Document:

ex4_3.htm

 Exhibit 4.3 

 

 MORTGAGE SALE 

 AGREEMENT 

 

 by and among 

 

 ROYAL BANK OF CANADA 

 

 as Seller 

 

 and 

 

 RBC COVERED BOND GUARANTOR 

 LIMITED PARTNERSHIP 

 

 as Purchaser 

 

 and 

 

 COMPUTERSHARE TRUST COMPANY OF CANADA 

 

 as Bond Trustee 

 

 

 

 October 25, 2007 

 

    

    

    

 

 TABLE OF CONTENTS 

 

 Page 

	
 ARTICLE 1 INTERPRETATION 

	   1 
	    	
 1.1 

	
 Definitions and Interpretations 

	 1 
	
 ARTICLE 2 AMOUNTS AND TERMS OF THE PURCHASES 

	 2 
	    	
 2.1 

	
 Purchase Facility 

	 2 
	    	
 2.2 

	
 Making Purchases 

	 2 
	    	
 2.3 

	
 Repurchase upon Breach or Adverse Claim 

	 5 
	    	
 2.4 

	
 Optional Repurchase Provisions 

	 6 
	    	
 2.5 

	
 Further Advances 

	 6 
	    	
 2.6 

	
 Payments and Computations, Etc. 

	 6 
	
 ARTICLE 3 CONDITIONS OF PURCHASE 

	 7 
	    	
 3.1 

	
 Conditions Precedent to Initial Purchase 

	 7 
	    	
 3.2 

	
 Conditions Precedent to All Purchases 

	 8 
	
 ARTICLE 4 REPRESENTATIONS AND WARRANTIES 

	 10 
	    	
 4.1 

	
 Seller Representations and Warranties 

	 10 
	    	
 4.2 

	
 Purchaser Representations and Warranties 

	 14 
	
 ARTICLE 5 COVENANTS 

	 15 
	    	
 5.1 

	
 Seller Covenants 

	 15 
	
 ARTICLE 6 INDEMNIFICATION 

	 17 
	    	
 6.1 

	
 Indemnities by the Seller 

	 17 
	
 ARTICLE 7 PERFECTION OF THE SALE 

	 18 
	    	
 7.1 

	
 Perfection 

	 18 
	    	
 7.2 

	
 Registration 

	 19 
	    	
 7.3 

	
 Acts Prior to Perfection 

	 19 
	    	
 7.4 

	
 Further Assurances 

	 19 
	    	
 7.5 

	
 Power of Attorney 

	 19 
	    	
 7.6 

	
 Limitation on Power of Attorney 

	 20 
	    	
 7.7 

	
 Costs 

	 20 
	
 ARTICLE 8 PRE-EMPTIVE RIGHT 

	 21 
	    	
 8.1 

	
 Pre-Emptive Right 

	 21 
	    	
 8.2 

	
 Acceptance 

	 21 
	    	
 8.3 

	
 Offers to Others 

	 21 
	    	
 8.4 

	
 Repurchase 

	 21 
	    	
 8.5 

	
 Loans and Related Security Files 

	 22 
	
 ARTICLE 9 MISCELLANEOUS 

	 22 
	    	
 9.1 

	
 The Bond Trustee 

	 22 
	    	
 9.2 

	
 Amendments, Etc. 

	 23 

 

    

    

    

 

	    	
 9.3 

	
 Notices, Etc. 

	 23 
	    	
 9.4 

	
 Assignability 

	 23 
	    	
 9.5 

	
 Costs and Expenses 

	 24 
	    	
 9.6 

	
 Confidentiality 

	 25 
	    	
 9.7 

	
 Governing Law and Jurisdiction 

	 25 
	    	
 9.8 

	
 Execution in Counterparts 

	 25 
	    	
 9.9 

	
 Entire Agreement 

	 25 
	    	
 9.10 

	
 Headings 

	 26 

 

 

 SCHEDULES 

 

 SCHEDULE 1 — LOAN ELIGIBILITY CRITERIA 

 

 SCHEDULE 2.2(b) – FORM OF LOAN PURCHASE NOTICE 

 

 SCHEDULE 2.2(g)– FORM OF SELLER ASSIGNMENT 

 

 SCHEDULE 4.1(l) – LOCATION OF SELLER 

 

 SCHEDULE 8.1 – FORM OF LOAN OFFER NOTICE 

 

 SCHEDULE 8.2 – FORM OF LOAN OFFER REPURCHASE NOTICE 

 

 

 

 

 

 

  

 - 2 - 

    

 

 MORTGAGE SALE AGREEMENT 

 

 THIS MORTGAGE SALE AGREEMENT made as of the 25th day of October, 2007. 

 

 BY AND AMONG : 

 

 ROYAL BANK OF CANADA, a bank named in Schedule I to the Bank Act (Canada), whose executive office is at Royal Bank Plaza, South Tower, 8th Floor, 200 Bay Street, Toronto, Ontario, Canada M5J 2J5 (hereinafter referred to as the “Seller”) 

 

 - and - 

 

 RBC COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under the laws of the Province of Ontario, whose registered office is at the Royal Bank Plaza, 9th Floor, 200 Bay Street, Toronto, Ontario, Canada, M5J 2J5 by its managing general partner RBC COVERED BOND GP INC. (hereinafter referred to as the “Purchaser”) 

 

 - and - 

 

 COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company formed under the laws of Canada whose registered office is at 100 University Avenue, 9th Floor, North Tower, Toronto, Ontario, Canada M5J 2Y1 in its capacity as the Bond Trustee (hereinafter the “Bond Trustee”). 

 

 RECITALS: 

 

	
 A. 

	
 The Seller desires from time to time to sell, transfer and assign Eligible Loans on a fully serviced basis, and the Purchaser desires to acquire such Eligible Loans on and subject to the terms and conditions of this Agreement. 

 

	
 B. 

	
 Contemporaneous with their execution and delivery of this Mortgage Sale Agreement each of the parties hereto has executed and delivered a Servicing Agreement dated as of the date hereof. 

 

 THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the respective covenants, representations, agreements and warranties of the parties contained herein and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties covenant and agree as follows: 

 

 ARTICLE 1 

 INTERPRETATION 

 

	
 1.1 

	
 Definitions and Interpretations 

 

 The Master Definitions and Construction Agreement dated as of October 25, 2007 made between the parties to the Transaction Documents on the Programme Date, as the same may be amended, varied or supplemented from time to time with the consent of the parties thereto, is expressly and specifically incorporated into this Agreement and, accordingly, all capitalized terms used herein without definition shall have the meanings ascribed thereto in the Master Definitions and Construction Agreement, and this Agreement shall be construed in accordance with the interpretation provisions set out in Section 2 of the Master Definitions and Construction Agreement. 

 

    

    

    

 

 ARTICLE 2 

 AMOUNTS AND TERMS OF THE PURCHASES 

 

	
 2.1 

	
 Purchase Facility 

 

 On and subject to the terms and conditions hereinafter set forth, the Purchaser hereby agrees to make purchases of Eligible Loans pursuant to Section 2.2(a) from time to time. 

 

	
 2.2 

	
 Making Purchases 

 

	
    

	
 (a) 

	
 The Purchaser may from time to time enquire of the Seller, or the Seller may notify the Purchaser, as to the availability of Eligible Loans and their Related Security to be acquired by the Purchaser from the Seller pursuant to this Agreement. 

 

	
    

	
 (b) 

	
 Upon receiving notice or confirmation, as the case may be, that the Seller has Eligible Loans and their Related Security available for sale, the Seller may from time to time deliver an irrevocable written notice in the form of Schedule 2.2(a) (each, a “Loan Purchase Notice”) to the Purchaser in accordance with Section 9.4 (other than the Loan Purchase Notice in respect of the first Purchase Date, each such Loan Purchase Notice must be received by the Purchaser prior to 11:00 a.m. (Toronto time) at least three (3) Business Days prior to the related Purchase Date or, in the case of the initial Purchase Date, prior to 11:00 a.m. (Toronto time) on such date).  The Loan Purchase Notice for the first Purchase Date shall be delivered on the Purchase Date. 

 

	
    

	
 (c) 

	
 Each Loan Purchase Notice for a purchase of Eligible Loans shall: 

 

	
    

	
 (i) 

	
 specify the date (each, a “Purchase Date”) on which the purchase and sale of the Eligible Loans and their Related Security identified in such Loan Purchase Notice is to take place and the Cut-Off Date for such purchase, provided that such Purchase Date (other than the first Purchase Date for which the Purchase Date shall be November 5, 2007) must be a Guarantor LP Payment Date; 

 

	
    

	
 (ii) 

	
 specify the Aggregate Purchase Price to be paid by the Purchaser to the Seller on the Purchase Date for the Eligible Loans identified in such Loan Purchase Notice; 

 

	
    

	
 (iii) 

	
 contain a listing of the Eligible Loans to be purchased on the Purchase Date including: 

 

	
    

	
 (A) 

	
 for each Eligible Loan subject to such Loan Purchase Notice: 

 

    

 - 2 - 

    

 

	
    

	
 (1) 

	
 the Seller’s identification number for such Eligible Loan; 

 

	
    

	
 (2) 

	
 the name of the Borrower in respect of such Eligible Loan; 

 

	
    

	
 (3) 

	
 the municipal street address, city, province and postal code of the related mortgaged property; 

 

	
    

	
 (4) 

	
 the insurer account number in respect any insured Eligible Loan, if applicable; 

 

	
    

	
 (5) 

	
 aggregate amount advanced in respect of the Loan; 

 

	
    

	
 (6) 

	
 the rate of interest chargeable on each such Eligible Loan as of the related Cut-Off Date; 

 

	
    

	
 (7) 

	
 if applicable, the date(s) on which adjustments in interest are to take place or may be effected by the lender pursuant to the Mortgage Terms in respect of the Loan; 

 

	
    

	
 (8) 

	
 the date on which the last payment is due in respect of such Eligible Loan; 

 

	
    

	
 (9) 

	
 the remaining amortization period in respect of such Eligible Loan; and 

 

	
    

	
 (10) 

	
 the Current Balance (excluding Capitalized Interest and Capitalized Arrears) of such Eligible Loan as of the related Cut-Off Date. 

 

	
    

	
 (B) 

	
 for all Eligible Loans subject to such Loan Purchase Notice, on an aggregate basis: 

 

	
    

	
 (1) 

	
 the highest and lowest interest rates chargeable on all of the Eligible Loans included in such Loan Purchase Notice; 

 

	
    

	
 (2) 

	
 the weighted  average amortization period for such Eligible Loans (in months); 

 

	
    

	
 (3) 

	
 the current index, prime or other reference rate(s) applicable to such Eligible Loans as at the Cut-Off Date; 

 

	
    

	
 (4) 

	
 the number of Eligible Loans identified in the Loan Purchase Notice; and 

 

	
    

	
 (5) 

	
 the aggregate Current Balance as of the related Cut-Off Date of such Eligible Loans. 

 

	
    

	
 (d) 

	
 If the Purchaser agrees to the terms and conditions set out in the Loan Purchase Notice it shall signify its acceptance thereof by executing and returning such Loan Purchase Notice to the Seller on the same day as the day of receipt thereof. 

 

    

 - 3 - 

    

 

	
    

	
 (e) 

	
 If the Purchaser fails to accept such Loan Purchase Notice within such period it shall be deemed to have declined to complete the proposed purchase on the terms and conditions set out in such Loan Purchase Notice and this Agreement. 

 

	
    

	
 (f) 

	
 Upon its acceptance of a Loan Purchase Notice, there shall exist a binding agreement between the Seller and the Purchaser for the purchase by the Purchaser from the Seller of the Eligible Loans listed in the relevant Loan Purchase Notice upon the terms and conditions of this Agreement including, without limitation, satisfaction of the conditions precedent in Section 3.1, in the case of the initial purchase, and Section 3.2, in the case of the initial purchase and all subsequent purchases. 

 

	
    

	
 (g) 

	
 On each Purchase Date specified in a Loan Purchase Notice, with respect to the Eligible Loans and their Related Security specified in such Loan Purchase Notice, together with all Collections (collectively the “Purchased Assets”) from the Cut-Off Date to the relevant Purchase Date, the Purchaser shall, upon satisfaction of the applicable conditions set forth in Article 3, pay to the Seller in same day funds an amount equal to the Aggregate Purchase Price by depositing such amount into the Seller’s Account or, if the Seller so elects in writing to the Purchaser on or before the applicable Purchase Date, the Purchaser shall credit the Seller’s Capital Account Ledger with an amount equal to all of (or the portion of the Aggregate Purchase Price not paid in cash) the Aggregate Purchase Price. Upon such payment and deposit or credit, as the case may be, all of the Seller’s beneficial ownership of such Purchased Assets subject to the related Loan Purchase Notice shall be sold, assigned and transferred to the Purchaser on a fully serviced basis effective as of the related Purchase Cut-Off Date and the Seller will execute and deliver the Seller Assignment. 

 

	
    

	
 (h) 

	
 On each Purchase Date, the Seller shall provide to the Purchaser (prior to a downgrade of the ratings of the Cash Manager below the Cash Management Deposit Ratings deliver to the Cash Manager and following a downgrade of the ratings of the Cash Manager below the Cash Management Deposit Ratings deposit in the GIC Account) in respect of the Purchased Loans and their Related Security acquired by the Purchaser on such date an amount equal to the aggregate Collections received by the Seller after the applicable Cut-Off Date and prior to such Purchase Date in respect of such Purchased Loans and their Related Security. 

 

    

 - 4 - 

    

 

	
 2.3 

	
 Repurchase upon Breach or Adverse Claim 

 

	
    

	
 (a) 

	
 If the Cash Manager or Asset Monitor give notice (each, a “Loan Repurchase Notice”) to the Seller (with a copy to the Purchaser) upon the discovery of any (i) breach of the Seller’s representations, warranties or covenants made pursuant to or in connection with this Agreement or in connection with any other Purchase Document which materially and adversely affects the interest of the Purchaser in any Purchased Loan or the value of the affected Purchased Loan; or (ii) Adverse Claim other than a Permitted Security Interest or arising through the Purchaser which materially and adversely affects the interest of the Purchaser in any Purchased Loan or the value of the affected Purchased Loan. For purposes of this Section 2.3(a), a loss or potential loss of more than 1% of the value of the affected Purchased Loan shall be deemed to be material. For greater certainty, such threshold is not intended to establish materiality for any other purpose, including, without limitation, with respect to Adverse Claims that result in a loss potential loss of 1% or less of the value of any Purchased Loan. The parties acknowledge that, for the purpose of the foregoing, if any Purchased Loan was not on the related Purchase Date an Eligible Loan, it shall be deemed to have been materially and adversely affected. Unless any such breach or Adverse Claim shall have been cured by the end of the 28th Business Day after delivery of the related Section 2.3 Notice, the Purchaser may, by written notice to the Seller (which notice shall be delivered within five days after the expiry of such 28 Business Day period without such breach or Adverse Claim having been cured), require the Seller to repurchase such Purchased Loan on the first Guarantor LP Calculation Date occurring after such 28th Business Day period. 

 

	
    

	
 (b) 

	
 As consideration for the repurchase of any Purchased Loan under this Section 2.3, the Seller shall remit the Repurchase Amount of such Purchased Loan and any other Loan secured or intended to be secured by the Related Security of such Purchased Loan on the applicable Guarantor LP Calculation Date (with the Repurchase Amount being determined as of such Guarantor LP Calculation Date), and thereupon all of the Purchaser’s right, title and interest in and to such Purchased Loan and all Collections thereon and proceeds thereof from and after such Guarantor LP Calculation Date shall be sold, assigned and transferred to the Seller effective as of such Guarantor LP Calculation Date, without recourse, representation or warranty (whether express, implied, statutory or otherwise) to, against, by or on behalf of the Purchaser save and except that (x) such Purchased Loan and proceeds thereof are free and clear of any Adverse Claim created by the Purchaser and (y) the Purchaser has the power and authority to sell, transfer and assign such Purchased Loan and the proceeds thereof to the Seller as herein provided. The Purchaser will, at the expense of the Seller, execute and deliver such assignments or other instruments of conveyance with respect to any Purchased Loan repurchased by the Seller pursuant to this Section 2.3 as may be reasonably requested.  The Purchaser shall apply an amount equal to the Repurchase Amount (less Accrued Interest and Arrears of Interest) in accordance with the Pre-Acceleration Principal Priority of Payments. 

 

    

 - 5 - 

    

 

	
 2.4 

	
 Optional Repurchase Provisions 

 

 Prior to the occurrence of an Issuer Event of Default, the Seller may from time to time offer to purchase one or more of the Purchased Loans on any Guarantor LP Payment Date at a purchase price (the “Optional Loan Repurchase Price”) equal to the aggregate Fair Market Value with respect to such Purchased Loans as of the date of such offer. If the Purchaser chooses to accept such offer and the Asset Coverage Test is satisfied on such Guarantor LP Calculation Date on a proforma basis after giving effect to such sale, (i) the Seller shall provide to the Guarantor LP (prior to a downgrade of the ratings of the Cash Manager below the Cash Management Deposit Ratings deliver to the Cash Manager and following a downgrade of the ratings of the Cash Manager below the Cash Management Deposit Ratings deposit in the GIC Account) an amount equal to the Optional Loan Repurchase Price on the related Guarantor LP Calculation Date; (ii) upon the making of such payment all of the Purchaser’s right, title and interest in and to such Purchased Loans and any Collections from the date of such offer to the relevant Guarantor LP Calculation Date shall be sold, assigned and transferred by the Purchaser to the Seller effective as of the date of such offer, without recourse, representation or warranty (whether express, implied, statutory or otherwise) to, against, by or on behalf of the Purchaser save and except that (x) such Purchased Loans and proceeds thereof are free and clear of any Adverse Claim created by the Purchaser and (y) the Purchaser has the power and authority to sell, transfer and assign such Purchased Loans and proceeds thereof as herein provided. The Purchaser will, at the expense of the Seller execute and deliver such assignments or other instruments of conveyance with respect to the Purchased Loans purchased pursuant to this Section 2.4 as may be reasonably requested. 

 

	
 2.5 

	
 Further Advances 

 

 The sale by any Seller of any Loans and their Related Security to the Purchaser shall not include any obligation to pay any Further Advance (if any), or any other such obligation relating to payment of funds to a Borrower in respect of such Loans which obligation shall at all times, and notwithstanding the sale of such Loans and their Related Security to the Purchaser, remain an obligation of the relevant Seller.  All such Further Advances in respect of the Loans and their Related Security in the Covered Bond Portfolio will be funded in accordance with the terms of the Intercompany Loan and the Guarantor LP Agreement. 

 

	
 2.6 

	
 Payments and Computations, Etc. 

 

	
    

	
 (a) 

	
 All amounts to be paid to the Cash Manager or deposited in the Guarantor LP Account, shall be paid or deposited, as the case may be, no later than 11:00 a.m. (Toronto time) on the day when due in same day funds. All amounts received after 11:00 a.m. (Toronto time) will be deemed to have been received on the immediately succeeding Business Day. 

 

	
    

	
 (b) 

	
 The Seller shall pay interest on any amount not paid or deposited by the Seller when due hereunder, at an interest rate equal to the rate of interest payable by the Purchaser on Advances under the Intercompany Loan Agreement, payable on demand. 

 

	
    

	
 (c) 

	
 All computations of interest under subsection (b) above and all computations of fees and other amounts hereunder shall be made on the basis of a year of 365 days, as the case may be, for the actual number of days elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day. 

 

	
    

	
 (d) 

	
 The Seller shall make all payments required to be made by it hereunder or under any other Purchase Document, in its personal capacity or in its capacity as Seller, without deduction, allowance or set-off regardless of any defence or counterclaim (whether based on any law, rule or policy now or hereafter issued or enacted by any Government Authority) unless required by applicable law. 

 

    

 - 6 - 

    

 

	
    

	
 (e) 

	
 Each interest rate which is calculated under this Agreement on any basis other than the actual number of days in a calendar year (the “Deemed Interest Period”) is, for the purposes of the Interest Act (Canada), equivalent to a yearly rate calculated by dividing such interest rate by the number of days in the Deemed Interest Period, then multiplying such result by 365. 

 

 ARTICLE 3 

 CONDITIONS OF PURCHASE 

 

	
 3.1 

	
 Conditions Precedent to Initial Purchase 

 

 The initial purchase by the Purchaser of Eligible Loans is subject to the conditions precedent that, as the case may be, the following shall have occurred or that the Purchaser shall have received on or before the date of such purchase the following, each in form and substance (including the date thereof) satisfactory to it, acting reasonably: 

 

	
    

	
 (a) 

	
 Executed copies of this Agreement and the other Purchase Documents. 

 

	
    

	
 (b) 

	
 A certificate of confirmation with respect to the Seller issued by the Office of the Superintendent of Financial Institutions. 

 

	
    

	
 (c) 

	
 Certified copies of all documents evidencing necessary corporate approvals. 

 

	
    

	
 (d) 

	
 A certificate of the Secretary or an Assistant Secretary of the Seller certifying the names and true signatures of the officers of the Seller authorized to sign this Agreement and the other Purchase Documents to which it is a party. Until the Purchaser receives a subsequent incumbency certificate from the Seller, the Purchaser shall be entitled to rely on the last such certificates delivered to it by the Seller. 

 

	
    

	
 (e) 

	
 A favourable opinion of counsel for the Seller, in form satisfactory to the Purchaser, acting reasonably. 

 

	
    

	
 (f) 

	
 Acknowledgements or duplicate registration copies of proper assignments, Financing Statements and other similar documents or instruments, with registration particulars stamped thereon, naming the Seller as seller or assignor and the Purchaser as purchaser or assignee, and duly filed on or before the date of such purchase under the PPSA in Ontario in order to perfect the interests of the Purchaser in the applicable Eligible Loans contemplated by this Agreement. 

 

	
    

	
 (g) 

	
 Executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge or release all security interests and other rights or interests of any Person in the Purchased Assets previously granted by the Seller, together with copies of the relevant financing change statements or other discharge statements or releases with the registration particulars stamped thereon or other assurance satisfactory to the Purchaser. 

 

    

 - 7 - 

    

 

	
    

	
 (h) 

	
 Completed PPSA search results, dated within five Business Days of the date of the initial Purchase Date, listing the financing statements referred to in Section 3.1(f) above and all other effective financing statements filed in the jurisdictions referred to in Section 3.1(f) above that name the Seller as debtor and show no other Adverse Claims on any of the Purchased Loans. 

 

	
    

	
 (i) 

	
 Such other approvals, opinions or documents as the Purchaser may reasonably request. 

 

	
 3.2 

	
 Conditions Precedent to All Purchases 

 

 Each purchase by the Purchaser under this Agreement of Eligible Loans (including the initial purchase) shall be subject to the further conditions precedent that, as the case may be, the following shall have occurred or that the Purchaser shall have received on or before the date of such purchase the following, each in form and substance (including the date thereof) satisfactory to it, acting reasonably: 

 

	
    

	
 (a) 

	
 A completed Loan Purchase Notice in accordance with Section 2.2(a) of this Agreement. 

 

	
    

	
 (b) 

	
 On the applicable Purchase Date, the following statements shall be true (and acceptance of the Aggregate Purchase Price payable by the Purchaser to the Seller on the date of such purchase shall be deemed a representation and warranty by the Seller that such statements are then true): 

 

	
    

	
 (i) 

	
 the representations and warranties contained in Sections 4.1 and 4.2 are true and correct on and as of the date of such purchase as though made on and as of such date; and 

 

	
    

	
 (ii) 

	
 no event has occurred and is continuing, or would result from such purchase, that constitutes a Servicer Event of Default or that would constitute a Servicer Event of Default but for the requirement that notice be given or time elapse or both; 

 

	
    

	
 (c) 

	
 An executed Seller Assignment in respect of the Purchased Loans to be sold to the Purchaser on the applicable Purchase Date, together with executed separate powers of attorney substantially in the form contemplated by Section 7.5; 

 

	
    

	
 (d) 

	
 Such other approvals, opinions or documents as the Purchaser may reasonably request. 

 

	
    

	
 (e) 

	
 If the sale of New Loans on the relevant Purchase Date includes the sale of New Loan Types to the Purchaser, the Bond Trustee has received Rating Agency Confirmation that such New Loan Types may be sold to the Purchaser. 

 

	
    

	
 (f) 

	
 If it has not already done so, the relevant New Seller accedes to the terms of this Agreement (with such subsequent amendments as may be agreed by the parties thereto) so that it has in relation to those New Loans and their Related Security to be sold to the Purchaser substantially the same rights and obligations as the Original Seller had in relation to those Loans and their Related Security comprised in the Initial Covered Bond Portfolio hereunder and procures that on the relevant Purchase Date its legal advisers shall provide the Purchaser and the Bond Trustee with legal opinions opining on, amongst other things, the accession of the relevant New Seller to this Agreement in such form as may be reasonably required by the Bond Trustee. 

 

    

 - 8 - 

    

 

	
    

	
 (g) 

	
 If it has not already done so, the relevant New Seller accedes to the terms of the Guarantor LP Agreement as a limited partner (with such subsequent amendments as may be agreed between the parties thereto) so that the relevant New Seller has in relation to those New Loans and their Related Security to be sold to the Purchaser substantially the same rights and obligations as the Original Seller had in relation to those Loans and their Related Security comprised in the Initial Covered Bond Portfolio thereunder. 

 

	
    

	
 (h) 

	
 If the relevant New Seller has not already done so, that New Seller accedes to the terms of the Servicing Agreement (with such subsequent amendments as may be agreed by the parties thereto) so that it has in relation to those New Loans and their Related Security to be sold to the Purchaser substantially the same rights and obligations as the Original Seller had in relation to those Loans and their Related Security comprised in the Initial Covered Bond Portfolio thereunder. 

 

	
    

	
 (i) 

	
 If it has not already done so, the relevant New Seller accedes to the terms of the Trust Deed and the Security Agreement in such form as the may be required by the Purchaser and the Bond Trustee (each acting reasonably) (with such subsequent amendments as may be agreed between the parties thereto respectively) and enters into such other documents in such form as may be required by the Bond Trustee and the Purchaser (each acting reasonably) to give effect to the addition of the relevant New Seller to the transactions contemplated by the Programme. 

 

	
    

	
 (j) 

	
 The Bond Trustee is satisfied that the accession of the relevant New Seller to the Programme would not be materially prejudicial to the Covered Bondholders and has received a Rating Agency Confirmation in relation thereto. 

 

	
    

	
 (k) 

	
 The Bond Trustee is satisfied that the accession of any New Seller to the Programme would be without prejudice to the Asset Coverage Test. 

 

	
    

	
 (l) 

	
 On the relevant Purchase Date, if the Seller is a New Seller, the relevant New Seller shall deliver to the Bond Trustee or its representative the following documents: 

 

	
    

	
 (i) 

	
 A certificate of confirmation with respect to the Seller issued by the Office of the Superintendent of Financial Institutions. 

 

	
    

	
 (ii) 

	
 Certified copies of all documents evidencing necessary corporate approvals. 

 

	
    

	
 (iii) 

	
 A certificate of the Secretary or an Assistant Secretary of the Seller certifying the names and true signatures of the officers of the Seller authorized to sign this Agreement and the other Purchase Documents to which it is a party. Until the Purchaser receives a subsequent incumbency certificate from the Seller, the Purchaser shall be entitled to rely on the last such certificates delivered to it by the Seller. 

 

    

 - 9 - 

    

 

	
    

	
 (iv) 

	
 A favourable opinion of legal counsel for the Seller, in form satisfactory to the Purchaser, acting reasonably. 

 

	
    

	
 (v) 

	
 Acknowledgements or duplicate registration copies of proper assignments, Financing Statements and other similar documents or instruments, with registration particulars stamped thereon, naming the Seller as seller or assignor and the Purchaser as purchaser or assignee, and duly filed on or before the date of such purchase under the PPSA in Ontario in order to perfect the interests of the Purchaser in the applicable Eligible Loans contemplated by this Agreement. 

 

	
    

	
 (vi) 

	
 Executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge or release all security interests and other rights or interests of any Person in the Purchased Assets previously granted by the Seller, together with copies of the relevant financing change statements or other discharge statements or releases with the registration particulars stamped thereon or other assurance satisfactory to the Purchaser. 

 

	
    

	
 (vii) 

	
 Completed PPSA search results, dated within five Business Days of the date of the initial Purchase Date, listing the financing statements referred to in Section 3.1(f) above and all other effective financing statements filed in the jurisdictions referred to in Section 3.1(f) above that name the Seller as debtor and show no other Adverse Claims on any of the Purchased Loans. 

 

	
    

	
 (viii) 

	
 Such other approvals, opinions or documents as the Purchaser may reasonably request. 

 

 ARTICLE 4 

 REPRESENTATIONS AND WARRANTIES 

 

	
 4.1 

	
 Seller Representations and Warranties 

 

 The Seller represents and warrants to the Purchaser as follows as of the date hereof and as of each Purchase Date that: 

 

	
    

	
 (a) 

	
 The Seller is a Schedule I Bank existing under the laws of Canada and duly qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified, except where the failure to qualify would not constitute a Material Adverse Event. 

 

	
    

	
 (b) 

	
 The Seller is not a non-resident of Canada within the meaning of the Income Tax Act (Canada). 

 

    

 - 10 - 

    

 

	
    

	
 (c) 

	
 The execution, delivery and performance by the Seller of the Purchase Documents to which it is a party (i) are within the Seller’s corporate powers, (ii) have been duly authorized by all necessary corporate action, and (iii) do not contravene or result in a default under or conflict with (1) the charter or by-laws of the Seller, (2) any law, rule or regulation applicable to the Seller, or (3) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting the Seller or its property. 

 

	
    

	
 (d) 

	
 No authorization, approval, licenses, consent or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for the due execution, delivery and performance by the Seller of the Purchase Documents to which it is a party or to make such Purchase Documents legal, valid, binding and admissible into evidence in a court of competent jurisdiction, other than authorizations, approvals, licenses, consents, actions, notices or polling that have been obtained, made or taken. 

 

	
    

	
 (e) 

	
 Each of the Purchase Documents to which the Seller is a party has been duly executed and delivered and constitutes the legal, valid and binding obligation of, and is enforceable in accordance with its terms against, the Seller, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. 

 

	
    

	
 (f) 

	
 There are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened, against or affecting the Seller at law, in equity or before any arbitrator or Governmental Authority having jurisdiction which, if adversely determined, would result in a Material Adverse Event. 

 

	
    

	
 (g) 

	
 The Seller is the legal and beneficial owner of the Eligible Loans to be sold to the Purchaser on each Purchase Date, free and clear of any Adverse Claim other than Permitted Security Interests; upon each purchase, the Purchaser shall acquire a valid and enforceable first priority perfected beneficial ownership interest in the applicable Purchased Loans and Collections and other proceeds with respect thereto, free and clear of any Adverse Claim other than Permitted Security Interests. 

 

	
    

	
 (h) 

	
 Other than (i) registrations in the appropriate land titles office, land registry office or similar office of public registration in respect of the sale, transfer and assignment of the relevant Purchased Loans from the Seller to the Purchaser effected by this Agreement and the Seller Assignments, and (ii) the provision to Borrowers under the related Purchased Loans or the obligors under the Related Security of actual notice of the sale, transfer and assignment thereof to the Purchaser, all material filings, recordings, notifications, registrations or other actions under all applicable laws have been made or taken in each jurisdiction where necessary or appropriate (and where permitted by applicable law) to give legal effect to the transactions contemplated hereby and by the other Purchase Documents, and to validate, preserve, perfect and protect the Purchaser’s ownership interest in and rights to collect any and all of the related Purchased Loans being purchased on the relevant Purchase Date, including the right to enforce such Purchased Loans and the Related Security related thereto. 

 

    

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 (i) 

	
 Each Loan Purchase Notice, information, exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by or on behalf of the Seller, as Seller or otherwise, to the Purchaser in connection with this Agreement is or will be complete and accurate as of the date so furnished. 

 

	
    

	
 (j) 

	
 Each Purchased Loan is and will be an Eligible Loan as of the Cut-Off Date. 

 

	
    

	
 (k) 

	
 The Seller’s complete name is set forth in the preamble to this Agreement. 

 

	
    

	
 (l) 

	
 The chief or principal place of business and chief executive office (as such terms are used in the PPSA) of the Seller are located at the address referred to in Schedule 4.1(l). 

 

	
    

	
 (m) 

	
 Each Loan and Related Security File is complete in all material respects and reflects all material transactions between the Seller and the Borrower under the related Purchased Loans and any other Person in respect thereof. 

 

	
    

	
 (n) 

	
 No selection procedures have been used in identifying the Eligible Loans for sale to the Purchaser which are adverse to the interests of the Purchaser. 

 

	
    

	
 (o) 

	
 The particulars of the Loans set out in the relevant Loan Purchase Notice in respect of any relevant Cut-Off Date are true, complete and accurate in all material respects. 

 

	
    

	
 (p) 

	
 Each of the Loans was originated by the Seller, in compliance with all material laws applicable thereto, in the ordinary course of business and kept on its books for a minimum of one month prior to the Cut-Off Date. 

 

	
    

	
 (q) 

	
 Each of the Loans was originated in Canadian dollars and is denominated in Canadian dollars. 

 

	
    

	
 (r) 

	
 No Loan has a Current Balance of more than Cdn.$3,000,000 as of the Cut-Off Date. 

 

	
    

	
 (s) 

	
 Each Loan (other than Loans that are home equity lines of credit) has a remaining amortization period of less than 50 years as at the relevant Cut-Off Date. 

 

	
    

	
 (t) 

	
 The first payment due pursuant to the relevant Mortgage Terms for each Loan has been paid. 

 

	
    

	
 (u) 

	
 The Lending Criteria are the lending criteria applicable to the Loans and their Related Security and are consistent with the criteria used by a Reasonable and Prudent Mortgage Lender. 

 

	
    

	
 (v) 

	
 Prior to the making of each advance under each of the relevant Loans, the Lending Criteria and all preconditions to the making of any Loan were satisfied in all material respects subject only to such exceptions as made on a case by case basis as would be acceptable to a Reasonable and Prudent Mortgage Lender. 

 

    

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 (w) 

	
 Each Loan was made and its Related Security taken or received substantially on the terms of the Standard Documentation, and is subject to renewal in accordance therewith using Standard Documentation therefore, without any material variation thereto and nothing has been done subsequently to add to, lessen, modify or otherwise vary the express provisions of any of the same in any material respect. 

 

	
    

	
 (x) 

	
 No Loan is guaranteed by a third party save where the guarantee and any security  related to such guarantee constitutes legal, valid and binding obligations of the guarantor enforceable in accordance with their terms and are assignable to the Purchaser and its assigns, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. 

 

	
    

	
 (y) 

	
 The Current Balance on each Loan and its Related Security (excluding for greater certainty, any agreement to provide Further Advances pursuant to the Mortgage Terms in respect of any relevant Loan including, without limitation, Additional Loan Advances and Line of Credit Drawings, which have not yet been advanced and become debts due) constitute a legal, valid, binding and enforceable debt due to the relevant Seller from the relevant Borrower and the terms of each Loan and its Related Security constitute valid and binding obligations of the Borrower enforceable in accordance with their terms (other than any agreement for Line of Credit Drawings (if any) and any other Additional Loan Advances). 

 

	
    

	
 (z) 

	
 Interest on each Loan is charged in accordance with the Standard Documentation. 

 

	
    

	
 (aa) 

	
 Each of the Loans is not a Non-Performing Loan. 

 

	
    

	
 (bb) 

	
 The whole of the Current Balance on each Loan is secured by a Mortgage over residential property in Canada. 

 

	
    

	
 (cc) 

	
 Each Mortgage constitutes a valid first mortgage lien over the related residential Property, or is insured as a first priority lien, in each case subject to Permitted Security Interests. 

 

	
    

	
 (dd) 

	
 Each Mortgage has first priority, subject to Permitted Security Interests, for the whole of the Current Balance on the Loan and all future interest, fees, costs and expenses payable under or in respect of such Mortgage. 

 

	
    

	
 (ee) 

	
 The True Balance on each Loan (other than any agreement for Additional Loan Advances (if any) or any home equity lines of credit which is secured on the same Property as the Borrower’s existing Loan and which may permit the Borrower to make further draws from time to time up to an amount fixed at the inception of the Loan and corresponding home equity line of credit) constitutes a  legal, valid, binding and enforceable debt due to the Seller from the relevant Borrower and the terms of each Loan and its related Mortgage constitute valid and binding obligations of the Borrower enforceable in accordance with their terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. 

 

    

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 (ff) 

	
 There is no requirement in order for a sale, transfer and assignment of the Loans and their Related Security to be effective to obtain the consent of the Borrower to such sale, transfer or assignment and such sale, transfer and assignment shall not give rise to any claim by the Borrower against the Purchaser, the Bond Trustee or any of their successors in title or assigns. 

 

	
    

	
 (gg) 

	
 All of the Properties are in Canada. 

 

	
    

	
 (hh) 

	
 Not more than 12 months (or a longer period as may be acceptable to a Reasonable and Prudent Mortgage Lender) prior to the granting of each Loan, the Seller obtained information on the relevant Property from an independently maintained valuation model, acceptable to a Reasonable and Prudent Mortgage Lender, or received a valuation report on the relevant Property, which would be, and the contents or confirmation, as applicable, of which, were such as would be, acceptable to a Reasonable and Prudent Mortgage Lender or obtained such other form of valuation of the relevant Property which has received Rating Agency Confirmation. 

 

	
    

	
 (ii) 

	
 Prior to the taking of Related Security (other than a re-mortgage) in respect of each Loan, the Seller instructed lawyers to conduct a search of title to the relevant Property and to undertake such other searches, investigations, enquiries and actions on behalf of the Seller as would be acceptable to a Reasonable and Prudent Mortgage Lender or the Borrower was required as a condition to granting the relevant Loan to obtain title insurance in respect of the relevant Property from an insurer acceptable to a Reasonable and Prudent Mortgage Lender. 

 

	
    

	
 (jj) 

	
 Each Loan contains a requirement that the relevant Property forming part of the Related Security be covered by adequate building insurance maintained by the Borrower or in the case of a leasehold property under a policy arranged by a relevant landlord or property management company. 

 

	
    

	
 (kk) 

	
 The Seller has, since the making of each Loan, serviced the Loan in compliance with all material laws applicable thereto, kept or procured the keeping of full and proper accounts, books and records showing clearly all transactions, payments, receipts, proceedings and notices relating to such Loans and their Related Security. 

 

 The representations and warranties of the Seller shall survive the Purchase Date on which such representations and warranties are given or deemed to be given pursuant to this Agreement for a period of three years following such Purchase Date. 

 

	
 4.2 

	
 Purchaser Representations and Warranties 

 

 Purchaser represents and warrants to the Seller as of the date hereof and as of each Purchase Date that: 

 

    

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 (a) 

	
 The Purchaser is a limited partnership formed under the laws of the Province of Ontario, and is duly qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its business, condition or operations. 

 

	
    

	
 (b) 

	
 The execution, delivery and performance by the Purchaser of the Purchase Documents to which it is a party (i) are within the Purchaser’s corporate powers, (ii) have been duly authorized by all necessary corporate or other action, and (iii) do not contravene or result in a default under or conflict with (1) the charter or by-laws of the Purchaser, (2) any law, rule or regulation applicable to the Purchaser, or (3) any order, writ, judgment award, injunction, decree or contractual obligation binding on or affecting the Purchaser or its property. 

 

	
    

	
 (c) 

	
 There are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened, against or affecting the Purchaser or any of its undertakings and assets, at law, in equity or before any arbitrator or Governmental Authority having jurisdiction which, if adversely determined, would reasonably be expected to materially adversely affect the financial condition or operations of the Purchaser or its property or the ability of the Purchaser to perform its obligations under this Agreement, or which purports to affect the legality, validity or enforceability of this Agreement. 

 

	
    

	
 (d) 

	
 No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for the due execution, delivery and performance by the Purchaser of the Purchase Documents to which it is a party, other than those that have been obtained, made or taken. 

 

	
    

	
 (e) 

	
 Each of the Purchase Documents to which the Purchaser is a party has been duly executed and delivered by the Purchaser and constitutes the legal, valid and binding obligation of, and is enforceable in accordance with its terms against, the Purchaser except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. 

 

 The representations and warranties of the Purchaser shall survive the Purchase Date on which such representations and warranties are given or deemed to be given pursuant to this Agreement for a period of three years following such Purchase Date. 

 

 ARTICLE 5 

 COVENANTS 

 

	
 5.1 

	
 Seller Covenants 

 

 The Seller covenants and agrees with the Purchaser that until the date on which the Outstanding Principal Balance of each Purchased Loan is reduced to zero or is determined to be uncollectible by the Servicer in accordance with the standards of a Reasonable and Prudent Mortgage Lender: 

 

    

 - 15 - 

    

 

	
    

	
 (a) 

	
 Compliance with Laws, Etc. The Seller shall comply in all respects with all applicable laws, rules, regulations and orders, and preserve and maintain its corporate existence, rights, franchises, qualifications, and privileges, except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and, maintain such existence, rights, franchises, qualifications, and privileges would not result in a Material Adverse Event. 

 

	
    

	
 (b) 

	
 Ownership Interest, Etc. The Seller shall take all action necessary or desirable to establish and maintain a valid and enforceable first priority perfected ownership interest in the Purchased Assets, free and clear of any Adverse Claim, except for Permitted Security Interests and the security interests created by the Purchaser, in favour of the Purchaser, including, without limitation, executing, delivering and registering all Financing Statements and taking such other action to perfect, protect or more fully evidence the interest of the Purchaser under this Agreement as the Purchaser may request; provided, however, that the Seller shall not be required to register any transfers or assignments of the Purchased Loans on the title to the related mortgaged properties until the time or times otherwise specified therefor by the Purchaser pursuant to and in accordance with this Agreement. 

 

	
    

	
 (c) 

	
 Sales, Liens, Etc. The Seller shall not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim, other than Adverse Claims in favour of the Purchaser or which are Permitted Security Interests, upon or with respect to, any or all of the Purchased Assets (including without limitation upon or with respect to any account to which any Collections of any Purchased Loans are deposited) except as herein provided. 

 

	
    

	
 (d) 

	
 Marking of Records. At its expense, the Seller shall mark its records relating to the Purchased Loans to clearly evidence that the Purchased Loans have been sold in accordance with this Agreement and the other Purchase Documents and showing the Purchaser as beneficial owner of the Purchased Loans. 

 

	
    

	
 (e) 

	
 InEligible Loan. The Seller shall promptly, and in any event not later than the next Guarantor LP Payment Date, notify the Purchaser, the Servicer and Cash Manager (in each case if other than the Seller) and the Bond Trustee after determining that any Purchased Loan was not an Eligible Loan on the applicable Purchase Date for such Purchased Loan. 

 

	
    

	
 (f) 

	
 Loan and Related Security Files.  The Seller undertakes that from the relevant Purchase Date until the perfection of the sale in accordance with the terms hereof, such Seller shall hold the Loan and Related Security Files relating to each New Loan and its Related Security sold by it on the relevant Purchase Date that are in its possession or under its control or held to its order to the order of the Bond Trustee or as the Bond Trustee shall direct. 

 

	
    

	
 (g) 

	
 Further Assurances.  Each Seller undertakes to the Purchaser and the Bond Trustee that, pending perfection under Section 6, each Seller: 

 

	
    

	
 (i) 

	
 shall not do or omit to do any act or thing which might, in the reasonable opinion of the Bond Trustee, prejudice the interests of the Purchaser and/or the Bond Trustee in the Covered Bond Portfolio; 

 

    

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 (ii) 

	
 shall promptly notify the Purchaser and the Bond Trustee in writing if it receives written notice of any litigation or claim calling into question in any material way that Seller's or the Purchaser's title to any Loan comprised in the Covered Bond Portfolio or its Related Security or if it becomes aware of any material breach of any of the Representations and Warranties or other obligations under this Agreement; 

 

	
    

	
 (iii) 

	
 shall, if reasonably required so to do by the Purchaser or the Bond Trustee, participate or join in any legal proceedings to the extent necessary to protect, preserve and enforce that Seller's or the Purchaser's or the Bond Trustee's title to or interest in any Loan or its Related Security; and 

 

	
    

	
 (iv) 

	
 shall make and enforce claims under any applicable insurance policies relating to the Loans and their Related Security to which the Seller is entitled to any benefit and hold the proceeds of such claims on trust for the Purchaser or as the Purchaser may direct. 

 

 ARTICLE 6 

 INDEMNIFICATION 

 

	
 6.1 

	
 Indemnities by the Seller 

 

 Without limiting any other rights that the Purchaser or any of its Affiliates, employees, agents, successors, transferees or assigns (each, an “Indemnified Party”) may have hereunder or under applicable law, the Seller hereby agrees, subject to the exclusions set forth below, to indemnify each Indemnified Party from and against any and all claims, damages, expenses, losses and liabilities (including legal costs) arising out of, relating to or resulting from any of the following (all of the foregoing being collectively referred to as “Indemnified Amounts”): 

 

	
    

	
 (a) 

	
 the failure of any Purchased Loan to be an Eligible Loan as of its Purchase Date; 

 

	
    

	
 (b) 

	
 the failure of any representation or warranty or statement made or deemed made by the Seller (or any of its officers), under or in connection with this Agreement or any other Purchase Document to have been true and correct when made; 

 

	
    

	
 (c) 

	
 the failure by the Seller to comply with any applicable law, rule or regulation with respect to the servicing, administration, enforcement or other dealing with any Purchased Loans; or the failure of any Purchased Loans to conform to any such applicable law, rule or regulation; 

 

	
    

	
 (d) 

	
 the failure to sell, assign, transfer and convey to the Purchaser beneficial ownership in, and to vest in and maintain vested in, the Purchaser a valid and enforceable first priority perfected ownership interest in the Purchased Assets (including upon registration by the Purchaser of any Registrable Transfers) free and clear of any Adverse Claim (other than a Permitted Security Interest or Adverse Claim in favour of the Purchaser) including, without limitation, any claim by any Governmental Authority that any part of the Purchased Assets consisting of amounts payable by the related Borrowers constitute the property of or are otherwise subject to the ownership, control or an Adverse Claim of or in favour of such Governmental Authority other than a Permitted Security Interest; 

 

    

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 (e) 

	
 the failure to have filed, or any delay in filing, Financing Statements, Registrable Transfers or other similar instruments or documents under any applicable laws of any applicable jurisdiction with respect to the Purchased Assets or any part thereof, whether at the time of any purchase or at any subsequent time; 

 

	
    

	
 (f) 

	
 any failure of the Seller to perform its covenants, duties or obligations in accordance with the provisions of this Agreement or any other Purchase Document or to perform its covenants, duties or obligations under the Purchased Loans; 

 

	
    

	
 (g) 

	
 any failure by the Seller or its assignee to repurchase any Purchased Loan pursuant to any of Section 2.3, 

 

 and the Seller shall pay on demand (without duplication) to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts arising out of; relating to or resulting from, any of the foregoing provided, however, that the foregoing obligation of indemnification shall not include Indemnified Amounts to the extent resulting from gross negligence or wilful misconduct on the part of such Indemnified Party. 

 

 ARTICLE 7 

 PERFECTION OF THE SALE 

 

	
 7.1 

	
 Perfection 

 

 The sale, transfer and assignments contemplated by this Agreement shall be Perfected on or before the 60th day after the earliest to occur of: 

 

	
    

	
 (a) 

	
 a Servicer Event of Default; 

 

	
    

	
 (b) 

	
 the occurrence of a Covered Bond Guarantee Activation Event; 

 

	
    

	
 (c) 

	
 the acceptance of any offer to sell Loans and their Related Security to any person other than the Seller, unless otherwise agreed by the applicable third party purchaser and the Purchaser, with the consent of the Bond Trustee, which consent will not be unreasonably withheld; and 

 

	
    

	
 (d) 

	
 a Seller and/or the Purchaser being required to Perfect legal title to the Mortgages by: 

 

	
    

	
 (i) 

	
 law; 

 

	
    

	
 (ii) 

	
 by an order of a court of competent jurisdiction; or 

 

	
    

	
 (iii) 

	
 by any regulatory authority of which that Seller is a member or any organisation whose members comprise (but are not necessarily limited to) mortgage lenders and with whose instructions it is customary for that Seller to comply. 

 

    

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 7.2 

	
 Registration 

 

 Subject to the terms of this Article 7, Perfection of the transfer of the Purchased Loans and their Related Security in the Covered Bond Portfolio over Properties shall be effected by means of a transfer in the form of the relevant land titles office, land registry office or similar office of public registration for the location where the real property subject thereto is situate and perfection of the transfer of other Related Security comprised in the Covered Bond Portfolio, shall be in such form as the Purchaser and the Bond Trustee (each acting reasonably) may require. 

 

	
 7.3 

	
 Acts Prior to Perfection 

 

 Until the happening of an event described in 7.1 of this Agreement, the Seller will hold the registered title to the Mortgages and any Related Security for the Purchased Loans as bare trustee in trust for and on behalf of the Purchaser and neither the Purchaser nor the Bond Trustee, will consent or instruct any person to, register or deposit or cause to be registered or deposited in any land registry or land titles office or similar place of public record this Agreement or any document giving any indication of the interest of the Purchaser in any of the Purchased Loans or their Related Security nor, subject to Section 3.1(b), will the Purchaser communicate in any way or manner whatsoever to the Borrower or any relevant guarantor of any Borrower under any of the Purchased Loans or their Related Security or to any Person having any interest in the property mortgaged by any of the Mortgages or in the equity of redemption in any such property based on the fact that the Purchaser owns the Purchased Loans and their Related Security. 

 

	
 7.4 

	
 Further Assurances 

 

 Within twenty-five Business Days following Perfection of the sale, transfer and assignments contemplated by this Agreement pursuant to Section 7, each Seller will do all of the acts, matters or things (including, for the avoidance of doubt, those acts, matters and things referred to in Section 7) as the Bond Trustee or the Purchaser requires each Seller to do. 

 

	
 7.5 

	
 Power of Attorney 

 

 The Seller hereby grants to the Purchaser an irrevocable power of attorney and hereby irrevocably constitutes and appoints it as its attorney-in-fact, with full power of substitution in favour of the Purchaser, to take in the place and stead of and in the name of it or in the Purchaser's own name from time to time at the Purchaser's discretion, the following: 

 

	
    

	
 (a) 

	
 to make all amendments, deletions, substitutions or additions to any assignment or transfer of any Purchased Loan or its Related Security sold by it to the Purchaser in the Covered Bond Portfolio executed by it in favour of the Purchaser (or as it may direct) which are necessary or desirable to register such assignment or transfer in the appropriate land registry or land titles office or other office of public record; 

 

    

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 (b) 

	
 to prepare, execute, deliver and/or register such further assignments or transfers of any Purchased Loan or its Related Security sold by it to the Purchaser in the Covered Bond Portfolio, whether in substitution for or replacement of any existing assignment or transfer of any Purchased Loan or its Related Security sold by it to the Purchaser in the Covered Bond Portfolio, or otherwise, which may be necessary or desirable to register legal title to such Loan or its Related Security in the name of the Purchaser (or as it may direct) in the appropriate land registry or land titles office or other office of public record; 

 

	
    

	
 (c) 

	
 to prepare, execute, deliver and/or register such further documents or instruments which may be necessary or desirable to register legal title to each any Loan or its Related Security sold by it to the Purchaser in the Covered Bond Portfolio in the name of the Purchaser (or as it may direct) or to register any other document or instrument giving rise to or evidencing the interest of the Purchaser in any such Loan or its Related Security, in the appropriate land registry or land titles office or other office of public record; 

 

	
    

	
 (d) 

	
 to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for monies due and to become due in connection with the Purchased Assets or otherwise owed to the Purchaser; 

 

	
    

	
 (e) 

	
 to receive, endorse and collect any cheques, drafts or other instruments in connection with the Purchased Assets or otherwise owed to the Purchaser; 

 

	
    

	
 (f) 

	
 to file any claims or take any action or institute any proceedings that the Purchaser may deem to be necessary or desirable for the collection of any of the Purchased Assets; and 

 

	
    

	
 (g) 

	
 to execute and deliver such instruments and documents (including assignments) necessary or desirable in furtherance of the foregoing. 

 

 The power of attorney granted hereby shall be coupled with an interest.  The power of attorney and other rights and privileges granted hereby shall survive any amalgamation, reorganization, dissolution, liquidation or winding-up of the Seller. 

 

	
 7.6 

	
 Limitation on Power of Attorney 

 

 The Purchaser may exercise its rights under the power of attorney provided in Section 7.5 only with respect to the Purchased Assets assigned and sold to the Purchaser pursuant to this Agreement and after the occurrence of an event described in Section 7.1 of this Agreement. 

 

	
 7.7 

	
 Costs 

 

 Each Seller shall indemnify each of the Purchaser and the Bond Trustee from and against any and all costs, fees and expenses (including, without limitation, legal fees and expenses and any applicable GST thereon) which may be properly incurred by the Purchaser and/or the Bond Trustee by reason of the doing of any act, matter or thing referred to in this Section 7. 

 

    

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 ARTICLE 8 

 PRE-EMPTIVE RIGHT 

 

	
 8.1 

	
 Pre-Emptive Right 

 

 Prior to the Purchaser making any offer to sell Loans and their Related Security to any person other than to the Seller, the Purchaser shall first offer to sell such Loans and their Related Security to the Seller by serving on the Seller a notice in writing in the form set out in Schedule 8.1 (the “Loan Offer Notice”), subject to and in accordance with the terms of Article 7 of the Guarantor LP Agreement. 

 

	
 8.2 

	
 Acceptance 

 

	
    

	
 (a) 

	
 Subject to Section 8.2(b), if the applicable Seller accepts the Purchaser's offer to sell the relevant Loans and their Related Security by signing the Loan Offer Notice in a manner indicating acceptance and delivering it to the Purchaser with a copy to the Bond Trustee within ten Business Days from and including the date of the Loan Offer Notice, the Purchaser shall within three Business Days of receipt of such acceptance serve a notice in writing (the “Loan Offer Repurchase Notice”) substantially in the form set out in Schedule 8.2 on the relevant Seller. 

 

	
    

	
 (b) 

	
 If an Issuer Event of Default has occurred prior to receipt by the Seller of a Loan Offer Notice, in addition to the conditions set out in Section 8.2(a), the Seller’s acceptance shall be conditional upon the Seller delivering with its Loan Offer Repurchase Notice, a certificate of an officer of the Seller in form acceptable to the Purchaser and the Bond Trustee, acting reasonably, certifying that, as of the date of the Loan Offer Repurchase Notice, the Seller is, and after giving effect to such purchase of the Loans the Seller will be, able to pay its debts as they fall due. 

 

	
 8.3 

	
 Offers to Others 

 

 Those Loans and their Related Security in respect of which the applicable Sellers reject or fail within the requisite time limit to accept the Purchaser's offer to sell shall be offered for sale by the Purchaser to third party purchasers and the Sellers in the manner and on the terms set out in Section 7.1 of the Guarantor LP Agreement. 

 

	
 8.4 

	
 Repurchase 

 

	
    

	
 (a) 

	
 Upon receipt of the Loan Offer Repurchase Notice duly signed on behalf of the Purchaser, the relevant Seller shall promptly sign and return a duplicate copy of the Loan Offer Repurchase Notice and shall repurchase from the Purchaser, and the Purchaser shall subject to Section 7.1 of the Guarantor LP Agreement re-assign or re-transfer to that Seller free from the Security created by the Security Agreement, those Loans and their Related Security (and any other Loan secured or intended to be secured by that Related Security or any part of it) referred to in the relevant Loan Offer Repurchase Notice. 

 

	
    

	
 (b) 

	
 Completion of the purchase and sale contemplated in this Section 8.4 will take place, upon satisfaction of any applicable conditions to the purchase and sale, on the first Guarantor LP Payment Date following receipt of the relevant Loan Offer Repurchase Notice(s) or such other date as the Guarantor LP may direct in the Loan Repurchase Notice, provided such date is not later than  the earlier to occur of the date which is (i) ten Business Days following receipt by the Guarantor LP of such Loan Offer Repurchase Notice, and (ii) the Final Maturity Date of the Earliest Maturing Covered Bonds. 

 

    

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 (c) 

	
 The Seller shall pay the offer price specified in the relevant Loan Offer Repurchase Notice to the Purchaser prior to a downgrade of the ratings of the Cash Manager below the Cash Management Deposit Ratings by payment in cash to the Cash Manager and following a downgrade of the ratings of the Cash Manager below the Cash Management Deposit Ratings by deposit of the cash amount in the GIC Account. 

 

	
 8.5 

	
 Loans and Related Security Files 

 

 Upon such completion of the repurchase of such Loans and their Related Security in accordance with Section 8.4 above or the sale of Loans and their Related Security to a Purchaser or Purchasers, the relevant Seller shall cease to be under any further obligation to hold the relevant Loans and Related Security Files or other documents relating to the Loans and their Related Security to the order of the Purchaser and if the Purchaser holds such documents it will send them to the relevant Seller.  Any repurchase by the relevant Seller of or in respect of the Loans and their Related Security or any sale of Loans and their Related Security by the Purchaser to a Purchaser or Purchasers pursuant to Section 7 of the Guarantor LP Agreement shall constitute a discharge and release of the relevant Seller from any claims which the Purchaser or the Bond Trustee may have against the relevant Seller arising from the relevant Representations or Warranties in relation to the Loans and their Related Security previously sold by that Seller to the Purchaser only but shall not affect any rights arising from a breach of any other express provision of this Agreement or any Representation or Warranty in relation to any other Loan and other Related Security. 

 

 ARTICLE 9 

 MISCELLANEOUS 

 

	
 9.1 

	
 The Bond Trustee 

 

 If there is any change in the identity of the Bond Trustee, the parties to this Agreement shall execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require for the purpose of vesting in the successor Bond Trustee the rights and obligations of the outgoing Bond Trustee under this Agreement. The Purchaser shall indemnify the Seller for all reasonable costs incurred by the Seller in relation to such change. 

 

 It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee shall not assume or have any of the obligations or liabilities of the Seller or the Purchaser under this Agreement 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 Section 9.2.  For the avoidance of doubt, the parties to this Agreement acknowledge that the right and obligations of the Bond Trustee are governed by the Trust Deed and the Security Agreement.  Any liberty or right which may be exercised or made in the Bond Trustee’s absolute discretion without any obligation to give reasons therefore and the Bond Trustee shall not be responsible for any liability occasioned by so acting in accordance with the terms of the Trust Deed and the Security Agreement, but without prejudice to the obligations of the Bond Trustee to act reasonably. 

 

    

 - 22 - 

    

 

	
 9.2 

	
 Amendments, Etc. 

 

 No amendment or waiver of any provision of this Agreement shall be effective unless in writing, signed by the Purchaser, the Seller and, with respect to amendments or waivers of Section 4.1 consented to by the Bond Trustee (which consent shall be given by the Bond Trustee if Rating Agency Confirmation has been received for such amendment or waiver) and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Purchaser to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. Each proposed amendment or waiver of this Agreement that is considered by the Purchaser to be a material amendment or waiver shall be subject to Rating Agency Confirmation and the Guarantor LP (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 LP under this Agreement. 

 

	
 9.3 

	
 Non-Petition 

 

 The Seller agrees that it shall not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor LP, or any of the general partners of the Guarantor LP, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer under the Programme 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. 

 

	
 9.4 

	
 Notices, Etc. 

 

 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 the registered office of such person set forth above unless an alternative address is provided below, in which case delivery shall be to the address provided below, or by facsimile transmission to facsimile number set forth below, as applicable: 

 

 (a)           in the case of the Bank: 

 

 Royal Bank of Canada 

 Royal Bank Plaza, South Tower 

 14th Floor, 200 Bay Street 

 Toronto, Ontario 

 Canada  M5J 2J5 

 

 Attention: Ann Milne, Senior Manager 

 Facsimile number: (416) 313-8419 

 

    

 - 23 - 

    

 

 (b)           in the case of the Purchaser to: 

 

 RBC Covered Bond Guarantor Limited Partnership 

 Royal Bank Plaza, South Tower 

 14th Floor, 200 Bay Street 

 Toronto, Ontario 

 Canada  M5J 2J5 

  

 Attention: Ann Milne, Senior Manager 

 Facsimile number: (416) 313-8419 

 

 (c)           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 

 Facsimile number: (416) 981-9777 

 

 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 Business Day and such delivery was made prior to 4:00 p.m. (Toronto time) and otherwise on the next Business Day, (ii) in the case of first class post, when it would be received in the ordinary course of the post, or (ii) if transmitted by facsimile transmission on the Business Day following the date of transmission provided the transmitter receives a confirmation of successful transmission. 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. 

 

	
 9.5 

	
 Assignability 

 

	
    

	
 (a) 

	
 This Agreement and the Purchaser’s rights and obligations herein shall not be assignable, in whole or in part, by the Purchaser and its successors and assigns without the Purchaser having obtained Rating Agency Confirmation therefor and the prior written consent of the Seller, which consent shall not be unreasonably withheld; provided, however, that at any time when Royal Bank of Canada is not the Seller, the consent of the Seller to any such assignment shall not be required. 

 

	
    

	
 (b) 

	
 Notwithstanding Section 9.5(a), the Purchaser may assign the Purchased Loans as security for any of its obligations to the Bond Trustee including, without limitation, its obligations under the Covered Bond Guarantee. 

 

    

 - 24 - 

    

 

	
    

	
 (c) 

	
 Without limiting Section 9.5(a), the Seller may not assign its rights hereunder or any interest herein without the prior written consent of the Purchaser and the Bond Trustee and Rating Agency Confirmation having been obtained by the Purchaser in respect thereof. 

 

	
 9.6 

	
 Costs and Expenses 

 

 Except as herein provided, each party shall pay it own costs and expenses in connection with the preparation, execution, delivery and administration of this Agreement and the other documents and agreements to be delivered hereunder. 

 

	
 9.7 

	
 Confidentiality 

 

 In all cases and without limiting the foregoing, each Party shall comply at all times with Applicable Privacy Laws in the performance of its obligations under this Agreement.  For greater certainty, each of the Purchaser and the Bond Trustee hereby agrees not to collect, use or disclose any Personal Information, or to cause the collection or use of any such information, of any Borrower provided by the Seller to the Purchaser or the Bond Trustee for any purpose whatsoever other than the purchase, sale or servicing (including collection and enforcement) of the related Purchased Loan in accordance with this Agreement and the other Purchase Documents or any other purpose permitted hereunder or thereunder unless compelled by law and to maintain privacy policies and procedures consistent with the terms of this Agreement and compliant with all Applicable Privacy Laws. 

 

	
 9.8 

	
 Governing Law and Jurisdiction 

 

	
    

	
 (a) 

	
 This Agreement shall be governed by, and construed in accordance with, the law of the Province of Ontario (without giving effect to the conflict of laws principles thereof). 

 

	
    

	
 (b) 

	
 Any legal action or proceeding with respect to this agreement may be brought in the courts of the Province of Ontario and by execution and delivery of this Agreement, each of the Purchaser, the Seller and the Bond Trustee consents, to the non-exclusive jurisdiction of those courts. Each of the Purchaser, the Seller and the Bond Trustee irrevocably waives, to the maximum extent permitted by law, any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of this Agreement or any document related hereto. The Purchaser, the Seller and the Bond Trustee each waive personal service of any claim, notice of motion or application, summons, complaint or other process, which may be made by any other means permitted by Ontario law. 

 

	
 9.9 

	
 Execution in Counterparts 

 

 This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 

 

    

 - 25 - 

    

 

	
 9.10 

	
 Entire Agreement 

 

 This Agreement and the other Purchase Documents constitute the entire agreement and understanding between the Purchaser, the Seller and the Bond Trustee with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. 

 

	
 9.11 

	
 Headings 

 

 The captions and headings of this Agreement (including in any Schedule hereto) are for convenience of reference only and shall not affect the interpretation hereof or thereof. 

 

 - the balance of this page has been intentionally left blank - 

 

 

 

 

 

 

    

 - 26 - 

    

 

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

 

 

	    	    	
 ROYAL BANK OF CANADA, as Seller 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

	    	    	
 RBC COVERED BOND GUARANTOR  

 LIMITED PARTNERSHIP, acting by its  

 managing general partner RBC COVERED  

 BOND GP INC., as Purchaser 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

	    	    	
 COMPUTERSHARE TRUST COMPANY  

 OF CANADA, as Bond Trustee 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

	    	    	    	    
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

    

 - 27 - 

    

 

 SCHEDULE 1 

 

 LOAN ELIGIBILITY CRITERIA 

 

 The following are the eligibility criteria applicable to each Loan on and as of the applicable Cut-Off Date for such Loan: 

 

	
    

	
 (a) 

	
 no Issuer Event of Default or Guarantor LP Event of Default under the Transaction Documents shall have occurred which is continuing as at the relevant Purchase Date; 

 

	
    

	
 (b) 

	
 the Purchaser, on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that the purchase of the relevant Loans and their Related Security would adversely affect the then current ratings by the Rating Agencies of the Covered Bonds; 

 

	
    

	
 (c) 

	
 no Loan being purchased has a Current Balance of more than C$3,000,000 on the Cut-Off Date; 

 

	
    

	
 (d) 

	
 no Loan being purchased relates to a Property which is not a residential Property; 

 

	
    

	
 (e) 

	
 no Loan being purchased constitutes a New Loan Type in respect of which no Rating Agency Confirmation has been received by the Bond Trustee such that such Loan may be sold to the Purchaser in accordance with the terms hereof; 

 

	
    

	
 (f) 

	
 the Loan is payable in Canada only and is denominated in Canadian Dollars; 

 

	
    

	
 (g) 

	
 the Loan has been duly authorized, executed and delivered by the parties thereto, is in full force and effect, unamended, except for any amendments reflected in the relevant Loan and Related Security File, and constitutes a legal, valid and binding obligation of the parties thereto enforceable in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law); 

 

	
    

	
 (h) 

	
 the Loan permits realization by the mortgagee against the Related Security in accordance with its terms, subject to applicable law, including, without limitation, the notice requirements and other limitations contained in the Bankruptcy and Insolvency Act (Canada), statutory limitations on the rights of mortgagees to exercise their remedies and certain qualifications at out in this Agreement; the Loan constitutes the Borrower’s obligation. to pay to the mortgagee, in accordance with the scheduled payments set forth therein, the amounts owing thereunder and permits full recourse against the Borrower; 

 

	
    

	
 (i) 

	
 the Loan is not a Non-Performing Loan; 

 

	
    

	
 (j) 

	
 the Loan and Related Security is capable of being registered or recorded and has been duly registered or recorded in the appropriate land titles office, land registry office or similar office of public registration in which the property subject thereto is located reflecting the Seller as the sole mortgagee thereunder; 

 

    

    

    

 

	
    

	
 (k) 

	
 the Related Security constitutes a valid and enforceable first charge or mortgage in favour of the mortgagee against the related mortgaged property, subject only to Permitted Security Interests and/or Adverse Claims which, in the aggregate do not materially impair the user value or marketability of the property mortgaged thereby or the value of the Loan; 

 

	
    

	
 (l) 

	
 if the Loan was originated by the Seller, such Loan is accompanied by (i) an opinion on title of legal counsel qualified to practice law in the province or territory in which the property subject thereto is located to the effect that, at the time of origination of such Loan, the Borrower had good title to, and such Mortgage constituted a valid and enforceable first charge or mortgage against, such property, subject only to Adverse Claims which do not in the aggregate materially impair the use, value or marketability of the property or the value of the security constituted by the Mortgage; or (ii) a policy of title insurance to the same effect; 

 

	
    

	
 (m) 

	
 the Loan is not subject to any dispute, set-off, counterclaim or defence, whatsoever, is free of any Adverse Claim, and the Seller shall not have given any consents, approvals or waivers or have postponed any of its rights under or in respect of any such Loan except in the ordinary course of business and any such permitted extension, modification, consent, approval, waiver or postponement is reflected in the Loan and Related Security Files; and 

 

	
    

	
 (n) 

	
 the Loan has not been satisfied or rescinded, nor has any property been discharged, reconveyed or released from the charge created by the Mortgage in whole or in part. 

 

 

 - 2 - 

    

 

 SCHEDULE 2.2(b) 

 

 FORM OF LOAN PURCHASE NOTICE 

 

 

 To:       RBC COVERED BOND GUARANTOR LIMITED PARTNERSHIP 

 

 This Loan  Purchase Notice is delivered to you pursuant to Section 2.2(a) of the mortgage sale agreement, made as of the 25th day of October, 2007 (the “Mortgage Sale Agreement”) between Royal Bank of Canada, as seller (in such capacity, together with its successors and permitted assigns in such capacity, the “Seller”) and as servicer, and RBC Covered Bond Guarantor Limited Partnership (the “Purchaser”), as purchaser. 

 

 Capitalized terms not defined herein shall have those meanings ascribed to them in the Mortgage Sale Agreement. 

 

 The Seller hereby irrevocably offers to sell to the Purchaser on the date indicated below the Eligible Loans, particular of which are indicated on the attached Schedule “A” attached hereto, in accordance with and subject to the terms and conditions of the Mortgage Sale Agreement: 

 

	
 Purchase Date: 

	
 [N.B. Insert Guarantor LP Payment Date] 

	   	   
	
 Cut-Off Date: 

	
 [N.B. Insert first day of month prior to Purchase Date] 

	   	   
	
 Eligible Loans: 

	
 See Schedule “A” 

	   	   
	
 Aggregate Purchase Price: 

	
 $l 

	   	   
	   	   
	
 Outstanding Principal Balance of the 

	    
	
 Eligible Loans: 

	
 $l 

	   	   
	   	   
	   	   
	
 – balance left intentionally blank – 

 

    

    

    

 

 SCHEDULE OF ELIGIBLE LOANS 

 

 

 

	
 Name of Seller 

	
 Interest Rate of Mortgages 

 Highest             %          Lowest            % 

 Weighted Average Amortization Period 

                                      Months 

	
 Index Rate or Prime Rate at Cut- 

 Off Date 

                              % 

 Weighted Average Interest Rate 

                              % 

	
 Total Number of Eligible 

 Loans 

	
 Aggregate Current Balance 

 as of Cut-Off Dates 

 

	
 Loan 

 Identification 

 Number 

	
 Name of 

 Borrower(s) 

	
 Address of 

 Mortgage 

 Property 

	
 Insurer 

 Account 

 Number 

	
 Aggregate 

 amount 

 advanced in 

 respect of Loan 

	
 Interest 

 Rate 

	
 Interest 

 Adjustment 

 Date 

	
 Date Last 

 Payment 

 Due 

	
 Current 

 Balance of 

 Security as 

 of Cut-Off 

 Date 

 (excluding 

 Capitalized 

 Interest & 

 Capitalized 

 Arrears) 

	
 Remaining 

 Amortization 

 Period Months 

 

	    	    	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	    

    

    

    

 

 SCHEDULE 2.2(g) 

 

 FORM OF SELLER ASSIGNMENT 

 

 

 THIS ASSIGNMENT made this l day of l, 20l. 

 

 BETWEEN: 

 

 

 ROYAL BANK OF CANADA, 

 a bank under the laws of Canada (the “Seller”) 

 

 - and - 

 

 RBC COVERED BOND GUARANTOR LIMITED PARTNERSHIP, 

 a limited partnership formed under the laws of the Province of Ontario, 

 by its managing general partner RBC COVERED BOND GP INC. (the “Purchaser”) 

 

 

 WHEREAS the Seller and the Purchaser have entered into a mortgage sale agreement made as of l, 2007 (the “Mortgage Sale Agreement”). 

 

 NOW THIS AGREEMENT WITNESSES that in consideration of the premises and for valuable consideration the parties hereto covenant and agree as follows: 

 

	
 1. 

	
 DEFINED TERMS 

 

 Unless otherwise defined herein or unless the context requires otherwise, capitalized terms shall have the same meanings herein as in the Mortgage Sale Agreement. 

 

	
 2. 

	
 SALE AND PURCHASE OF ELIGIBLE LOANS 

 

 The Seller hereby sells, transfers and assigns unto the Purchaser and the Purchaser hereby purchases from the Seller, all of the Seller’s beneficial ownership of the Eligible Loans, on a fully serviced basis, described in Schedule A hereto (the “Purchased Loans”), all on the terms and subject to the conditions set out in the Mortgage Sale Agreement. 

 

	
 3. 

	
 CONFIRMATION 

 

 The Seller hereby confirms to the Purchaser that: 

 

	
    

	
 (a) 

	
 the representations and warranties of the Seller contained in the Mortgage Sale Agreement are true and correct as of the date hereof; 

 

    

    

    

 

	
    

	
 (b) 

	
 it has made a notation in its records that beneficial ownership of the Scheduled Purchased Loans has been assigned to the Purchaser; and 

 

	
    

	
 (c) 

	
 until the happening of an event described in Schedule 7.1 of the Mortgage Sale Agreement, the Seller holds the registered title to the Mortgages and any Related Security for the Purchased Loans and the related Mortgage Deed and other documents evidencing and securing the Purchased Loans in trust as bare trustee and nominee for the Purchaser. 

 

	
 4. 

	
 GOVERNING LAW 

 

 This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario (without giving effect to the conflict of laws principles thereof). 

 

	
 5. 

	
 NUMBER AND GENDER 

 

 Words importing the singular include the plural and vice versa, and words importing gender include all genders. 

 

	
 6. 

	
 COUNTERPARTS 

 

 This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this agreement by facsimile shall be as effective as delivery of a manually executed counterpart of such signature page. 

 

 [The rest of this page is intentionally left blank] 

 

 

 - 2 - 

    

 

 IN WITNESS WHEREOF the Seller has executed this Assignment. 

 

	    	    	
 ROYAL BANK OF CANADA 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

 This Assignment is accepted by the Purchaser this _____day of  __________________, 20___. 

 

 

	    	    	
 RBC COVERED BOND GUARANTOR  

 LIMITED PARTNERSHIP, acting by its  

 managing general partner RBC COVERED  

 BOND GP INC. 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

 

 

 

  

 

 - 3 - 

    

 

 SCHEDULE A 

 

 PURCHASED LOANS 

 

 

 

 

 

 

    

    

    

 

 SCHEDULE 4.1(l) 

 

 LOCATION OF SELLER 

 

	
    

	
 Royal Bank Plaza 

	
    

	
 200 Bay Street 

	
    

	
 Toronto, Ontario 

	
    

	
 Canada, M5J 2J5 

 

 

 

 

 

 

    

    

    

 

 SCHEDULE 8.1 

 

 FORM OF LOAN OFFER NOTICE 

 

	
 To: 

	
 Royal Bank of Canada (the “Seller”) 

	
 From: 

	
 RBC Covered Bond Guarantor Limited Partnership (the “Guarantor LP”) 

 

 It is hereby agreed for the purpose of this Loan Offer Notice that the “Principal Agreement” shall mean the mortgage sale agreement dated October 25, 2007 made by and among Royal Bank of Canada, as seller, Guarantor LP, as purchaser, and Computershare Trust Company of Canada, as bond trustee (the “Bond Trustee”), as the same may be or have been amended, varied or supplemented from time to time pursuant to the terms of that agreement. 

 

 Unless otherwise defined herein, capitalized words and expressions in this Loan Offer Notice shall have the same meanings given thereto in the Principal Agreement. 

 

 In accordance with and subject to Article 8 of the Principal Agreement we make an offer to you on the following terms: 

 

	
 1. 

	
 This Loan Offer Notice constitutes an offer to sell the certain Loans and their Related Security more particularly described in Schedule “A” hereto to you at the offer price in aggregate equal to the greater of the Fair Market Value of such Loans and the Adjusted Required Redemption Amount. 

 

	
 2. 

	
 This offer is capable of acceptance by you within ten (10) Business Days from and including the date of this Loan Offer Notice.  If you do not accept this offer, we intend to sell the Loans and their Related Security described in Schedule “A” hereto to a third party or third parties. 

 

	
 3. 

	
 This Loan Offer Notice shall incorporate, mutatis mutandis, the relevant provisions of the Principal Agreement. 

 

 You may accept this offer to you by signing the duplicate of this Loan Offer Notice in a manner indicating acceptance and delivering it to the Guarantor LP with a copy to the Bond Trustee. 

 

 We refer you to the Principal Agreement as to your rights, and the consequences of failure to accept this offer in time or at all or of doing so in a manner other than that specified in the Principal Agreement. 

 

 

 [Remainder of this page is intentionally left blank.] 

 

    

    

    

 

 Dated as of the [l] 

 

 

	    	    	
 RBC COVERED BOND GUARANTOR  

 LIMITED PARTNERSHIP, acting by its  

 managing general partner RBC COVERED  

 BOND GP INC. 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

 We accept the offer contained in this Loan Offer Notice. 

 

 Dated as of the [l] 

  

	    	    	
 ROYAL BANK OF CANADA 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

 - 2 - 

    

 

 Schedule “A” 

	
 1. 

	
 2. 

	
 3. 

	
 4. 

	
 5. 

	
 Title No. (if 

 registered) 

	
 Borrower 

	
 Account No. 

	
 Property Postal 

 Code 

	
 Date of Mortgage 

	    	    	    	    	    
	    	    	    	    	    

 

  

 

    

    

    

 

 SCHEDULE 8.2 

 FORM OF LOAN OFFER REPURCHASE NOTICE 

	
 To: 

	
 Royal Bank of Canada (the “Seller”) 

	   	   
	
 From: 

	
 RBC Covered Bond Guarantor Limited Partnership (the “Guarantor LP”) 

 

 It is hereby agreed for the purpose of this Loan Offer Repurchase Notice that the “Principal Agreement” shall mean the mortgage sale agreement dated October 25, 2007 made by and among Royal Bank of Canada, as seller, Guarantor LP, as purchaser, and Computershare Trust Company of Canada, as bond trustee (the “Bond Trustee”), as the same may be or have been amended, varied or supplemented from time to time pursuant to the terms of that agreement. 

 

 Unless otherwise defined herein, capitalized words and expressions in this Loan Offer Repurchase Notice shall have the same meanings given thereto in the Principal Agreement. 

 

 In accordance with Article 8 of the Principal Agreement, upon receipt of this Loan Offer Repurchase Notice by the Seller there shall exist between the Seller and the Guarantor LP an agreement (the “Agreement for Sale”) for the sale by the Guarantor LP to the Seller of the Loans and their Related Security more particularly described in Schedule “A” hereto.  Completion of such sale shall take place on [INSERT DATE] and the price payable by the Seller for the Loans and their Related Security more particularly described in Schedule “A” hereto shall be in aggregate equal to the greater of the Fair Market Value of such Loans and the Adjusted Required Redemption Amount. 

 

 The Agreement for Sale shall incorporate, mutatis mutandis, the relevant provisions of the Principal Agreement. 

 

 Dated as of the [l] 

	    	    	
 RBC COVERED BOND GUARANTOR  

 LIMITED PARTNERSHIP, acting by its  

 managing general partner RBC COVERED  

 BOND GP INC. 

	   	   	   
	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

 

 We hereby acknowledge receipt of and confirm the contents of the Loan Repurchase Notice dated [l]. 

	    	    	
 ROYAL BANK OF CANADA 

	   	   	   
	    	    	
 Per: 

	    
	    	    	    	
 Name: 

	    	    	    	
 Title: 

    

    

    

 

 Schedule “A” 

	
 1. 

	
 2. 

	
 3. 

	
 4. 

	
 5. 

	
 Title No. (if 

 registered) 

	
 Borrower 

	
 Account No. 

	
 Property Postal 

 Code 

	
 Date of Mortgage 

 

 

 

 

 

 - 2 -ex4_4.htm

 Exhibit 4.4 

 

 

 

 

 ASSET MONITOR AGREEMENT 

 

 by and among 

 

 RBC COVERED BOND GUARANTOR LIMITED PARTNERSHIP 

 as Guarantor LP 

 

 and 

 

 ROYAL BANK OF CANADA 

 as Cash Manager 

 

 and 

 

 DELOITTE & TOUCHE LLP 

 as Asset Monitor 

 

 and 

 

 COMPUTERSHARE TRUST COMPANY OF CANADA 

 as Bond Trustee 

 October 25, 2007 

    

    

    

 TABLE OF CONTENTS 

 

	
 Section 

	
 Page 

	   	   	   
	
 1. 

	
 DEFINITIONS AND INTERPRETATION 

	
 2 

	   	   	   
	
 2. 

	
 SERVICES OF THE ASSET MONITOR 

	
 3 

	   	   	   
	
 3. 

	
 PROVISION OF INFORMATION TO THE ASSET MONITOR 

	
 5 

	   	   	   
	
 4. 

	
 COVENANTS OF THE ASSET MONITOR 

	
 6 

	   	   	   
	
 5. 

	
 TERMINATION 

	
 7 

	   	   	   
	
 6. 

	
 FEES 

	
 8 

	   	   	   
	
 7. 

	
 SUBORDINATION OF RIGHTS 

	
 8 

	   	   	   
	
 8. 

	
 ASSIGNMENTS AND TRANSFERS 

	
 9 

	   	   	   
	
 9. 

	
 CONFIDENTIALITY 

	
 9 

	   	   	   
	
 10. 

	
 PROVISION OF INFORMATION TO THE BOND TRUSTEE 

	
 10 

	   	   	   
	
 11. 

	
 LIABILITY 

	
 10 

	   	   	   
	
 12. 

	
 FURTHER PROVISIONS 

	
 11 

	   	   	   
	
 13. 

	
 NOTICES 

	
 12 

	   	   	   
	
 14. 

	
 COUNTERPARTS 

	
 13 

	   	   	   
	
 15. 

	
 THE BOND TRUSTEE 

	
 13 

	   	   	   
	
 16. 

	
 MODIFICATION 

	
 14 

	   	   	   
	
 17. 

	
 CONTINUING PROVISIONS 

	
 14 

	   	   	   
	
 18. 

	
 ENTIRE AGREEMENT 

	
 14 

	   	   	   
	
 19. 

	
 GOVERNING LAW 

	
 14 

	   	   	   
	
 20. 

	
 SUBMISSION TO JURISDICTION 

	
 14 

 

    

    

    

 

 ASSET MONITOR AGREEMENT 

 

 THIS ASSET MONITOR AGREEMENT (this “Agreement”) is made as of the 25th day of October, 2007. 

 BY AND AMONG: 

 

	
 (1) 

	
 RBC COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under the laws of the Province of Ontario, whose registered office is at the Royal Bank Plaza, South Tower, 9th Floor, 200 Bay Street, Toronto, Ontario, Canada M5J 2J5 by its managing general partner RBC COVERED BOND GP INC. (hereinafter the “Guarantor LP”); 

 

	
 (2) 

	
 ROYAL BANK OF CANADA, a bank named in Schedule I to the Bank Act (Canada), whose executive office is at Royal Bank Plaza, South Tower, 8th Floor, 200 Bay Street, Toronto, Ontario, Canada M5J 2J5, acting in its capacity as the Cash Manager (hereinafter the “Cash Manager”); 

 

	
 (3) 

	
 DELOITTE & TOUCHE LLP, a limited liability partnership formed under the laws of Ontario, acting through its office located at Brookfield Place, Suite 1400, Toronto, Ontario, 5J 2V1, acting in its capacity as Asset Monitor (hereinafter the “Asset Monitor”); and 

 

	
 (4) 

	
 COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company formed under the laws of Canada, whose registered office is at 100 University Avenue, 9th Floor, North Tower, Toronto, Ontario, Canada, M5J 2Y1, acting in its capacity as Bond Trustee (hereinafter the “Bond Trustee”). 

 

 WHEREAS: 

 

	
 (A) 

	
 Under the terms of the Programme, the Issuer will issue Covered Bonds on each Issue Date. 

 

	
 (B) 

	
 In connection with the Programme, the Guarantor LP has agreed to guarantee payments of interest and principal under the Covered Bonds pursuant to the terms of the Covered Bond Guarantee. 

 

	
 (C) 

	
 In connection therewith, the Guarantor LP has entered into the Cash Management Agreement with the Cash Manager pursuant to which the Cash Manager has agreed to, inter alia, perform certain calculations in relation to the Asset Coverage Test and the Amortization Test. 

 

	
 (D) 

	
 The Asset Monitor has agreed to be appointed by the Guarantor LP and the Bond Trustee to carry out various arithmetic testing and notification procedures in relation to the calculations performed by the Cash Manager in relation to the Asset Coverage Test and the Amortization Test subject to and in accordance with the terms of this Agreement. 

 

 NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants and agreements herein set forth, the parties agree as follows: 

 1.      DEFINITIONS AND INTERPRETATION 

	
 1.1 

	
 The master definitions and construction agreement made between, inter alia, the parties to this Agreement as of October 25, 2007 (as the same may be amended, 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 shall, 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 shall be construed in accordance with the interpretation provisions set out in Section 2 of the Master Definitions and Construction Agreement. 

 

    

 2 

    

 

	
 1.2 

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

 

 2.      SERVICES OF THE ASSET MONITOR 

 

	
 2.1 

	
 Subject to Sections 2.3, 2.4 and 2.7 hereof, prior to the occurrence of an Issuer Event of Default, the Cash Manager shall conduct the Asset Coverage Test in respect of each Calculation Period for which the Asset Monitor is required to conduct arithmetic testing in accordance with the terms hereof on or before the date that is at least five (5) Business Days prior to the Guarantor LP Payment Date immediately following such Calculation Period. The Asset Monitor shall, in respect of each Calculation Period ending in October (being the anniversary of the Programme) and each Calculation Period immediately preceding a proposed Issue Date, subject to due receipt of the information to be provided to the Asset Monitor by the Cash Manager in accordance with Section 3 below in relation to the calculations performed by the Cash Manager regarding the relevant Asset Coverage Test, test the arithmetic accuracy of the calculations performed by the Cash Manager in relation to the Cash Manager’s calculations of the Asset Coverage Test in respect of such period, with a view to confirmation of the accuracy or otherwise of such calculations, and report on the same to the Cash Manager and the Bond Trustee by no later than five Business Days following the receipt of such information. In the event that the Calculation Date in respect of any relevant Calculation Period falls after an Issuer Event of Default, the calculations in respect of such Calculation Period shall be carried out pursuant to Section 2.2. 

 

	
 2.2 

	
 Subject to Sections 2.3, 2.4 and 2.7 hereof, after the occurrence of an Issuer Event of Default the Cash Manager shall conduct the Amortization Test in respect of each Calculation Period on or before the date that is at least five (5) Business prior to the Guarantor LP Payment Date immediately following such Calculation Period. The Asset Monitor shall, in respect of each Calculation Period ending in October (being the anniversary of the Programme) and each Calculation Period immediately preceding a proposed Issue Date, subject to due receipt of the information to be provided to the Asset Monitor by the Cash Manager in accordance with Section 3 below in relation to the calculations performed by the Cash Manager regarding the relevant Amortization Test, test the arithmetic accuracy of the calculations performed by the Cash Manager in relation to the Cash Manager’s calculations of the Amortization Test in respect of such period, with a view to confirmation of the accuracy or otherwise of such calculations, and report on the same to the Cash Manager and the Bond Trustee by no later than five Business Days following the receipt of such information. 

 

	
 2.3 

	
 If: 

 

	
    

	
 (a) 

	
 the long-term unsecured, unguaranteed and unsubordinated debt obligation ratings by the Rating Agencies of the Cash Manager and/or the long-term unsecured, unguaranteed and unsubordinated debt obligation ratings by the Rating Agencies of the Issuer fall below the Asset Monitor Oversight Ratings; or 

 

    

 3 

    

 

	
    

	
 (b) 

	
 prior to an Issuer Event of Default having occurred, an Asset Coverage Test Breach Notice has been served on the Guarantor LP and has not been revoked, 

 

 subject to due receipt of the information to be provided to the Asset Monitor by the Cash Manager in accordance with Section 3 below, the Asset Monitor shall test the arithmetic accuracy of the Cash Manager’s calculations referred to in Sections 2.1 and 2.2 above, as applicable, in respect of the Calculation Period immediately preceding any proposed Issue Date or every Calculation Period, as applicable, by no later than five Business Days following the receipt of such information unless and until the Cash Manager and/or the Issuer regains a long-term unsecured, unguaranteed and unsubordinated debt obligation rating by the Rating Agencies equal to or superior to the Asset Monitor Oversight Ratings or the Asset Coverage Test Breach Notice is revoked, as the case may be, following which the relevant tests with respect to the arithmetic accuracy of the calculations performed by the Cash Manager will be conducted by the Asset Monitor in respect of each Calculation Period ending in October (being the anniversary of the Programme) in accordance with Sections 2.1 and 2.2 above, as applicable. 

 

	
 2.4 

	
 If the arithmetic testing conducted by the Asset Monitor in accordance with Sections 2.1 and 2.2, as applicable, reveal arithmetic errors in the relevant calculations performed by the Cash Manager such that: 

 

	
    

	
 (a) 

	
 the Asset Coverage Test had been failed on the relevant Calculation Date (where the Cash Manager had recorded it as being satisfied); or 

 

	
    

	
 (b) 

	
 the reported Adjusted Aggregate Loan Amount or the reported Amortization Test Aggregate Loan Amount, as applicable, was mis-stated by the Cash Manager by an amount exceeding 1% of the Adjusted Aggregate Loan Amount or the Amortization Test Aggregate Loan Amount, as applicable, in respect of such Calculation Period as calculated by the Asset Monitor, 

 

 subject to due receipt of the information to be provided to the Asset Monitor by the Cash Manager in accordance with Section 3 below, for a period of six months thereafter the Asset Monitor shall conduct tests the arithmetic accuracy of the Cash Manager’s calculations referred to in Section 2.1 above (in the case of failure of the Asset Coverage Test as described in (a) above) or Sections 2.1 and 2.2 above (in the case of mis-statement of the Adjusted Aggregate Loan Amount or the Amortization Test Aggregate Loan Amount as described in (b) above), as applicable, in respect of every Calculation Date by no later than five Business Days following the receipt of such information from the Cash Manager. 

 

	
 2.5 

	
 The Asset Monitor shall promptly notify, on a confidential basis, the Guarantor LP, the Cash Manager, the Bond Trustee and the Issuer, in writing (the “Asset Monitor Report”), and in any event by no later than two Business Days following the testing by it pursuant to this Section 2 of the relevant calculations performed by the Cash Manager, of the results of its arithmetic tests of the arithmetic accuracy of the Cash Manager’s calculations. If the arithmetic calculations performed by the Cash Manager have not been performed correctly, the written notification by the Asset Monitor shall set out the correct arithmetic calculation of the Asset Coverage Test or Amortization Test, as applicable, and the result of such correct calculation together with the incorrect calculation and the result of such incorrect calculation as carried out by the Cash Manager.  The Asset Monitor shall provide such written notification (in relation to the Cash Manager, the Issuer and the Bond Trustee for information only and without accepting any liability whatsoever towards the Cash Manager, the Issuer, the Bond Trustee or the Rating Agencies and (in relation to the Guarantor LP) subject to Section 11 below. 

 

    

 4 

    

 

	
 2.6 

	
 Other than in relation to the testing by the Asset Monitor of the arithmetic accuracy of the calculations performed by the Cash Manager in accordance with the provisions of this Agreement, the Asset Monitor is entitled to assume that all information provided to the Asset Monitor in accordance with Section 3 is true and correct and is complete and not misleading and is not required to conduct an audit or other similar examination in respect of or otherwise take steps to verify the accuracy or completeness of such information save that the Asset Monitor will be required to advise the Cash Manager if it is not or has not been provided with any of those figures referred to in Sections 3.1 or 3.2 as applicable. Further assumptions, qualifications and conditions with respect to the arithmetic testing to be conducted by the Asset Manager are set out in Schedule “A” hereto. 

 

	
 2.7 

	
 The Asset Monitor shall promptly notify the Guarantor LP, the Cash Manager, the Issuer and the Bond Trustee if the information provided by the Cash Manager to the Asset Monitor in accordance with Section 3 contains what appear to be manifest errors.  Following such notification, and within three Business Days of receipt of such notification, the Cash Manager shall provide such further or amended information to the Asset Monitor as is necessary to remedy such manifest errors or shall confirm the accuracy of the information provided in accordance with Section 3.  By no later than five Business Days following the receipt of such further or amended information or confirmation, the Asset Monitor shall conduct arithmetic tests to test the arithmetic accuracy of the calculations performed by the Cash Manager in relation to the Asset Coverage Test or the Amortization Test, as applicable, on the relevant Calculation Date and notify the Guarantor LP, the Cash Manager, the Bond Trustee, the Issuer and the Rating Agencies of the results of its tests in accordance with Section 2.5 above. 

 

	
 2.8 

	
 For greater certainty, and without limiting anything else contained herein, the services of the Asset Monitor hereunder are limited to conducting arithmetic tests to test the arithmetic accuracy of the calculations of Cash Manager and in no circumstances, except with the prior written consent of the Asset Monitor, shall the Asset Monitor be responsible for performing or perform  the Asset Coverage Test or the Amortization Test except to the extent required by the arithmetic testing and reporting procedures hereunder. 

 

 3.      PROVISION OF INFORMATION TO THE ASSET MONITOR 

 

	
 3.1 

	
 In accordance with Section 3.4(b) of the Cash Management Agreement, the Cash Manager shall provide the Asset Monitor with: 

 

	
    

	
 (a) 

	
 the figures used by the Cash Manager for items A, B, C, D and Z described in Schedule 2 (Asset Coverage Test) of the Guarantor LP Agreement in its calculation of the Adjusted Aggregate Loan Amount on the relevant Calculation Date; 

 

	
    

	
 (b) 

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

 

	
    

	
 (c) 

	
 the Principal Amount Outstanding of the Covered Bonds as calculated by the Cash Manager on the relevant Calculation Date. 

 

    

 5 

    

 

	
 3.2 

	
 In accordance with Section 3.4(b) of the Cash Management Agreement, the Cash Manager shall provide the Asset Monitor with: 

 

	
    

	
 (a) 

	
 the figures used by the Cash Manager for items A, B, C and Z described in Schedule 2 (Asset Coverage Test) of the Guarantor LP Agreement in its calculation of the Amortization Test Aggregate Loan Amount on the relevant Calculation Date; 

 

	
    

	
 (b) 

	
 the constituent figures used in the calculation of items A and Z described in Schedule 2 (Asset Coverage Test) of the Guarantor LP Agreement in order to test the arithmetical accuracy of the figures used by the Cash Manger for items A and Z provided in accordance with paragraph 3.2(a) above; and 

 

	
    

	
 (c) 

	
 the Principal Amount Outstanding of the Covered Bonds as calculated by the Cash Manager on the relevant Calculation Date. 

 

	
 3.3 

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

 

	
 3.4 

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

 

 4.      COVENANTS OF THE ASSET MONITOR 

 

 Without prejudice to any of its specific obligations under this Agreement, the Asset Monitor covenants with the Guarantor LP and the Bond Trustee that it shall: 

 

	
    

	
 (a) 

	
 exercise reasonable skill and care in the performance of its obligations hereunder; and 

 

	
    

	
 (b) 

	
 comply with 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 under this Agreement. 

 

    

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 5.      TERMINATION 

 

	
 5.1 

	
 The Asset Monitor may, at any time, resign from its appointment under this Agreement upon providing the Guarantor LP (or the Cash Manager on its behalf) and the Bond Trustee with 60 days’ prior written notice, provided that the Asset Monitor shall use its reasonable efforts to assist with the appointment of a replacement, which agrees to perform the duties (or substantially similar duties) of the Asset Monitor set out in this Agreement. The Asset Monitor may terminate this Agreement immediately upon written notice to Guarantor LP if it determines that (i) a governmental, regulatory or professional entity (including, without limitation, the Canadian Institute of Chartered Accountants, provincial accounting institutes, securities commissions, the Public Company Accounting Oversight Board or the Canadian Public Accountability Board) or an entity having the force of law has introduced a new, or modified an existing, law, rule, regulation, interpretation or decision the result of which would render the Asset Monitor’s performance of any part of this Agreement illegal or otherwise unlawful or in conflict with independence or professional rules, or (ii) circumstances change (including, without limitation, changes in ownership of the Guarantor LP, Issuer and Cash Manager or any of their affiliates) such that the Asset Manager’s performance of any part of this Agreement would be illegal or otherwise unlawful or in conflict with independence or professional rules. 

 

	
 5.2 

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

 

	
 5.3 

	
 The Guarantor LP may, at any time but subject to the prior written consent of the Bond Trustee, terminate the appointment of the Asset Monitor hereunder upon providing the Asset Monitor with 60 days’ prior written notice, provided that, subject to Section 5.5, such termination may not be effected unless and until a replacement approved by the Bond Trustee has been found by the Guarantor LP (such replacement to be approved by the Bond Trustee if the replacement is an accounting firm of national standing) which agrees to perform the duties (or substantially similar duties) of the Asset Monitor set out in this Agreement. 

 

	
 5.4 

	
 Any costs, charges, fees or expenses incurred by the Asset Monitor as a result of its appointment being terminated under Section 5.3 above (together with the Asset Monitor’s rights under Section 6 in relation to moneys owing to the Asset Monitor for the period up to and including the date of the termination of the Asset Monitor’s appointment becoming effective) shall be payable in full by the Guarantor LP. 

 

	
 5.5 

	
 If a replacement Asset Monitor has not been appointed in accordance with the provisions of Section 5.1 or 5.3 above of this Agreement within 60 days of the giving of notice of resignation or termination in accordance with Section 5.1 or 5.3 above, as applicable, or in any event by the date which is 30 days prior to the date on which a test is to be conducted by the Asset Monitor in accordance with Sections 2.1 and 2.2 hereof, as applicable, the Guarantor LP shall use all reasonable efforts to appoint an accounting firm of national standing to carry out the relevant tests in accordance with Sections 2.1 and 2.2 hereof, on a one-off basis, provided that notice of such appointment is given to the Bond Trustee and the Guarantor LP continues to use reasonable efforts to find a replacement approved by the Bond Trustee which replacement agrees to perform the duties (or substantially similar duties) of the Asset Monitor set out in this Agreement.  Subject to the requirements of this Section 5.5 being met in relation to any such replacement, the Guarantor LP shall not be obliged to appoint that replacement.  For greater certainty, the Bond Trustee shall not be obliged to act as Asset Monitor in any circumstances. 

 

	
 5.6 

	
 The Asset Monitor agrees that, if a replacement is found in accordance with the provisions of Section 5.1 or Section 5.3 above of this Agreement, or a temporary arrangement is instituted pursuant to Section 5.5, the Asset Monitor shall provide all reasonable co-operation to the replacement and shall forthwith deliver to such replacement (and in the meantime hold on trust for the Guarantor LP and the Bond Trustee) all records, papers, files and computer data which it has received pursuant to this Agreement since the most recent Calculation Date in respect of which the Asset Monitor was obliged, in accordance with Section 2 above, to conduct tests of the calculations performed by the Cash Manager on such Calculation Date.  The Asset Monitor shall retain all of its intellectual property rights in relation to its written notifications provided under Section 2.5 and in relation to any of its records, working papers, files or computer data which it produces in its capacity as Asset Monitor. 

 

    

 7 

    

 

	
 5.7 

	
 The Asset Monitor’s appointment under this Agreement will terminate upon the earlier of the occurrence of a Guarantor LP Event of Default or the repayment in full of all amounts outstanding in relation to all Covered Bonds. 

 

 6.      FEES 

 

	
 6.1 

	
 The Guarantor LP shall (subject to Section 6.2 and 6.3 below) pay to the Asset Monitor for its services hereunder a fee for each report that it provides (the “Asset Monitor Fee”) (exclusive of GST) in an amount equal to the fee charged by the Asset Monitor in respect of each calculation, as set out in Schedule “A” hereto on the first Guarantor LP Payment Date (each such date, an “Asset Monitor Payment Date”) following delivery by the Asset Monitor of the relevant report. 

 

	
 6.2 

	
 The parties agree that the Asset Monitor Fee shall be payable by Guarantor LP (or the Cash Manager on its behalf) on the Guarantor LP Payment Date immediately following the Calculation Period in which such invoice is delivered to the Guarantor LP (or the Cash Manager on its behalf). 

 

	
 6.3 

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

 

 7.      SUBORDINATION OF RIGHTS 

 

	
 7.1 

	
 The Asset Monitor hereby agrees that it shall not take any steps for the purpose of recovering any amounts payable to it under or pursuant to this Agreement (including, without limitation, by exercising any rights of set-off) or procuring the winding up, administration or liquidation of the Guarantor LP in respect of any of its liabilities whatsoever unless a Guarantor LP Acceleration Notice shall have been served. 

 

	
 7.2 

	
 The Asset Monitor agrees to be bound by the terms of the Priorities of Payment set out in Article 6 (Priorities of Payments) of the Guarantor LP Agreement and in the Security Agreement. Without prejudice to Section 7.1 above, the Asset Monitor further agrees that, notwithstanding any other provision contained herein, it will not demand or receive payment of, or any distribution in respect of or on account of, any amounts payable by the Guarantor LP (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to the Asset Monitor under the Asset Monitor Agreement, in cash or in kind, and will not apply any money or assets in discharge of any such amounts payable to it (whether by set off or by any other method), unless all amounts then due and payable by the Guarantor LP to all other creditors ranking higher in the relevant Priorities of Payments have been paid in full. 

 

    

 8 

    

 

	
 7.3 

	
 Without prejudice to Section 7.2 above, whether in the liquidation of the Guarantor LP 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 the Asset Monitor in respect of any amount payable by the Guarantor LP (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to the Asset Monitor under this Agreement at a time when, by virtue of the provisions of this Agreement, the Guarantor LP Agreement and the Security Agreement, no payment or distribution should have been made, the amount so received shall be held by the Asset Monitor 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). 

 

	
 7.4 

	
 Without prejudice to Section 7.1 above, the Asset Monitor shall not claim, rank, prove or vote as a creditor of the Guarantor LP or its estate in competition with any prior ranking creditors in the relevant Priorities of Payments, or claim a right of set-off until all amounts then due and payable to creditors who rank higher in the relevant Priorities of Payments have been paid in full. 

 

	
 7.5 

	
 Neither the Guarantor LP nor the Bond Trustee shall pay or repay, or make any distribution in respect of, any amount owing to the Asset Monitor under this Agreement (in cash or in kind) unless and until all amounts then due and payable by the Guarantor LP or the Bond Trustee to all other creditors ranking higher in the relevant Priorities of Payments have been paid in full. 

 

	
 7.6 

	
 The perpetuity period for the trusts in this Section 7 shall be 80 years. 

 

 8.      ASSIGNMENTS AND TRANSFERS 

 

	
 8.1 

	
 Subject to Section 8.2 no party to this Agreement may assign, novate, transfer or sub-contract any of its rights or obligations under this Agreement other than with the prior consent of the other parties to this Agreement, which consent may not be unreasonably withheld or delayed, and unless Rating Agency Confirmation has been received in respect of any such assignment, novation or transfer or sub-contracting. 

 

	
 8.2 

	
 The parties hereto acknowledge and agree that the Guarantor LP is permitted to assign its rights hereunder to the Bond Trustee pursuant to the Security Agreement. 

 

 9.      CONFIDENTIALITY 

 

	
 9.1 

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

 

	
    

	
 (a) 

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

 

	
    

	
 (b) 

	
 information which is public knowledge otherwise than as a result of the wrongful conduct of the Asset Monitor; 

 

	
    

	
 (c) 

	
 information that the Asset Monitor is required to disclose pursuant to the laws of the Province of Ontario or the federal laws of Canada applicable therein or the order of any court of the Province of Ontario or any court competent to the appeals therefrom or pursuant to any direction, request or requirement (whether or not having the force of law) of any governmental or other regulatory or taxation authority in Canada or the United Kingdom (including, without limitation, any official bank examiners or regulators), or any stock exchange on which securities issued by the Issuer are listed; 

 

    

 9 

    

 

	
    

	
 (d) 

	
 information which the Asset Monitor wishes to disclose to its professional indemnity insurers or advisers where such insurers or advisers receive the same under a duty of confidentiality; 

 

	
    

	
 (e) 

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

 

	
    

	
 (f) 

	
 information disclosed to professional advisers of the Asset Monitor who receive the same under a duty of confidentiality in substantially the same terms as this Section 9; and 

 

	
    

	
 (g) 

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

 

	
 9.2 

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

 

	
 9.3 

	
 The Asset Monitor agrees (subject to the Security granted pursuant to the Security Agreement) that it shall have recourse only to sums paid to or received by (or on behalf of) the Guarantor LP pursuant to the Bank Account Agreement, the Mortgage Sale Agreement, the Guarantor LP Agreement, the Intercompany Loan Agreement, the Swap Agreements, or any other document entered into by the Guarantor LP in relation to the Intercompany Loan Agreement or the Loans. 

 

 10.    PROVISION OF INFORMATION TO THE BOND TRUSTEE 

 

 The Cash Manager, solely in its capacity as cash manager, the Guarantor LP and the Asset Monitor shall each provide to the Bond Trustee, or procure the provision to the Bond Trustee of, such information and evidence available to that party in respect of any dealing between that relevant party, in the case of the Cash Manager, solely in its capacity as cash manager, or its officers, employees, attorneys or agents and the Cash Manager, solely in its capacity as cash manager, the Guarantor LP and the Asset Monitor (as applicable) under or in relation to this Agreement as the Bond Trustee may reasonably request and the Cash Manager, solely in its capacity as cash manager, the Guarantor LP and the Asset Monitor hereby waive any right or duty of confidentiality which they may have or which may be owed to them in respect of the disclosure of such information and evidence pursuant to this Section 10. 

 

 11.    LIABILITY 

 

	
 11.1 

	
 To the fullest extent permitted by law, the Asset Monitor shall not have liability hereunder to the extent that liability would (but for this Section 11.1) be imposed upon the Asset Monitor by reason of it having relied upon any statement or information made or provided by any person (including information provided in accordance with Section 3 above) which was untrue, inaccurate, incomplete or misleading without the Asset Monitor having been aware of this other than in respect of the accuracy of the calculations performed by the Cash Manager in respect of the Asset Coverage Test and the Amortization Test which the Asset Monitor has been appointed to test in accordance with the provisions of this Agreement. 

 

    

 10 

    

 

	
 11.2 

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

 

	
 11.3 

	
 To the fullest extent permitted by law, the Asset Monitor shall not be liable to any other party hereto for any loss or damage suffered by them or any one of them arising from fraud, misrepresentation, withholding of information material to services performed under this Agreement or other default relating to such material information on the part of any such party. 

 

	
 11.4 

	
 The Asset Monitor shall not be liable to any other party hereto, in contract or tort or under statute or otherwise for any indirect or consequential economic loss or damage (including loss of profits) suffered by such party, arising from or in connection with the performance by the Asset Monitor of its obligations under this Agreement, however such loss or damage is caused, except as a result of gross negligence, fraud or other deliberate breach of the covenants or obligations of the Asset Monitor hereunder. 

 

	
 11.5 

	
 Any Sections in this Agreement which operate or which may operate to exclude or limit the liability of the Asset Monitor or any other person in any respects shall not operate to exclude or limit any liability which cannot lawfully be excluded or limited. 

 

	
 11.6 

	
 The Guarantor LP 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. 

 

 12.    FURTHER PROVISIONS 

 

	
 12.1 

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

 

	
 12.2 

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

 

	
 12.3 

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

 

    

 11 

    

 

 13.    NOTICES 

 

	
 13.1 

	
 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 the registered office of such person set forth above unless an alternative address is provided below, in which case delivery shall be to the address provided below, or by facsimile transmission to facsimile number set forth below, as applicable: 

 

 in the case of the Guarantor LP, to: 

 

 RBC Covered Bond Guarantor Limited Partnership 

 Royal Bank Plaza, South Tower 

 14th Floor, 200 Bay Street 

 Toronto, Ontario 

 Canada M5J 2J5

 

 Attention: Ann Milne, Senior Manager 

 Facsimile number: (416) 974-6056 

 

	
    

	
 (a) 

	
 in the case of the Asset Monitor, to: 

 Deloitte & Touche LLP 

 Brookfield Place, Suite 1400 

 Toronto, Ontario, M5J 2V1 

 Attention: Michael Darroch 

 Facsimile number: 416-601-6590; 

	
    

	
 (b) 

	
 in the case of the Cash Manager or the Issuer, to: 

 Royal Bank of Canada 

 Royal Bank Plaza, South Tower 

 14th Floor, 200 Bay Street 

 Toronto, Ontario 

 Canada M5J 2J5 

 Attention: Ann Milne, Senior Manager 

 Facsimile number: (416) 974-6056 

 

	
    

	
 (c) 

	
 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 

	
    

	
 Facsimile number: (416) 981-9777 

 

    

 12 

    

 

	
 13.2 

	
 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 Business Day and such delivery was made prior to 4:00 p.m. (Toronto time) and otherwise on the next Business Day, (ii) in the case of first class post, when it would be received in the ordinary course of the post, or (ii) if transmitted by facsimile transmission on the Business Day following the date of transmission provided the transmitter receives a confirmation of successful transmission. 

 

	
 13.3 

	
 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. 

 

	
 13.4 

	
 Notwithstanding anything else in this Section 13 and provided that each give their prior consent to such delivery, the Asset Monitor may send notice to or otherwise communicate with any of the Guarantor LP, the Cash Manager, the Bond Trustee, or the Rating Agencies by electronic mail.  Each of the Cash Manager, the Bond Trustee, the Issuer and the Rating Agencies shall be deemed: (i) to have received any electronic mail sent by the Asset Monitor pursuant to the terms of this Section 13.4 subject to the risks (including the security risks of interception, unauthorized access, corruption or viruses) of communications via electronic mail and (ii) to have performed reasonable virus checks required in connection with the receipt of electronic mail. 

 

 14.    COUNTERPARTS 

 

 This Agreement may be executed in any number of counterparts (manually or by facsimile), and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.  Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument. 

 

 15.    THE BOND TRUSTEE 

 

	
 15.1 

	
 If there is any change in the identity of the Bond Trustee, the parties to this Agreement shall execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require for the purpose of vesting in the successor Bond Trustee the rights and obligations of the outgoing Bond Trustee under this Agreement.  The Guarantor LP shall indemnify the Asset Monitor for all reasonable costs incurred by the Asset Monitor in relation to such change. 

 

	
 15.2 

	
 The Bond Trustee has agreed to become a party to this Agreement for the better preservation and enforcement of its rights under this Agreement but shall have no responsibility for any of the obligations of, nor assume any liabilities to, the Asset Monitor, the Cash Manager or the Guarantor LP hereunder.  For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and obligations of the Bond Trustee are governed by the Trust Deed and the Security Agreement.  Any liberty or right which may be exercised or any 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 shall not be responsible for any liability occasioned by so acting, if acting in accordance with the terms of the Trust Deed and the Security Agreement, but without prejudice to the obligation of the Bond Trustee to act reasonably. 

 

    

 13 

    

 

 16.    MODIFICATION 

 

 No amendment, modification or variation 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 hereto and Rating Agency Confirmation has been received for such amendment, modification or variation. Each proposed amendment or waiver of this Agreement that is considered by the Guarantor LP to be a material amendment or waiver shall be subject to Rating Agency Confirmation and the Guarantor LP (or the Cash Manager on its behalf) shall or shall cause notice to be delivered from time to time to the Rating Agencies of amendment or amendments thereto, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor LP under this Agreement. 

 

 17.    NON-PETITION 

 

 The Cash Manager and Asset Monitor agree that they shall not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor LP, or any of the general partners of the Guarantor LP, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer under the Programme 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. 

 

 18.    CONTINUING PROVISIONS 

 

 Sections 5.2, 5.4, 5.6, 6, 7, 9, 11, 17, 19 and 21 of this Agreement shall survive the expiry or termination of this Agreement. 

 

 19.    ENTIRE AGREEMENT 

 

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

 

 20.    GOVERNING LAW 

 

 This Agreement shall be governed by, and construed in accordance with, the laws of Ontario and the laws of Canada applicable therein. 

 

 21.    SUBMISSION TO JURISDICTION 

 

 Each party to this Agreement hereby irrevocably submits to the exclusive jurisdiction of the Ontario courts in any action or proceeding arising out of or relating to this Agreement, and hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined by such courts.  Each party to this Agreement hereby irrevocably waives, to the fullest extent it may possibly do so, any defence or claim that the Ontario courts are an inconvenient forum for the maintenance or hearing of such action or proceeding. 

 

 [The remainder of this page intentionally left blank.] 

 

    

 14 

    

 

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

 

	   	
 RBC COVERED BOND GUARANTOR  

 LIMITED PARTNERSHIP, by its general  

 partner RBC COVERED BOND GP INC. 

	   	   
	   	
 Per: 

	    
	   	    	
 Name: 

	   	    	
 Title: 

  

	   	
 ROYAL BANK OF CANADA 

	   	   
	   	
 Per: 

	    
	   	    	
 Name: 

	   	    	
 Title: 

  

	   	
 DELOITTE & TOUCHE LLP 

	   	   
	   	    
	   	    
	   	    

	   	
 COMPUTERSHARE TRUST COMPANY  

 OF CANADA 

	   	   
	   	
 Per: 

	    
	   	    	
 Name: 

	   	    	
 Title: 

	   	
 Per: 

	    
	   	    	
 Name: 

	   	    	
 Title: 

    

 

    

 

 SCHEDULE “A” 

 ASSUMPTIONS, QUALIFICATIONS AND CONDITIONS 

 

  

 The parties to this Agreement specifically acknowledge and agree to the following: 

 

	
 l 

	
 The performance of the agreed-upon arithmetic testing by the Asset Monitor will not constitute an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion on the elements, accounts, or items of a financial statement.  Therefore, Asset Monitor will not be in a position to express, and will not express, an opinion or any other form of assurance with respect to any matters as a result of performing the agreed-upon testing; 

 

	
 l 

	
 The agreed-upon testing that the Asset Monitor is to perform is limited in nature and does not comprehend all matters relating to the Programme that might be pertinent or necessary as part of the Programme; 

 

	
 l 

	
 The Asset Monitor’s report will not extend to any financial statements taken as a whole, or internal controls for any date or period, of any entity involved in the Programme; 

 

	
 l 

	
 The nature, scope, and design of the Asset Coverage Test and the Amortization Test is the sole responsibility of the Cash Manager.  Furthermore, Asset Monitor has no responsibility to advise the any party to this Agreement of other procedures and tests that might be performed. The Asset Monitor makes no representations as to the sufficiency of the arithmetic tests for the purposes of any party to this Agreement; 

 

	
 l 

	
 Asset Monitor responsibility is limited to performing the arithmetic tests specified in the Agreement, and to reporting as required in the Agreement. The Asset Monitor’s services cannot be relied on to disclose significant deficiencies, material weaknesses, or fraud should they exist.  In addition, Asset Monitor’s services cannot be relied on to disclose errors, other than those errors that may be reported as findings in connection with the application of the agreed-upon arithmetic testing procedures that Asset Monitor is to perform hereunder.  Asset Monitor has no responsibility for updating the arithmetic testing procedures performed or for performing any additional procedures other than as set out in this Agreement; 

 

	
 l 

	
 The Cash Manager shall be solely responsible for providing accurate and complete information requested by Asset Monitor.  Asset Monitor has no responsibility for the accuracy or completeness of the information provided by or on behalf of the Cash Manager or any other party; 

 

	
 l 

	
 The Asset Monitor may request that management of the Guarantor LP, Issuer or Cash Manager provide Asset Monitor with a representation letter confirming that such management is not aware of any matters that are inconsistent with or contradict the findings of the agreed-upon arithmetic testing procedures to be performed by the Asset Monitor; 

 

	
 l 

	
 Should Asset Monitor determine that significant restrictions are being placed on the performance of the agreed-upon arithmetic testing procedures by the Guarantor LP, Issuer or Cash Manager, including, without limitation, the failure of management of the Guarantor LP, Issuer or Cash Manager to provide the Asset Monitor with a management representation letter that Asset Monitor determines to be satisfactory, Asset Monitor shall be entitled to withdraw from this Agreement in accordance with section 5.1; and 

 

    

 

    

 Inclusion of Asset Monitor reports or references to Asset Monitor in other documents or electronic sites 

 If a party to this Agreement intends to publish or otherwise reproduce in any document our report on the specified arithmetic procedures or otherwise make reference to the Asset Monitor in a document that contains other information in addition to the specified arithmetic testing procedures report (e.g., in a periodic filing with a regulator, in a debt or equity offering circular or in a private placement memorandum), thereby associating the Asset Monitor with such document, such party agrees that its management will provide the Asset Monitor with a draft of the document to read and obtain our approval for the inclusion or incorporation by reference of our report, or the reference to the Asset Monitor, in such document before the document is printed and distributed.  The inclusion or incorporation by reference of our report in any such document would constitute the re-issuance of our report.  The parties to this Agreement agree to provide adequate notice of the preparation of any such public documents.  The parties also agree that they will notify the Asset Monitor and obtain the Asset Monitor’s approval prior to including any report on an electronic site. The Asset Monitor agreement to perform the services described in the Agreement does not constitute the Asset Monitor’s agreement to be associated with any such documents published or reproduced by or on behalf of any party to this Agreement.  Any request by a party to reissue a report, to consent to its inclusion or incorporation by reference in an offering or other document, or to agree to its inclusion on an electronic site, will be considered by the Asset Monitor based on the facts and circumstances existing at the time of such request.  The estimated fees for any services that would need to be performed in connection with any such request; and their scope would be subject to agreement with the Asset Monitor at such time and would be described in a separate agreement. 

 

 

 

 

  

    

 

    

 

 SCHEDULE B 

 FEES 

 The Asset Monitor Fee for performing the Services is as follows: 

	    	
 Cost per report 

	    	
 Minimum 

	
 Maximum 

	
 Initial report 

	
 $8,000 

	
 $15,000 

	
 Subsequent reports 

	
 $5,000 

	
 $10,000 

 Beyond the initial performance of agreed-upon arithmetic testing procedures, the Cash Manager may request subsequent performance of such procedures up to a maximum of 11 times.  Thus, the frequency of performance of the agreed-upon tests is a range of one to twelve times.  Accordingly, the range of fees for performing the services set out in this Agreement is a range of $8,000 to $125,000.

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