)
(to the extent that withdrawal of those amounts would not cause the balance of the Transaction Account to become overdrawn) from amounts held by the Cash Manager for and on behalf of the Guarantor and used on any date: 

 

	 	 (i)
	 if any amount has been 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 either that Borrower or the relevant Seller (in relation to Loans sold by that Seller) or the Guarantor, to pay such amount when due to such third party or, in the case of the payment of an insurance premium,
where such third party and the Cash Manager have agreed that payment of commission should be made by deduction from such insurance premium, to pay such amount less such commissions when due to such third party and to pay such commission to the Cash
Manager and to pay any premiums in respect of any insurance policies obtained or held by the Guarantor in accordance with the terms of the Guarantor Agreement or relating to any Loan comprised in the Covered Bond Collateral;

  

	 	 (ii)
	 subject to Section 7.2 of the Mortgage Sale Agreement, to pay to any Person (including the Seller) any amounts due arising from any overpayment
by any Person or arising from any reimbursement by any Person of any such overpayment (including, for the avoidance of doubt, where arising from the failure of a direct debit); 

  
 - 2 -

	 	 (iii)
	 subject to Section 7.2 of the Mortgage Sale Agreement, to pay when due (but subject to any right to refuse or withhold payment or of set-off
that has arisen by reason of the Borrower’s breach of the terms of the relevant Mortgage or Loan) any amount payable to a Borrower under the terms of the Mortgage or the Loan to which that Borrower is a party; 

 

	 	 (iv)
	 to pay when due and payable any amounts due and payable by the Guarantor to third parties and incurred without breach by the Guarantor of the
Guarantor Agreement where payment is not provided for elsewhere in the Pre-Acceleration Revenue Priority of Payments or the Pre-Acceleration Principal Priority of Payments; 

 

	 	 (v)
	 to refund any amounts due arising from the rejection of any payments in respect of a Loan and any other amounts which have not been received by the
Guarantor as cleared funds; and 

  

	 	 (vi)
	 to pay to the relevant Seller any amounts owed to the Seller(s) pursuant to Article 5 (Trust of Funds) of the Mortgage Sale Agreement.

  

	 5.
	 Use of Ledgers 

  

	 	 (a)
	 The Cash Manager shall forthwith record monies received or payments made by it on behalf of the Guarantor in the Ledgers in the manner set out in
this Agreement and the Guarantor Agreement. 

  

	 	 (b)
	 A debit item shall only be made in respect of any of the Ledgers and the corresponding payment or transfer (if any) may only be made from amounts
held for and on behalf of the Guarantor in the GDA Account (or, as applicable, the Stand-By GDA Account) or the Transaction Account (or, as applicable, the Stand-By Transaction Account), as the case may be, to the extent that such entry does not
cause the relevant Ledger to have a debit balance. 

  

	 	 (c)
	 Following the service of a Notice to Pay on the Guarantor: 

 

	 	 (i)
	 the Cash Manager shall not be obliged to maintain the Ledgers other than the Capital Account Ledger and the Intercompany Loan Ledger; and

  

	 	 (ii)
	 the Cash Manager shall establish any new Ledgers required by the Guarantor or the Bond Trustee to record payments in respect of obligations of the
Guarantor under the Covered Bond Guarantee or otherwise. 

  

	 6.
	 Revenue Ledger 

 The Cash Manager shall ensure that: 
  

	 	 (a)
	 the following amounts shall be credited to the Revenue Ledger: 

  
 - 3 -

	 	 (i)
	 all Revenue Receipts; 

  

	 	 (ii)
	 all interest received by the Guarantor on the Guarantor Accounts; 

 

	 	 (iii)
	 all amounts received by the Guarantor representing income on any such Substitution Assets; 

 

	 	 (iv)
	 all amounts received by the Guarantor under any Interest Rate Swap Agreement on a Guarantor Payment Date (but excluding any early termination
payments under the Swap Agreements and Swap Collateral Excluded Amounts); and 

  

	 	 (v)
	 any other revenue income of the Guarantor which is not referred to in paragraphs (i) to (iv) above and which is not referred to in the
receipts to be credited to the Principal Ledger in paragraph 7 below; and 

  

	 	 (b)
	 any payment or provision made under the Pre-Acceleration Revenue Priority of Payments or made under paragraph 5 above (but only to the extent that
such payment made under paragraph 5 has been recorded as a receipt on the Revenue Ledger), shall be debited to the Revenue Ledger. 

  

	 7.
	 Principal Ledger 

 The Cash Manager shall ensure that: 
  

	 	 (a)
	 all Principal Receipts shall be credited to the Principal Ledger; and 

 

	 	 (b)
	 any payment or provision made under the Pre-Acceleration Principal Priority of Payments or made under paragraph 3 above (but only to the extent that
such payment made under paragraph 3 has been recorded as a receipt on the Principal Ledger), shall be debited to the Principal Ledger. 

  

	 8.
	 Capital Account Ledgers 

  

	 	 (a)
	 The Cash Manager shall ensure that each Capital Contribution made by a Partner shall be credited to that Partner’s Capital Account Ledger or,
as applicable, debited from that Partner’s Capital Account Ledger where a Capital Distribution has been made pursuant to Section 3.6 of the Guarantor Agreement. The Cash Manager shall record on each Partner’s Capital Account Ledger
whether the relevant Capital Contribution was a Cash Capital Contribution or a Capital Contribution in Kind. 

  

	 	 (b)
	 The Cash Manager shall ensure that each Capital Distribution to a Partner shall be debited to that Partner’s Capital Account Ledger.

  

	 9.
	 Reserve Ledger 

 The Cash Manager shall ensure that: 

  
 - 4 -

	 	 (a)
	 any amounts (or part thereof) borrowed by the Guarantor under the Intercompany Loan Agreement that are specifically required to be credited to the
Reserve Fund, shall be credited to the Reserve Ledger; and 

  

	 	 (b)
	 amounts shall be credited to the Reserve Ledger in accordance with the Pre-Acceleration Revenue Priority of Payments; and

  

	 	 (c)
	 amounts shall be debited to the Reserve Ledger on each Guarantor Payment Date in order to be applied in accordance with the Pre-Acceleration Revenue
Priority of Payments or, as applicable, the Guarantee Priority of Payments. 

  

	 10.
	 Intercompany Loan Ledger 

 The Cash Manager shall ensure that each Advance, each repayment, all payments of interest and repayments of principal on each Advance under the Intercompany Loan Agreement are recorded in the Intercompany
Loan Ledger at the appropriate time. 
  

	 11.
	 Payment Ledger 

 The Cash Manager shall ensure that all payments, and the Person to whom such payments are made and the source of such payments are recorded in the Payment Ledger at the appropriate time. 

 

	 12.
	 Pre-Maturity Liquidity Ledger 

 The Cash Manager will ensure that all credits and debits of funds in respect of any Series of Hard Bullet Covered Bonds are recorded in the Pre-Maturity Liquidity Ledger at the appropriate time.

  

	 13.
	 Payments to Principal Paying Agent 

 Each of the Bond Trustee and the Guarantor agree that all amounts payable by the Cash Manager in respect of the Intercompany Loan or under the Covered Bond Guarantee, in accordance with the applicable
Priorities of Payments, may be paid directly to the Principal Paying Agent. 

  
 - 5 -

 SCHEDULE 3 
 FORM OF INVESTOR REPORTEX-4.12

 Exhibit 4.12 
 GENERAL SECURITY AGREEMENT 
 by and among 

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP 
 as Guarantor 
 and 

COMPUTERSHARE TRUST COMPANY OF CANADA 
 as Bond Trustee 
 and 

ANY OTHER PERSON WHO FROM TIME TO TIME MAY BECOME A PARTY TO 

THIS AGREEMENT 
 September 30, 2013 

 TABLE OF CONTENTS 

 

							
	 ARTICLE 1 DEFINITIONS AND INTERPRETATION
	  	 	1	  
			
	 Section 1.01
	  	 Definitions and Interpretation.
	  	 	1	  
	 Section 1.02
	  	 Schedules.
	  	 	2	  
	 Section 1.03
	  	 Terms Incorporated by Reference.
	  	 	2	  
		
	 ARTICLE 2 SECURITY
	  	 	3	  
			
	 Section 2.01
	  	 Grant of Security.
	  	 	3	  
	 Section 2.02
	  	 Obligations Secured.
	  	 	4	  
	 Section 2.03
	  	 Notice and Acknowledgement.
	  	 	4	  
	 Section 2.04
	  	 Accession of New Secured Creditors.
	  	 	5	  
	 Section 2.05
	  	 Declaration of Trust.
	  	 	5	  
	 Section 2.06
	  	 Attachment.
	  	 	5	  
	 Section 2.07
	  	 Scope of Security.
	  	 	6	  
	 Section 2.08
	  	 Grant of Licence to Use Intellectual Property.
	  	 	7	  
	 Section 2.09
	  	 Care and Custody of Collateral.
	  	 	7	  
	 Section 2.10
	  	 Rights of the Guarantor in Respect of Pledged Securities.
	  	 	7	  
	 Section 2.11
	  	 Care and Custody of Securities.
	  	 	8	  
	 Section 2.12
	  	 Investments in Substitution Assets.
	  	 	8	  
	 Section 2.13
	  	 Management and Application of Funds.
	  	 	8	  
		
	 ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GUARANTOR
	  	 	9	  
			
	 Section 3.01
	  	 Representations and Warranties of the Guarantor.
	  	 	9	  
	 Section 3.02
	  	 Additional Representations and Warranties of the Guarantor.
	  	 	10	  
	 Section 3.03
	  	 Covenants of the Guarantor.
	  	 	10	  
	 Section 3.04
	  	 Additional Covenants of the Guarantor.
	  	 	10	  
		
	 ARTICLE 4 ENFORCEMENT
	  	 	10	  
			
	 Section 4.01
	  	 Enforcement.
	  	 	10	  
	 Section 4.02
	  	 Knowledge of Bond Trustee of a Guarantor Event of Default.
	  	 	12	  
	 Section 4.03
	  	 Discretionary Enforcement.
	  	 	12	  
	 Section 4.04
	  	 Mandatory Enforcement.
	  	 	12	  
	 Section 4.05
	  	 Mandatory Other Action.
	  	 	13	  
	 Section 4.06
	  	 Disposal of Collateral.
	  	 	13	  
	 Section 4.07
	  	 Payment of Monies After Service of a Guarantor Acceleration Notice.
	  	 	13	  
	 Section 4.08
	  	 Remedies.
	  	 	14	  
	 Section 4.09
	  	 Additional Rights.
	  	 	14	  
	 Section 4.10
	  	 Enforcement When Not All Amounts Due and Payable.
	  	 	16	  
	 Section 4.11
	  	 Concerning the Receiver.
	  	 	17	  
	 Section 4.12
	  	 Appointment of Attorney.
	  	 	17	  
	 Section 4.13
	  	 Dealing with the Collateral.
	  	 	17	  

  
 i 

							
	 Section 4.14
	  	 Indemnity.
	  	 	18	  
	 Section 4.15
	  	 Standards of Sale.
	  	 	18	  
	 Section 4.16
	  	 Set-Off.
	  	 	19	  
	 Section 4.17
	  	 Dealings by Third Parties.
	  	 	20	  
	 Section 4.18
	  	 Risk of Funds.
	  	 	20	  
		
	 ARTICLE 5 CONFLICTS
	  	 	20	  
			
	 Section 5.01
	  	 Secured Creditors.
	  	 	20	  
	 Section 5.02
	  	 Acknowledgement.
	  	 	21	  
		
	 ARTICLE 6 EXERCISE OF CERTAIN RIGHTS
	  	 	21	  
			
	 Section 6.01
	  	 No Enforcement by Bond Trustee.
	  	 	21	  
	 Section 6.02
	  	 Subordination.
	  	 	22	  
		
	 ARTICLE 7 RELEASE
	  	 	23	  
			
	 Section 7.01
	  	 Discharge.
	  	 	23	  
	 Section 7.02
	  	 Sale of the Portfolio.
	  	 	23	  
	 Section 7.03
	  	 Disposal of Substitution Assets.
	  	 	23	  
	 Section 7.04
	  	 Withdrawals from Guarantor Accounts.
	  	 	24	  
		
	 ARTICLE 8 SUPPLEMENTAL PROVISIONS REGARDING THE BOND TRUSTEE
	  	 	24	  
			
	 Section 8.01
	  	 Consent of Bond Trustee.
	  	 	24	  
	 Section 8.02
	  	 Interests of Secured Creditors.
	  	 	24	  
	 Section 8.03
	  	 Modification to Transaction Documents.
	  	 	25	  
		
	 ARTICLE 9 REMUNERATION OF THE BOND TRUSTEE
	  	 	26	  
			
	 Section 9.01
	  	 Remuneration.
	  	 	26	  
	 Section 9.02
	  	 Additional Remuneration.
	  	 	26	  
	 Section 9.03
	  	 Disputes.
	  	 	27	  
	 Section 9.04
	  	 Expenses.
	  	 	27	  
		
	 ARTICLE 10 APPOINTMENT OF NEW BOND TRUSTEE AND REMOVAL OF BOND TRUSTEE
	  	 	27	  
			
	 Section 10.01
	  	 Power of Guarantor.
	  	 	27	  
	 Section 10.02
	  	 Power of Bond Trustee.
	  	 	27	  
	 Section 10.03
	  	 Multiple Bond Trustees.
	  	 	28	  
		
	 ARTICLE 11 RETIREMENT OF BOND TRUSTEE
	  	 	28	  
		
	 ARTICLE 12 NON-PETITION
	  	 	28	  

  
 ii 

							
		
	 ARTICLE 13 GENERAL
	  	 	28	  
			
	 Section 13.01
	  	 Notices, etc.
	  	 	28	  
	 Section 13.02
	  	 GST.
	  	 	29	  
	 Section 13.03
	  	 No Merger.
	  	 	29	  
	 Section 13.04
	  	 Further Assurances.
	  	 	29	  
	 Section 13.05
	  	 Amendments.
	  	 	30	  
	 Section 13.06
	  	 Supplemental Security.
	  	 	30	  
	 Section 13.07
	  	 Successors and Assigns.
	  	 	31	  
	 Section 13.08
	  	 Severability.
	  	 	31	  
	 Section 13.09
	  	 Governing Law.
	  	 	31	  
	 Section 13.10
	  	 Counterparts.
	  	 	31	  

  
 iii

 GENERAL SECURITY AGREEMENT 

THIS GENERAL SECURITY AGREEMENT (this “Agreement”) is made as of the 30th day of September, 2013. 

BY AND AMONG: 
  

	 (1)
	 BMO 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, Canada M5X 1B8, by its managing general partner BMO Covered Bond GP, Inc. (hereinafter the “Guarantor”); 

 

	 (2)
	 Computershare Trust Company of Canada, a trust company formed under the laws of Canada, whose registered office is at 100 University Avenue,
11th Floor, Toronto, Ontario, Canada M5J 2Y1 acting
in its capacity as Bond Trustee (hereinafter the “Bond Trustee”); and 

  

	 (3)
	 Any other person who from time to time may become a party to this Agreement as a secured creditor (together with the Bond Trustee for and on its own
behalf and on behalf of the Holders of the Covered Bonds, the “Secured Creditors”). 

WHEREAS: 
  

	 (A)
	 Pursuant to the Trust Deed, the Guarantor has provided a guarantee covering all Guaranteed Amounts when the same become Due for Payment in respect
of all Covered Bonds issued under the Program from time to time; and 

  

	 (B)
	 The Guarantor has agreed to execute and deliver this Agreement to and in favour of the Bond Trustee (on behalf of the Secured Creditors) as security
for the payment and performance of the Guarantor’s obligations under the Transaction Documents to which the Guarantor is a party, including but not limited to the Trust Deed; 

NOW THEREFORE, in consideration of the foregoing premises, the sum of $10.00 in lawful money of Canada now paid by the Bond
Trustee to the Guarantor and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, the parties hereto agree as follows: 
 ARTICLE 1 
 DEFINITIONS AND INTERPRETATION 

Section 1.01 Definitions and Interpretation. 

The master definitions and construction agreement made between the parties to the Transaction Documents on
September 30, 2013 (as the same may be amended, restated, varied 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, varied or supplemented) shall, except where the context otherwise

  
 1 

 
requires and save where otherwise defined herein, have the same meanings in this Agreement, including the recitals hereto and this Agreement shall be construed in accordance with the
interpretation provisions set out in Section 2 of the Master Definitions and Construction Agreement. 
 For
the purposes hereof, “this Agreement” has the same meaning as Security Agreement in the Master Definitions and Construction Agreement. 
 Section 1.02 Schedules. 
 The following
Schedules are attached to and form part of this Agreement: 
 Schedule 1—Additional
Representations and Warranties of the Guarantor 
 Schedule 2—Additional Covenants of the
Guarantor 
 Schedule 3—Post-Enforcement Priority of Payments 

Schedule 4—Address for Notice 

Section 1.03 Terms Incorporated by Reference. 

(1) In this Agreement, “PPSA” shall mean the Personal Property Security Act as in effect from
time to time in the Province of Ontario; provided that, if validity, perfection or the effect of perfection or non-perfection or the priority of the security interest granted by any Security in any collateral and the rights and remedies of the Bond
Trustee are governed by the PPSA or other similar legislation as in effect in a jurisdiction other than Ontario, then “PPSA” shall mean the Personal Property Security Act or other similar legislation as in effect from time to time
in such other jurisdiction, including for greater certainty the Québec Civil Code in respect of the Province of Québec, for purposes of the provisions hereof relating to such validity, perfection, effect of perfection or non-perfection
or priority and to such rights and remedies. 
 (2) The terms “investment property”,
“account”, “consumer goods”, “control”, “inventory” and “equipment” whenever used herein have the meanings given to those terms in the PPSA, as now enacted or as the same may from time to time be
amended, re-enacted or replaced and the terms “entitlement holder”, “financial asset”, “security”, “securities account”, “securities intermediary”, “entitlement order” and “security
entitlement” whenever used herein have the meanings given to those terms in the Securities Transfer Act (Ontario) (the “STA”), as now enacted or as the same may from time to time be amended, re-enacted or replaced.

 (3) Other terms defined in the PPSA or the STA and used in this Agreement shall, unless otherwise defined
herein, have the same meaning as ascribed to such terms in the PPSA or the STA, as applicable. 

  
 2 

 ARTICLE 2 
 SECURITY 
 Section 2.01 Grant of Security. 

Subject to Section 2.07 and the right of the Guarantor (provided that, if required pursuant to the Transaction
Documents, the Asset Coverage Test or the Amortization Test, as applicable, is met) to sell such collateral, the Guarantor assigns by way of security, mortgages, charges, hypothecates and pledges to the Bond Trustee (on behalf of the Secured
Creditors) and grants to the Bond Trustee (on behalf of the Secured Creditors) a security interest in all the Guarantor’s right, title and interest in and to all of the present and future personal property and undertaking of the Guarantor,
wherever situate and all proceeds thereof (collectively, the “Collateral”). The Collateral shall include, without limitation, the Portfolio, Excess Proceeds received from the Bond Trustee pursuant to the Trust Deed, Substitution
Assets and Transaction Documents that the Guarantor may acquire from time to time and all funds being held for the account of the Guarantor by its service providers and the amounts standing to the credit of the Guarantor in the Guarantor Accounts;
and includes any and all of the Guarantor’s: 
  

	 	 (a)
	 inventory, including goods held for sale, lease or resale, goods furnished or to be furnished to third parties under contracts of lease, consignment
or service, goods which are raw materials or work in process, goods used in or procured for packing and materials used or consumed in the business of the Guarantor; 

 

	 	 (b)
	 equipment, machinery, furniture, fixtures, plants, vehicles and other goods of every kind and description and all licences and other rights and all
records, files, charts, plans, drawings, specifications, manuals and documents relating thereto; 

  

	 	 (c)
	 accounts due or accruing and all agreements, books, accounts, invoices, letters, documents and papers recording, evidencing or relating thereto;

  

	 	 (d)
	 money, documents of title, chattel paper and instruments; 

 

	 	 (e)
	 investment property and Equity Interests in other Persons that do not constitute investment property, now or hereafter acquired or owned by or on
behalf of the Guarantor or in which the Guarantor now or hereafter has an interest (collectively, “Pledged Securities”), together with all substitutions or exchanges from time to time in respect of any of the foregoing Pledged
Securities, and all dividends, distributions and other income (whether in the form of money, Securities or any other property) derived in respect of the foregoing Pledged Securities or payable in connection therewith and all monies and property
received or receivable in the nature of the return or repayment of capital in respect thereof; 

  

	 	 (f)
	 intangibles including all security interests, goodwill, choses in action and other contractual benefits and all trade marks, trade mark
registrations and 

  
 3 

	 	
pending trade mark applications, patents and pending patent applications and copyrights and other intellectual property (collectively, the “Intellectual Property”);

  

	 	 (g)
	 to the fullest extent permitted by applicable law, all authorizations, permits, approvals, grants, licenses, consents, rights, franchises,
privileges, orders, certificates, judgments, writs, injunctions, awards, determinations, directions, decrees, demands or the like issued or granted by law or by rule or regulation of any public body now or hereafter issued or granted to it;

  

	 	 (h)
	 substitutions and replacements of and increases, additions and, where applicable, accessions to the property described in
Section 2.01(a)-(g) inclusive; and 

  

	 	 (i)
	 proceeds in any form derived directly or indirectly from any dealing with all or any part of the property described in
Section 2.01(a)-(h) inclusive or the proceeds of such proceeds. 

 Section 2.02 Obligations
Secured. 
 (1) The assignment, mortgage, charge, hypothecation, pledge and security interest granted hereby
(the “Security”) secures the payment and performance of all debts, liabilities and obligations of any and every kind, nature and description, whether, present or future, direct or indirect, absolute or contingent, matured or
unmatured, at any time due or accruing due, owing by the Guarantor to the Bond Trustee and the other Secured Creditors under the Transaction Documents to which it is a party, however or wherever incurred, and in any currency, and whether incurred by
the Guarantor alone or with another or others and whether as principal or surety (collectively, and together with the expenses, costs and charges set out in Section 2.02(2), the “Obligations”). 

(2) All reasonable expenses, costs and charges incurred by or on behalf of the Bond Trustee in connection with this
Agreement, the Security or the realization of the Collateral, including all reasonable legal fees, court costs, receiver’s or agent’s remuneration and other expenses of, or of taking or defending any action in connection with, taking
possession of, repairing, protecting, insuring, preparing for disposition, realizing, collecting, selling, transferring, delivering or obtaining payment of the Collateral or other lawful exercises of the powers conferred by the Transaction Documents
shall be added to and form a part of the Obligations. 
 Section 2.03 Notice and Acknowledgement. 

The execution of this Agreement by each Secured Creditor shall constitute an express acknowledgement by each of them of
such charges and assignments and other Security made or granted by the foregoing provisions of this Article 2 and each of the Secured Creditors covenants with the Bond Trustee not to do anything inconsistent with the Security given under or
pursuant to this Agreement or knowingly to prejudice the Security constituted hereunder or pursuant hereto or under any Mortgage provided that, without prejudice to Article 4, nothing herein shall

  
 4 

 
be construed as limiting the rights or obligations of any of the Secured Creditors exercisable or to be prepared in accordance with and subject to the terms of any of the other Transaction
Documents. 
 Section 2.04 Accession of New Secured Creditors. 

As a condition precedent to any new Series or Tranche, as applicable, of Covered Bonds issued under the Program, any
Person which becomes a Secured Creditor pursuant to and in accordance with this Agreement (each a “New Secured Creditor”) shall be bound by the terms of this Agreement and as evidence of such shall execute an instrument in a form
acceptable to the Bond Trustee. 
 Section 2.05 Declaration of Trust. 

The Bond Trustee hereby declares itself trustee of all the covenants, undertakings, charges, assignments, assignations
and other security interests made or given to be made or given under or pursuant to this Agreement and the other Transaction Documents for itself and the other Secured Creditors in respect of the Obligations owed to each of them respectively upon
and subject to the terms and conditions of this Agreement. 
 Section 2.06 Attachment. 

(1) The Guarantor acknowledges that (i) value has been given, (ii) it has rights in the Collateral (other than
after-acquired Collateral) or the power to transfer rights in the Collateral (other than after-acquired Collateral) to the Bond Trustee, (iii) it has not agreed to postpone the time of attachment of the Security, and (iv) it has received a
duplicate original copy of this Agreement. 
 If the Guarantor acquires Collateral consisting of chattel paper,
instruments, securities, investment property or negotiable documents of title (collectively, “Negotiable Collateral”), the Guarantor will, immediately upon receipt, deliver to the Bond Trustee the Negotiable Collateral and shall,
(i) at the request of the Bond Trustee cause the transfer of the Negotiable Collateral to the Bond Trustee to be registered wherever, in the opinion of the Bond Trustee, such registration may be required or advisable, (ii) duly endorse the
same for transfer in blank by an effective endorsement or deliver a stock transfer power in respect thereof or as the Bond Trustee may direct, (iii) immediately deliver to the Bond Trustee any and all consents or other documents which may be
necessary to effect the transfer of the Negotiable Collateral to the Bond Trustee or any third party, and (iv) to the extent such Negotiable Collateral consists of investment property, cause the Bond Trustee to obtain control of such Negotiable
Collateral as determined pursuant to the PPSA. If and to the extent that the Negotiable Collateral is uncertificated, the Guarantor shall enter into such custodial, control or other agreements at the request of the Bond Trustee. 

(2) With respect to any Pledged Security that is a certificated security, until further notice by the Bond Trustee, any
certificate representing such Pledged Security may remain registered in the name of the Guarantor, provided that the Guarantor shall promptly at the request and pursuant to the direction of the Bond Trustee (in the Bond Trustee’s sole
discretion) either duly endorse such certificate in blank for transfer or execute a stock transfer power of attorney in 

  
 5 

 
respect thereof; in either case with signatures guaranteed and with all documentation being in form and substance satisfactory to the Bond Trustee and any transfer agent appointed from time to
time in respect of such Pledged Security. With respect to any Pledged Security that is an uncertificated security, the Guarantor shall enter into, and cause the issuer thereof to enter into, such custodial, control or other agreements as the Bond
Trustee requires, including the taking of any steps to provide the Bond Trustee with control over such Pledged Security. Notwithstanding the foregoing, at any time and from time to time upon request by the Bond Trustee (in the Bond Trustee’s
sole discretion), the Guarantor shall cause any or all of the Pledged Securities to be issued and registered in the name of the Bond Trustee or its nominee, and the Bond Trustee is hereby appointed the irrevocable attorney (coupled with an interest)
of the Guarantor with full power of substitution to cause any or all of the Pledged Securities to be issued and registered in the name of the Bond Trustee or its nominee. 

(3) The Guarantor shall hold its security entitlements in a securities account that (i) is maintained in the name of
the Guarantor at an office of a securities intermediary located in Ontario, and (ii) together with all financial assets credited thereto and all related security entitlements, is subject to a Securities Account Control Agreement (as defined
below) among the Guarantor, the Bond Trustee and such securities intermediary (“Controlled Securities Account”). The Guarantor shall, at the request of the Bond Trustee (in the Bond Trustee’s sole discretion), (i) enter
into and cause any securities intermediary holding a securities account in respect of Pledged Securities to enter into a securities account control agreement in form and substance satisfactory to the Bond Trustee acting reasonably (a
“Securities Account Control Agreement”) in respect of all Pledged Securities constituting security entitlements of the Guarantor, and (ii) deliver each such Securities Account Control Agreement to the Bond Trustee. The
Guarantor shall cause all Pledged Securities underlying any security entitlements acquired by the Guarantor after the date hereof to be credited to a Controlled Securities Account. 

(4) The Guarantor will promptly inform the Bond Trustee in writing of the acquisition by the Guarantor of any personal
property which is not adequately described in this Agreement, and the Guarantor will execute and deliver, at its own expense, from time to time amendments to this Agreement or additional Agreements or schedules as may be required by the Bond Trustee
in order that the Security shall attach to such personal property. 
 Section 2.07 Scope of Security. 

(1) To the extent that the creation of the Security would constitute a breach or permit the acceleration or termination
of any agreement, right, licence or permit of the Guarantor (each, a “Restricted Asset”), the Security shall not attach to the Restricted Asset but the Guarantor shall hold its interest in the Restricted Asset in trust for the Bond
Trustee, and shall be deemed to have granted a Security in such Restricted Asset to the Bond Trustee or as it may direct immediately, and such Security shall attach to the Restricted Asset, upon obtaining the consent of the other party. 

(2) Until the Security shall have become enforceable, the grant of the Security in the Intellectual Property shall not
affect in any way the Guarantor’s rights to commercially exploit the Intellectual Property, defend it, enforce the Guarantor’s rights in it or with respect to it against third parties in any court or claim and be entitled to receive any
damages with respect to any infringement of it. 

  
 6 

 (3) The Security shall not extend to consumer goods. 

(4) The Security shall not extend or apply to the last day of the term of any lease or sublease or any agreement for a
lease or sublease, now held or hereafter acquired by the Guarantor in respect of real property, but the Guarantor shall stand possessed of any such last day upon trust to assign and dispose of it as the Bond Trustee may direct. 

Section 2.08 Grant of Licence to Use Intellectual Property. 

For purposes of enabling the Bond Trustee to exercise its rights and remedies pursuant to Article 4, at such time as
the Bond Trustee shall be lawfully entitled to exercise its rights and remedies and for no other purpose, the Guarantor grants to the Bond Trustee an irrevocable, nonexclusive licence (exercisable without payment of royalty or other compensation to
the Guarantor) to use, assign or sublicense any of the Intellectual Property wherever the same may be located, including in such licence access to (i) all media in which any of the licensed items may be recorded or stored, and (ii) all
computer programs used for compilation or print-out. 
 Section 2.09 Care and Custody of Collateral. 

(1) Subject to subsection (2) below, the Bond Trustee shall have no obligation to keep Collateral in its possession
identifiable. 
 (2) Prior to the service of a Guarantor Acceleration Notice, the Bond Trustee shall be bound to
exercise in the physical keeping of any Pledged Securities or Negotiable Collateral, only the same degree of care as it would exercise in respect of its own Securities, negotiable collateral or other investment property kept at the same place.

 (3) The Bond Trustee may, after the Security shall have become enforceable, (i) notify any person
obligated on an account or on chattel paper or any obligor on an instrument to make payments to the Bond Trustee whether or not the Guarantor was previously making collections on such accounts, chattel paper or instruments, and (ii) assume
control of any proceeds arising from the Collateral. 
 Section 2.10 Rights of the Guarantor in Respect of Pledged
Securities. 
 (1) Until the Security has become enforceable, the Guarantor shall be entitled to vote the
Pledged Securities and to give consents, ratifications or waivers and to receive all cash dividends in respect of the Pledged Securities. Upon a Guarantor Acceleration Notice being served, all rights of the Guarantor to vote the Pledged Securities
and to give consents, ratifications or waivers and to receive dividends in respect of the Pledged Securities shall cease and all such rights shall become vested solely and absolutely in the Bond Trustee. 

(2) Any dividends received by the Guarantor contrary to Section 2.10(1) or any other money or property which may be
received by the Guarantor at any time for, or in respect of, the Pledged Securities shall be received as trustee for the Bond Trustee and shall be immediately paid over to the Bond Trustee. 

  
 7 

 Section 2.11 Care and Custody of Securities. 

Unless a Guarantor Acceleration Notice has been served, the Bond Trustee shall not have any right to the collection of
dividends on, or exercise any option or right (including any right to vote, give consents, ratifications or waivers) in connection with, any Pledged Securities. The Bond Trustee need not protect or preserve any Collateral from depreciating in value
or becoming worthless and is released from all responsibility for any loss of value. 
 Section 2.12 Investments in
Substitution Assets. 
 (1) Notwithstanding the Security created by or pursuant to this Agreement, the Cash
Manager may, on behalf of the Guarantor and the Bond Trustee, invest in the name of the Guarantor and the Bond Trustee, monies standing from time to time to the credit of the Guarantor Accounts in Substitution Assets in accordance with the Cash
Management Agreement and the Guarantor Agreement provided that: 
  

	 	 (a)
	 any costs properly incurred by the Bond Trustee in making and changing investments will be reimbursed to the Bond Trustee by the Guarantor; and

  

	 	 (b)
	 all income from and proceeds following the disposal or maturity of Substitution Assets shall be credited to the relevant Guarantor Account.

 (2) Notwithstanding the Security created by or pursuant to this Agreement, Substitution
Assets may, on any Canadian Business Day, be sold, redeemed, realized or otherwise disposed of subject always to the other provisions of this Agreement. 
 Section 2.13 Management and Application of Funds. 

The Guarantor shall take or cause to be taken such action as may from time to time be necessary on its part to ensure
that the GDA Account (and/or, as applicable, the Standby GDA Account) shall from time to time be credited with all amounts received by the Guarantor and falling within any of the following categories: 

 

	 	 (a)
	 all Revenue Receipts and all Principal Receipts; 

  

	 	 (b)
	 all Cash Capital Contributions; 

  

	 	 (c)
	 amounts received by the Guarantor pursuant to the Interest Rate Swap Agreement; 

 

	 	 (d)
	 Excess Proceeds received from the Bond Trustee pursuant to the Trust Deed; 

 

	 	 (e)
	 any other amount whatsoever received by or on behalf of the Guarantor after the Program Date (including, without limitation, any proceeds

  
 8 

	 	
advanced to the Guarantor under the Intercompany Loan Agreement where such proceeds have not been applied to acquire Loans and their Related Security, to refinance an existing Advance under the
Intercompany Loan Agreement or invest in Substitution Assets); 

  

	 	 (f)
	 the proceeds arising from the disposal of any Substitution Assets and any and all income or other distributions received by the Guarantor in respect
thereof or arising from the proceeds of any Substitution Assets; and 

  

	 	 (g)
	 such other payments received by the Guarantor as are, or ought in accordance with this Agreement to be, comprised in the Collateral.

 ARTICLE 3 
 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GUARANTOR 

Section 3.01 Representations and Warranties of the Guarantor. 

(1) The Guarantor represents and warrants to the Secured Creditors, acknowledging and confirming that the Secured
Creditors are relying thereon without independent inquiry, that as at the date hereof: 
  

	 	 (a)
	 this Agreement creates a valid first priority security interest in the Collateral; 

 

	 	 (b)
	 it is the registered, legal and beneficial owner of the Pledged Securities and is the legal and beneficial owner of all other Collateral;

  

	 	 (c)
	 the Collateral is free and clear of all liens, mortgages, charges, security interests, claims, encumbrances or other similar rights or interests of
any third parties other than those created in favour of the Bond Trustee and none of the Collateral is held by the Guarantor in a trust capacity; 

  

	 	 (d)
	 the Security in the Collateral has been perfected; 

 

	 	 (e)
	 the address of the Guarantor’s chief executive office is that given at the end of this Agreement; 

 

	 	 (f)
	 the Bond Trustee has obtained control pursuant to the PPSA of the Collateral that consists of investment property (“Controlled
Assets”) and the Bond Trustee is a protected purchaser within the meaning of the PPSA; 

  

	 	 (g)
	 no Person other than the Bond Trustee has control or has the right to obtain control within the meaning of the PPSA of any Controlled Assets; and

  

	 	 (h)
	 no authorizations, consents or approvals from, or notices to, any Governmental Authority or other Person is or was necessary in connection

  
 9 

	 	
with the execution and delivery of this Agreement or the performance or enforcement of the Guarantor’s obligations hereunder, except as have been obtained, given or are in full force and
effect unamended, at the date hereof. 

 Section 3.02 Additional Representations and Warranties of the
Guarantor. 
 In addition to the representations and warranties of the Guarantor in Section 3.01, the
Guarantor further represents and warrants to the Secured Creditors that the representations and warranties set out in Schedule 1 hereto are true as at the date hereof. 
 Section 3.03 Covenants of the Guarantor. 
 Subject to
the provisions of the Guarantor Agreement, the Guarantor covenants and agrees with the Bond Trustee that it shall: 
  

	 	 (a)
	 duly and punctually pay and discharge all monies and liabilities whatsoever which now are or at any time hereafter may (whether before or after the
Security has become enforceable pursuant to this Agreement) become due and payable to the Bond Trustee (whether for its own account or as trustee for the Secured Creditors) or any of the other Secured Creditors by the Guarantor, whether actually or
contingently, solely or jointly with one or more Persons and whether as principal or guarantor under or pursuant to this Agreement or any other of the Transaction Documents; 

 

	 	 (b)
	 observe, perform and satisfy all of its other obligations and liabilities under or pursuant to this Agreement and/or any of the other Transaction
Documents; 

  

	 	 (c)
	 not do anything inconsistent with the Security or knowingly to prejudice the Security or the Bond Trustee’s interest therein; and

  

	 	 (d)
	 comply in all respects with the Priorities of Payments as set out in the Guarantor Agreement prior to and until service of a Guarantor Acceleration
Notice on the Guarantor. 

 Section 3.04 Additional Covenants of the Guarantor. 

In addition to the covenants of the Guarantor in Section 3.03, the Guarantor covenants and agrees with the Bond
Trustee as set out on Schedule 2 hereto. 
 ARTICLE 4 

ENFORCEMENT 
 Section 4.01 Enforcement. 
 (1) The Security shall be
and become enforceable against the Guarantor; 

  
 10 

	 	 (a)
	 upon a Guarantor Acceleration Notice being served on the Guarantor; or 

 

	 	 (b)
	 if there are no Covered Bonds outstanding following: 

 

	 	 (i)
	 the non-payment when due, whether by acceleration or otherwise, of any Obligations or the failure of the Guarantor to observe or perform any
obligation, covenant, term, provision or condition contained in this Agreement or any other Transaction Document to which it is a party which is not remedied within thirty (30) days after notice has been given by the Bond Trustee to the
Guarantor specifying such default and requiring the Guarantor to remedy same; 

  

	 	 (ii)
	 the occurrence of a bankruptcy or insolvency of the Guarantor or if the Guarantor is insolvent within the meaning of the Bankruptcy and
Insolvency Act (Canada); 

  

	 	 (iii)
	 the filing against the Guarantor of an application for a bankruptcy order, the making of a compromise, arrangement or an assignment for the benefit
of creditors by the Guarantor, the appointment of a receiver, interim receiver, trustee or similar official for the Guarantor or for any assets of the Guarantor or the institution by or against the Guarantor of any other type of insolvency
proceeding under the Bankruptcy and Insolvency Act (Canada), Companies’ Creditors Arrangement Act (Canada), or similar statute in Canada or any other applicable law, and if involuntary, which is not contested in good faith and
vacated, discharged or stayed within thirty (30) days, provided that no order is made granting relief; 

  

	 	 (iv)
	 the institution by or against the Guarantor of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against
or winding up of affairs of the Guarantor and if involuntary, which is not contested in good faith and vacated, discharged or stayed within thirty (30) days, provided that no order is made granting relief; 

 

	 	 (v)
	 any Security Interest, ownership interest, right of set-off or other right of claim of any person (an “Encumbrance”) affecting the
Collateral becomes enforceable against the Collateral; or 

  

	 	 (vi)
	 the Guarantor ceasing or threatening to cease to carry on business or agreeing to make a bulk sale of assets without complying with applicable law
or committing or threatening to commit an act of bankruptcy. 

 (2) The Bond Trustee shall, if
reasonably practicable, give prior notification to the Seller of the Bond Trustee’s intention to enforce the Security, provided always that the failure of the Bond Trustee to provide such notification shall not prejudice the ability of the Bond
Trustee to enforce the Security. 

  
 11 

 (3) Without prejudice to the effectiveness of any service of the Guarantor
Acceleration Notice, as soon as is reasonable thereafter the Bond Trustee shall serve a copy of any Guarantor Acceleration Notice on each of the Secured Creditors, the Guarantor, the Rating Agencies and the Cover Pool Monitor. 

Section 4.02 Knowledge of Bond Trustee of a Guarantor Event of Default. 

The Bond Trustee will be deemed not to have knowledge of the occurrence of a Guarantor Event of Default or Potential
Guarantor Event of Default unless the Bond Trustee has received written notice from the Guarantor (or on its behalf) or a Secured Creditor stating that a Guarantor Event of Default or Potential Guarantor Event of Default has occurred and describing
that Guarantor Event of Default. 
 Section 4.03 Discretionary Enforcement. 

Subject to the provisions of this Agreement, the Bond Trustee may at any time, at its discretion and without notice, take
such proceedings and/or other action as it may think fit against, or in relation to, the Guarantor or any other person to enforce their respective obligations under or pursuant to this Agreement or any other Transaction Document. Subject to the
provisions of this Agreement, at any time after the Security has become enforceable, the Bond Trustee may, at its discretion and without notice, take such steps as it may think fit to enforce such Security. 

Section 4.04 Mandatory Enforcement. 
 The Bond Trustee shall not be bound to take any steps to enforce any provision of this Agreement or to institute any proceedings or to enforce the Security unless the Bond Trustee: 

 

	 	 (a)
	 shall have been directed to do so by an Extraordinary Resolution of all the Holders of the Covered Bonds of all Series (with the Covered Bonds of
all Series taken together as a single Series as provided in Condition 7.03) or requested to do so in writing by the holders of not less than 25% in aggregate Principal Amount Outstanding of the Covered Bonds of all Series (taken together and
converted into USD at the rate specified in the applicable Final Terms Document in accordance with Condition 7.03) then outstanding; and 

  

	 	 (b)
	 shall have been indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby render itself liable and all
Liabilities which it may incur by so doing and the terms of such indemnity may include the provision of a fighting fund, non-recourse loan or other similar arrangement. 

  
 12 

 Section 4.05 Mandatory Other Action. 

The Bond Trustee shall not be bound to take any other steps (other than the steps referred to in Section 4.04 above)
under or pursuant to this Agreement or any of the other Transaction Documents unless the Bond Trustee shall have been directed to do so by an Extraordinary Resolution of the Holders of Covered Bonds of the relevant one or more Series (with Covered
Bonds of such Series taken together as a single Series (if more than one Series) and converted, if applicable, into USD at the rate specified in the applicable Final Terms Document) or requested to do so in writing by the holders of not less than
25% in aggregate Principal Amount Outstanding of the Covered Bonds then outstanding of the relevant one or more Series (taken together and converted in to USD as aforesaid); and shall have been indemnified and/or secured to its satisfaction as
aforesaid. 
 Section 4.06 Disposal of Collateral. 

Notwithstanding the other provisions of this Article 4, if the Security has become enforceable otherwise than by
reason of a default in payment of any amount due on the Covered Bonds, the Bond Trustee will not be entitled to dispose of any of the Collateral unless either a sufficient amount would be realised to allow discharge in full of all amounts owing to
the Holders of Covered Bonds or the Bond Trustee is of the sole opinion, which shall be binding on the Bond Trustee, reached after considering at any time and from time to time the advice of any financial adviser (or such other professional advisers
reasonably selected by the Bond Trustee for the purpose of giving such advice), that the cash flow prospectively receivable by the Guarantor will not (or that there is a significant risk that it will not) be sufficient, having regard to any other
relevant actual, contingent or prospective liabilities of the Guarantor, to discharge in full in due course all amounts owing to the Holders of Covered Bonds. The fees and expenses of the aforementioned financial adviser or other professional
adviser selected by the Bond Trustee shall be paid by the Guarantor. 
 Section 4.07 Payment of Monies After Service of
a Guarantor Acceleration Notice. 
 (1) From and including the time when the Bond Trustee serves a Guarantor
Acceleration Notice on the Guarantor, no amount may be withdrawn from the Guarantor Accounts without the prior written consent of the Bond Trustee. 
 (2) Any and all moneys received or recovered (excluding all amounts due or to become due in respect of any Third Party Amounts) by the Bond Trustee (or a receiver appointed on its behalf in accordance
with this Agreement) following the service of a Guarantor Acceleration Notice and enforcement of the Security, shall be held by it in the Guarantor Accounts in trust to be applied by the Bond Trustee (or a receiver appointed on its behalf in
accordance with this Agreement) in accordance with Schedule 3 (the “Post-Enforcement Priority of Payments”) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full).

  
 13 

 Section 4.08 Remedies. 

Whenever the Security has become enforceable, the Bond Trustee may realize upon the Collateral and enforce the rights of
the Bond Trustee and the other Secured Creditors by: 
  

	 	 (a)
	 entry onto any premises where Collateral consisting of tangible personal property may be located; 

 

	 	 (b)
	 entry into possession of the Collateral by any method permitted by law; 

 

	 	 (c)
	 sale or lease of all or any part of the Collateral; 

 

	 	 (d)
	 collection of any proceeds arising in respect of the Collateral; 

 

	 	 (e)
	 collection, realization or sale of, or other dealing with, the accounts; 

 

	 	 (f)
	 appointment by instrument in writing of a receiver (which term as used in this Agreement includes a receiver and manager) or agent of all or any
part of the Collateral and removal or replacement from time to time of any receiver or agent; 

  

	 	 (g)
	 institution of proceedings in any court of competent jurisdiction for the appointment of a receiver of all or any part of the Collateral;

  

	 	 (h)
	 institution of proceedings in any court of competent jurisdiction for sale or foreclosure of all or any part of the Collateral;

  

	 	 (i)
	 filing of proofs of claim and other documents to establish claims to the Collateral in any proceeding relating to the Guarantor; and

  

	 	 (j)
	 any other remedy or proceeding authorized or permitted under the PPSA (or any other applicable statute) or otherwise by law or equity.

 Such remedies may be exercised from time to time separately or in combination and are in addition to, and
not in substitution for, any other rights of the Bond Trustee however created. The Bond Trustee shall not be bound to exercise any right or remedy, and the exercise of rights and remedies shall be without prejudice to any other rights of the Bond
Trustee in respect of the Obligations including the right to claim for any deficiency. The taking of any action or proceeding or refraining from doing so, or any other dealings with any other security for the Obligations secured by this Agreement
shall not release or affect the Collateral or the Security. 
 Section 4.09 Additional Rights. 

(1) In addition to the remedies set forth in Section 4.08, the Bond Trustee may, whenever the Security has become
enforceable: 

  
 14 

	 	 (a)
	 require the Guarantor, at the Guarantor’s expense, to assemble the Collateral at a place or places designated by notice in writing and the
Guarantor agrees to so assemble the Collateral; 

  

	 	 (b)
	 require the Guarantor, by notice in writing, to disclose to the Bond Trustee the location or locations of the Collateral and the Guarantor agrees to
make such disclosure when so required; 

  

	 	 (c)
	 repair, process, modify, complete or otherwise deal with the Collateral and prepare for the disposition of the Collateral, whether on the premises
of the Guarantor or otherwise; 

  

	 	 (d)
	 carry on all or any part of the business of the Guarantor and, to the exclusion of all others including the Guarantor, enter upon, occupy and use
all or any of the premises, buildings, and other property of or used by the Guarantor for such time as the Bond Trustee sees fit, free of charge, and the Bond Trustee shall not be liable to the Guarantor for any act, omission or negligence in so
doing or for any rent, charges, depreciation or damages incurred in connection with or resulting from such action; 

  

	 	 (e)
	 exercise all voting rights attached to the Pledged Securities (whether or not registered in the name of the Bond Trustee or its nominee) and give or
withhold all consents, waivers and ratifications in respect thereof, collect and receive dividends and other distributions relating thereto and otherwise act with respect thereto as though it were the absolute owner thereof;

  

	 	 (f)
	 deal with any security entitlements, securities accounts and securities intermediaries holding security entitlements as if it were the entitlement
holder thereof including making such entitlement orders as it deems appropriate and instructing any such securities intermediary to transfer the securities accounts held in any Controlled Securities Accounts into an account in the name of the Bond
Trustee or as it may direct; 

  

	 	 (g)
	 exercise any and all rights of redemption, conversion, exchange, sale, subscription or any other rights, privileges or options pertaining to any of
the Pledged Securities as if it were the absolute owner thereof including, without limitation, the right to exchange at its discretion any and all of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization or other
readjustment of any issuer thereof, or upon the exercise by any issuer of any right, privilege or option pertaining to any of the Pledged Securities, and in connection therewith, to deposit and deliver or direct the sale or other disposition of any
of the Pledged Securities with any committee, depositary, Securities Intermediary, clearing house, transfer agent, registrar or other designated agency upon such terms and conditions as it may determine, all without liability except to account for
property actually received by it; 

  
 15 

	 	 (h)
	 borrow for the purpose of carrying on the business of the Guarantor or for the maintenance, preservation or protection of the Collateral and
mortgage, grant or charge a security interest in the Collateral, whether or not in priority to the Security, to secure repayment; and 

  

	 	 (i)
	 commence, continue or defend any judicial or administrative proceedings for the purpose of protecting, seizing, collecting, realizing or obtaining
possession or payment of the Collateral, and give good and valid receipts and discharges in respect of the Collateral and compromise or give time for the payment or performance of all or any part of the accounts or any other obligation of any third
party to the Guarantor. 

 (2) The Bond Trustee shall have the power to insure against any
liabilities or obligations arising: 
  

	 	 (a)
	 as a result of the Bond Trustee acting or failing to act in a certain way (other than which may arise from its negligence or wilful default or that
of its officers or employees); 

  

	 	 (b)
	 as a result of any act or failure to act by any person or persons to whom the Bond Trustee has delegated any of its trusts, rights, powers, duties,
authorities or discretions, or appointed as its agent (other than which may arise from such person’s negligence, fraud and/or wilful default); 

  

	 	 (c)
	 in connection with the Collateral; or 

  

	 	 (d)
	 in connection with or arising from the enforcement of the Security created by or pursuant to this Agreement. 

The Bond Trustee shall not be under any obligation to insure in respect of such liabilities and/or obligations or to require any other
person to maintain insurance, but to the extent that it does so, the Guarantor shall quarterly and on written request pay all insurance premiums and expenses which the Bond Trustee may properly incur in relation to such insurance. If the Guarantor
fails to pay such premiums or expenses or to reimburse the Bond Trustee therefor, the Bond Trustee shall be entitled to be indemnified out of the Collateral in respect thereof and, where a Guarantor Acceleration Notice has been served, the
indemnification of the Bond Trustee in respect of all such insurance premiums and expenses shall be payable in priority to payments to the Holders of the Covered Bonds and all other Secured Creditors and otherwise in accordance with this Agreement.

 Section 4.10 Enforcement When Not All Amounts Due and Payable. 

If the Bond Trustee enforces the Security at a time when either no amounts or not all amounts owing in respect of the
Obligations have become due and payable, the Bond Trustee (or a receiver appointed by it in accordance with this Agreement) may, for so long as no such amounts or not all such amounts have become due and payable, pay any monies referred to in
Section 4.07 into, and retain such monies in, an interest-bearing account (a “Retention Account”) to be held by it as security and applied by it in accordance with Section 4.07 as and when any of the amounts referred to
therein become due and payable. 

  
 16 

 Section 4.11 Concerning the Receiver. 

(1) Any receiver appointed by the Bond Trustee shall be vested with the rights and remedies which could have been
exercised by the Bond Trustee in respect of the Guarantor or the Collateral and such other powers and discretions as are granted in the instrument of appointment and any supplemental instruments. The identity of the receiver, its replacement and its
remuneration shall be within the sole and unfettered discretion of the Bond Trustee. 
 (2) Any receiver
appointed by the Bond Trustee shall act as agent for the Bond Trustee for the purposes of taking possession of the Collateral, but otherwise and for all other purposes (except as provided below), as agent for the Guarantor. The receiver may sell,
lease, or otherwise dispose of Collateral as agent for the Guarantor or as agent for the Bond Trustee as the Bond Trustee may determine in its discretion. The Guarantor agrees to ratify and confirm all actions of the receiver acting as agent for the
Guarantor, and to release and indemnify the receiver in respect of all such actions. 
 (3) The Bond Trustee, in
appointing or refraining from appointing any receiver, shall not incur liability to the receiver, the Guarantor or otherwise and shall not be responsible for any misconduct or negligence of such receiver. 

Section 4.12 Appointment of Attorney. 

The Guarantor irrevocably appoints the Bond Trustee (and any of its officers) as attorney of the Guarantor (with full
power of substitution) to do, make and execute, in the name of and on behalf of the Guarantor, all such further acts, documents, matters and things which the Bond Trustee may deem necessary or advisable to accomplish the purposes of this Agreement
including the execution, endorsement and delivery of documents and any notices, receipts, assignments or verifications of the accounts and the delivery and transfer of any Collateral to the Bond Trustee or to its nominees or transferees. Whenever
the Security has become enforceable, the Bond Trustee or its nominees and transferees are empowered to exercise all rights and powers and to perform all acts of ownership with respect to the Collateral that constitutes Pledged Securities to the same
extent as the Guarantor might do. The power of attorney herein granted is in addition to, and not in substitution for any transfer power of attorney delivered by the Guarantor and such power of attorney may be relied upon by the Bond Trustee
severally or in combination. All acts of the attorney are ratified and approved, and the attorney shall not be liable for any act, failure to act or any other matter or thing, except for its own gross negligence or wilful misconduct. This power of
attorney is coupled with an interest and is irrevocable. 
 Section 4.13 Dealing with the Collateral. 

(1) The Bond Trustee shall not be obliged to exhaust its recourse against the Guarantor or any other Person or against
any other security it may hold in respect of the Obligations before realizing upon or otherwise dealing with the Collateral in such manner as the Bond Trustee may consider desirable. Neither the taking of any judgement nor the exercise of

  
 17 

 
any power of seizure or sale shall extinguish the liability of the Guarantor to pay the Obligations, nor shall the same operate as a merger of any covenant contained in this Agreement or of any
other liability, nor shall the acceptance of any payment or other security constitute or create a novation. 

(2) The Bond Trustee may grant extensions or other indulgences, take and give up securities, accept compositions, grant
releases and discharges and otherwise deal with the Guarantor and with other Persons, sureties or securities as it may see fit without prejudice to the Obligations, the liability of the Guarantor or the rights of the Bond Trustee in respect of the
Collateral. 
 (3) The Bond Trustee shall not be (i) liable or accountable for any failure to collect,
realize or obtain payment in respect of the Collateral, (ii) bound to institute proceedings for the purpose of collecting, enforcing, realizing or obtaining payment of the Collateral or for the purpose of preserving any rights of any Persons in
respect of the Collateral, (iii) responsible for any loss occasioned by any sale or other dealing with the Collateral or by the retention of or failure to sell or otherwise deal with the Collateral, or (iv) bound to protect the Collateral
from depreciating in value or becoming worthless. 
 (4) The Guarantor shall not assert and hereby waives (to
the fullest extent permitted by applicable law), all of the rights, benefits and protections given by any present or future statute that imposes limitations on the rights, powers or remedies of a secured party or on the methods of, or procedures
for, realization of security, including any “seize or sue” or “anti-deficiency” statute or any similar provision of any other statute. 
 Section 4.14 Indemnity. 
 The Guarantor agrees to
indemnify in full (but only following service of an Issuer Acceleration Notice on the Issuer and service of a Notice to Pay on the Guarantor) the Bond Trustee and any receiver appointed in accordance with this Agreement from and against all losses,
actions, claims, costs (including legal costs and travel expenses), charges and expenses (including insurance premiums), demands and liabilities whether in contract, tort or otherwise now or hereafter properly sustained or incurred by the Bond
Trustee or such receiver and its respective officers and employees or by any person for whose liability, act or omission the Bond Trustee or such receiver may be answerable, in connection with anything done or omitted to be done under or pursuant to
this Agreement or any other Transaction Document to which such entity is a party, or in the exercise or purported exercise of the powers herein contained, or occasioned by any breach by the Guarantor of any of its covenants or other obligations to
the Bond Trustee, or in consequence of any payment in respect of the Obligations (whether made by the Guarantor or a third person) being declared void or impeached for any reason whatsoever. 

Section 4.15 Standards of Sale. 
 Without prejudice to the ability of the Bond Trustee to dispose of the Collateral in any manner which is commercially reasonable, the Guarantor acknowledges that a disposition of Collateral by the Bond
Trustee which takes place substantially in accordance with the following provisions shall be deemed to be commercially reasonable: 

  
 18 

	 	 (a)
	 the Collateral may be disposed of in whole or in part; 

 

	 	 (b)
	 the Collateral may be disposed of by public auction, public tender, private contract or any other means, with or without advertising and without any
other formality; 

  

	 	 (c)
	 any assignee of such Collateral may be the Bond Trustee or a customer of the Bond Trustee; 

 

	 	 (d)
	 any sale conducted by the Bond Trustee shall be at such time and place, on such notice and in accordance with such procedures as the Bond Trustee,
in its sole discretion, may deem advantageous; 

  

	 	 (e)
	 Pledged Securities may be disposed of in any manner and on any terms necessary to avoid violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that the prospective bidders and purchasers have certain qualifications, and restrict the prospective bidders and purchasers to Persons who
will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of the Pledged Securities) or in order to obtain any required approval of the disposition (or of the resulting
purchase) of any Governmental Authority; 

  

	 	 (f)
	 a disposition of Collateral may be on such terms and conditions as to credit or otherwise as the Bond Trustee, in its sole discretion, may deem
advantageous; and 

  

	 	 (g)
	 the Bond Trustee may establish an upset or reserve bid or price in respect of any Collateral. 

Section 4.16 Set-Off. 
 The Bond Trustee may at any time after the Security shall have become enforceable (without notice and notwithstanding any settlement of account or other matter whatsoever) combine or consolidate all or
any existing accounts of the Guarantor whether in its own name or jointly with others and held by it or any Secured Creditor and may set-off or transfer all or any part of any credit balance or any sum standing to the credit of any such account
(whether or not the same is due to the Guarantor from the Bond Trustee or relevant Secured Creditor and whether or not the credit balance and the account in debit or the Obligations are expressed in the same currency in which case the Bond Trustee
is hereby authorized to effect any necessary conversions at its prevailing rates of exchange) in or towards satisfaction of any of the Obligations and may in its absolute discretion estimate the amount of any liability of the Guarantor which is
contingent or unascertained and thereafter set-off such estimated amount and no amount shall be payable by the Bond Trustee to the Guarantor unless and until all Obligations have been ascertained and fully repaid or discharged. 

  
 19 

 Section 4.17 Dealings by Third Parties. 

(1) No Person dealing with the Bond Trustee or an agent or receiver shall be required to determine (i) whether the
Security has become enforceable, (ii) whether the powers which such Person is purporting to exercise have become exercisable, (iii) whether any money remains due to the Bond Trustee by the Guarantor, (iv) the necessity or expediency
of the stipulations and conditions subject to which any sale or lease is made, (v) the propriety or regularity of any sale or other dealing by the Bond Trustee with the Collateral, or (vi) how any money paid to the Bond Trustee has been
applied. 
 (2) Any purchaser of Pledged Securities from the Bond Trustee shall hold the Pledged Securities
absolutely, free from any claim or right of whatever kind, including any equity of redemption, of the Guarantor, which it specifically waives (to the fullest extent permitted by law) as against any such purchaser, all rights of redemption, stay or
appraisal which the Guarantor has or may have under any rule of law or statute now existing or hereafter adopted. 

Section 4.18 Risk of Funds. 
 None of the provisions contained in this Agreement shall require the Bond Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it believes that repayment of such funds or adequate indemnity against such risk or liability is not assured to it, provided that the Bond Trustee shall, forthwith upon making such a determination, deliver
notice of the same to the Secured Creditors and the Guarantor, which notice shall include the grounds for such belief . 

Section 4.19 Fondé de Pouvoir and Power of Attorney 

The Bond Trustee is hereby appointed and accepts its appointment as a holder of an irrevocable power of attorney
(fondé de pouvoir) of the Secured Creditors as contemplated by Article 2692 of the Civil Code of Québec to enter into, to take and to hold, on behalf of and for the benefit of each of the Secured Creditors any hypothec
granted pursuant to the laws of the Province of Québec to secure or evidence the Obligations, and to exercise such powers and duties that are conferred upon the Bond Trustee under any deed of hypothec, or under this Agreement or the other
Transaction Documents. Any Person who becomes a Secured Creditor will be deemed to have consented to confirm the Bond Trustee as fondé de pouvoir and to have ratified as of the date such Person becomes a Secured Creditor all actions
taken by the fondé de pouvoir. The execution by the Bond Trustee, acting as fondé de pouvoir and mandatary, prior to the execution of this Agreement or any deeds of hypothec, is hereby ratified and confirmed.
Notwithstanding the provisions of Section 32 of An Act respecting the special powers of legal persons (Québec), the Bond Trustee may acquire and be the holder of any bond issued by the Guarantor (i.e., the fondé de
pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Guarantor). 
 ARTICLE 5

 CONFLICTS 
 Section 5.01 Secured Creditors. 
 (1) The Bond
Trustee, as regards the exercise and performance of all powers, rights, trusts, authorities, duties and discretions of the Bond Trustee in respect of the Collateral, under or pursuant to this Agreement or any other Transaction Document to which the
Bond Trustee is a party or the rights or benefits in respect of which are comprised in the Collateral, shall have regard only to the interests of the Holders of the Covered Bonds while any of the Covered Bonds remain outstanding and shall not be
required to have regard to the interests of any other Secured Creditor or any other person or to act upon or comply with any direction or request of any other Secured Creditor or any other person whilst any amount remains owing to any Holders of the
Covered Bonds. 
 (2) In connection with the exercise by it of any of its trusts, powers, authorities or
discretions hereunder (including, without limitation, any modification, waiver, authorization, determination or substitution), the Bond Trustee shall have regard to the general interests of the Covered Bondholders of each Series as a class (but
shall not have regard to any interests arising from circumstances particular to individual Covered Bondholders, Receiptholders or Couponholders whatever their number) and, in particular but without limitation, shall not have regard to the
consequences of such exercise for individual Covered Bondholders, Receiptholders 

  
 20 

 
and Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular
territory or any political sub division thereof and the Bond Trustee shall not be entitled to require, nor shall any Covered Bondholder, Receiptholder or Couponholder be entitled to claim, from the Issuer, either of the Guarantor, the Bond Trustee
or any other person any indemnification or payment in respect of any tax consequences of any such exercise upon individual Covered Bondholders, Receiptholders and/or Couponholders, except to the extent already provided for in Condition 7
(Taxation) of the Trust Deed and/or in any undertaking or covenant given in addition thereto or in substitution therefor hereunder. 
 (3) If, in connection with the exercise of its powers, trusts, authorities or discretions, the Bond Trustee is of the opinion that the interests of the Holders of the Covered Bonds of any one or more
Series would be materially prejudiced thereby, the Bond Trustee shall not exercise such power, trust, authority or discretion without the approval of such Holders of the Covered Bonds by Extraordinary Resolution or by a direction in writing of such
Holders of the Covered Bonds of not less than 25% of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series then outstanding (taken together and converted into USD at the rate specified in the applicable Final Terms Document).

 Section 5.02 Acknowledgement. 

Each of the Secured Creditors hereby acknowledges and concurs with the provisions of Section 5.01 and each of them
agrees that it shall have no claim against the Bond Trustee as a result of the application thereof. 
 ARTICLE 6

 EXERCISE OF CERTAIN RIGHTS 
 Section 6.01 No Enforcement by Bond Trustee. 
 Each of
the Secured Creditors (other than the Holders of the Covered Bonds (which holders will be subject to the applicable provisions of the Trust Deed) and the Bond Trustee and, in relation to subparagraph (b) below, the Bond Trustee) hereby agrees
with the Guarantor and the Bond Trustee that: 
  

	 	 (a)
	 only the Bond Trustee may enforce the security created in favour of the Bond Trustee by this Agreement in accordance with the provisions hereof; and

  

	 	 (b)
	 it shall not take any steps for the purpose of (i) recovering any of the Obligations (including, without limitation, by exercising any rights
of set-off); or (ii) enforcing any rights arising out of the Transaction Documents against the Guarantor or procuring the winding up, administration or liquidation of the Guarantor or any of its General Partners in respect of any of its
liabilities whatsoever, 

  
 21 

 unless the Bond Trustee, having become bound to take any steps or proceedings to enforce the
said security under or pursuant to this Agreement, fails to do so within 30 days of having become bound to do so (in which case each of such Secured Creditors shall be entitled to take any such steps and proceedings as it shall deem necessary other
than the presentation of a petition for the winding up of, or for an administration order or liquidation in respect of, the Guarantor or any of its General Partners). 
 Section 6.02 Subordination. 
 (1) Each of the Secured
Creditors hereby acknowledges that it has received a copy of the Guarantor Agreement and hereby agrees to be bound by the terms of the Priorities of Payments set out in the Guarantor Agreement and this Agreement. Without prejudice to
Section 6.01, each of the Secured Creditors further agrees with each other party to this Agreement that, notwithstanding any other provision contained herein or in any other Transaction Document: 

 

	 	 (a)
	 it will not demand or receive payment of, or any distribution in respect of or on account of, any amounts payable by the Guarantor (or the Cash
Manager on its behalf) or the Bond Trustee, as applicable, to that Secured Creditor under the Transaction Documents, in cash or in kind, and will not apply any money or assets in discharge of any such amounts payable to it (whether by set off or by
any other method), unless all amounts then due and payable by the Guarantor to all other Secured Creditors ranking higher in the relevant Priorities of Payments have been paid in full; 

 

	 	 (b)
	 without prejudice to the foregoing, whether in the liquidation of the Guarantor or any other party to the Transaction Documents or otherwise, if any
payment or distribution (or the proceeds of any enforcement of any security) is received by a Secured Creditor in respect of any amount payable by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to that Secured
Creditor under the relevant Transaction Document at a time when, by virtue of the provisions of the relevant Transaction Document, the Guarantor Agreement and this Agreement, no payment or distribution should have been made, the amount so received
shall be held by the Secured Creditor upon trust for the entity from which such payment was received and shall be paid over to such entity forthwith upon receipt (whereupon the relevant payment or distribution shall be deemed not to have been made
or received); and 

  

	 	 (c)
	 without prejudice to Section 4.01 above, it shall not claim, rank, prove or vote as creditor of the Guarantor or its estate in competition with
any prior ranking Secured Creditors in the relevant Priorities of Payments or, the Bond Trustee, as applicable, or claim a right of set-off until all amounts then due and payable to Secured Creditors who rank higher in the relevant Priorities of
Payments have been paid in full. 

 (2) Neither the Guarantor nor the Bond Trustee shall pay
or repay, or make any distribution in respect of, any amount owing to a Secured Creditor under the relevant Transaction 

  
 22 

 
Documents (in cash or in kind) unless and until all amounts then due and payable by the Guarantor or the Bond Trustee to all other Secured Creditors ranking higher in the relevant Priorities of
Payments have been paid in full. 
 (3) The trusts in this Article 6 shall terminate on the date which is
the day before the last day of the period that is twenty-one years after the death of the last to die of the descendants of Her Majesty, Queen Elizabeth II, alive at the date of this Agreement. 

(4) Each of the Secured Creditors acknowledges that this Article 6 is without prejudice to the provisions set out in
Section 7.3 of the Intercompany Loan Agreement. 
 ARTICLE 7 

RELEASE 

Section 7.01 Discharge. 
 The Security shall be discharged upon, but only upon, full payment and performance of the Obligations and at the request and expense of the Guarantor, and thereafter the Bond Trustee shall execute and
deliver to the Guarantor such other releases and discharges as the Guarantor may reasonably require. 
 Section 7.02
Sale of the Portfolio. 
 (1) In the event of any sale of Loans and their Related Security included in
the Portfolio by or on behalf of the Guarantor pursuant to and in accordance with the Transaction Documents, such Loans and their Related Security shall no longer form part of the Portfolio and the Bond Trustee shall, while any Covered Bonds are
outstanding and if so requested in writing by the Guarantor, release, reassign or discharge those Loans and their Related Security from the Security on or prior to the date of any such sale provided that: 

 

	 	 (a)
	 the Bond Trustee provides its prior written consent to the terms of such sale in accordance with the Guarantor Agreement; and

  

	 	 (b)
	 in the case of the sale of Loans and their Related Security, the Guarantor provides to the Bond Trustee a certificate confirming that the Loans and
their Related Security being sold are Randomly Selected Loans. 

 (2) In the event of the
repurchase of a Loan and its Related Security by the Seller pursuant to and in accordance with the Transaction Documents, the Bond Trustee shall release such Loan and its Related Security from the Security on the date of the repurchase. 

Section 7.03 Disposal of Substitution Assets. 

Upon the Cash Manager, on behalf of the Guarantor, making a disposal of any Substitution Asset secured pursuant to the
Security, the Bond Trustee shall, if so requested in writing by the Cash Manager (but at the sole cost and expense (on an indemnity basis) of the Guarantor), but without being responsible for any loss, costs, claims or liabilities whatsoever

  
 23 

 
occasioned and howsoever arising by so acting upon such request, release, reassign or discharge from the encumbrances constituted by this Agreement the relevant Substitution Assets, provided that
the proceeds of such disposal are paid into the Guarantor Accounts from which the monies to make such Substitution Assets were originally drawn, subject to and in accordance with the provisions of the Guaranteed Deposit Account Contract, the Standby
Guaranteed Deposit Account Contract (if applicable), the Cash Management Agreement and this Agreement. 
 Section 7.04
Withdrawals from Guarantor Accounts. 
 From time to time, and for greater certainty, there shall be
deemed to be released from the Security all amounts which the Cash Manager, on behalf of the Guarantor and the Bond Trustee, is permitted to withdraw from the Guarantor Accounts pursuant to the relevant Priorities of Payments and otherwise in
accordance with the Cash Management Agreement and this Agreement, any such release to take effect immediately upon the relevant withdrawal being made provided that where the relevant amount is transferred to another Guarantor Account, it shall
thereupon become subject to the Security constituted by this Agreement in respect of such other Guarantor Account. 

ARTICLE 8 
 SUPPLEMENTAL PROVISIONS REGARDING THE BOND TRUSTEE 
 Section 8.01
Consent of Bond Trustee. 
 If a request in writing is made to the Bond Trustee by the Guarantor or any
other person to give its consent to any event, matter or thing, then: 
  

	 	 (a)
	 if the Transaction Document specifies that the Bond Trustee is required to give its consent to that event, matter or thing if certain specified
conditions are satisfied in relation to that event, matter or thing, then the Bond Trustee shall give its consent to that event, matter or thing upon being satisfied acting reasonably that those specified conditions have been satisfied; and

  

	 	 (b)
	 in any other case, the Bond Trustee may give its consent if to do so would not, in its opinion, be materially prejudicial to the interests of any of
the Holders of the Covered Bonds. 

 Section 8.02 Interests of Secured Creditors. 

Where the Bond Trustee is required to have regard to the interests of any Secured Creditor (which requirement shall only
apply at any time during which no Covered Bonds are outstanding), the Bond Trustee may consult with such Secured Creditor and may rely on the written opinion of such Secured Creditor as to whether any act, matter or thing is or is not materially
prejudicial to the interests of such Secured Creditor. 

  
 24 

 Section 8.03 Modification to Transaction Documents. 

(1) Subject to Section 8.03(2) and Section 8.03(3) below, the Bond Trustee may from time to time and at any
time without any consent or sanction of the Secured Creditors (other than any Secured Creditor who is a party to the relevant document) concur with any person in making or sanctioning any modification (subject to any modification relating to a
Series Reserved Matter): 
  

	 	 (a)
	 to the Covered Bonds of any one or more Series, the related Receipts and/or Coupons or any of the Transaction Documents provided that the Bond
Trustee is of the opinion that such modification will not be materially prejudicial to the interests of the Holders of Covered Bonds of any series and notice of such modification is given to the Rating Agencies prior to such modification becoming
effective; or 

  

	 	 (b)
	 to the Covered Bonds of any one or more Series, the related Receipts and/or Coupons or any of the Transaction Documents which in the Bond
Trustee’s opinion is of a formal, minor or technical nature or is made to correct a manifest error or an error established as such to the satisfaction of the Bond Trustee, or to comply with mandatory provisions of law. In establishing whether
an error is established as such, the Bond Trustee may have regard to any evidence which the Bond Trustee considers reasonable to rely upon and may, but shall not be obliged to, have regard to all or any of the following:

  

	 	 (i)
	 a certificate from any of the Arrangers: 

  

	 	 (1)
	 stating the intention of the parties to the relevant Transaction Document; 

 

	 	 (2)
	 confirming nothing has been said to or by investors or any other parties which is in any way inconsistent with the stated intention; and

  

	 	 (3)
	 stating the modification to the relevant Transaction Document is required to reflect such intention; or 

 

	 	 (ii)
	 Rating Agency Confirmation in respect of such modification. 

(2) The prior consent of the Bond Trustee and the other Secured Creditors (other than the Bond Trustee) will not be
required or obtained in relation to the accession of any New Seller to the Program provided that the relevant conditions precedent set out in the Dealership Agreement and the Mortgage Sale Agreement are satisfied at the time of the intended
accession. 
 (3) The Bond Trustee shall be obliged to concur in and to effect any modifications to the
Transaction Documents that are requested by the Guarantor or the Cash Manager to accommodate the accession of a New Seller to the Program subject to the provisions of Section 

  
 25 

 
8.03(1) being satisfied and, provided that (i) the Guarantor or the Cash Manager, as the case may be, has certified to the Bond Trustee in writing that such modifications are required in
order to accommodate the addition of New Sellers to the Program and (ii) all other conditions precedent to the accession of a New Seller to the Program set out in the Dealership Agreement, the Mortgage Sale Agreement, the Servicing Agreement,
the Guarantor Agreement and any other Transaction Documents have been satisfied at the time of the accession. 

(4) Each Secured Creditor agrees that any such modifications effected pursuant to this Section 8.03 shall be binding
on it and unless the Bond Trustee otherwise agrees, notice thereof shall be given by the Servicer to the Secured Creditors as soon as practicable after the modifications have been made. 

(5) Each of the Secured Creditors and the Bond Trustee, on behalf of the holders of the Covered Bonds, agrees from time
to time to do and perform such other and further acts and execute and deliver any and all such other documents and instruments as may be required by law or requested by the other party at the other party’s expense to establish, maintain and
protect the rights and remedies of the other party and carry out and effect the intent and purpose of this Section 8.03. 

ARTICLE 9 
 REMUNERATION OF THE BOND TRUSTEE 
 Section 9.01 Remuneration.

 (1) Subject to the terms of the Trust Deed (and subject also as hereinafter provided), the Issuer (or,
following an Issuer Event of Default and service of a Notice to Pay on the Guarantor, the Guarantor) shall (subject as hereinafter provided) pay to the Bond Trustee an annual fee of such amount and payable on such dates as shall from time to time be
agreed in writing by the Issuer and the Bond Trustee. All such remuneration shall be payable in accordance with the Guarantee Priority of Payments or the Post-Enforcement Priority of Payments, as applicable. Such remuneration shall accrue from day
to day and shall be payable up to and including the date when all of the Obligations have been paid and/or discharged and the Bond Trustee has released, reassigned and/or discharged the Collateral as provided in Article 7. 

(2) The Issuer (or, following an Issuer Event of Default and service of a Notice to Pay on the Guarantor, the Guarantor)
shall in addition pay to the Bond Trustee an amount equal to the amount of any GST chargeable in respect of its remuneration hereunder subject to the Bond Trustee issuing to the Issuer or (as the case may be) the Guarantor a proper GST invoice in
respect thereof. 
 Section 9.02 Additional Remuneration. 

In the event of an Issuer Event of Default, a Guarantor Event of Default, Potential Issuer Event of Default or Potential
Guarantor Event of Default occurring or in the event of the Bond Trustee finding it expedient or necessary or being required by the Issuer or (as the case may be) the Guarantor to undertake any duties which the Bond Trustee and the Issuer or the
Guarantor 

  
 26 

 
agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Bond Trustee under or pursuant to this Agreement, the Issuer or the Guarantor shall pay to the Bond
Trustee such additional remuneration as shall be agreed between the Bond Trustee and the Guarantor. 
 Section 9.03
Disputes. 
 In the event of the Bond Trustee and the Issuer (or, following an Issuer Event of Default
and service of a Notice to Pay on the Guarantor, the Guarantor) failing to agree upon the amount of any remuneration from time to time pursuant to Section 9.01 or to agree in a case to which Section 9.02 above applies, upon whether such
duties are of an exceptional nature or otherwise outside the scope of the normal duties of the Bond Trustee hereunder or upon the amount of such additional remuneration, such matters shall be determined by a merchant or investment bank (acting as an
expert and not as an arbitrator) selected by the Bond Trustee and approved by the Issuer or the Guarantor or, failing such approval, nominated by a sole arbitrator in accordance with the (screened) appointment procedure provided in the Simplified
Arbitration Rules of the ADR Institute of Canada Inc. then currently in effect, the expenses being involved in such nomination and the fees of such investment bank being payable by the Issuer or the Guarantor, and the decision of any such merchant
or investment bank shall be final and binding on the Issuer or the Guarantor and the Bond Trustee. 
 Section 9.04
Expenses. 
 In addition to remuneration hereunder, the Issuer (or, following an Issuer Event of Default
and service of a Notice to Pay on the Guarantor, the Guarantor) shall on written request, pay all Liabilities which the Bond Trustee may properly incur in relation to the negotiation, preparation and execution of, the exercise of its powers and the
performance of its duties under or pursuant to this Agreement and any of the other Transaction Documents to which the Bond Trustee is a party including but not limited to travelling and legal expenses and any stamp, issue, registration, documentary
and other similar taxes or duties paid or payable by the Bond Trustee in connection with any action taken or contemplated by or on behalf of the Bond Trustee for enforcing this Agreement or any of the other Transaction Documents to which it is
party. 
 ARTICLE 10 
 APPOINTMENT OF NEW BOND TRUSTEE AND REMOVAL OF BOND TRUSTEE 

Section 10.01 Power of Guarantor. 
 The power to appoint or remove the Bond Trustee or any new Bond Trustee shall be governed in accordance with the terms of the Trust Deed. 

Section 10.02 Power of Bond Trustee. 

Other than as specified herein, the powers and obligations of the Bond Trustee shall be governed in accordance with the
terms of the Trust Deed. 

  
 27 

 Section 10.03 Multiple Bond Trustees. 

The determination of procedures, powers and obligations of a Bond Trustee where there is more than one bond trustee shall
be governed in accordance with the terms of the Trust Deed. 
 ARTICLE 11 

RETIREMENT OF BOND TRUSTEE 
 The retirement of the Bond Trustee shall be governed in accordance with the terms of the Trust Deed. 
 ARTICLE 12 
 NON-PETITION 

The Bond Trustee agrees that, other than pursuant to the exercise of its rights and remedies on behalf of the Secured
Creditors in accordance with this Agreement or any of the other Transaction Documents, and each Secured Creditor agrees that by taking the benefit of this Agreement and the Security, shall not institute or join any other Person or entity in
instituting against, or with respect to, the Guarantor, or any of the general partners of the Guarantor, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such Covered Bonds shall have been outstanding. The foregoing provision shall survive the termination of this Agreement by any of the parties hereto. 

ARTICLE 13 
 GENERAL 
 Section 13.01 Notices, etc. 

(1) Any notice, direction or other communication given under this Agreement shall be in writing and given by delivering
it or sending it by prepaid first class mail to, in the case of the Guarantor and the Bond Trustee, the address provided below and in the case of the Secured Creditors other than the Bond Trustee, to the address provided for such Person in Schedule
4 hereto, or by facsimile transmission to facsimile number set forth below, as applicable: 
  

	 	 (a)
	 in the case of the Guarantor to: 

 BMO Covered Bond Guarantor Limited Partnership 
 c/o Bank of
Montreal 
 18th Floor, First Canadian Place 
 100 King Street West 
 Toronto, Ontario M5X 1A1 

Attention: Senior Manager, Securitization Finance and Operations 

Fax: (416) 867-4166 

  
 28 

	 	 (b)
	 in the case of the Bond Trustee to: 

 Computershare Trust Company of Canada 
 100 University Avenue

 9th Floor, North Tower 
 Toronto, Ontario 
 Canada M5J 2Y1 

Attention:      Manager, Corporate Trust 

Fax:                 (416) 981-9777

 (2) Any such communication will be deemed to have been validly and effectively given (i) if personally
delivered, on the date of such delivery if such date is a Canadian Business Day and such delivery was made prior to 4:00 p.m. (Toronto time) and otherwise on the next Canadian Business Day, (ii) in the case of first class post, when it would be
received in the ordinary course of the post, or (iii) if transmitted by facsimile transmission on the Canadian Business Day following the date of transmission provided the transmitter receives a confirmation of successful transmission.

 (3) Any party may change its address for notice, or facsimile contact information for service from time to
time by notice given in accordance with the foregoing and any subsequent notice shall be sent to such party at its changed address, or facsimile contact information, as applicable. 

Section 13.02 GST. 
 If any sums which are payable by the Guarantor under Section 3.04 or Section 4.07 of this Agreement are subject to GST, the Guarantor shall make payment of the amount in respect of GST, where
the payment is not already inclusive of GST to the relevant person in accordance with the order of priorities set out in those Sections. 
 Section 13.03 No Merger. 
 This Agreement shall not operate by way of
merger of any of the Obligations and no judgment recovered by the Bond Trustee shall operate by way of merger of, or in any way affect, the Security, which is in addition to, and not in substitution for, any other security now or hereafter held by
the Bond Trustee in respect of the Obligations. 
 Section 13.04 Further Assurances. 

(1) The Guarantor shall from time to time, whether before or after the Security shall have become enforceable
(i) do, or cause to be done, all acts and things and execute and deliver, or cause to be executed and delivered, all transfers, assignments and instruments, (ii) give, or 

  
 29 

 
cause to be given, any notices to any Governmental Authority or Person, and (iii) obtain, or cause to be obtained, any approvals from any Governmental Authority or Person, in each case, as
the Bond Trustee may reasonably require: 
  

	 	 (a)
	 for protecting the Collateral; 

  

	 	 (b)
	 for perfecting the Security; 

  

	 	 (c)
	 to obtain control, as determined pursuant to the PPSA, of any Collateral that consists of investment property; 

 

	 	 (d)
	 for exercising all powers, authorities and discretions conferred upon the Bond Trustee; and 

 

	 	 (e)
	 for otherwise enabling the Bond Trustee to obtain a first priority perfected security interest in the Collateral (subject only to Permitted Security
Interests) and to exercise the rights and powers herein granted. 

 (2) The Guarantor shall,
from time to time after the Security has become enforceable (i) give, or cause to be given, any notices to any Governmental Authority or Person, (ii) obtain, or cause to be obtained, any approvals from any Governmental Authority or Person,
and (iii) do, or cause to be done, all other acts and things and execute and deliver, or cause to be executed and delivered, all such transfers, assignments and instruments, in each case, as the Bond Trustee may require to effect the sale,
transfer or other disposition of the Collateral in connection with its realization. 
 Section 13.05 Amendments.

 Subject to Section 21.2 of the Trust Deed, and except as otherwise expressly provided in this Agreement,
the provisions in this Agreement may be amended or modified only by written agreement of all of the parties hereto, and each proposed amendment or waiver of this Agreement that is considered by the Guarantor to be a material amendment or waiver
shall be subject to Rating Agency Confirmation. 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 Rating Agency Confirmation provided that failure to
deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement. The Guarantor (or the Cash Manager on its behalf) shall deliver notice to CMHC of any material amendment to this Agreement, provided that
failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement. 

Section 13.06 Supplemental Security. 

This Agreement is in addition to and without prejudice to all other security now held or which may hereafter be held by
the Bond Trustee. 

  
 30 

 Section 13.07 Successors and Assigns. 

None of the parties hereto may assign or transfer any of their rights or obligations under this Agreement without the
prior written consent of the other party and the Guarantor having obtained Rating Agency Confirmation in respect of such assignment. 
 Section 13.08 Severability. 
 If any provision of this
Agreement shall be deemed by any court of competent jurisdiction to be invalid or void, the remaining provisions shall remain in full force and effect. 
 Section 13.09 Governing Law. 
 (1) This Agreement
shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario (other than certain other provisions relating to real property located outside of the Province of Ontario which will be governed by the law of
the jurisdiction in which such property is located) and the laws of Canada applicable therein. 
 (2) The
Guarantor hereby (i) irrevocably submits to the non-exclusive jurisdiction of any court sitting in the Province of Ontario over any suit, action or proceeding arising out of or relating to this Agreement; (ii) irrevocably agrees that all
claims in respect of any suit, action or proceeding may be heard and determined in such court; and (iii) irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. The Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other manner provided by law. Nothing in this section shall affect the right of the Bond Trustee to serve process in any manner permitted by law or limit the rights of the Bond Trustee to
bring proceedings against the Guarantor in the courts of any other jurisdiction. 
 (3) The Guarantor hereby
consents generally in respect of any legal action or proceedings arising out of or in connection with this Agreement to the giving of any relief or the issue of any process in connection with such action or proceedings, including, without
limitation, the making, enforcement or execution against the Guarantor of any order or judgment which may be made or given in such action or proceedings. 
 (4) To the extent that the Guarantor has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process (whether service of notice, attachment prior to judgment,
attachment in the aid of execution, execution or otherwise) with respect to itself or its assets, the Guarantor hereby irrevocably waives, to the fullest extent permitted by law, such immunity in respect of its obligations under this Agreement.

 Section 13.10 Counterparts. 

This Agreement may be executed in counterparts (including by way of facsimile) and all such counterparts taken together
shall be deemed to constitute one and the same instrument. 

  
 31 

 [The remainder of this page is intentionally left blank] 

  
 32 

 IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above written. 
  

			
	 BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its general partner BMO COVERED BOND GP, INC.

		
	 Per:    
	 	 /s/ Chris Hughes

		 	 Name: Chris Hughes
 Title:   President and Secretary

  

			
	 COMPUTERSHARE TRUST COMPANY OF CANADA

		
	 Per:    
	 	 /s/ Sean Pigott

		 	 Name: Sean Pigott
 Title:   Corporate Trust Officer

		
	 Per:    
	 	 /s/ Stanley Kwan

		 	 Name: Stanley Kwan
 Title:   Associate Trust Officer

 ADDRESS OF DEBTOR 

Location of Chief Executive Office: 
 Suite 6100 
 1 First Canadian Place 

100 King Street West 
 Toronto, ON M5X 1B8 

  
 33 

 SCHEDULE 1 

Additional Representations and Warranties of Guarantor 

 

	 (a)
	 No encumbrance exists over or in respect of any of its assets except for encumbrances created by this Agreement and Permitted Security Interests.

  

	 (b)
	 It is validly formed and existing as a limited partnership under the LP Act pursuant to a declaration of limited partnership filed under the LP Act.

  

	 (c)
	 Since the date of registration of its limited partnership declaration there has been no material adverse change in its financial position or
prospects. 

  

	 (d)
	 It is not the subject of any governmental or official investigation or inquiry and to its knowledge, none is progressing or pending or has been
threatened in writing against it, which may have a material adverse effect on any of it, any relevant Transaction Document (for greater certainty, the term “relevant Transaction Documents” in this Schedule “A” does not
include the Guarantor Agreement), and/or the issue and offering of Covered Bonds under the Program. 

  

	 (e)
	 No litigation, arbitration or administrative proceedings of or before any court, tribunal or governmental body has been commenced or, so far as it
is aware are pending or threatened against it or any of its assets or revenues which may have a material adverse effect on it, any relevant Transaction Document and/or the issuance and offering of Covered Bonds under the Program.

  

	 (f)
	 The Managing GP has at all times carried on and conducted the affairs and business of the Guarantor in the name of the Guarantor as a separate
entity and in accordance with the Guarantor Agreement and all laws and regulations applicable to it and shall continue to do so throughout the continuation of the Partnership. 

 

	 (g)
	 The Managing GP has at all times kept or procured the keeping of proper books of account and records for the Guarantor separate from any person or
entity. 

  

	 (h)
	 The Managing GP for and on behalf of the Guarantor has duly executed the relevant Transaction Documents. 

 

	 (i)
	 Its entry into and the execution (and, where appropriate, delivery) of the relevant Transaction Documents and the performance by it of its
obligations under the relevant Transaction Documents do not and will not conflict with or constitute a breach or infringement of: 

  

	 	 (i)
	 the Declaration; 

  

	 	 (ii)
	 any law applicable to it; or 

  

	 	 (iii)
	 any agreement, indenture, contract, mortgage, deed or other instrument to which it is a party or which is binding on it or any of its assets.

  
 1 

	 (j)
	 The obligations expressed to be assumed by it under the relevant Transaction Documents are legal and valid obligations, binding on it and
enforceable against it in accordance with their terms. 

  

	 (k)
	 The Transaction Documents to which it is a party have been entered into in good faith for its own benefit and on arm’s length commercial terms.

  

	 (l)
	 It is not in breach of or default under any agreement, indenture, contract, mortgage, deed or other instrument to which it is a party or which is
binding on it or any of its assets which would be reasonably likely to have a material adverse effect on the ability of the Guarantor to perform its obligations under the Transaction Documents, or have a material adverse effect on the Collateral.

  

	 (m)
	 It is not necessary that any relevant Transaction Document in relation to it be filed, recorded or enrolled with any court or other authority in any
jurisdiction in which the assets of the Partnership are located. 

  

	 (n)
	 It does not require the consent of any other party except for such consents as have been obtained by it prior to the date hereof or the consent,
licence, approval or authorisation of any Governmental Authority in connection with the entering into or performance of the relevant Transaction Documents. 

 

	 (o)
	 This Agreement and the other Transaction Documents have been properly authorized by all necessary action on the part of the Guarantor and its
partners in accordance with the term of the Guarantor Agreement and constitutes a legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms except as may be limited by applicable bankruptcy, insolvency,
moratorium, and other similar laws affecting creditors’ rights generally and except that orders for specific performance, injunctions and other equitable remedies are discretionary remedies which may be granted only in the discretion of the
court; the making and performance of this Agreement will not result in the breach of, constitute a default under, contravene any provision of, or result in the creation of, any lien upon the Collateral other than a Permitted Security Interest.

  

	 (p)
	 There are no futures accounts currently in existence. In the event that any futures accounts were to come into existence, it will take all necessary
actions in connection therewith. 

  

	 (q)
	 Consumer goods held by the Guarantor are not material in value. 

 

	 (r)
	 The Guarantor and/or the Bond Trustee have control over all investment property. 

  
 2 

 SCHEDULE 2 

Additional Covenants of Guarantor 
 The Guarantor covenants and agrees with the Bond Trustee (for and on behalf of itself and the Secured Creditors) that: 
  

	 (a)
	 It will, at all times, carry on and conduct its affairs and business in its own name (or if necessary in the name of the Managing GP) as a separate
entity and in accordance with the Guarantor Agreement and applicable laws. 

  

	 (b)
	 It will not, without the Bond Trustee’s prior written consent, sell, lease or otherwise dispose of any of the Collateral, except in accordance
with the other Transaction Documents. 

  

	 (c)
	 It will not incur any indebtedness in respect of borrowed money or give any guarantee or indemnity in respect of any indebtedness, except pursuant
to the terms of the Transaction Documents or in connection with a Permitted Security Interest. 

  

	 (d)
	 It will, at its own expense, promptly and duly authorize, execute and deliver any further instruments and documents, and take any further action,
that the Bond Trustee may request for the purpose of obtaining or preserving the full benefits of, and the rights and powers granted by, this Agreement and any of the other Transaction Documents (including the filing of any financing statements or
financing change statements under any applicable legislation with respect to the Security Interest created by this Agreement). 

  

	 (e)
	 It will give notice in writing to the Bond Trustee of the occurrence of any Guarantor Event of Default, Potential Guarantor Event of Default and/or
service of a Guarantor Acceleration Notice (such notice to be effected by the delivery of a copy of the Guarantor Acceleration Notice to the Bond Trustee) immediately upon becoming aware thereof and without waiting for the Bond Trustee to take any
further action. 

  

	 (f)
	 It will, at all times, comply with the obligations and provisions binding upon it under and pursuant to this Agreement and the other relevant
Transaction Documents. 

  

	 (g)
	 It will provide prior written notice to each Rating Agency if the location of the chief executive office of the Guarantor or the Managing GP is to
be other than in the Province of Ontario; 

  

	 (h)
	 It will notify the Bond Trustee promptly upon becoming aware of (1) any change in the issuer’s jurisdiction in respect of any
uncertificated securities that are Collateral or any change in a securities intermediary’s jurisdiction in respect of any security entitlements or securities accounts that are Collateral, or (2) any change in the futures
intermediary’s jurisdiction if the collateral is a futures contract or a futures account; 

  

	 (i)
	 It will not, after the date of this Agreement, establish and maintain any securities accounts with any securities intermediary unless (1) it
gives the Bond Trustee 30 days’ 

  
 1 

	 	
prior written notice of its intention to establish such new securities account, (2) such securities intermediary is reasonably acceptable to the Bond Trustee and (3) the Bond Trustee,
the securities intermediary and the Guarantor (i) execute and deliver a control agreement with respect to such securities account that is in form and substance reasonably acceptable to the Bond Trustee or (ii) transfer the security
entitlements in such securities account into a securities account in the name of the Guarantor, all in accordance with the terms of this Agreement. 

  

	 (j)
	 It will not, after the date of this Agreement, establish and maintain any futures accounts with any futures intermediary unless (1) it gives
the Bond Trustee 30 days’ prior written notice of its intention to establish such new futures account, (2) such futures intermediary is reasonably acceptable to the Bond Trustee and (3) the Bond Trustee, the futures intermediary and
the Guarantor execute and deliver an agreement with respect to such futures account in accordance with Section 1(2)(d)(ii) of the PPSA that is in form and substance reasonably acceptable to the Bond Trustee; provided that such agreement shall
not be required where the Bond Trustee is the futures intermediary with which the futures contract is carried. 

  

	 (k)
	 It will not create or permit to subsist any Adverse Claim whatsoever (unless arising by operation of law and not within the control of the Guarantor
pursuant to the Transaction Documents, including this Agreement) upon the whole or any part of its assets, including the Collateral, or its undertaking, present or future. 

 

	 (l)
	 It will not change its name or amalgamate with any other corporation without first giving notice to the Bond Trustee of its new name and the names
of all amalgamating corporations and the date when such new name or amalgamation is to become effective. 

  

	 (m)
	 It will not change its chief executive office, or the jurisdiction of its incorporation or formation, or establish a new location for any of its
Collateral unless (i) it shall have given to the Bond Trustee not less than 30 days’ prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the
Bond Trustee may reasonably request, and (ii) all filings have been made and all other actions taken that are required in order for the Bond Trustee to continue at all times following such change to have a valid and perfected first priority
Security Interest in respect of all of the Collateral. 

  
 2 

 SCHEDULE 3 

Post-Enforcement Priority of Payments 
  

	 (a)
	 first, in or towards satisfaction of pro rata and pari passu according to the respective amounts thereof of:

  

	 	 (i)
	 all amounts due and payable or to become due and payable to the Bond Trustee under the provisions of the Trust Deed with respect to the performance
of its obligations hereunder and under the Trust Deed together with interest and applicable GST (or other similar taxes) chargeable on the supply in respect of which the payment is made as provided therein; and 

 

	 	 (ii)
	 all amounts due and payable or to become due and payable to the Bond Trustee or any Receiver under the provisions of this Agreement together with
interest and applicable GST (or other similar taxes) chargeable on the supply in respect of which the payment is made as provided therein; and 

  

	 (b)
	 second, in or towards satisfaction pro rata and pari passu according to respective amounts thereof of any remuneration then due
and payable to the Agents under or pursuant to the Agency Agreement together with applicable GST (or other similar taxes) thereon to the extent provided therein; 

 

	 (c)
	 third, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof, of:

  

	 	 (i)
	 any remuneration then due and payable to the Servicer and any costs, charges, liabilities and expenses then due or to become due and payable to the
Servicer under the provisions of the Servicing Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Servicer in excess of $150,000;

  

	 	 (ii)
	 any remuneration then due and payable to the Cash Manager and any costs, charges, liabilities and expenses then due or to become due and payable to
the Cash Manager under the provisions of the Cash Management Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Cash Manager in excess of $150,000;

  

	 	 (iii)
	 amounts due to the Account Bank or, as applicable, the Standby Account Bank (including costs) pursuant to the terms of the Bank Account Agreement
or, as applicable, the Standby Bank Account Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Account Bank or, as applicable, the Standby Account
Bank in excess of $150,000; and 

  
 3 

	 	 (iv)
	 amounts due to the Custodian pursuant to the terms of the Mortgage Sale Agreement, together with applicable GST (or other similar taxes) thereon to
the extent provided therein, other than any Indemnity Amounts payable to the Custodian in excess of $150,000; 

  

	 (d)
	 fourth, to pay pro rata and pari passu according to the respective amounts thereof, of: 

 

	 	 (i)
	 any amounts due and payable to the Interest Rate Swap Provider pro rata and pari passu according to the respective amounts thereof
(including any termination payment (but excluding any Excluded Swap Termination Amounts)) pursuant to the terms of the Interest Rate Swap Agreement; 

  

	 	 (ii)
	 the amounts due and payable to the Covered Bond Swap Provider pro rata and pari passu in respect of each relevant Series of Covered
Bonds to the Covered Bond Swap Agreement (including any termination payment due and payable by the Guarantor under the Covered Bond Swap Agreement (but excluding any Excluded Swap Termination Amount)) in accordance with the terms of the Covered Bond
Swap Agreement; and 

  

	 	 (iii)
	 the amounts due and payable under the Covered Bond Guarantee, to the Bond Trustee on behalf of the holders of the Covered Bonds pro rata and
pari passu in respect of interest and principal due and payable on each Series of Covered Bonds, 

 provided that if the amount available for distribution under this paragraph (d) (excluding any amounts received from the Covered Bond Swap Provider in respect of amounts referred to in (d)(ii) above)
would be insufficient to pay the Canadian Dollar Equivalent of the amounts due and payable under the Covered Bond Guarantee in respect of each Series of Covered Bonds under (d)(iii) above, the shortfall will be divided amongst all such Series of
Covered Bonds on a pro rata basis and the amount payable by the Guarantor in respect of each relevant Series of Covered Bonds under (d)(ii) above to the Covered Bond Swap Provider will be reduced by the amount of the shortfall applicable to
the Covered Bonds in respect of which such payment is to be made; 
  

	 (e)
	 fifth, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof, of any Excluded Swap
Termination Amounts due and payable by the Guarantor to the relevant Swap Provider under the relevant Swap Agreement; 

  

	 (f)
	 sixth, to pay or provide for pro rata and pari passu according to the respective amounts thereof, any Indemnity Amounts payable
to the Servicer, the Cash Manager, the Account Bank (or the Standby Account Bank, as applicable) and the Custodian, to the extent not paid pursuant to paragraph (c) above; 

 

	 (g)
	 seventh, in or towards repayment in full of all amounts outstanding under the Intercompany Loan Agreement; 

  
 4 

	 (h)
	 eighth, towards payment of any indemnity amount due to the Partners pursuant to the Guarantor Agreement; 

 

	 (i)
	 ninth, in or towards payment of the fee due to the Corporate Services Provider; and 

 

	 (j)
	 tenth, thereafter any remaining moneys will be applied in or towards payment to the Partners pursuant to the Guarantor Agreement.

  
 5 

 SCHEDULE 4 

Address For Notice 
  

	 	 (a)
	 in the case of the Guarantor to: 

 BMO Covered Bond Guarantor Limited Partnership 
 c/o Bank of
Montreal 
 18th Floor, 1 First Canadian Place 

100 King Street West 
 Toronto, Ontario 
 Canada M5X 1A1 

Attention:          Senior Manager, Securitization Finance and

                    
      Operations 

Fax:                  
416-867-4166 
  

	 	 (b)
	 in the case of the Bond Trustee to: 

 Computershare Trust Company of Canada 
 100 University Avenue

 11th Floor 
 Toronto, Ontario 
 Canada M5J 2Y1 

Attention:            Manager, Corporate Trust 

Fax:                   
  (416) 981-9777 

  
 1

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