F-3/A

As filed with the Securities and Exchange Commission on October 3, 2013

Registration No. 333-189814

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT No. 1

to

FORM F-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Bank of Montreal

BMO Covered Bond Guarantor Limited Partnership

(Exact name of Registrant as specified in its charter)

CANADA

(State or other jurisdiction of incorporation or organization)

13-4941092

(I.R.S. Employer Identification No.)

100 King St. West

1 First Canadian Place

Toronto, Ontario

Canada M5X 1A1

(416) 867-6785

(Address and telephone number of Registrant’s principal executive offices)

Colleen Hennessy

Bank of Montreal

111 West Monroe Street, P.O. Box 755

Chicago, Illinois 60690

(312) 461-7745

(Name, address and telephone number of agent for service)

Please send copies to:
Lawton M. Camp	Jerry R. Marlatt
Allen & Overy LLP	Morrison & Foerster LLP
1221 Avenue of the Americas	1290 Avenue of the Americas
New York, New York 10020	New York, New York 10104
(212) 610-6300	(212) 468-8000

Approximate date of commencement of proposed sale to the public: At such time or times on or after the effective date of this registration statement as the Registrants shall determine.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  ¨

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box.  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.  ¨

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.  ¨

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered (1)	Proposed maximum aggregate price per security	Proposed maximum aggregate offering price (2)(3)	Amount of registration fee (1)
Covered Bonds	U.S. $10,000,000,000	100%	U.S. $10,000,000,000	U.S. $1,288,000

(1) This Registration Statement also includes an indeterminate amount of securities of the classes specified above that may be reoffered and resold on an ongoing basis after their initial sale in market-making transactions by affiliates of the Registrant. These securities consist of an indeterminate amount of such securities that are initially being registered, and will initially be offered and sold, under this Registration Statement. All such market-making reoffers and resales of these securities that are made pursuant to a registration statement after the effectiveness of this registration statement are being made solely pursuant to this Registration Statement.

(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act.

(3) Separate consideration may not be received for registered securities that are issuable on exercise, conversion or exchange of other securities.

The Registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a) of the Act, may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated October [—], 2013

Bank of Montreal

unconditionally and irrevocably guaranteed by

BMO Covered Bond Guarantor Limited Partnership

Covered Bonds

up to an aggregate initial offering price of U.S.$10,000,000,000

or the equivalent thereof in other currencies under the global registered covered bond program

This prospectus describes some of the general terms that may apply to these covered bonds and the related guarantee and the general manner in which they may be offered. We will give you the specific prices and other terms of the covered bonds we are offering in supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest. We may sell the covered bonds to or through one or more dealers or agents. The names of the dealers or agents will be set forth in supplements to this prospectus.

Prospective investors should be aware that the acquisition of the covered bonds described herein may have tax consequences both in the United States and in Canada. Such consequences may not be described fully herein or in any applicable prospectus supplement.

Investing in the covered bonds involves risks. See “Risk Factors” beginning on page 25 of this prospectus.

The enforcement by investors of civil liabilities under United States federal securities laws may be affected adversely by the fact that Bank of Montreal is a Canadian bank, that many of its officers and directors are residents of Canada, that BMO Covered Bond Guarantor Limited Partnership is a limited partnership existing under the laws of the Province of Ontario, that some or all of the dealers or experts named in the registration statement may be residents outside of the United States, and that all or a substantial portion of the assets of Bank of Montreal, BMO Covered Bond Guarantor Limited Partnership and such persons may be located outside the United States.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The covered bonds described herein will not constitute deposits that are insured under the Canada Deposit Insurance Corporation Act (Canada) or by the United States Federal Deposit Insurance Corporation.

THE COVERED BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY CANADA MORTGAGE AND HOUSING CORPORATION (“CMHC”) NOR HAS CMHC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. THE COVERED BONDS ARE NEITHER INSURED NOR GUARANTEED BY CMHC OR THE GOVERNMENT OF CANADA OR ANY OTHER AGENCY THEREOF.

Arrangers for the Program

Barclays BMO Capital Markets

The date of this prospectus is             , 2013

Table of Contents

	Page
ABOUT THIS PROSPECTUS		6
SUMMARY		12
PROGRAM STRUCTURE DIAGRAM		15
SUMMARY OF THE COVERED BOND PROGRAM		16
RISK FACTORS		25
USE OF PROCEEDS		54
CONSOLIDATED EARNINGS RATIOS		55
CONSOLIDATED CAPITALIZATION OF THE BANK		56
BANK OF MONTREAL		57
BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP		60
DESCRIPTION OF THE COVERED BONDS		63
TERMS AND CONDITIONS OF THE COVERED BONDS		70
SUMMARY OF THE PRINCIPAL DOCUMENTS		114
CASHFLOWS		175
PORTFOLIO		190
LOAN ORIGINATION AND LENDING CRITERIA		192
THE SERVICER		196
DESCRIPTION OF THE CANADIAN REGISTERED COVERED BOND PROGRAMS REGIME		200
PLAN OF DISTRIBUTION (AND CONFLICTS OF INTEREST)		203
TAXATION		207
BENEFIT PLAN INVESTOR CONSIDERATIONS		223
OWNERSHIP AND BOOK-ENTRY		226
EXPERTS		231
LEGAL MATTERS		232
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION		233
GLOSSARY		234

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In this prospectus, unless the context otherwise indicates, the “Bank” means Bank of Montreal, and “Guarantor” means BMO Covered Bond Guarantor Limited Partnership, and “we”, “us” or “our” means the Bank and Guarantor collectively. In this prospectus and any prospectus supplement, currency amounts are stated in Canadian Dollars (“$”), unless specified otherwise.

ABOUT THIS PROSPECTUS

This document is called a prospectus and is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration or continuous offering process. The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the covered bonds and related guarantee offered under this prospectus. The registration statement can be accessed at the SEC’s website at www.sec.gov or inspected at the offices of the SEC.

This prospectus provides you with a general description of the covered bonds the Bank may offer and the Guarantor may guarantee. Each time the Bank offers covered bonds pursuant to this prospectus, it will provide a prospectus supplement containing specific information about the terms of the covered bonds being offered. A prospectus supplement may include a discussion of any risk factors or other special considerations applicable to those covered bonds or to us. A prospectus supplement may also add, update or change information in this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the information in the prospectus supplement. You should read both this prospectus and any applicable prospectus supplement together with additional information described under the heading “Where You Can Find More Information” on page 7 of this prospectus.

The Bank may sell covered bonds to dealers who will sell the covered bonds to the public on terms fixed at the time of sale. In addition, the covered bonds may be sold by the Bank directly or through agents designated from time to time. If the Bank, directly or through agents, solicits offers to purchase the covered bonds, it reserves the sole right to accept and, together with any agents, to reject, in whole or in part, any of those offers.

Any prospectus supplement will contain the names of the dealers or agents, if any, together with the terms of offering, the compensation of those dealers and the net proceeds to us. Any dealers or agents participating in the offering may be deemed “underwriters” within the meaning of the Securities Act.

DOCUMENTS INCORPORATED BY REFERENCE

The SEC allows us to “incorporate by reference” into this prospectus the information in documents we file with it. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus and should be read with the same care. When we update the information contained in documents that have been incorporated by reference by making future filings with the SEC the information incorporated by reference in this prospectus is considered to be automatically updated and superseded. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. In other words, in the case of a conflict or

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inconsistency between information contained in this prospectus and information incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later. The making of a modifying or superseding statement will not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded will not be deemed, except as so modified or superseded to constitute a part of this prospectus.

The Bank incorporates by reference into this prospectus its annual report on Form 40-F for the fiscal year ended October 31, 2012 (the “2012 Annual Report”), the Bank’s reports filed on Form 6-K filed on February 26, 2013 and May 29, 2013, and each of the Bank’s reports on Form 6-K after that date in which the Bank states that such report is also incorporated by reference into one or more of the Bank’s registration statements filed under the U.S. Securities Act of 1933, as amended (the “Securities Act”). In addition, the Bank will incorporate by reference into this prospectus all documents that it has filed under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and, to the extent, if any, the Bank designates therein, reports on Form 6-K it furnishes to the SEC after the date of this prospectus and prior to the termination of any offering contemplated in this prospectus.

The Guarantor will file ongoing disclosure regarding the Covered Bond Guarantee (as defined below) and the Portfolio in reports on Form 10-K, Form 8-K, and Form 10-D. The Guarantor incorporates by reference its annual report on Form 10-K filed after the date of this prospectus and each Form 10-D filed with the SEC. In addition, the Guarantor will incorporate by reference into this prospectus all documents that it has filed under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of every offering contemplated in this prospectus.

Upon a new annual report and the related annual financial statements being filed by the Bank with, and, where required, accepted by, the SEC, the previous annual report will be deemed no longer incorporated by reference into this prospectus for purposes of future offers and sales of covered bonds under this prospectus.

Upon a new annual report being filed by the Guarantor with, and, where required, accepted by, the SEC, the previous annual report will be deemed no longer incorporated by reference into this prospectus for the purposes of further offers and sales of covered bonds under this prospectus.

All documents incorporated by reference, or to be incorporated by reference, have been filed with or furnished to, or will be filed with or furnished to, the SEC.

You may request a copy of these filings, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing, at no cost, by writing to or telephoning us at the following address:

Bank of Montreal

Corporate Secretary’s Department

100 King Street West 1

First Canadian Place

Toronto, Ontario

Canada M5X 1A1

Telephone: (416) 867-6785

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WHERE YOU CAN FIND MORE INFORMATION

In addition to the continuous disclosure obligations under the securities laws of the provinces and territories of Canada, the Bank and the Guarantor are subject to the informational reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith files reports and other information with the SEC. Under a multijurisdictional disclosure system adopted by the United States and Canada, such reports and other information may be prepared in accordance with the disclosure requirements of the provincial and territorial securities regulatory authorities of Canada, which requirements are different from those of the United States. These reports and other information, when filed or furnished by us in accordance with such requirements, can be inspected and copied by you at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You can get further information about the SEC’s Public Reference Room by calling 1-800-SEC-0330. The Bank’s and the Guarantor’s filings with the SEC are also available to the public through the SEC’s website at www.sec.gov. The Bank’s common shares are listed on the New York Stock Exchange, and reports and other information concerning the Bank can be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

The Bank and the Guarantor have filed with the SEC a registration statement on Form F-3 with respect to the covered bonds and related guarantee covered by this prospectus. This prospectus does not contain all of the information that is set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. Statements made in this prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete, and in each instance, you should refer to the exhibits that are a part of the registration statement for a copy of the contract, agreement or other document for a more complete description of the matter. For further information with respect to the Bank, the Guarantor, the covered bonds and the related guarantee, reference is made to the registration statement and the exhibits thereto, which are publicly available as described in the preceding paragraph.

Additional information with respect to the Bank, the Guarantor, the Portfolio and certain other matters, together with copies of each of the Transaction Documents and the Investor Reports filed by the Bank from time to time, is also available on the Bank’s website at www.bmo.com/home/about/banking/investor-relations/financial-information/covered-bonds and through the CMHC’s covered bond registry (the “Registry”) at www.cmhc-schl.gc.ca/coveredbonds. Information on or accessible through the Bank’s website does not form part of this prospectus and should not be relied upon.

FORWARD-LOOKING STATEMENTS

Our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the SEC, or in other communications. All such statements by the Bank (but not the Guarantor) are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for 2013 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, and the results of or outlook for our operations or for the Canadian and U.S. economies.

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By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; weak, volatile or illiquid capital and/or credit markets; interest rate and currency value fluctuations; changes in monetary, fiscal or economic policy; the degree of competition in the geographic and business areas in which we operate; changes in laws or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to execute our strategic plans and to complete and integrate acquisitions; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; operational and infrastructure risks; changes to our credit ratings; general political conditions; global capital markets activities; the possible effects on our business of war or terrorist activities; disease or illness that affects local, national or international economies; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; technological changes; and our ability to anticipate and effectively manage risks associated with all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors could adversely affect our results. For more information, please see the discussion in our 2012 Annual Report and the Bank’s reports filed on Form 6-K on February 26, 2013 and May 29, 2013, which are incorporated by reference herein and which outlines in detail certain key factors that may affect the Bank’s future results. When relying on forward-looking statements to make decisions with respect to the Bank, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the Bank or on its behalf, except as required by law. The forward-looking information contained or incorporated by reference into this prospectus is presented for the purpose of assisting investors in understanding our operations, prospects, risks and other extreme factors that impact us specifically as of and for the periods ended on the dates presented, as well as certain strategic priorities and objectives, and may not be appropriate for other purposes.

PRESENTATION OF FINANCIAL INFORMATION

The Bank prepares its consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”), which replaced Canadian generally accepted accounting principles (“GAAP”) for publicly accountable enterprises beginning in 2011. IFRS became effective for the Bank for its interim and annual periods commencing November 1, 2011 (adoption date), and includes the preparation and reporting of one year of comparative figures, including an opening balance sheet as of November 1, 2010 (transition date). For additional information regarding the Bank’s adoption of IFRS, see Note 30 “Transition to International Financial Reporting Standards” in the Bank’s 2012 Annual Report.

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Additionally, we publish our consolidated financial statements in Canadian Dollars. In this prospectus and any applicable supplement, currency amounts are stated in Canadian Dollars ($), unless specified otherwise. As indicated in the table below, the Canadian Dollar has fluctuated in value compared to the U.S. Dollar over time.

The tables below set forth the high and low daily noon exchange rates, the average yearly rate and the rate at period end between Canadian Dollars and U.S. Dollars (in U.S. Dollars per Canadian Dollar) for the five-year period ended October 31, 2012 and the high and low daily noon exchange rates for the three months ended January 31, 2013, the three months ended April 30, 2013, the three months ended July 31, 2013 and for the period August 1, 2013 through October 2, 2013. On October 2, 2013, the daily noon exchange rate was U.S.$0.9679 = $1.00. Our reference to the “daily noon exchange rate” is the daily noon exchange rate as reported by the Bank of Canada.

Year Ended October 31,	High		Low		Average Rate(1)		At Period End
2008		1.0905		0.7726		0.9718		0.8220
2009		0.9716		0.7692		0.8603		0.9282
2010		1.0039		0.9278		0.9605		0.9815
2011		1.0583		0.9430		1.0164		1.0065
2012		1.0299		0.9536		0.9968		1.0004
Three months ending					High		Low
January 31, 2013						1.0164		0.9923
April 30, 2013						1.0040		0.9696
July 31, 2013						0.9977		0.9455
Period of					High		Low
August 1, 2013 through October 2, 2013						0.9768		0.9476

(1) The average of the daily noon exchange rates on the last business day of each full month during the relevant period.

LIMITATIONS ON THE ENFORCEMENT OF U.S. LAWS

AGAINST THE BANK, OUR MANAGEMENT AND OTHERS

The Bank is incorporated under the federal laws of Canada under the Bank Act (Canada) (the “Bank Act”). The Guarantor is an Ontario limited partnership. Substantially all of the Bank’s directors and executive officers, including many of the persons who signed the Registration Statement on Form F-3, of which this prospectus forms a part, and some or all of the experts named in this document, reside outside the United States, and all or a substantial portion of the Bank and the Guarantor’s assets and the assets of such persons are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon such persons, or to realize upon judgments rendered against the Bank or such persons by the courts of the United States predicated upon, among other things, the civil liability provisions of the federal securities laws of the United States. In addition, it may be difficult for you to enforce, in original actions brought in courts in jurisdictions located outside the United States, among other things, civil liabilities predicated upon such securities laws.

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The Bank has been advised by our Canadian counsel, Osler, Hoskin & Harcourt LLP, that a judgment of a United States court predicated solely upon civil liability under such laws and that would not be contrary to public policy would probably be enforceable in Canada if the United States court in which the judgment was obtained has a basis for jurisdiction in the matter that was recognized by a Canadian court for such purposes. The Bank has also been advised by such counsel, however, that there is some residual doubt whether an original action could be brought successfully in Canada predicated solely upon such civil liabilities.

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SUMMARY

This summary highlights key information described in greater detail elsewhere, or incorporated by reference, in this prospectus. You should read carefully the entire prospectus and the documents incorporated by reference and any applicable prospectus supplement before making an investment decision.

Bank of Montreal

The Bank is among North America’s ten largest banks, as measured by assets and market capitalization and offers a broad range of credit and non-credit products and services directly and through Canadian and non-Canadian subsidiaries, offices and branches. As at October 31, 2012, the Bank had more than 12 million customers, approximately 46,000 full-time equivalent employees, maintained approximately 1,570 bank branches in Canada and the United States and operated internationally in major financial markets and trading areas through its offices in 24 other jurisdictions, including the United States. BMO Financial Corp. (“BMO Harris”) (formerly Harris Financial Corp.), based in Chicago and wholly-owned by Bank of Montreal, operates primarily through its subsidiary BMO Harris Bank N.A., which provides banking, financing, investing and cash management services in select markets in the U.S. Midwest. The Bank provides a full range of investment dealer services through entities including BMO Nesbitt Burns Inc., a major fully-integrated Canadian investment dealer, and BMO Capital Markets Corp., Bank of Montreal’s wholly-owned registered securities dealer in the United States.

BMO Covered Bond Guarantor Limited Partnership

The Guarantor is a limited partnership established under the laws of the Province of Ontario whose principal business is to provide a guarantee of the obligations of the Bank pursuant to covered bonds issued by the Bank, from time to time, pursuant to the Bank’s Global Registered Covered Bond Program (the “Program”) and certain ancillary activities with respect thereto.

The Global Registered Covered Bond Program

The Bank intends to issue, offer and sell covered bonds under the Program in the United States pursuant to this prospectus. These covered bonds will be issued under a trust deed governed by Ontario law (the “Trust Deed”). The Bond Trustee acts as the trustee under the Trust Deed. All Series of covered bonds under the Program will have the benefit of the covered bond guarantee (the “Covered Bond Guarantee”) issued by the Guarantor and be secured by a pledge of the Portfolio to the Bond Trustee. The Bank anticipates that it will continue to issue covered bonds by means other than this prospectus under the Trust Deed from time to time. On                     , the Bank was accepted as a registered issuer under Part I.1 of the National Housing Act (Canada) (the “NHA”) and the CMHC Guide in accordance with their terms and on                     , the Program was registered as a registered program under Part I.1 of the NHA and the CMHC Guide. All future covered bonds issued by the Bank under the Program will be covered bonds issued under its registered covered bond program pursuant to Part I.1 of the NHA and the CMHC Guide.

The Legislative Framework sets out certain statutory protections for holders of covered bonds under Canadian federal and provincial bankruptcy, insolvency and fraudulent conveyance laws. The CMHC Guide elaborates on the role and powers of CMHC as administrator of the Legislative Framework and sets out the conditions and restrictions applicable to registered covered bond issuers and registered covered bond programs.

The Portfolio

The assets in the “Portfolio” consist primarily of Canadian residential mortgage loans and home equity loans and their related security interest in residential property, cash and in some cases certain Substitution Assets up to a certain threshold amount. As required by the CMHC Guide, the Portfolio does not include any residential mortgages or home equity loans that are insured by a Prohibited Insurer such as CMHC.

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Global Public Sector Covered Bond Programme

The Bank has previously issued the equivalent of approximately $9.1 billion of covered bonds in a variety of currencies both outside and in the United States pursuant to the private placement exemptions under the Bank’s Global Public Sector Covered Bond Programme utilizing residential mortgage loans insured by the CMHC. $7.6 billion of these covered bonds remain outstanding as of the date of this prospectus, and such covered bonds are guaranteed by a different guarantor entity and are secured by a different cover pool.

The Guarantee

Pursuant to the Covered Bond Guarantee, the Guarantor has irrevocably and unconditionally guaranteed the due and punctual payment of the Guaranteed Amounts on the covered bonds of each Series issued by the Bank in accordance with the Trust Deed.

Program Structure Overview

The Covered Bond Guarantee is secured by a pledge of certain assets of the Guarantor, which includes the Portfolio, to the Bond Trustee pursuant to the terms of the Security Agreement. The Guarantor purchased the initial loans and their Related Security included in the Portfolio from the Bank using amounts borrowed from the Bank under the Intercompany Loan. Proceeds from the Intercompany Loan may also be used to purchase Loans and their Related Security for the Portfolio and for other purposes as described in “Summary of the Principal Documents—Mortgage Sale Agreement.” The Guarantor and the Bank have entered into an Interest Rate Swap Agreement and a Covered Bond Swap Agreement. The Interest Rate Swap Agreement converts interest received on the Portfolio to an amount in excess of the interest rate payable on the Intercompany Loan and, for each Series, the Covered Bond Swap Agreement converts a certain portion of the Canadian Dollar payments from the Interest Rate Swap Agreement (or if not then in place for any reason, the Portfolio) to the currency and interest amounts payable on the related covered bonds. No cash flows will be exchanged under the Covered Bond Swap Agreement until after the occurrence of certain specified events.

Risk Factors

An investment in the covered bonds involves risks. You should carefully consider all of the information set forth in this prospectus and any applicable prospectus supplement and, in particular, should evaluate the specific factors set forth under Risk Factors in deciding whether to invest in the covered bonds. For a discussion of important business and financial risks relating to the Bank, please see “Risk Factors” in our 2012 Annual Report and our reports filed on Form 6-K on February 26, 2013 and May 29, 2013, which are incorporated in this prospectus by reference (and in any of our annual or quarterly reports for a subsequent financial period that are so incorporated).

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Corporate Offices

The Bank’s corporate headquarters are located at 100 King Street West, 1 First Canadian Place, 68th Floor, Toronto, Ontario, Canada M5X 1A1 and the head office is located at 129 rue Saint Jacques, Montréal, Québec, Canada H2Y 1L6. The telephone number is 416-867-6656.

The Guarantor’s address is c/o BMO Covered Bond GP, Inc., Suite 6100, 100 King Street West, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1A1. The telephone number is 416-867-6656.

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PROGRAM STRUCTURE DIAGRAM

The following structure diagram provides an indicative summary of the principal features of the Program. The diagram must be read in conjunction with and is qualified in its entirety by the detailed information presented elsewhere in this prospectus and any applicable prospectus supplement.

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SUMMARY OF THE COVERED BOND PROGRAM

This section is a summary and does not describe every aspect of the covered bonds. This section summarizes the material terms of the covered bonds that are common to all Series of covered bonds and which are more fully described in this prospectus. References to “Conditions” in this summary refer to the Terms and Conditions described elsewhere in this prospectus. This summary is subject to and qualified in its entirety by reference to all the provisions of the Trust Deed and other Transaction Documents, including definitions of certain terms used in the Trust Deed and other Transaction Documents. In this summary, we describe the meaning of only some of the more important terms. This summary is also subject to and qualified by reference to the description of the particular terms of your Series or Tranche described in the applicable prospectus supplement. Those terms may vary from the terms described in this prospectus. The applicable prospectus supplement relating to each Series or Tranche of covered bonds will be attached to the front of this prospectus.

Bank: Bank of Montreal (“BMO”). For a more detailed description of the Bank, see “Bank of Montreal.”

Guarantor: BMO Covered Bond Guarantor Limited Partnership.

Dealers: BMO Capital Markets Corp., Barclays Capital Inc. and any other dealer appointed from time to time by the Bank generally in respect of the Program or in relation to a particular Series or Tranche of covered bonds.

Seller: The Bank, any New Seller or other Limited Partner, who may from time to time accede to, and sell Loans and their Related Security to the Guarantor.

Servicer: The Bank, subject to replacement in accordance with the terms of the Servicing Agreement.

Cash Manager: The Bank, subject to replacement in accordance with the terms of the Cash Management Agreement.

Calculation Agent: Bank of New York Mellon, acting through its offices located at 101 Barclay Street 4E, New York, NY 10286.

Custodian: Computershare Trust Company of Canada, acting through its offices located at 100 University Avenue, 11th Floor, Toronto, Ontario Canada M5J 2Y1.

Registrar, Principal Paying Agent, Transfer Agent and Exchange Agent: Bank of New York Mellon, acting through its offices located at 101 Barclay Street 4E, New York, NY 10286.

Bond Trustee: Computershare Trust Company of Canada, acting through its offices located at 100 University Avenue, 8th Floor, North Tower, Toronto, Ontario Canada M5J 2Y1.

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Cover Pool Monitor: KPMG LLP, acting through its offices at Bay Adelaide Centre, 333 Bay Street, Suite 4600, Toronto, Ontario, Canada M5H 2S5.

Interest Rate Swap Provider: The Bank, subject to replacement in accordance with the terms of the Interest Rate Swap Agreement.

Covered Bond Swap Provider: The Bank, subject to replacement in accordance with the terms of the Covered Bond Swap Agreement.

GDA Provider: The Bank, acting through its main branch in Toronto.

Account Bank: The Bank, acting through its main branch in Toronto.

Standby Account Bank: Royal Bank of Canada, acting through its offices at Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario Canada M5J 2J5.

Standby GDA Provider: Royal Bank of Canada, acting through its offices at Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario Canada M5J 2J5.

Intercompany Loan Provider: The Bank, acting through its main branch in Toronto.

Legislative Framework: The legislative framework established by Part I.1 of the NHA, including the CMHC Guide.

Issuance of Series: Covered bonds will be issued in series (each, a “Series”). Each Series may comprise one or more tranches (“Tranches” and each, a “Tranche”) issued on different issue dates. The covered bonds of each Series will all be subject to identical terms, except that the issue date and the amount of the first payment of interest may be different in respect of different Tranches.

The covered bonds will be issued by the Bank, as a CMHC registered issuer, under its CMHC registered covered bond program, which is registered pursuant to Part I.1 of the NHA.

Currency and Denomination: Unless otherwise specified in the applicable prospectus supplement, covered bonds will be issued in U.S.$ and in such denominations as may be agreed to between the Dealers and the Bank and as set forth in the applicable prospectus supplement.

Maturities: Such maturities as may be agreed between the Bank and the Dealers or covered bondholders, as the case may be, and as indicated in the prospectus supplement, subject to such minimum or maximum maturities as may be allowed or required from time to time by the relevant regulator (or equivalent body) or any laws or regulations applicable to the Bank or the relevant specified currency.

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Branch of Account: The head office of the Bank in Toronto, or such other branch as may be specified in the applicable prospectus supplement, any such branch being the “Branch of Account” for the purposes of the Bank Act, will take the deposits evidenced by the covered bonds, but without prejudice to the provisions of Condition 5 (Payments) as described in Terms and Conditions of the Covered Bonds.

Form of the Covered Bonds: The covered bonds will be issued in registered form as a global covered bond held through The Depository Trust Company or its successors (“DTC”).

Interest: Covered bonds may be interest bearing or non-interest bearing. Interest (if any) may accrue at a fixed or floating rate (detailed in a formula or otherwise) and may vary during the lifetime of the relevant Series.

Types of covered bonds: Unless otherwise specified in the prospectus supplement, the types of covered bonds that may be issued pursuant to this prospectus are (i) fixed rate covered bonds and (ii) floating rate covered bonds.

Fixed Rate Covered Bonds: Fixed rate covered bonds will bear interest at a fixed rate which will be payable on such date or dates as may be agreed between the Bank and the Dealers and on redemption and will be calculated on the basis of such day count basis as may be agreed between the Bank and the Dealers (as set out in the applicable prospectus supplement), provided that if an Extended Due for Payment Date is specified in the prospectus supplement, interest following the Original Due for Payment Date will continue to accrue and be payable on the unpaid amount in accordance with Condition 4 (Interest), at a rate of interest determined in accordance with Condition 4.1 (Interest on Fixed Rate Covered Bonds) (in the same manner as the rate of interest for floating rate covered bonds) even where the relevant covered bonds are fixed rate covered bonds.

Floating Rate Covered Bonds: Floating rate covered bonds will bear interest at a rate determined on such basis as may be agreed between the Bank and the Dealers, as set out in the applicable prospectus supplement.

Other provisions in relation to Floating Rate Covered Bonds: Floating Rate Covered Bonds may also have a Maximum Rate of Interest, a Minimum Rate of Interest or both (as indicated in the applicable prospectus supplement). Interest on Floating Rate Covered Bonds in respect of each Interest Period, as agreed prior to the issue by the Bank and the relevant Dealer(s), will be payable on such Interest Payment Dates, and will be calculated on a day count basis, in each case as may be agreed between the Bank and the relevant Dealer(s).

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Hard Bullet Covered Bonds: Hard Bullet Covered Bonds may be offered and will be subject to a Pre-Maturity Test. The intention of the Pre-Maturity Test is to test the liquidity of the Guarantor’s assets in respect of Hard Bullet Covered Bonds maturing within 12 months from the relevant Pre-Maturity Test Date when the Bank’s credit ratings have fallen below the Pre-Maturity Required Ratings.

Rating Agency Condition: Any issuance of covered bonds will be conditional upon satisfaction of the Rating Agency Condition.

Listing: Covered bonds will not be listed on any stock exchange unless otherwise specified in the applicable prospectus supplement.

Redemption: The applicable prospectus supplement relating to each Tranche of covered bonds will indicate either that the relevant covered bonds of such Tranche cannot be redeemed prior to their stated maturity (other than following an Issuer Event of Default or a Guarantor Event of Default or as indicated below) or that such covered bonds will be redeemable at the option of the Bank upon giving notice to the holders of the covered bonds, on a date or dates specified prior to such stated maturity and at a price or prices and on such other terms as may be agreed between the Bank and the Dealers (as set out in the applicable prospectus supplement).

Early redemption will be permitted for taxation reasons and illegality as described in Conditions 6.2 (Redemption for taxation reasons) and 6.5 (Redemption due to illegality or invalidity), but will otherwise be permitted only to the extent specified in the applicable prospectus supplement.

Extendable obligations under the Covered Bond Guarantee: The applicable prospectus supplement may also provide that (if a Notice to Pay has been served on the Guarantor) the Guarantor’s obligations under the Covered Bond Guarantee to pay the Guaranteed Amounts corresponding to the Final Redemption Amount of the applicable Series of covered bonds on their Final Maturity Date (subject to applicable grace periods) may be deferred until the Extended Due for Payment Date.

In such case, such deferral will occur automatically (i) if the Bank fails to pay the Final Redemption Amount of the relevant Series of covered bonds on their Final Maturity Date (subject to applicable grace periods) and (ii) if the Guaranteed Amounts equal to the Final Redemption Amount in respect of such Series of covered bonds are not paid in full by the Guarantor by the Extension Determination Date (for example, because the Guarantor has insufficient funds in accordance with the Priorities of Payments to pay in full the Guaranteed Amounts corresponding to the Final Redemption Amount of the relevant

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Series of covered bonds after payment of higher ranking amounts and taking into account amounts ranking pari passu in the Priorities of Payments). To the extent a Notice to Pay has been served on the Guarantor and the Guarantor has sufficient time and sufficient monies to pay in part the Final Redemption Amount, such partial payment will be made by the Guarantor on any Interest Payment Date up to and including the relevant Extended Due for Payment Date as described in Condition 6.1 (Final redemption) of the Terms and Conditions of the Covered Bonds. Interest will continue to accrue and be payable on the unpaid amount in accordance with Condition 4 (Interest) at a rate of interest determined in accordance with Condition 4 (Interest) (in the same manner as the rate of interest for floating rate covered bonds) of the Terms and Conditions of the Covered Bonds. The Guarantor will pay Guaranteed Amounts constituting Scheduled Interest on each Original Due for Payment Date and the Extended Due for Payment Date and any unpaid amounts in respect thereof will be due and payable on the Extended Due for Payment Date.

Taxation: Payments made by the Bank in respect of covered bonds will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Canada or any province or territory thereof, or, in the case of covered bonds issued by a branch of the Bank located outside Canada, the country in which such branch is located, or any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Bank will (subject to customary exceptions) pay such additional amounts as will result in the holders of covered bonds receiving such amounts as they would have received in respect of such covered bonds had no such withholding or deduction been required. Under the Covered Bond Guarantee, the Guarantor will not be liable to pay any such additional amounts as a consequence of any applicable tax withholding or deduction, including such additional amounts which may become payable by the Bank under Condition 7 (Taxation) of the Terms and Conditions of the Covered Bonds.

If (i) any portion of interest payable on a covered bond is contingent or dependent on the use of, or production from, property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criteria or by reference to dividends paid or payable to shareholders of a corporation; (ii) the recipient of interest payable on a covered bond does not deal at arm’s length with the Bank or the Guarantor for purposes of the Income Tax Act (Canada) (“ITA”); (iii) interest is payable in respect of a covered bond owned by a person with whom the Bank or the Guarantor does not deal at arm’s length for purposes of the ITA; or (iv) the recipient of

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interest payable on a covered bond is a “specified shareholder” of the Bank or a non-resident person that does not deal at arm’s length with a specified shareholder of the Bank (in each case within the meaning of the ITA for purposes of the thin capitalization rules contained in subsection 18(4) of the ITA), such interest may be subject to Canadian nonresident withholding tax. A “specified shareholder” of the Bank is a person who owns, or is deemed to own, alone or together with persons with whom that person does not deal at arm’s length, shares entitled to 25% or more of the votes that could be cast at an annual shareholders’ meeting or shares having a fair market value of 25% or more of the fair market value of all the issued and outstanding shares of the Bank. Special rules, which are not discussed in this summary, may apply to a non-Canadian Holder that is an insurer that carries on an insurance business in Canada and elsewhere. Additional opinions from Canadian tax counsel may be required. See the discussion under the caption “Taxation—Canadian Taxation.”

ERISA: In general, a covered bond may be purchased by U.S. benefit plan investors as defined in Section 3(42) of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), subject to certain conditions (see “Benefit Plan Investor Considerations”).

Cross Default: If a Guarantor Acceleration Notice is served in respect of any covered bonds, then the obligation of the Guarantor to pay Guaranteed Amounts in respect of all covered bonds outstanding will be accelerated. If an Issuer Acceleration Notice is served in respect of any series of covered bonds, all outstanding covered bonds issued under the Program will accelerate against the Bank but will be subject to, and have the benefit of, the Guaranteed Amounts under the Covered Bond Guarantee.

Status of the Covered Bonds: The covered bonds will constitute deposit liabilities of the Bank for purposes of the Bank Act, however the covered bonds will not be insured under the Canada Deposit Insurance Corporation Act (Canada), and will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of the Bank and rank pari passu with all deposit liabilities of the Bank without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Bank, present and future, except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution).

Governing Law and Jurisdiction: The covered bonds and the Transaction Documents (other than the Underwriting Agreement) will be governed by, and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. The Underwriting Agreement will be governed by the laws of the State of New York.

Ontario courts have non-exclusive jurisdiction in the event of litigation in respect of the contractual documentation and the covered bonds governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

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Terms and Conditions: A prospectus supplement will be prepared in respect of each Tranche of covered bonds. The terms and conditions applicable to each Tranche will be those described under Terms and Conditions of the Covered Bonds as supplemented, modified or replaced by the applicable prospectus supplement.

Clearing System: DTC and/or, in relation to any covered bonds, any other clearing system as may be specified in the applicable prospectus supplement.

Non-U.S. Selling Restrictions: There will be specific restrictions on offers, sales and deliveries of covered bonds and on the distribution of offering material in Canada, Japan, the EEA, the United Kingdom, France, Australia and Italy, as well as such other restrictions as may be required in connection with a particular issue of covered bonds as set out in the applicable prospectus supplement.

Covered Bond Guarantee: Payment of interest and principal in respect of the covered bonds when Due for Payment will be irrevocably guaranteed by the Guarantor. The obligations of the Guarantor to make payment in respect of the Guaranteed Amounts when Due for Payment are subject to the condition that a Covered Bond Guarantee Activation Event has occurred. The obligations of the Guarantor under the Covered Bond Guarantee will accelerate against the Guarantor upon the service of a Guarantor Acceleration Notice. The obligations of the Guarantor under the Covered Bond Guarantee constitute direct obligations of the Guarantor secured against the assets of the Guarantor, including the Portfolio.

Payments made by the Guarantor under the Covered Bond Guarantee will be made subject to, and in accordance with, the applicable Priorities of Payments.

Security: To secure its obligations under the Covered Bond Guarantee and the Transaction Documents to which it is a party, the Guarantor has granted a first ranking security interest over all of its present and future acquired assets, including the Portfolio, in favor of the Bond Trustee (for itself and on behalf of the other Secured Creditors) pursuant to the terms of the Security Agreement.

Intercompany Loan: Under the terms of the Intercompany Loan Agreement, the Bank will make available to the Guarantor an interest-bearing Intercompany Loan, comprised of a Guarantee Loan and a revolving Demand Loan, in a combined aggregate amount equal to the Total Credit Commitment, subject to increases and decreases as described below. The Intercompany Loan will be denominated in Canadian Dollars. The interest rate on the Intercompany Loan will be a Canadian Dollar floating rate determined by the Bank from time to time, subject to a maximum of the floating rate received by the Guarantor pursuant to the Interest Rate Swap Agreement, less a minimum spread and an amount for certain expenses of the Guarantor.

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The balance of the Guarantee Loan and Demand Loan will fluctuate with the issuances and redemptions of covered bonds and the requirements of the Asset Coverage Test.

To the extent the Portfolio increases or is required to be increased to meet the Asset Coverage Test, the Bank may increase the Total Credit Commitment to enable the Guarantor to acquire Loans and their Related Security from the Seller.

The balance of the Guarantee Loan and the Demand Loan will be disclosed in each Investor Report.

Guarantee Loan: The Guarantee Loan is in an amount equal to the balance of outstanding covered bonds at any relevant time plus that portion of the Portfolio required in accordance with the Asset Coverage Test as over-collateralization for the covered bonds in excess of the amount of then outstanding covered bonds (see “Summary of the Principal Documents—Guarantor Agreement—Asset Coverage Test”).

Demand Loan: The Demand Loan is a revolving credit facility, the outstanding balance of which is equal to the difference between the balance of the Intercompany Loan and the balance of the Guarantee Loan at any relevant time. At any time prior to a Demand Loan Repayment Event, the Guarantor may borrow any withdrawn or committed amount or re-borrow any amount repaid by the Guarantor under the Intercompany Loan for a permitted purpose provided, among other things, (i) such drawing does not result in the Intercompany Loan exceeding the Total Credit Commitment; and (ii) no Issuer Event of Default or Guarantor Event of Default has occurred and is continuing.

The Proceeds of the Intercompany Loan: The Guarantor will use the initial advance under the Intercompany Loan to purchase Loans and their Related Security for inclusion in the Portfolio from the Seller in accordance with the terms of the Mortgage Sale Agreement and may use additional advances (i) to purchase additional Loans and their Related Security pursuant to the terms of the Mortgage Sale Agreement; and/or (ii) to invest in Substitution Assets in an amount not exceeding the prescribed limit under the CMHC Guide; and/or (iii) subject to complying with the Asset Coverage Test and the CMHC Guide, to make Capital Distributions to the Limited Partner; and/or (iv) to make deposits of the proceeds in the Guarantor Accounts (including, without limitation, to fund the Reserve Fund and the Pre-Maturity Liquidity Ledger, in each case to an amount not exceeding the prescribed limit).

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Capital Contribution: The Limited Partner may from time to time make Capital Contributions to the Guarantor including Capital Contributions of Loans and their Related Security. The Managing GP and the Liquidation GP respectively hold 99 percent and 1 percent of the 0.05 percent general partner interest in the Guarantor. The Limited Partner holds the substantial economic interest in the Guarantor (99.95 percent).

Consideration: Under the terms of the Mortgage Sale Agreement, the Seller will sell Loans and their Related Security to the Guarantor for the Portfolio on a fully-serviced basis for cash consideration equal to the Fair Market Value of such Loans on their Purchase Date, or if so determined by the Limited Partner, the Limited Partner may make Capital Contributions of Loans and their Related Security on a fully-serviced basis to the Guarantor in exchange for additional interests in the capital of the Guarantor.

Interest Rate Swap Agreement: The Guarantor has entered into the Interest Rate Swap Agreement with the Interest Rate Swap Provider to provide a hedge against possible variances in the rates of interest payable on the Loans in the Portfolio (which may, for instance, include variable rates of interest or fixed rates of interest), the amounts payable on the Intercompany Loan and (following the Covered Bond Swap Effective Date) the Covered Bond Swap Agreement.

Covered Bond Swap Agreement: To provide a hedge against currency risks arising, following the Covered Bond Swap Effective Date, in respect of amounts received by the Guarantor under the Interest Rate Swap Agreement and amounts payable in respect of its obligations under the Covered Bond Guarantee, the Guarantor will enter into the Covered Bond Swap Agreement (which may include a new ISDA Master Agreement schedule and confirmation(s) and credit support annex, if applicable, for each Tranche and/or Series of covered bonds) with the Covered Bond Swap Provider.

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RISK FACTORS

Investment in the covered bonds is subject to various risks including those risks inherent in conducting the business of a diversified financial institution. Before deciding whether to invest in the covered bonds, you should consider carefully the risks described in the documents incorporated by reference in this prospectus (including subsequently filed documents incorporated by reference) and, if applicable, those described in a prospectus supplement, as the case may be, relating to a specific offering of covered bonds.

Risks relating to the covered bonds generally

The covered bonds may not be a suitable investment for all investors

The purchase of covered bonds involve substantial risks and are suitable only for investors who have the knowledge and experience in financial and business matters necessary to enable them to evaluate the risks and the merits of an investment in the covered bonds. Prior to making an investment decision, prospective investors should consider carefully, in light of their own financial circumstances and investment objectives, (i) all the information set forth in this prospectus and, in particular, the considerations set forth below and (ii) all the information set forth in the applicable prospectus supplement. Prospective investors should make such inquiries as they deem necessary without relying on us or any arranger or dealer.

Each potential investor in the covered bonds must determine the suitability of its investment in light of its own circumstances. In particular, each potential investor should:

• have sufficient knowledge and experience to make a meaningful evaluation of the covered bonds, the merits and risks of investing in the covered bonds and the information contained in this prospectus or incorporated herein by reference or any applicable supplement;

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the covered bonds and the impact the covered bonds will have on its overall investment portfolio;

• have sufficient financial resources and liquidity to bear all of the risks of an investment in the covered bonds, including covered bonds with principal or interest payable in one or more currencies, or where the currency for principal or interest payments is different from the currency in which the potential investor’s financial activities are principally denominated;

• understand thoroughly the terms of the covered bonds and be familiar with the behavior of any relevant indices and financial markets; and

• be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Covered bonds are complex financial instruments. Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone investments. They

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purchase complex financial instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in covered bonds, which are complex financial instruments, unless it has the expertise (either alone or with a financial adviser) to evaluate how the covered bonds will perform under changing conditions, the resulting effect on the value of the covered bonds and the impact this investment will have on the potential investor’s overall investment portfolio.

Certain issues of covered bonds involve a high degree of risk and potential investors should be prepared to sustain a loss of all or part of their investment.

The covered bonds will constitute unsecured and uninsured deposit obligations of the Bank

The covered bonds will constitute deposit liabilities of the Bank for purposes of the Bank Act, however the covered bonds will not be insured under the Canada Deposit Insurance Corporation Act (Canada), and will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of the Bank and rank pari passu with all deposit liabilities of the Bank without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Bank, present and future, except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution). If the Bank enters into any bankruptcy, liquidation, rehabilitation or other winding-up proceedings and there is a default in payment under any of the Bank’s secured or unsecured indebtedness or if there is an acceleration of any of the Bank’s indebtedness, the value of the covered bonds may decline. Further, the occurrence of an Issuer Event of Default alone does not constitute a Guarantor Event of Default and does not entitle the Bond Trustee to accelerate payment of the Guaranteed Amounts. The Guarantor has no obligation to pay the Guaranteed Amounts payable under the Covered Bond Guarantee until service on the Guarantor of (i) a Notice to Pay following service of an Issuer Acceleration Notice on the Bank following the occurrence of an Issuer Event of Default, or (ii) a Guarantor Acceleration Notice following the occurrence of a Guarantor Event of Default However, failure by the Guarantor to pay amounts when Due for Payment under the Covered Bond Guarantee constitutes a Guarantor Event of Default (subject to any applicable grace periods) and following service of a Guarantor Acceleration Notice, the covered bonds will become immediately due and payable against the Bank and the obligations of the Guarantor under the Covered Bond Guarantee will be accelerated.

The covered bonds are obligations of the Bank and the Guarantor only and do not extend to any of their affiliates or the other parties to the Program, including the Bond Trustee

The payment obligations in relation to the covered bonds will be solely obligations of the Bank and, subject to the terms of the Covered Bond Guarantee, obligations of the Guarantor. Accordingly, the payment obligations under the covered bonds will not be obligations of, or guaranteed by, any other affiliate of the Bank. In particular, the covered bonds will not be obligations of, and will not be guaranteed by, any of the Arrangers, the Dealers, the Bond Trustee, the Cash Manager, the Custodian, any Swap Provider, any of their agents, any company in the same group of companies as such entities or any other party to the Transaction Documents relating to the Program. Any failure by the Bank or the Guarantor to pay any amount due under the covered bonds will not result in any liability whatsoever in respect of such failure being accepted by any of the Arrangers, any of the Dealers, the Bond Trustee, the Custodian, any Swap Provider, any of their agents, the Partners, any company in the same group of companies as such entities or any other party to the Transaction Documents relating to the Program.

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The obligations under the Covered Bond Guarantee may be subject to an Extended Due for Payment Date and payment on the Final Redemption Amount may be deferred beyond the Final Maturity Date

The prospectus supplement for a Series of covered bonds may specify that they are subject to an Extended Due for Payment Date. If specified in the applicable prospectus supplement, in circumstances where neither the Bank nor the Guarantor has sufficient funds available to pay in full the Final Redemption Amount due on a Series of covered bonds on the relevant Final Maturity Date or within the relevant grace period, then the Final Maturity Date of the relevant Series of covered bonds may be deferred to an Extended Due for Payment Date. If payment has been deferred as discussed below, failure by the Guarantor to make payment in respect of all or any portion of the Final Redemption Amount on the Final Maturity Date (or such later date within any applicable grace period) will not constitute a Guarantor Event of Default.

If and to the extent that the Guarantor has sufficient funds available to partially redeem the relevant Series of covered bonds, either on the Final Maturity Date or on the applicable Original Due for Payment Dates for that Series of covered bonds up to and including the Extended Due for Payment Date, then (assuming that the Guarantee Acceleration Notice and Notice to Pay for the relevant amount have been served on the Guarantor within the relevant timeframes) the Guarantor will make such partial redemption in accordance with the Guarantee Priorities of Payments and as described in Condition 6.1 (Final redemption) of the Terms and Conditions of the Covered Bonds.

Interest will continue to accrue and be payable on the unpaid amount of the relevant Series of covered bonds in accordance with Condition 4 (Interest) of the Terms and Conditions of the Covered Bonds, and at the rate of interest specified in the applicable prospectus supplement and the Guarantor will pay Guaranteed Amounts constituting Scheduled Interest on each Original Due for Payment Date and the Extended Due for Payment Date.

Failure by the Guarantor to pay Guaranteed Amounts corresponding to the unpaid portion of the Final Redemption Amount or the balance thereof, as the case may be, on the Extended Due for Payment Date and/or pay Guaranteed Amounts constituting Scheduled Interest on any Original Due for Payment Date or the Extended Due for Payment Date will in each case (subject to any applicable grace period) constitute a Guarantor Event of Default.

Covered bonds issued under the Program will rank pari passu with each other and will accelerate at the same time

Covered bonds issued under the Program (except for the first issue of the covered bonds) will either be fungible with an existing Series of covered bonds or have different terms from an existing Series of covered bonds (in which case they will constitute a new Series). All covered bonds issued under the Program from time to time will rank pari passu with each other in all respects and, as obligations of the Bank, pari passu with covered bonds issued previously under the Bank’s Global Public Sector Covered Bond Programme. Following the occurrence of an Issuer Event of Default and service by the Bond Trustee of an Issuer Acceleration Notice, all outstanding covered bonds issued under the Program will accelerate against the Bank but will be subject to, and have the benefit of, the Guaranteed Amounts under the Covered Bond Guarantee (following a Notice to Pay having been served by the Bond Trustee on the Guarantor).

Following the occurrence of a Guarantor Event of Default and service by the Bond Trustee of a Guarantor Acceleration Notice, all outstanding covered bonds will accelerate against the Bank (if not already accelerated following service of an Issuer Acceleration Notice) and the obligations of the Guarantor under the Covered Bond Guarantee will accelerate.

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All covered bonds issued under the Program will share pari passu in the Security granted by the Guarantor under the Security Agreement on a pro rata basis. Accordingly, the holders of each Series of covered bonds issued under the Program will be required to share recovery proceeds from the Security with all other holders of each other Series of the covered bonds issued under the Program on a pro rata and pari passu basis. However, holders of covered bonds issued under the Program will not share in the security granted under the Bank’s Global Public Sector Covered Bond Programme, which is guaranteed by a different guarantor entity and secured by a different pool.

Credit ratings assigned to the covered bonds may not reflect all risks

The credit rating assigned to the covered bonds may not reflect the potential impact of all risks related to structure, market, and other factors that may affect the value of the covered bonds. The ratings assigned to the covered bonds with respect to Fitch address the following: the likelihood of full and timely payment to covered bondholders of all payments of interest on each Interest Payment Date; and the likelihood of ultimate payment of principal in relation to covered bonds on (a) their applicable Final Maturity Date, or (b) if the covered bonds are subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee in accordance with the applicable prospectus supplement, the applicable Extended Due for Payment Date. With respect to DBRS Limited and its successors (“DBRS”), the ratings assigned to the covered bonds address the risk that the issuer will fail to satisfy its financial obligations in accordance with the terms under which the covered bonds have been issued and are based on quantitative and qualitative considerations relating to the issuer and the relevant ranking of claims. With respect to Moody’s, the ratings assigned to the covered bonds address the expected loss posed to investors.

Any Rating Agency may lower or withdraw its credit rating if, in the sole judgment of the Rating Agency, the credit quality of the covered bonds has declined or is in question. If any rating assigned to the covered bonds is lowered or withdrawn, the market value of the covered bonds may be reduced. A downgrade or potential downgrade in these ratings, the assignment of new ratings that are lower than existing ratings, or a downgrade or potential downgrade in the ratings assigned to the Bank or any other securities of the Bank could reduce the number of potential investors in the covered bonds and adversely affect the price and liquidity of the covered bonds. A rating is based upon information furnished by the Bank or obtained by the rating agency from its own sources and is subject to revision, suspension or withdrawal by the rating agency at any time. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time.

Modifications, waivers and substitution under the covered bonds may, in certain circumstances, be made without consent of the covered bondholders

The Terms and Conditions contain provisions for calling meetings of covered bondholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all covered bondholders including covered bondholders who did not attend and vote at the relevant meeting and covered bondholders who voted in a manner contrary to the majority. Except to the extent the Trust Indenture Act applies, an individual covered bondholder may not be in a position to affect the outcome of the resolutions adopted by the meetings of covered bondholders.

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The Terms and Conditions of the covered bonds also provide that the Bond Trustee may, without the consent of covered bondholders, (a) agree to any modification, waiver or authorization, of any breach, or proposed breach, of any of the provisions of the covered bonds, (b) determine that any Issuer Event of Default or Guarantor Event of Default will not be treated as such, (c) agree to the substitution of another company as principal debtor under any covered bonds in place of the Bank or the Guarantor or (d) agree to any modification which is of a formal, minor or technical nature or to correct a manifest error or an error which, in the opinion of the Bond Trustee, is proven, in the circumstances described in Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) of the Terms and Conditions of the Covered Bonds. The covered bondholders will not be in a position to give instructions to the Bond Trustee in relation to the matters set out above.

The Guarantor’s ability to make payments under the Covered Bond Guarantee will depend primarily on the Portfolio

The Guarantor’s ability to meet its obligations under the Covered Bond Guarantee will depend primarily on the realizable value of Loans and Substitution Assets in the Portfolio, the amount of Revenue Receipts and Principal Receipts generated by the Portfolio and the timing thereof, amounts received from, and payable to, the Swap Providers and the receipt by it of credit balances and interest on credit balances in the GDA Account and the other Guarantor Accounts. The Guarantor will not have any other source of funds available to meet its obligations under the Covered Bond Guarantee. In addition, the Security granted pursuant to the Security Agreement may not be sufficient to meet the claims of all the Secured Creditors, including the covered bondholders. Following enforcement of the Security, Secured Creditors may still have an unsecured claim against the Bank for the deficiency, which will rank pari passu with the other deposit obligations of the Bank. However, there can be no assurance that the Bank will have sufficient funds to pay that shortfall.

If there is a call on the Covered Bond Guarantee, the claims of covered bondholders will be limited to the Guarantor’s available funds from time to time, which may be limited due to a lack of liquidity in respect of the Portfolio

If there is a call on the Covered Bond Guarantee and sale of the Portfolio, the proceeds from the sale of the Portfolio will depend on market conditions at the time of sale. If market conditions are unfavorable, the sale of the Portfolio may result in proceeds that are less than the amount due on the covered bonds. Furthermore, the maturities of the Loans in the Portfolio may not match those of the covered bonds which may require the Guarantor to sell Loans in order to pay principal on those covered bonds. Any such sale of Loans exposes investors to market risk, as the then current market value of the Loans may be less than the principal amount on the covered bonds. In addition, should an Issuer Event of Default or other Registered Title Event occur, there may be a delay in any and all borrowers switching payments to the new Servicer or the Guarantor.

There is no tax gross-up under the Covered Bond Guarantee

All payments of principal and interest in respect of the covered bonds will be made by the Bank without withholding or deduction for, or on account of, taxes imposed by any governmental or other taxing authority (subject to customary exceptions), unless such withholding or deduction is required by law. In the event that any such withholding or deduction is imposed by a tax jurisdiction specified under the Terms and Conditions, the Bank will, save in certain limited circumstances provided in the Terms and Conditions, be required to pay additional amounts to

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cover the amounts so deducted. By contrast, under the terms of the Covered Bond Guarantee, the Guarantor will not be liable to pay any such additional amounts payable by the Bank under the Terms and Conditions, or to pay any additional amounts in respect of any amount withheld or deducted for, or on account of, taxes from a payment by the Guarantor under the Covered Bond Guarantee.

The Guarantor may not be able to sell Loans prior to maturity of Hard Bullet Covered Bonds upon a breach of the Pre-Maturity Test or upon an Asset Coverage Test Breach Notice or Notice to Pay

Upon the breach of the Pre-Maturity Test and unless the Pre-Maturity Liquidity Required Amount is otherwise fully funded from Capital Contributions, the Guarantor is obligated to sell Selected Loans (selected on a random basis) to a purchaser in order to generate sufficient cash to enable the Guarantor to pay the Final Redemption Amount on any Hard Bullet Covered Bond in the event that the Bank fails to pay that amount on the relevant Final Maturity Date. If an Asset Coverage Test Breach Notice or a Notice to Pay is served on the Guarantor, the Guarantor may be obliged to sell Selected Loans (selected on a random basis) in order to remedy a breach of the Asset Coverage Test or to make payments to the Guarantor’s creditors, including payments under the Covered Bond Guarantee, as appropriate. There is no guarantee that a purchaser will be found to acquire Selected Loans at the times required and there can be no guarantee or assurance as to the price, which may be obtained, which may affect the ability of the Guarantor to make payments under the Covered Bond Guarantee.

In addition, the Guarantor will not be permitted to give representations and warranties or indemnities for those Selected Loans. There is no obligation for the Seller to give, and no assurance that the Seller would give, any representations and warranties or indemnities in respect of the Selected Loans. Any representations or warranties or indemnities previously given by the Seller in respect of Loans in the Portfolio may not have value for a purchaser if the Seller is then insolvent. Accordingly, there is a risk that the realizable value of the Selected Loans could be adversely affected by the lack of representations, warranties or indemnities which in turn could adversely affect the ability of the Guarantor to meet its obligations under the Covered Bond Guarantee.

The Bond Trustee will not be required to release the Loans and their Related Security from the Security pursuant to any sale and purchase agreement with respect to the sale of Selected Loans unless (i) the Bond Trustee has provided its prior written consent to the terms of such sale in accordance with the Guarantor Agreement, and (ii) the Guarantor has provided a certificate to the Bond Trustee that such sale of Loans and their Related Security has been made in accordance with the terms of the Transaction Documents. See “Summary of the Principal Documents—Security Agreement—Release of Security,” below.

Later maturing covered bonds may not be paid in full or at all under the Covered Bond Guarantee as Portfolio assets are not segregated by different Series of covered bonds and will be used to repay earlier maturing covered bonds first

Although each Series of covered bonds will rank pari passu with all other Series of covered bonds, each Series of covered bonds may not necessarily have the same Final Maturity Date. As Portfolio assets are not segregated in relation to each Series of covered bonds and will be used to repay earlier maturing covered bonds first, there is a risk that later maturing covered bonds will not be paid in full (or at all) under the Covered Bond Guarantee. The Amortization Test may not mitigate this risk. A breach of the Amortization Test will occur if the aggregate principal amount of the covered bonds issued and outstanding under the Program is

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greater than the aggregate value of the Portfolio’s assets. Upon the occurrence of a breach of the Amortization Test, a Guarantor Event of Default will also occur which will (subject to the Terms and Conditions) lead to the service of a Guarantor Acceleration Notice on the Guarantor and the acceleration of the obligations under the Covered Bond Guarantee in relation to all covered bonds then outstanding (hence any further timing subordination will cease to exist). There is however no guarantee that the remaining Portfolio assets will be sufficient to meet the claims of the remaining covered bondholders under the Covered Bond Guarantee in full.

Reliance on certain transaction parties

The Guarantor and the covered bondholders place significant reliance on the Bank in connection with the multiple roles of the Bank under the Transaction Documents and such reliance may give rise to conflicts of interest

The Guarantor and the covered bondholders place significant reliance on the Bank in connection with the servicing of the Loans in the Portfolio, as well as for the Guarantor’s administration and funding. In particular, the Bank performs the initial roles of (a) Cash Manager, (b) Servicer, (c) GDA Provider, (d) Swap Provider, (e) Intercompany Loan Provider, and (f) Calculation Agent. The Bank holds substantially all of the interests in the Guarantor and is the sole shareholder of the initial Managing GP. Prior to the occurrence of a Managing GP Default Event, subject to the occurrence of certain events, the Bank has the ability to control the Guarantor through its control of the initial Managing GP. The Bank, under the Servicing Agreement, will be responsible for servicing and administering the Loans and their Related Security. Furthermore, the Bank, as the Seller of assets to the Portfolio, (a) has considerable discretion to substitute Portfolio assets during the course of the Program and can generate and store the data and documentation relating to the Portfolio assets underlying the transfer, retransfer and servicing of the Loans and the Related Security, which data is also provided to third parties in their respective functions under the Program, and (b) is obligated in certain circumstances to repurchase Loans and their Related Security from the Guarantor. See “Summary of the Principal Documents—Mortgage Sale Agreement—Repurchase of Loans.” The Bank, as Cash Manager, has, (a) prior to the earlier of (i) its credit rating falling below any of the threshold ratings of (x) P-1 (in respect of Moody’s), (y) BBB+ and F2 (in respect of Fitch), and (z) BBB (low) (in respect of DBRS), as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or in the case of Fitch, the issuer default rating) of the Cash Manager by the Rating Agencies (the “Cash Manager Required Ratings”) or (ii) the occurrence of a Cash Manager Termination Event, unrestricted access to the funds standing to the credit accounts of the Guarantor, and (b) the obligation to identify Non-Performing Loans for purposes of performing the Asset Coverage Test, the Amortization Test and the Valuation Calculation from time to time. The Guarantor is also reliant on the Swap Providers to provide it with the funds matching its obligations under advances and the Covered Bond Guarantee. In view of these multiple roles of the Bank, such reliance may give rise to a wide variety of substantial conflicts of interests. The Bank will have significant influence over important services required to maintain the Program and provided to the Guarantor, which may conflict with the interests of the Guarantor and holders of the covered bonds. This influence could adversely affect the Program and value of the covered bonds. If the Bank does not adequately perform or withdraws from performing such services for the Guarantor or if there are disputes between the Bank and the Guarantor, the Guarantor’s performance of its obligations could be affected. There can be no assurance that the conflicts of interest described above will not have a material adverse effect on the Guarantor’s performance of its payment and other obligations and/or on the covered bondholders.

Further, the Bond Trustee is not obliged under any circumstances to act as a Servicer, as Cash Manager or as any other third party on which the Guarantor relies, or to monitor the performance of any obligations of any third parties under any relevant agreement.

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Reliance on Swap Providers

The Guarantor has entered into the Interest Rate Swap Agreement with the Interest Rate Swap Provider to provide a hedge against possible variances in the rates of interest payable on the Loans in the Portfolio (which may, for instance, include variable rates of interest or fixed rates of interest), the amounts payable on the Intercompany Loan and (following the Covered Bond Swap Effective Date) the Covered Bond Swap Agreement. To provide a hedge against currency risks arising, following the Covered Bond Swap Effective Date, in respect of amounts received by the Guarantor under the Interest Rate Swap Agreement and amounts payable in respect of its obligations under the Covered Bond Guarantee, the Guarantor has entered into the Covered Bond Swap Agreement with the Covered Bond Swap Provider.

If the Guarantor fails to make timely payments of amounts due under any Swap Agreement (except where such failure is caused by the funds available to the Guarantor being insufficient to make the required payment in full), then it will have defaulted under that Swap Agreement and such Swap Agreement may be terminated. Further, a Swap Provider is only obliged to make payments to the Guarantor as long as and to the extent that the Guarantor complies with its payment obligations. The Guarantor will not be in breach of its payment obligations where the Guarantor fails to pay a required payment in full, provided such non-payment is caused by the funds of the Guarantor being insufficient to make such payment in full under the relevant Swap Agreement. If a Swap Agreement terminates or the Swap Provider is not obliged to make payments or if it defaults in its obligations to make payments of amounts (including in the relevant currency, if applicable) to the Guarantor on the payment date under the relevant Swap Agreement, the Guarantor will be exposed to changes in the relevant currency exchange rates to Canadian Dollars and to any changes in the relevant rates of interest. Unless a replacement Swap Agreement is entered into, the Guarantor may have insufficient funds to meet its obligations under the Covered Bond Guarantee.

If a Swap Agreement terminates, the Guarantor may be obliged to make a termination payment in an amount related to the mark to market value of such Swap Agreement to the relevant Swap Provider. There can be no assurance that the Guarantor will have sufficient funds available to make such termination payment under the relevant Swap Agreement, nor can there be any assurance that the Guarantor will be able to find a replacement swap counterparty which (i) agrees to enter into a replacement swap agreement on substantially the same terms as the terminated swap agreement, and (ii) has sufficiently high ratings to prevent a downgrade of the then current ratings of the covered bonds by any one of the Rating Agencies.

The obligation to pay a termination payment may reduce the funds available to the Guarantor, which may adversely affect the ability of the Guarantor to meet its obligations under the Covered Bond Guarantee. Additionally, the failure of the Guarantor to receive a termination payment from the relevant Swap Provider may reduce the funds available to the Guarantor, which may adversely affect the ability of the Guarantor to meet its obligations under the Covered Bond Guarantee.

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Replacement of the Bank as services provider may not be found on acceptable terms or within an acceptable time period and the ability of the Guarantor to perform its obligations may be impaired

As noted above, the Bank performs a number of initial roles. In addition, the Bank will, as Servicer of the Loans and Related Security, continue to service and administer the Loans and Related Security until revocation of the relevant authority by the Guarantor.

In certain circumstances, the Bank is required to be replaced as provider of these services, for instance if it ceases to have the requisite minimum rating (and it is unable to take other mitigating steps), or if an Issuer Event of Default occurs in relation to the Bank. If the Bank is replaced as Cash Manager, then the Guarantor will be obliged to procure that the funds in the Guarantor’s accounts deposited with the Bank are transferred to a newly opened account with a replacement Cash Manager that meets the Cash Manager Required Ratings. See “Summary of the Principal Documents—Cash Management Agreement.”

There is no certainty that a relevant replacement third party services provider/counterparty could be found who would be willing to enter into the relevant agreement with the Guarantor. The ability of that servicer/counterparty to perform fully its services would depend in part on the information, software and records which are then available to it. In addition, the replacement servicer may be required to acquire or develop new servicing systems or platforms, which may require substantial time and expense to implement. There can be no assurance that the Guarantor will be able to enter into such replacement agreements and transactions on acceptable terms and within a time period which will ensure uninterrupted payments of amounts due by the Guarantor under the Covered Bond Guarantee (if called). Moreover, any entity appointed as Servicer would not become bound by the Bank’s obligations under the Mortgage Sale Agreement.

In the event that any of the Cash Manager, the Account Bank, the Custodian, the Servicer, a Swap Provider or other relevant party providing services to the Guarantor under the Transaction Documents fails to perform its obligations or the Guarantor is unable to replace such service providers in a timely manner, the Guarantor’s ability to perform its payment and other obligations may be compromised. Furthermore, any delay or inability to appoint a suitable replacement Servicer may have an impact on the realizable value of the Portfolio’s assets.

Depending on market conditions and the existence of a potential replacement Swap Provider with the required ratings and other applicable characteristics, the Guarantor may not be able to enter into replacement swaps if the Bank is required to be replaced as Swap Provider. If no such replacement swaps are executed, an investor in the relevant covered bonds will be exposed to the interest rate and currency risks that were otherwise hedged by the relevant swaps prior to their termination. Such exposure may result in a reduction of the amounts available to be paid on the covered bonds.

In addition, should the applicable criteria (other than ratings requirements which, if not satisfied, will require the replacement of the Bank unless the Guarantor is Independently Controlled and Governed) cease to be satisfied, the parties to the relevant Transaction Document may agree to amend or waive certain of the terms of such document, including the applicable criteria, in order to avoid the need for a replacement entity to be appointed. Although in certain circumstances the consent of the Bond Trustee and satisfaction of the Rating Agency Condition may be required, the consent of covered bondholders may not be required in relation to such amendments and/or waivers.

Further, the Bank will act in its own interests under the Program which may be adverse to your interests as a holder of the covered bonds. See “—Program related legal and regulatory risks—The Bank will act in its own interest in connection with the Program, and such actions may not be in the best interests of, and may be detrimental to, the holders of covered bonds.”

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Bankruptcy or Insolvency Risk

The assignments of the Portfolio assets from the Seller to the Guarantor pursuant to the terms of the Mortgage Sale Agreement are intended by the Seller and the Guarantor to be, and have been documented as, sales for legal purposes. As the subject of a legal sale, the Portfolio assets would not form part of the assets of the Bank available for distribution to the creditors of the Bank. However, if the Seller or the Guarantor were to become bankrupt or otherwise subject to insolvency, winding-up, receivership and/or restructuring proceedings, the Superintendent of Financial Institutions (the “Superintendent”), appointed pursuant to the Office of the Superintendent of Financial Institutions Act (Canada), Canada Deposit Insurance Corporation, appointed as receiver pursuant to the Canada Deposit Insurance Corporation Act (Canada), or any liquidator or other stakeholder of the Seller, could attempt to re-characterize the sale of the Portfolio assets as a loan from the Guarantor to the Seller secured by the Portfolio assets, to challenge the sale under the fraudulent transfer or similar provisions of the Winding-up and Restructuring Act (Canada) (“WURA”) or other applicable laws or to consolidate the assets of the Seller with the assets of the Guarantor. In this regard, the Transaction Documents contain restrictions on the Seller and the Guarantor intended to reduce the possibility that a Canadian court would order consolidation of the assets and liabilities of the Seller and the Guarantor given, among other things, current jurisprudence on the matter. Further, the Legislative Framework contains provisions that will limit the application of the laws of Canada and the provinces and territories relating to bankruptcy, insolvency and fraudulent conveyance to the assignments of the Portfolio assets from the Seller to the Guarantor. Nonetheless, any attempt to challenge the transaction or to consolidate the assets of the Seller with the assets of the Guarantor, even if unsuccessful, could result in a delay or reduction of collections on the Portfolio assets available to the Guarantor to meet its obligations under the Covered Bond Guarantee, which could prevent timely or ultimate payment of amounts due to the Guarantor, and consequently, the holders of the covered bonds.

The interests of the Guarantor may be subordinate to statutory deemed trusts and other non-consensual liens, trusts and claims created or imposed by statute or rule of law on the property of the Seller arising prior to the time that the Portfolio assets are transferred to the Guarantor, which may reduce the amounts that may be available to the Guarantor and, consequently, the holders of the covered bonds. The Guarantor will not, at the time of sale, give notice to borrowers of the transfer to the Guarantor of the Portfolio assets or the grant of a security interest therein to the Bond Trustee. However, under the Mortgage Sale Agreement, the Seller will warrant that the Portfolio assets have been or will be transferred to the Guarantor free and clear of the security interest or lien of any third party claiming an interest therein, through or under the Seller, other than certain permitted security interests. The Guarantor will warrant and covenant that it has not taken and will not take any action to encumber or create any security interests or other liens in any of the property of the Guarantor, except for the security interest granted to the Bond Trustee and except as permitted under the Transaction Documents.

Amounts that are on deposit from time to time in the Guarantor Accounts may be invested in certain permitted investments pursuant to the Transaction Documents. In the event of

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the liquidation, insolvency, receivership or administration of any entity with which an investment of the Guarantor is made (such as pursuant to the Guaranteed Deposit Account Contract or the Standby Guaranteed Deposit Account Contract) or which is an issuer, obligor or guarantor of any investment, the ability of the Guarantor to enforce its rights to any such investments and the ability of the Guarantor to make payments to holders of the covered bonds in a timely manner may be adversely affected and may result in a loss on the covered bonds. In order to reduce this risk, these investments must satisfy certain criteria.

Payments of interest and principal on the covered bonds are subordinate to certain payments (including payments for certain services provided to the Guarantor), taxes and the reimbursement of all costs, charges and expenses of and incidental to the enforcement of the Trust Deed and the other Transaction Documents to which the Bond Trustee is a party, including the appointment of a receiver in respect of the Portfolio assets (including legal fees and disbursements) and the exercise by the receiver or the Bond Trustee of all or any of the powers granted to them under the Trust Deed and the other Transaction Documents to which the Bond Trustee is a party, and the reasonable remuneration of such receiver or any agent or employee of such receiver or any agent of the Bond Trustee and all reasonable costs, charges and expenses properly incurred by such receiver or the Bond Trustee in exercising their power. These amounts could increase, especially in adverse circumstances such as the occurrence of a Guarantor Event of Default, the insolvency of the Bank or the Guarantor or a Servicer Termination Event. If after the insolvency of the Bank such expenses or the costs of a receiver or the Bond Trustee become too great, payments of interest on and principal of the covered bonds may be reduced or delayed.

The ability of the Bond Trustee (for itself and on behalf of the other Secured Creditors) to exercise remedies in respect of the covered bonds and the Covered Bond Guarantee and to enforce the security granted to it pursuant to the terms of the Security Agreement is subject to the bankruptcy and insolvency laws of Canada. The Bankruptcy and Insolvency Act (Canada) (“BIA”) and the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) both provide regimes pursuant to which debtor companies are entitled to seek temporary relief from their creditors. The BIA applies to limited partnerships. In addition, Canadian jurisprudence makes it clear that both the BIA and the CCAA can apply to limited partnerships. Further, it is a possibility that a liquidator or receiver of the Seller, another creditor of the Guarantor or the Superintendent could seek the court appointment of a receiver of the Guarantor or a winding-up of the Guarantor, or might commence involuntary bankruptcy or insolvency proceedings against the Guarantor under the BIA or the CCAA.

If the Guarantor or Bank, including as Seller and initial Servicer, voluntarily or involuntarily becomes subject to bankruptcy, insolvency or winding-up proceedings including pursuant to the BIA, the CCAA or the WURA or if a receiver is appointed over the Bank or the Guarantor, notwithstanding the protective provisions of the Legislative Framework, this may delay or otherwise impair the exercise of rights or any realization by the Bond Trustee (for itself and on behalf of the other Secured Creditors) under the covered bonds, the Covered Bond Guarantee and/or the Security Agreement and/or impair the ability of the Guarantor or Bond Trustee to trace and recover any funds which the Servicer has commingled with any other funds held by it prior to such funds being paid into the GDA Account. In the event of a Servicer Termination Event as a result of the insolvency of the Bank, the right of the Guarantor to appoint a successor Servicer may be stayed or prevented.

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Risks relating to the Portfolio

When realizing assets of the Portfolio following the occurrence of a Guarantor Event of Default, the proceeds may be insufficient to repay all amounts due to covered bondholders

All Guaranteed Amounts will immediately become due and payable following the occurrence of a Guarantor Event of Default and the service of a Guarantor Acceleration Notice on the Guarantor. At such time, the Bond Trustee will then be entitled to liquidate the Portfolio and otherwise enforce assets under the Portfolio in accordance with, and subject to, the provisions of the Security Agreement. The enforcement proceeds thereof may be used to make payments to the Guarantor’s creditors, including payments under the Covered Bond Guarantee in accordance with the Post-Enforcement Priorities of Payments, described below in “Cashflows.” However, there is no guarantee that the proceeds of enforcement of the Portfolio will be in an amount sufficient to repay all amounts due to the covered bondholders and any relevant creditors.

In the case of insolvency of the Account Bank, the Guarantor will only have an unsecured claim against the estate for funds deposited

While the Guarantor has undertaken to transfer the funds standing to the credit of the Account Bank to another bank if the credit rating of the Account Bank falls below the Account Bank Required Ratings, there can be no assurance that such transfer would be completed before the Account Bank becomes insolvent. If such an event occurs, the Guarantor would have a claim as an unsecured creditor of the Account Bank. Accordingly, there is a potential risk of a loss of the Guarantor’s funds held with the Account Bank in the event that the Account Bank has insufficient funds to meet all the claims of its unsecured creditors.

The Asset Coverage Test, Amortization Test, Valuation Calculation and Pre-Maturity Test may not ensure that adequate funds will be available to satisfy the Guarantor’s obligations in full

While the Asset Coverage Test, the Amortization Test and the Pre-Maturity Test have been designed to mitigate certain economic and legal stresses in connection with the performance and valuation of the Portfolio in order to ensure that the Guarantor is able to meet its ongoing requirements at all relevant times, in setting the values and criteria for such tests, modeling has been undertaken on the basis of certain assumptions in certain stress scenarios. No assurance can be given that the assumptions utilized in such modeling have been able to incorporate or examine all possible scenarios that may occur in respect of the Guarantor and the Portfolio. As such, no assurance can be given that the methodology and modeling utilized to set the relevant values and criteria within such tests will be sufficient in all scenarios to ensure that the Guarantor will be able to meet its obligations in full.

The Bond Trustee will not be responsible for monitoring compliance with, or the monitoring of, the Asset Coverage Test, the Amortization Test, the Valuation Calculation or the Pre-Maturity Test or any other test, or supervising the performance by any other party of its obligations under any Transaction Document. See “Summary of the Principal Documents—Guarantor Agreement.”

While the Guarantor is required to perform the Valuation Calculation to monitor exposure to volatility of interest rate and currency market risk by measuring the present value of the Portfolio relative to the market value of the obligations guaranteed under the Covered Bond Guarantee, there is no obligation on the part of the Bank or the Guarantor to take any action in respect of the Valuation Calculation to the extent it shows the market value of the Portfolio is less than the market value of the obligations guaranteed under the Covered Bond Guarantee.

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Borrowers may default in paying amounts due under the Loans. The inability of borrowers to pay amounts due under the Loans may reduce the amount of the Guarantor’s available funds.

Borrowers may for a variety of reasons default on their obligations due under the Loans. Various factors influence mortgage delinquency rates and the ultimate payment of interest and principal. Examples of such factors include changes in the national or international economic climate, regional economic or housing conditions, changes in tax laws, interest rates, inflation, the availability of financing, yields on alternative investments, political developments and government policies. Other factors in a borrower’s individual, personal or financial circumstances may affect the ability of the borrower to repay the Loan. Loss of earnings, illness, divorce and other similar factors may also lead to an increase in delinquencies by and bankruptcies of borrowers, and could ultimately have an adverse impact on the ability of borrowers to repay the Loans. In addition to the above, the ability of a borrower to sell a property at a price sufficient to repay the amounts outstanding under that Loan will depend upon a number of factors, including the availability of purchasers for that property, the value of that property and property values in general at the time. See also “—Risks relating to the Canadian residential mortgage market such as a deterioration in the market for real estate, could negatively affect the value and marketability of the covered bonds.”

Risks relating to the Canadian residential mortgage market such as a deterioration in the market for real estate, could negatively affect the value and marketability of the covered bonds

A severe correction in the housing market could create strains in the residential mortgage market by causing an economic recession (and associated loss of income) and a reduction in homeowner equity, leading to rising delinquencies. The risk of a severe correction is considered low in most regions of the country, as valuations are moderate, affordability is reasonable and interest rates are likely to remain low for some time. The risk of a correction is somewhat larger in the Greater Vancouver and Toronto areas, which account for about one-quarter of the population, as valuations are high and affordability of detached properties is strained. The risk of a severe correction would increase if interest rates rose sharply or an external shock caused the economy to contract. In this case, the subsequent housing downturn would impair economic circumstances and create greater stress in the mortgage market.

Prior to the completion of a transfer of payments collected from the Loans and their Related Security to the Guarantor, funds collected by the Servicer on behalf of the Guarantor are commingled with the funds of the Servicer, and there can be no assurance as to the ability of the Guarantor to obtain effective direct payments from borrowers

Notice is usually given to borrowers of the transfer of the Loan and Related Security to the Guarantor only after the occurrence of a Registered Title Event. Such notice will instruct the relevant borrower to pay all further amounts due under the relevant Loan to an account in the name of the Guarantor (as specified in such notice). As a matter of Canadian law, until such notice is received by the borrower, the borrower may continue to pay all amounts due under the relevant Loan to the Seller and receive good discharge for such payments.

There can be no assurance that upon the occurrence of a Registered Title Event, (a) notification to the borrower will be made duly and timely or (b) the Guarantor will have the ability to obtain effective direct payments from the borrower under the Loan and the Related Security.

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Under the Servicing Agreement, the Servicer may receive funds belonging to the Guarantor that arise from the Loans and their Related Security comprised in the Portfolio and are to be paid into the GDA Account. Prior to a downgrade of the ratings of the Servicer by one or more Rating Agencies below any of the Servicer Deposit Threshold Ratings, the Servicer will transfer such funds on or before the next Guarantor Payment Date (i) to the Cash Manager prior to a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below any of the Cash Management Deposit Ratings, and (ii) following a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below any of the Cash Management Deposit Ratings, directly into the GDA Account. In the event of a downgrade of the ratings of the Servicer by one or more Rating Agencies below any of the Servicer Deposit Threshold Ratings, the Servicer will transfer such funds (i) to the Cash Manager prior to a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below any of the Cash Management Deposit Ratings, and (ii) following a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below any of the Cash Management Deposit Ratings, directly into the GDA Account, in each case within two Canadian Business Days of the collection and/or receipt thereof.

Until completion of the transfer of such payments collected on the Loans and Related Security to the Cash Manager or the GDA Account and prior to the circumstances as set out above, funds collected by the Servicer on the account of the Guarantor are commingled with the funds of the Servicer. This may adversely affect the timing and amount of payments on the covered bonds. Moreover, the Bank also serves as initial Account Bank to the Guarantor. Therefore, even if the transfer of such payments to the Guarantor’s account with the Bank is completed, the covered bondholders bear the risk of an insolvency of the Bank unless the Bank has been replaced as Account Bank and transfer of the funds has been completed prior to such event.

The Lending Criteria applicable to any Loans at the time of its origination may not be the same as those set out in this prospectus, including lower creditworthiness

Each of the Loans originated by the Seller will have been originated in accordance with its Lending Criteria at the time of origination. Since the Portfolio is dynamic, Loans made based on different lending criteria may be included in the Portfolio so long as the Loan Representations and Warranties are satisfied as of the applicable Purchase Date with respect to each such Loan. It is expected that the Seller’s Lending Criteria will generally consider type of property, term of loan, age of applicant, the Loan-To-Value ratio, insurance policies, high loan-to-value fees, status of applicants and credit history. In connection with the sale of any Loans and Related Security to the Guarantor, the Seller will warrant only that prior to making each advance under such Loans, the Lending Criteria and all other preconditions to the making of the Loans were satisfied. The Seller retains the right to revise its Lending Criteria from time to time but would only do so to the extent that such a change would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market. If the Lending Criteria of the Seller changes in a manner that affects the creditworthiness of the Loans, that may lead to increased defaults by borrowers and may affect the realizable value of the Portfolio, or part thereof, and the ability of the Guarantor to make payments under the Covered Bond Guarantee.

In addition, New Sellers who are affiliates of the Bank may in the future accede to the Program, become a limited partner of the Guarantor and sell Loans and their Related Security to

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the Guarantor. Any loans originated by a New Seller will have been originated in accordance with the lending criteria of the New Seller, which may differ from the Lending Criteria for Loans originated by the Seller. If the lending criteria differ in a way that affects the creditworthiness of the Loans in the Portfolio, that may lead to increased defaults by borrowers and may affect the realizable value of the Portfolio or any part thereof or the ability of the Guarantor to make payments under the Covered Bond Guarantee.

Levels of arrears in the Portfolio included in the applicable prospectus supplement are as of the applicable cut-off dates, and may have changed at the date of the issuance of the relevant Series of covered bonds

For each Series of covered bonds, selected information about the Loans in the Portfolio, including information in respect of arrears as at the cut-off date prior to the time of the relevant issue of such Series of covered bonds, will be set out in the applicable prospectus supplement. Except as otherwise indicated in such prospectus supplement, the selected information will be prepared using the current balance as of the relevant cut-off date, which includes all principal and accrued interest for the Loans as of the relevant cut-off date and may not be a true reflection of the Loans as at the date of issuance of such Series of covered bonds. The selected information will not include any Loans assigned to the Portfolio since the relevant cut-off date.

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New Loan Types may be included in the Portfolio without the consent of covered bondholders

As at the date of this prospectus, the Portfolio is comprised of Loans secured on residential property located in Canada which have been fully advanced at the date of sale to the Guarantor. In the event that New Loan Types are subsequently included, amendments will be made to the Eligibility Criteria, the Loan Representations and Warranties and certain related provisions of the Mortgage Sale Agreement, subject to satisfaction of the Rating Agency Condition with respect thereto. While New Loan Types will be required to comply with the eligibility requirements under Part I.1 of the NHA and the CMHC Guide, the consent of the covered bondholders to these changes will not need to be obtained and as a consequence the interests of the covered bondholders may be adversely affected.

The Guarantor does not have registered or recorded title to the Loans and their Related Security in the Portfolio on the relevant Purchase Date, which could affect its rights against borrowers

The Seller will transfer all of its right, title and interest in the Loans and their Related Security to the Guarantor pursuant to the Mortgage Sale Agreement on the relevant Purchase Date. However, the registered or recorded title to the transferred Loans and their Related Security will remain with the Seller until the occurrence of a Registered Title Event. As a result (and until such time) application will not be made to the applicable land registry offices to register or record the Guarantor’s ownership interest in the Loans and their Related Security and notice of the sale of the Loans and their Related Security will not be given to any borrower. Since prior to the occurrence of a Registered Title Event, the Guarantor will not have perfected its ownership interest in the Loans and their Related Security by completing the applicable registrations at the appropriate land registry or land titles office or providing notice of the sale of the Loans to the borrowers, the following risks exist:

• first, if the Seller sells a Loan and its Related Security, which has already been sold to the Guarantor, to another person and that person acted in good faith and did not have notice of the interest of the Guarantor in the Loan and its Related Security, then such person might obtain good title to the Loan and its Related Security, free from the interest of the Guarantor. If this occurs then the Guarantor may not have good title in the affected Loan and its Related Security and it may not be entitled to payments by a borrower in respect of that Loan.

• second, the rights of the Guarantor may be subject to the rights of the borrowers against the Seller, such as rights of set-off that may occur in relation to transactions or deposits made between borrowers and the Seller and the rights of borrowers to redeem their mortgages by repaying the Loans directly to the Seller; and

• third, unless the Guarantor has perfected the sale of the Loans (which it is only entitled to do in certain circumstances), the Guarantor may not be able to enforce any borrower’s obligations under the relevant Loan itself but may have to join the Seller as a party to any legal proceedings.

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If any of the risks described in the bullet points above were to occur, then the realizable value of the Portfolio or any part thereof and/or the ability of the Guarantor to make payments under the Covered Bond Guarantee may be adversely affected. In addition, the exercise of set-off rights by borrowers may also adversely affect the amount that the Bond Trustee (for covered bondholders and on behalf of the other Secured Creditors) is able to realize on the Portfolio under the Security Agreement.

Limitations on recourse to the Seller may adversely affect the Portfolio

The Guarantor and the Bond Trustee will not undertake any investigations, searches or other actions on any Loan or its Related Security and will rely instead on the representations and warranties provided by the Seller in connection with the transfer of such Loans and their Related Security. If any of the representations and warranties prove to be untrue or there is a material breach of these representations and warranties (subject to the Seller remedying such breach within a certain period of time), the Seller will be required to repurchase the Loan and its Related Security. There can be no assurance that the Seller will have the financial resources to repurchase the Loans and their Related Security. However, if the Seller does not repurchase those Loans and their Related Security that are in breach, those Loans will be given a zero value for the purposes of any calculation of the Asset Coverage Test, the Valuation Calculation and/or the Amortization Test. There is no further recourse to the Seller for a breach of a Loan Representation and Warranty.

The Portfolio consists of Loans and their Related Security to be randomly selected by the Seller which are represented to satisfy the Loan Representations and Warranties and the CMHC Guide

None of the Arrangers, the Cover Pool Monitor, any Dealer, Bond Trustee, or the Custodian has undertaken or will undertake any due diligence with respect to the wording or content of the individual agreements underlying such Portfolio assets or the facts and circumstances relating to the particular relationship between the relevant borrower or the related Property, respectively, and the Seller, all of which may impact the viability and interpretation of such agreements. The Guarantor will rely on the Loan Representations and Warranties given by the Seller in the Mortgage Sale Agreement. The remedies provided for in the Mortgage Sale Agreement to the Guarantor in respect of non-compliance with the Loan Representation and Warranties (other than where such breach was waived at the point of transfer to the Guarantor), will be limited to the repurchase by the Seller of the related Loan and its Related Security for an amount equal to the applicable Repurchase Amount. Such obligation is not guaranteed by nor will it be the responsibility of any person other than the Seller and neither the Guarantor nor the Bond Trustee will have recourse to any other person in the event that the Seller, for whatever reason, fails to meet such obligation.

The sale of real property upon the enforcement of a mortgage security is subject to Canadian real property and insolvency regulations, property transfer taxes, capital gain taxes and legal liens

Limitations on enforceability of mortgage security. Generally, a lender’s right to realize on its mortgage security may be subject to or regulated by statutes, the existing practice and procedures of a court of competent jurisdiction and that court’s equitable powers. Under certain circumstances, a court may exercise equitable powers to relieve a borrower from the effects of certain defaults or acceleration. Certain proceedings taken by a lender to realize upon its

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mortgage security, such as foreclosure and judicial sale, are subject to most of the delays and expenses of other lawsuits, particularly if defenses or counterclaims are asserted, sometimes requiring up to several years to complete. If a borrower makes a proposal or an assignment or initiates or becomes subject to any other proceedings under the BIA or other insolvency, arrangement or other legislation for the relief of debtors, the Seller or the Guarantor may not be permitted to accelerate the maturity of the related Loan, to foreclose on the Property or to exercise power of sale or other mortgage enforcement proceedings for a considerable period of time.

Where a borrower or any beneficial owner of a Property is or subsequently becomes a non-resident of Canada under the ITA and remains a non-resident at the time that enforcement proceedings are taken under the Loan, the specific remedies available to the lender may be practically limited by the requirement that the lender comply with section 116 of the ITA upon any sale of the Property under or in respect of the related Loan which may require the lender to withhold from realization proceeds an amount equal to (or, in certain cases, greater than) the tax applicable to any accrued capital gain of such non-resident person triggered by such sale. Many of the Loans contain “due-on-sale” clauses, which permit the acceleration of the maturity of the related Loan if the borrower sells the related Property. The Loans also generally include a debt-acceleration clause, which permits the acceleration of the Loan upon a monetary or non-monetary default by the borrower. The enforceability of such due-on-sale and debt-acceleration clauses is subject to and may be affected by (i) applicable bankruptcy, insolvency and other laws of general application limiting the enforcement of creditors’ rights and remedies generally, and (ii) applicable principles of law and equity, and in some provinces, applicable statutory provisions which limit restraint on alienation of real property and provide relief to a borrower, in certain circumstances, from the effects of certain defaults or acceleration.

Prior liens. The priority of mortgages securing the Loans may be subject to prior liens resulting from the operation of law, such as liens in favor of governmental authorities and persons having supplied work or materials to the relevant Property. In each province and territory, the priority of a mortgage against real property may be subject to a prior lien for unpaid realty taxes in favor of the applicable taxing authorities. In the Province of Québec, the priority of a hypothec on rents may be subject to a prior claim in favor of the government for amounts due under fiscal laws.

Registered title. The Mortgages securing the Loans will be registered in the name of the Seller, as agent, bare trustee and nominee in trust for the Guarantor. Upon the occurrence of a Registered Title Event, the Guarantor will have the right to demand that the Seller provide it with registered or recorded title to the Loans and their Related Security at the expense of the Seller, and if the Seller fails to do so, the Guarantor will exercise certain powers of attorney granted to it by the Seller, and record assignments and transfers of all Loans in its name (or in any other name it may decide). If such registration becomes necessary, there may be costs and delays associated with effecting such registrations (potentially resulting in delays in commencing, prosecuting and completing enforcement proceedings). The Seller will be responsible for meeting all costs associated with such registrations. However, if the Seller does not have the funds to pay such costs, any related expenses the Guarantor is required to pay may reduce the amounts available to pay the covered bondholders.

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Adverse environmental conditions on a Property may affect the value of a Loan

If an adverse environmental condition exists with respect to a Property, the related Loan may be subject to the following risks: (i) a diminution in the value of such Property or the practical ability to foreclose or take other enforcement proceedings against such Property; (ii) the potential that the related borrower may default on the related Loan due to such borrower’s inability to pay high remediation costs or difficulty in bringing the Property into compliance with environmental laws; (iii) in certain circumstances as more fully described below, the liability for clean-up costs or other remedial actions could exceed the value of the Property; or (iv) the practical inability to sell the Property or the related Loan in the secondary market. Under certain provincial laws, the reimbursement of remedial costs incurred by regulatory agencies to correct environmental conditions may be secured by a statutory lien over the subject property, which lien, in some instances, may be prior to the lien of an existing mortgage. Any such lien arising in respect of a Loan could adversely affect the value of such Loan and could make any foreclosure or other enforcement proceedings impracticable. Under various federal and provincial laws and regulations, a current or previous owner or operator of real property, as well as certain other categories of parties, may be liable for the costs of removal or remediation of hazardous or toxic substances on, under, adjacent to or in such property. The cost of any required remediation and the owner’s liability therefor is generally not limited under applicable laws, and could exceed the value of the property and/or the assets of the owner. Under some environmental laws, a secured lender may be found to be an “owner” or “operator” or person in charge, management or control of, or otherwise responsible for, the Property. In such cases, a secured lender may be liable for the costs of any required removal or remediation of adverse environmental conditions. The Guarantor and/or the Bond Trustee’s exposure to liability for clean-up costs will increase if it or its agent actually takes possession of a Property.

The entire real property securing the Loans in the Portfolio is located in Canada and a deterioration in the market for real estate in Canada could negatively affect the value of the covered bonds

All the real property securing the Loans in the Portfolio is located in Canada. The performance of the Loans will therefore be affected by general economic conditions in Canada and the condition of the residential housing market in Canada. A significant deterioration in the market for residential or other real estate could negatively affect the value of the real property in the underlying Portfolio and the Canadian residential mortgage market, which in turn could have an adverse effect on the value and marketability of the covered bonds and the ability of the Guarantor to make payments under the Covered Bond Guarantee.

Interest obligations may be greater than the monthly installment payment for certain products and borrowers may refuse to pay excess amounts

When the Bank’s prime rate increases, the amount of interest payable by a borrower under a variable rate loan increases. The borrower’s installment payment, however, remains constant (except as discussed below) and, the portion of the borrower’s monthly mortgage payment allocated towards the payment of principal is reduced. If the interest rate on a Loan reaches the level at which the borrower’s mortgage payment is insufficient to cover the interest payable, the difference is capitalized and added to the principal balance of the Loan. For certain

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variable rate products this may result in the principal balance of the Loan being greater than the original principal amount of the Loan. If the principal balance of the Loan increases in excess of 105 percent of the original principal amount of the Loan, the Bank may require the borrower to pay the excess amount, increase the amount of the borrower’s monthly installment, or (if the borrower has the right to do so under the Loan) convert the Loan to a Fixed Rate Loan. Accordingly, an increase in a borrower’s monthly installment or principal balance may affect the borrower’s timely payment of scheduled payments of principal and interest on the related Loan and, accordingly, the actual rates of delinquencies, foreclosures and losses with respect to such Loan. Further, economic and market conditions may impair borrowers’ ability to make timely payment of scheduled payments of principal and interest on the Loans or to refinance or sell their residential properties, which may contribute to higher delinquency and default rates, and may in turn adversely affect the value of the covered bonds. See “—Risks relating to the Canadian residential mortgage market such as a deterioration in the market for real estate, could negatively affect the value and marketability of the covered bonds.”

The Portfolio consists of Loans with renewal risk due to short maturities

Canadian mortgage loans generally provide for the renewal of the loans periodically (e.g., every five years), but the amortization period of the loans is generally much longer (e.g., 25 years). See “Portfolio—Characteristics of the Loans.” The borrower faces a change, perhaps a substantial change, in the applicable interest rate on the loan at the time of renewal and the prospect of seeking a replacement loan from another lender if the current lender does not renew the loan. In an adverse economic environment, obtaining a replacement loan may be difficult. Accordingly, if prevailing interest rates have risen significantly, an existing lender may need to renew the loan at below market rates in order to avoid a default on a loan up for renewal.

If the Bank renews Loans at below market rates, it may adversely affect the market value of such Loans in the Portfolio and in the event that the Guarantor must liquidate some Loans in order to meet its obligations under the Covered Bond Guarantee it may realize less than the principal amount of the Loans liquidated. If the Guarantor is required to liquidate a large number of Loans that have interest rates significantly below prevailing interest rates, the Guarantor may not realize sufficient proceeds to pay the covered bonds in full.

Risks relating to the Guarantor

There are limited events of default with respect to the Guarantor

Service of an Issuer Acceleration Notice on the Bank does not constitute an event of default with respect to the Guarantor and, therefore, does not in itself trigger an acceleration of the payment obligations of the Guarantor under the Covered Bond Guarantee. Instead, the Terms and Conditions contain limited events of default with respect to the Guarantor, the occurrence of which would entitle covered bondholders to accelerate payment obligations under the Covered Bond Guarantee. Acceleration of the covered bonds following a Guarantor Event of Default may not lead to accelerated payments to covered bondholders, since there can be no assurance that the Guarantor or the Bond Trustee will be able to promptly sell the Portfolio.

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Currency risks and risks related to Swaps

Differences in timing of obligations of the Guarantor and the Covered Bond Swap Provider under the Covered Bond Swap Agreement could adversely affect the Guarantor’s ability to meet its obligations

Following the Covered Bond Swap Effective Date, the Guarantor will, on each Guarantor Payment Date, pay or provide for payment of an amount to the Covered Bond Swap Provider based on the Canadian Deposit Offering Rate for Canadian Dollar deposits (“CDOR”) having the relevant maturity for the agreed period. The Covered Bond Swap Provider may not be obliged to make corresponding swap payments to the Guarantor until amounts are due and payable by the Guarantor under the Intercompany Loan Agreement or Due for Payment under the Covered Bond Guarantee. If the Covered Bond Swap Provider does not meet its payment obligations to the Guarantor under the Covered Bond Swap Agreement or does not make a termination payment that has become due from it to the Guarantor under the Covered Bond Swap Agreement, the Guarantor may have a larger shortfall in funds with which to make payments under the Covered Bond Guarantee with respect to the covered bonds than if the Covered Bond Swap Provider satisfied its payment obligations on the same date as the date on which the Guarantor’s payment obligations under the Covered Bond Swap were due. Hence, the difference in timing between the obligations of the Guarantor and the obligations of the Covered Bond Swap Provider under the Covered Bond Swap Agreement may affect the Guarantor’s ability to make payments under the Covered Bond Guarantee with respect to the covered bonds. To mitigate the risk, the Covered Bond Swap Provider will be required, pursuant to the terms of the relevant Covered Bond Swap Agreement, to post collateral with the Guarantor if the Guarantor’s net exposure to the Covered Bond Swap Provider under the relevant Covered Bond Swap Agreement exceeds a certain threshold level or if certain ratings requirements are not met.

Risks related to the structure of a particular issue of covered bonds

Changes of law, including applicable banking, bankruptcy and income tax laws and NHA regulations and policies may affect the covered bonds, the Covered Bond Guarantee, the Bank and/or the Guarantor

The structure of the issue of the covered bonds and the ratings which are to be assigned to them are based on the laws of the Province of Ontario and the federal laws of Canada applicable therein including banking, bankruptcy and income tax laws in effect as at the date of this prospectus, unless otherwise indicated. No assurance can be given as to the impact of any possible change to these laws, including the NHA and the regulations and policies thereunder with respect to CMHC guidelines (including the CMHC Guide), the applicable laws, regulations and policies with respect to the issuance of covered bonds, the covered bonds themselves or the bankruptcy and receivership of the Bank or the Guarantor after the date of this prospectus, nor can any assurance be given as to whether such change could adversely affect the ability of the Bank to meet its obligations in respect of the covered bonds or the Guarantor to meet its obligations under the Covered Bond Guarantee.

The covered bonds may be subject to optional redemption by the Bank

An optional redemption feature of a Series of covered bonds is likely to limit their market value. During any period when the Bank may elect to redeem such covered bonds, the market value of those covered bonds generally will not rise substantially above the price at which they can be redeemed. This also may occur prior to any redemption period.

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The Bank may be expected to redeem such Series of covered bonds when its cost of borrowing is lower than the interest rate on the Series of covered bonds. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Series of covered bonds being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.

The Bank may issue covered bonds that bear interest at a rate that converts from a Fixed Rate to a Floating Rate, or from a Floating Rate to a Fixed Rate

The Bank may issue a Tranche of covered bonds that bear interest at a rate that converts from a Fixed Rate to a Floating Rate, or from a Floating Rate to a Fixed Rate. Where the Bank has the right to affect such a conversion, this may affect the secondary market and the market value of the covered bonds since the Bank may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the Bank converts from a Fixed Rate to a Floating Rate, in such circumstances, the spread on such covered bonds may be less favorable than the prevailing spreads on comparable Floating Rate covered bonds tied to the same Reference Rate. In addition, the new Floating Rate at any time may be lower than the rates on the other covered bonds. If the Bank converts from a Floating Rate to a Fixed Rate, in such circumstances, the Fixed Rate may be lower than the prevailing rates on the other covered bonds.

Covered bonds issued at a substantial discount or premium may experience significant price volatility

The issue price of covered bonds specified in the applicable prospectus supplement may be more than the market value of such covered bonds as of the issue date, and the price, if any at which a dealer or any other person is willing to purchase the covered bonds in secondary market transactions may be lower than the issue price. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest bearing securities with comparable maturities.

The Bond Trustee’s powers may affect the interests of the holders of the covered bonds

In the exercise of its powers, trusts, authorities and discretions, the Bond Trustee will only have regard to the interests of the holders of the covered bonds. In the exercise of its powers, trusts, authorities and discretions, the Bond Trustee may not act on behalf of the Bank. If, in connection with the exercise of its powers, trusts, authorities or discretions, the Bond Trustee is of the opinion that the interests of the holders of the covered bonds of any one or more Series would be materially prejudiced thereby, the Bond Trustee will not exercise such power, trust, authority or discretion without the approval by Extraordinary Resolution of such holders of the relevant Series of covered bonds then outstanding or by a direction in writing of such holders of the covered bonds representing at least 25 percent of the Principal Amount Outstanding of covered bonds of the relevant Series then outstanding.

The Bond Trustee is not obligated to serve an Issuer Acceleration Notice on the Bank upon an Issuer Event of Default or a Notice to Pay on the Guarantor, or to seek enforcement of the provisions of the Trust Deed on the covered bonds, except if so directed by the holders of the covered bonds. Accordingly, the powers of the Bond Trustee may adversely affect your interests in the covered bonds.

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Additional risk factors

Additional risk factors in relation to specific issues of covered bonds may be included in the applicable prospectus supplement.

The covered bonds have no established trading market when issued and there is no assurance that an active and liquid secondary market will develop for the covered bonds

Covered bonds may have no established trading market when issued, and no assurance is provided that an active and liquid secondary market for the covered bonds will develop. To the extent a secondary market exists or develops, it may not continue for the life of the covered bonds or it may not provide covered bondholders with liquidity of investment with the result that a covered bondholder may not be able to find a buyer to buy its covered bonds readily or at prices that will enable the covered bondholder to realize a desired yield. This is particularly the case for covered bonds that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives or strategies or have been structured to meet the investment requirements of limited categories of investors. These types of covered bonds generally would have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may severely and adversely affect the market value of covered bonds.

Lack of liquidity in the secondary market may adversely affect the value of the covered bonds

There is not, at present, an active and liquid secondary market for the covered bonds, and there can be no assurance that a secondary market for the covered bonds will develop. If a secondary market does develop, it may not continue for the life of the covered bonds or it may not provide holders of the covered bonds with liquidity of investment with the result that a holder of the covered bonds may not be able to find a buyer to buy its covered bonds readily or at prices that will enable the holder of the covered bonds to realize a desired yield.

The covered bonds will initially be held in book-entry form and therefore you must rely on the procedures of the relevant clearing systems to exercise any rights and remedies

Unless and until definitive U.S. Registered Covered Bonds are issued in exchange for book-entry interests in the covered bonds, owners of the book-entry interests will not be considered owners or holders of the covered bonds. Instead, the registered holder, or their respective nominee, will be the sole holder of the covered bonds. Payments of principal, interest and other amounts owing on or in respect of the covered bonds in global form will be made to Paying Agent, which will make payments to DTC. Thereafter, payments will be made by DTC to participants in these systems and then by such participants to indirect participants. After payment to the common depositary neither the Bank, the Bond Trustee nor the Paying Agent will have any responsibility or liability of any aspect of the records related to, or payments of, interest, principal or other amounts to DTC or to owners of book-entry interests.

Since the covered bonds are not represented in physical form, it may make it difficult for you to pledge the covered bonds as security if covered bonds in physical form are required or necessary for such purposes. Unlike holders of the covered bonds themselves, owners of book-entry interests will not have the direct right to act upon our solicitations or consents or requests

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for waivers or other actions from holders of the covered bonds that we may choose to make in the future. Rather, owners of book-entry interests will be permitted to act only to the extent that they have received appropriate proxies to do so from DTC or, if applicable, from a participant. We cannot assure you that procedures implemented for the granting of such proxies will be sufficient to enable you to vote on any such solicitations or requests for actions on a timely basis.

Issuance of covered bonds in book-entry form may affect liquidity and the ability to pledge the covered bonds

Some investors, including some insurance companies and other institutions, are required by law or otherwise to hold physical certificates for securities they invest in and are not be permitted to hold securities in book-entry form. Unless a prospectus supplement provides to the contrary, it is expected that the covered bonds will be issued in registered form as global covered bonds through DTC and, accordingly, some investors may not be permitted to own covered bonds. This may reduce the liquidity for the covered bonds by limiting the purchasers eligible to purchase the covered bonds in the secondary market.

Exchange rate risks relating to currency conversions and/or exchange controls imposed by government or monetary authorities may affect investors expected returns on the covered bonds

The Bank will pay principal and interest on the covered bonds and the Guarantor will make any payments under the Covered Bond Guarantee in U.S. Dollars. This presents certain risks relating to currency conversions if an investor’s financial activities are denominated principally in a currency or currency unit (the “Investor’s Currency”) other than U.S. Dollars. These include the risk that exchange rates may significantly change (including changes due to devaluation of the U.S. Dollar or revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to the U.S. Dollar would decrease (i) the Investor’s Currency-equivalent yield on the covered bonds, (ii) the Investor’s Currency-equivalent value of the principal payable on the covered bonds and (iii) the Investor’s Currency-equivalent market value of the covered bonds.

Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.

Subsequent changes in market interest rates may adversely affect the value of Fixed Rate Covered Bonds

Investment in Fixed Rate Covered Bonds involves the risk that subsequent changes in market interest rates may adversely affect the value of the Fixed Rate Covered Bonds.

Program related legal and regulatory risks

The covered bonds and the Bank’s activities are subject to the remedial powers of the Superintendent under the Bank Act and the requirements of the Legislative Framework and the CMHC Guide

The Superintendent, under Section 645(1) of the Bank Act, has the power, where in the opinion of the Superintendent, a bank, or a person with respect to a bank, is committing, or is

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about to commit, an act that is an unsafe or unsound practice in conducting the business of the bank, or is pursuing or is about to pursue any course of conduct that is an unsafe or unsound practice in conducting the business of the bank, to direct the bank or person, as the case may be, to cease or refrain from committing the act or pursuing the course of conduct and to perform such acts as in the opinion of the Superintendent are necessary to remedy the situation.

Although the above remedial power exists, following an initial review of potential regulatory and policy concerns associated with the issuance of covered bonds by Canadian deposit taking institutions (during which it requested that financial institutions refrain from issuing covered bonds), the Office of the Superintendent of Financial Institutions (“OSFI”) confirmed by letter dated June 27, 2007 that Canadian deposit taking institutions may issue covered bonds, provided certain conditions are met. The conditions are as follows: (i) at the time of issuance, the covered bonds must not make up more than four percent of the OSFI Total Assets of the relevant deposit taking institution; (ii) if at any time after issuance the four percent limit is exceeded, the relevant deposit taking institution must immediately notify OSFI; and (iii) excesses (above the four percent limit) due to factors not under the control of the issuing institution, such as foreign exchange fluctuations, will not require the relevant deposit taking institution to take action to reduce the amount outstanding, however, for other excesses, the relevant deposit taking institution must provide a plan showing how it proposes to eliminate the excess quickly. “OSFI Total Assets” for the purpose of the foregoing limit, will be equal to the numerator of the asset-to-capital multiple of the relevant deposit taking institution. In addition, relevant deposit taking institutions are expected, prior to issuing any covered bonds, to amend the pledging policies they are required to maintain under the Bank Act to take into account the issuance of covered bonds consistent with the above limits and to obtain board and/or committee approval for such amendments prior to issuance of any covered bonds.

The full Program amount, when combined with the outstanding balance of the covered bonds issued by the Bank under its previous program, is less than four percent of the OSFI Total Assets of the Bank as of the date of this prospectus. The Bank did not issue covered bonds prior to June 27, 2007, and the Bank previously received the requisite board approval for amendments to its pledging policies which take into account the issuance of covered bonds under the Program.

In 2012, the NHA was amended to establish a legislative framework for covered bonds (the “Legislative Framework”). The amendments to the NHA have given CMHC the responsibility to administer the Legislative Framework, with discretionary authority to establish conditions and restrictions applicable to registered issuers and registered covered bond programs and to oversee and enforce compliance with those conditions and terms. On December 17, 2012, CMHC published the Canadian Registered Covered Bond Programs Guide (as amended from time to time, the “CMHC Guide”) implementing the Legislative Framework. The CMHC Guide elaborates on the role and powers of CMHC as administrator of the Legislative Framework and sets out the conditions and restrictions applicable to registered issuers and registered covered bond programs. The Bank and the Program are required to comply with the requirements of the NHA and CMHC Guide.

No assurance can be given that additional regulations or guidance from CMHC, OSFI, the Canadian Deposit Insurance Corporation or any other regulatory authority will not arise with regard to the mortgage market in Canada generally, the Seller’s or the Guarantor’s particular sector in that market or specifically in relation to the Seller or the Guarantor. Any such action or developments may have a material adverse effect on the Seller and/or the Guarantor and their respective businesses and operations. This may adversely affect the ability of the Guarantor to

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dispose of the Portfolio or any part thereof in a timely manner and/or the realizable value of the Portfolio or any part thereof, and accordingly, affect the ability of the Bank and the Guarantor, respectively, to meet their obligations under the covered bonds in the case of the Bank and the Covered Bond Guarantee in the case of the Guarantor.

Suspension of the Bank’s ability to issue covered bonds under Part I.1 of NHA and the CMHC Guide could negatively impact the covered bonds

Part I.1 of the NHA and the CMHC Guide impose certain ongoing obligations on both the Bank and the Guarantor and permit CMHC to take certain actions in respect of the Bank if such obligations are not complied with from time to time. Such actions include suspending the right of the Bank to issue covered bonds under the Program and directing the Bank to take specified steps for the purpose of complying with the CMHC Guide. There is a risk that suspending the right of the Bank to issue covered bonds under the Program or any non-compliance with a request from CMHC may negatively impact the value and/or liquidity of the covered bonds. However, pursuant to 9.1(a) (Issuer Events of Default), non-compliance by the Bank with Part I.1 of the NHA or the CMHC Guide will not constitute an Issuer Event of Default.

The Bank’s residential mortgage underwriting practices and procedures may be affected by regulatory guidelines

Guideline B-20—Residential Mortgage Underwriting Practices and Procedures (“Guideline B-20”), published by OSFI in June 2012, sets out OSFI’s expectations for prudent residential mortgage underwriting by federally-regulated financial institutions, which includes the Seller in respect of Loans originated by it. Guideline B-20 calls for the establishment of a residential mortgage underwriting policy by the Seller and sets out expectations with respect to borrower due diligence, collateral management and appraisal processes and credit and counterparty risk management practices and procedures by the Seller. OSFI’s expectation was for full compliance with Guideline B-20 by the end of the Seller’s fiscal year 2012 and it had indicated that, where possible, federally-regulated financial institutions should comply immediately.

Loans that may be sold to the Guarantor in the future may have characteristics differing from current Loans generated before the implementation of Guideline B-20, including in respect of loss experience, delinquencies, revenue experience and monthly payment rates. Although uncertain at this time, compliance with Guideline B-20 may impact the Seller’s ability to generate Loans at the same rate as the Seller originated prior to Guideline B-20 coming into effect.

Guideline B-20 also provides that where a federally-regulated financial institution acquires a residential mortgage loan, including a home equity line of credit, that has been originated by a third party, such federally regulated financial institution should ensure that the underwriting standards of that third party are consistent with those set out in the residential mortgage underwriting policy of the federally-regulated financial institution and compliant with Guideline B-20. To the extent that the Bond Trustee realizes upon the security it has on the Loans and Related Security, the Bond Trustee may be limited in its ability to sell such assets to a federally-regulated financial institution if such purchaser determines that the sale would not be in compliance with Guideline B-20.

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Canadian usury laws prohibit the receipt of interest above certain thresholds and any provisions for the payment of interest or a redemption amount above these thresholds may not be enforceable

Unless otherwise indicated, all covered bonds issued under the Program are governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The Criminal Code (Canada) prohibits the receipt of “interest” at a “criminal rate” (namely, an effective annual rate of interest that exceeds 60 percent). Accordingly, the provisions for the payment of interest or a redemption amount in excess of the aggregate principal amount of the covered bonds may not be enforceable if the provision provides for the payment of “interest” in excess of an effective annual rate of interest of 60 percent.

Implementation of the Basel III risk-weighted asset framework may result in changes to the risk-weighting of the covered bonds

In order to promote a more resilient banking sector and strengthen global capital standards, the Basel Committee on Banking Supervision proposed significant enhancements and capital reforms to the current framework, referred to as Basel II. The revised framework, referred to as Basel III, was effective January 1, 2013 and provides lengthy periods for transitioning to numerous new requirements. The most significant aspects of the reforms are measures to improve the quality of capital and increase capital requirements for the global financial system. The Bank cannot predict the precise effects of the potential changes that might result from implementation of the Basel III framework on both its own financial performance or the impact on the pricing of the covered bonds.

Implementation of the Basel framework and any changes as described above may have an impact on the capital requirements in respect of ownership of the covered bonds and/or on incentives to hold the covered bonds for investors that are subject to requirements that follow the relevant framework and, as a result, may affect the liquidity and/or value of the covered bonds.

In general, investors should consult their own advisers as to the regulatory capital requirements of the covered bonds and as to the consequences for and effect on them of any changes to the Basel framework (including the changes described above) and the relevant implementing measures. No predictions can be made as to the precise effects of such matters on any investor or otherwise.

The Bank will act in its own interest in connection with the Program, and such actions may not be in the best interests of and may be detrimental to the holders of covered bonds

The Bank has a number of roles pursuant to the Program including, but not limited to, Seller, Servicer, Cash Manager, Swap Provider, GDA Provider, Intercompany Loan Provider, and Limited Partner. In respect of the Program, the Bank will act in its own interest subject to compliance with the Transaction Documents. Such actions by the Bank may not be in the best interests of, and may be detrimental to, the holders of the covered bonds. Subject to compliance with the Transaction Documents, the Bank may act in its own interest without incurring any liability to the holders of any Series or Tranche of covered bonds.

Legal investment considerations may restrict certain investments

The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent: (i) covered bonds are legal investments for it; (ii) covered bonds can be used as collateral for various types of borrowing; and (iii) other restrictions apply to its purchase or pledge of any covered bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of covered bonds under any applicable risk-based capital or similar rules.

Interests of Dealers

Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform services for, the Bank and its affiliates in the ordinary course of business.

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The Bank may sell the covered bonds to one or more of the Dealers, including BMO Capital Markets Corp. which is an affiliate of the Bank. The terms of the Program were negotiated at arm’s length between the Bank and the Dealers. BMO Capital Markets Corp. will receive a portion of any fees and commissions payable in connection with any such offering of covered bonds in its capacity as a Dealer.

U.S. Foreign Account Tax Compliance Act withholding may apply to payments in respect of the covered bonds

Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986 (“FATCA”) impose a new reporting regime and, potentially, a 30% withholding tax with respect to (i) certain payments from sources within the United States, (ii) “foreign passthru payments” made to certain non-U.S. financial institutions that do not comply with this new reporting regime, and (iii) payments to certain investors that do not provide identification information with respect to interests issued by a participating non-U.S. financial institution. Whilst the covered bonds are held within the clearing systems, in all but the most remote circumstances, it is not expected that FATCA will affect the amount of any payment received by the clearing systems in respect of such covered bonds. However, FATCA may affect payments made to custodians or intermediaries in the subsequent payment chain leading to the ultimate investor if any such custodian or intermediary generally is unable to receive payments free of FATCA withholding. It also may affect payment to any ultimate investor that is a financial institution that is not entitled to receive payments free of withholding under FATCA, or an ultimate investor that fails to provide its broker (or other custodian or intermediary from which it receives payment) with any information, forms, other documentation or consents that may be necessary for the payments to be made free of FATCA withholding. Investors should choose the custodians or intermediaries with care (to ensure each is compliant with FATCA or other laws or agreements related to FATCA) and provide each custodian or intermediary with any information, forms, other documentation or consents that may be necessary for such custodian or intermediary to make a payment free of FATCA withholding. The Bank’s obligations under the covered bonds are discharged once it has paid the clearing systems and the Bank has therefore no responsibility for any amount thereafter transmitted through the hands of the clearing systems and custodians or intermediaries. Prospective investors should refer to the section “Taxation—Foreign Account Tax Compliance Act”.

Covered bonds that bear interest at rates based on LIBOR and/or EURIBOR may be adversely affected by a change in the Bank’s inter-bank lending rate reporting practices or the method in which LIBOR and/or EURIBOR is determined

Regulators and law enforcement agencies from a number of governments have been conducting investigations relating to the calculation of the London inter-bank lending rate (“LIBOR”) across a range of maturities and currencies, and certain financial institutions that are member banks surveyed by the British Bankers’ Association (the “BBA”) in setting daily LIBOR have entered into agreements with the U.S. Department of Justice, the U.S. Commodity Futures Trading Commission and/or the Financial Services Authority in order to resolve the investigations. In addition, in September 2012, the U.K. government published the results of its review of LIBOR, which is referred to as the “Wheatley Review.” The Wheatley Review made a number of recommendations for changes with respect to LIBOR, including the introduction of statutory regulation of LIBOR, the transfer of responsibility for LIBOR from the BBA to an independent administrator, changes to the method of compilation of lending rates, new regulatory oversight and enforcement mechanisms for rate-setting and the corroboration of LIBOR, as far as possible, by transactional data. Based on the Wheatley Review, on March 25, 2013, final rules for the regulation and supervision of LIBOR by the Financial Conduct Authority (the “FCA”) were published (the “FCA Rules”). In particular, the FCA Rules include requirements that (1) an independent LIBOR administrator monitor and survey LIBOR submissions to identify breaches of practice standards and/or potentially manipulative behavior, and (2) firms submitting data to LIBOR establish and maintain a clear conflicts of interest policy and appropriate systems and controls. The FCA Rules took effect on April 2, 2013. It is anticipated that a reform of EURIBOR will be implemented also, which may (but will not necessarily) be in a similar fashion. Accordingly, EURIBOR calculation and publication could be altered, suspended or discontinued.

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It is not possible to predict the effect of changes in the methods pursuant to which the LIBOR and/or EURIBOR rates are determined, any other reforms to LIBOR and/or EURIBOR that will be enacted in the U.K. and elsewhere, and any actions taken by any new administrator of LIBOR and/or EURIBOR that may be appointed, each of which may adversely affect the trading market for LIBOR and/or EURIBOR-based securities, including any covered bonds that bear interest at rates based on LIBOR and/or EURIBOR. Any such changes or reforms in the method pursuant to which the LIBOR and/or EURIBOR rates are determined or actions taken by any new administrator of LIBOR and/or EURIBOR may result in a sudden or prolonged increase or decrease in the reported LIBOR and/or EURIBOR rates. If that were to occur and to the extent that the value of any covered bonds that bear interest at rates based on LIBOR and/or EURIBOR is affected by reported LIBOR and/or EURIBOR rates, the amount of interest payable under and the value of such covered bonds may be affected.

Further, uncertainty as to the extent and manner in which the Wheatley Review recommendations with respect to LIBOR will continue to be adopted and the timing of such changes may adversely affect the current trading market for LIBOR-based securities and the value of any covered bonds that bear interest at rates based on LIBOR.

Since the Bank and the Guarantor reside outside of the United States and a substantial portion of their respective assets is located outside the United States, there is a risk that service of process, enforcement of judgments and bringing of original actions will be more difficult.

The Bank is incorporated under the federal laws of Canada under the Bank Act and the Guarantor is an Ontario limited partnership. Substantially all of the Bank’s directors and executive officers, and all or a substantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon such persons, or to realize upon judgments rendered against the Bank or such persons by the courts of the United States predicated upon, among other things, the civil liability provisions of the federal securities laws of the United States. In addition, it may be difficult for you to enforce, in original actions brought in courts in jurisdictions located outside the United States, among other things, civil liabilities predicated upon such securities laws. Based on the foregoing, it may not be possible for U.S. investors to enforce against us any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

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USE OF PROCEEDS

Except as otherwise set forth in the prospectus supplement, the net proceeds from the sale of the covered bonds will be added to the Bank’s general working capital and will be used for general working capital purposes.

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CONSOLIDATED EARNINGS RATIOS

The following table provides the Bank’s consolidated ratios of earnings to fixed charges, calculated in accordance with Canadian GAAP for each of the years in the three year period ended October 31, 2010 and in accordance with IFRS for each of the nine month periods ended July 31, 2013 and 2012 and the years in the two year period ended October 31, 2012.

	Nine Months Ended July 31,				Years Ended October 31,
	2013(1)		2012(1)		2012(1)		2011(1)		2010(2)		2009(2)		2008(2)
Consolidated Ratios of Earnings to Fixed Charges
Excluding interest on deposits		3.50		3.06		3.08		2.57		4.56		2.90		1.79
Including interest on deposits		2.12		2.01		2.01		1.76		2.06		1.40		1.20
Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
Excluding interest on deposits		3.26		2.86		2.88		2.39		3.90		2.58		1.74
Including interest on deposits		2.05		1.94		1.94		1.70		1.96		1.37		1.19

(1) Calculated in accordance with IFRS.

(2) Calculated in accordance with Canadian GAAP.

For purposes of computing these ratios:

• earnings represent income from continuing operations plus income taxes and fixed charges (excluding capitalized interest);

• fixed charges, excluding interest on deposits, represent interest (including capitalized interest), estimated interest within rent, and amortization of debt issuance costs; and

• fixed charges, including interest on deposits, represent all interest.

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CONSOLIDATED CAPITALIZATION OF THE BANK

The following table sets forth the consolidated capitalization of the Bank as at July 31, 2013:

	As at July 31, 2013
	(In millions of Canadian Dollars)
Subordinated Debt		4,014
Capital Trust Securities(1)
BMO Tier 1 Notes – Series A		451
Equity
Preferred Shares(2)		2,265
Common Shares		11,999
Contributed Surplus		321
Retained Earnings		14,780
Accumulated Other Comprehensive Income		274
Total Shareholders’ Equity		29,639
Non-controlling Interest in Subsidiaries		1,058
Total Equity		30,697
Total Capitalization		35,162

Notes:

(1) For more information on the classification of Capital Trust Securities, please refer to Note 18 of the audited consolidated financial statements of Bank of Montreal for the year ended October 31, 2012.

(2) Preferred Shares classified under Shareholders’ Equity consist of Class B Preferred Shares Series 13, 14, 15, 16, 18, 21, 23 and 25. For more information on the classification of Preferred Shares, please refer to Note 20 of the audited consolidated financial statements of Bank of Montreal for the year ended October 31, 2012.

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BANK OF MONTREAL

The Bank commenced business in Montreal in 1817 and was incorporated in 1821 by an Act of Lower Canada as the first Canadian chartered bank. Since 1871, the Bank has been a chartered bank under the Bank Act, and is named in Schedule I of the Bank Act. The Bank Act is the charter of the Bank and governs its operations. The Bank is a registered holding company under the Bank Holding Company Act of 1956 and is certified as a financial holding company under the Gramm-Leach-Bliley Act.

The Bank’s head office is located at 129 rue Saint Jacques, Montréal, Québec, H2Y 1L6, and its executive offices are located at 100 King Street West, 1 First Canadian Place, Toronto, Ontario, M5X 1A1. The Bank’s telephone number is (416) 867-6785.

The Bank offers a broad range of credit and non-credit products and services directly and through Canadian and non-Canadian subsidiaries, offices and branches. As at October 31, 2012, the Bank had more than 12 million customers, approximately 46,000 full-time equivalent employees, maintained approximately 1,570 bank branches in Canada and the United States and operated internationally in major financial markets and trading areas through its offices in 24 other jurisdictions, including the United States. BMO Financial Corp. (formerly Harris Financial Corp.), based in Chicago and wholly-owned by Bank of Montreal, operates primarily through its subsidiary BMO Harris Bank N.A., which provides banking, financing, investing and cash management services in select markets in the U.S. Midwest. The Bank provides a full range of investment dealer services through entities including BMO Nesbitt Burns Inc., a major fully-integrated Canadian investment dealer, and BMO Capital Markets Corp., Bank of Montreal’s wholly-owned registered securities dealer in the United States.

The Bank primarily conducts business through three operating groups: Personal and Commercial Banking (“P&C”) comprised of P&C Canada and P&C U.S.; Private Client Group (“PCG”); and BMO Capital Markets. P&C Canada operates across Canada, offering banking, financing, and investing solutions as well as card and payment services. Operating predominately in the U.S. Midwest under the BMO Harris brand, P&C U.S. provides personal and commercial clients with banking, lending, and treasury management services. PCG, the Bank’s wealth management business, serves a full range of client segments from mainstream to ultra-high net worth and institutional, with a broad offering of wealth management products and solutions including insurance products. PCG operates in both Canada and the United States as well as in Asia and Europe. BMO Capital Markets provides capital raising, investing, advisory, treasury and research services to corporate, institutional, and government clients in Canada, the United States, South America, Europe, Asia and Australia. The Bank’s Corporate Services group, which includes Technology and Operations, provides risk management, information technology and other corporate services to the three operating groups.

Certain Matters Relating to the Bank’s Board of Directors

Under the Bank Act, the Bank’s board of directors must have at least seven members and the Bank’s board of directors may establish by by-law a minimum and maximum number of directors. The Bank Act also requires that no more than two-thirds of the directors may be affiliated with the Bank, as specified by the Bank Act, and no more than 15% of the directors may be employees of the Bank or a subsidiary of the Bank, except that up to four of these employees may be directors if they constitute not more than 50% of the directors. Subject to the foregoing

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residency requirements, a majority of directors will constitute a quorum at any meeting of the board of directors. Under the Bank Act, a majority of the directors of the Bank must be resident Canadians and, except in limited circumstances, directors may not transact business at a meeting of directors or a committee of directors at which a majority of the directors present are not resident Canadians. The Bank Act also requires the directors of a bank to appoint from their members a chief executive officer who must ordinarily be resident in Canada. Under the Bank’s by-laws, the minimum number of directors is seven and the maximum number of directors is 40. The Bank’s by-laws provide that the number of directors to be elected at any annual meeting of shareholders of the Bank will be fixed by the board of directors before the meeting. Directors may be elected to terms of one, two or three years. The Bank currently has 13 directors.

Under the Bank Act, any director or the entire board of directors may be removed with the approval of a majority of the votes cast at a special meeting of shareholders. A vacancy created by such removal may be filled at the meeting or by a quorum of the directors. Bank policies stipulate that a director will not stand for re-election at the first annual meeting after reaching the age of 70, and, in addition, directors are subject to maximum term limits of 15 years for new directors (elected after January 1, 2010), except a director serving as chairman, who is subject to a maximum term limit of 20 years.

Conflicts of Interest

The Bank Act contains detailed provisions with regard to a director’s power to vote on a material proposal, arrangement or contract in which the director is interested. These provisions include procedures for: disclosure of the conflict of interest and the timing for such disclosure; the presence of directors at board meetings where the proposal, arrangement or contract giving rise to the conflict of interest is being considered, and voting with respect to the proposal, arrangement or contract giving rise to the conflict of interest; and other provisions for dealing with such conflicts of interest. The Bank Act also contains detailed provisions regarding transactions with persons who are related parties of the Bank, including directors of the Bank. See “—Borrowing Powers.”

Compensation

The by-laws of the Bank have provisions with regard to remuneration of directors. The board of directors may, from time to time, by resolution determine their remuneration that may be paid, but such remuneration may not exceed in each year an aggregate cap set out in the by-laws, and individually may be in such amounts as the board may determine by resolution. The directors may also be paid their reasonable out-of-pocket expenses incurred in attending meetings of the board, shareholders or committees of the board or otherwise in the performance of their duties.

Directors are required to hold at least eight times the cash retainer portion of their annual retainer fee in either common shares or deferred share units under the Bank’s Deferred Share Unit Plan for Non-employee Directors (“Deferred Share Units”) and until this level is obtained, directors must take 100% of their annual retainer in the form of either common shares (which are purchased on the open market) or Deferred Share Units. Once this threshold has been reached, directors receive a minimum of $100,000 of their $175,000 annual retainer fee in common shares (which are purchased on the open market) or in Deferred Share Units. A Deferred Share Unit is an amount owed by the Bank to directors having the same value as one common share, but is not paid out (in cash or in common shares purchased on the open market) until such time as the director leaves the board, thereby providing an ongoing equity stake in the Bank throughout the

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director’s period of board service. Directors have the option to receive up to 100% of their annual retainer and meeting fees in this manner. Only non-employee directors can receive Deferred Share Units.

Borrowing Powers

The directors of the Bank may, without authorization of the shareholders, authorize the Bank to borrow money. The Bank Act, however, prohibits the Bank from entering into transactions with persons who are deemed to be related parties of the Bank, subject to certain exceptions. Related party transactions may include loans made on the credit of the Bank. In addition, the by-laws of the Bank may be amended, as described in “Description of Common Shares and Preferred Shares—Amendments to the Rights, Privileges, Restrictions and Conditions of the Bank’s Share Capital” in the Bank’s 2012 Annual Report, to vary the borrowing authority of directors in this regard.

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BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

The Guarantor is a limited partnership established under the laws of the Province of Ontario whose principal business is providing services to the Bank in respect of the Program by (i) entering into the Intercompany Loan Agreement and accepting Capital Contributions from the partners; (ii) using the proceeds from the Intercompany Loan and Capital Contributions (a) to purchase the Initial Portfolio consisting of Loans and their Related Security from the Seller in accordance with the terms of the Mortgage Sale Agreement and Loans and their Related Security pursuant to the terms of the Mortgage Sale Agreement; and/or (b) to invest in Substitution Assets in an amount not exceeding the prescribed limit in the CMHC Guide; and/or (c) subject to complying with the Asset Coverage Test and the CMHC Guide, from time to time, to make Capital Distributions to the Limited Partner; and/or (d) to make deposits of the proceeds in the Guarantor Accounts (including, without limitation, to fund the Reserve Fund and the Pre-Maturity Liquidity Ledger, in each case up to an amount not exceeding the Prescribed Cash Limitation); (iii) arranging for the servicing of the Portfolio by the Servicer; (iv) entering into the Trust Deed, giving the Covered Bond Guarantee and entering into the Security Agreement; (v) entering into the other Transaction Documents to which it is a party; and (vi) performing its obligations under the Transaction Documents and in respect thereof and doing all things incidental or ancillary thereto.

The Guarantor has not, since its formation, engaged in, and will not, while there are covered bonds outstanding, engage in any material activities other than activities relating to the business of the Guarantor described above and/or incidental or ancillary thereto. The Guarantor and its general partners are not required by applicable Canadian law (including the Limited Partnership Act (Ontario)) to publish any financial statements, and will not be required by the SEC to publish any financial statements in its annual reports on Form 10-K. Instead the Guarantor will file an annual report in accordance with General Instruction J of Form 10-K and will include in the Form 10-K information required by the following provisions of Regulation AB: Item 1112(b), Item 1114(b)(2), Item 1115(b), Item 1117, Item 1119, Item 1122 and Item 1123. The Guarantor has no employees.

The current partners (the “Partners”) of the Guarantor are BMO Covered Bond GP, Inc., as the managing general partner (the “Managing GP”), 8429065 Canada Inc., as the liquidation general partner (the “Liquidation GP”), and the Bank, as the sole limited partner. The Bank holds substantially all of the capital in the Guarantor with the Managing GP and the Liquidation GP each holding a nominal interest in the Guarantor. Pursuant to the terms of the Limited Partnership Act (Ontario), the liability of a limited partner for the liabilities, debts and obligations of the Guarantor is limited to the amount contributed by it or agreed to be contributed by it to the Guarantor, unless, in addition to exercising rights and powers as a limited partner, such limited partner takes part in control of the business of the Guarantor and such limited partner will, subject to applicable law, otherwise have no liability in respect of the liabilities, debts and obligations of the partnership. Each of the general partners of the Guarantor will have unlimited liability for any obligation of the Guarantor unless the holder of such obligation agrees otherwise.

Each of the Partners has covenanted in the Guarantor Agreement that, except as provided in the Transaction Documents, it will not sell, transfer, convey, create or permit to arise any security interest on, create any beneficial interest in or otherwise dispose of its interest in the Guarantor without the prior written consent of the Guarantor and, while there are covered bonds outstanding, the Bond Trustee.

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Ownership Structure of the Guarantor

The following diagram sets forth the ownership structure of the Guarantor:

Ownership Structure of the Managing GP

The Managing GP is a wholly-owned subsidiary of the Bank. The directors and officers of the Managing GP are officers and employees of the Bank.

Ownership Structure of the Liquidation GP

91 percent of the issued and outstanding shares in the capital of the Liquidation GP are held by the Corporate Services Provider, as trustee of the BMO Covered Bond LGP Trust (the “LGP Trust”) and 9 percent of the issued and outstanding shares in the capital of the Liquidation GP are held by the Bank. A majority of the directors of the Liquidation GP are appointed by the Corporate Services Provider, as trustee of the LGP Trust, and are independent of the Bank. The Bank is entitled to have one nominee on the board of the Liquidation GP who is an officer or employee of the Bank.

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The beneficiary of the LGP Trust is one or more charities registered under the ITA.

Withdrawal or Removal of the General Partners

The Managing GP or Liquidation GP may resign as managing general partner or liquidation general partner, as the case may be, on not less than 180 days’ prior written notice to the Partners and the Bond Trustee, provided that neither the Managing GP nor Liquidation GP may resign if the effect would be to dissolve the Guarantor. In the event that the Liquidation GP resigns as liquidation general partner, the Managing GP will use its best commercially reasonable efforts to, without delay, find a replacement liquidation general partner acceptable to the limited partner(s) of the Guarantor and the Bond Trustee and which satisfies the requirements of the CMHC Guide, to accept the role of liquidation general partner formerly held by the Liquidation GP and acquire a general partner interest in the Guarantor.

In the event the Managing GP resigns, an Issuer Event of Default occurs and is continuing, or a winding-up or insolvency of the Managing GP occurs, the Managing GP will forthwith, or in the case of resignation at the expiry of the notice period described above, cease to be the managing general partner of the Guarantor and the Liquidation GP will automatically assume the role and responsibilities (but not the interest in the Guarantor) of the Managing GP and continue the business of the Guarantor as Managing GP.

If at any time the Liquidation GP becomes the Managing GP pursuant to the foregoing, it may appoint a replacement Managing GP (other than the Bank or any of its affiliates) acceptable to the limited partner(s) of the Guarantor and the Bond Trustee and which satisfies the requirements of the CMHC Guide to act as Managing GP and acquire a general partner interest in the Guarantor. Following the appointment of the replacement Managing GP pursuant to the foregoing, the replacement Managing GP will have the powers, duties and responsibilities of the Managing GP of the Guarantor and the Liquidation GP will resume its role, as it was, prior to assuming the role and responsibility of the Managing GP.

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DESCRIPTION OF THE COVERED BONDS

General

The Bank may issue, and the Guarantor may guarantee, as many distinct Series of the covered bonds under the Trust Deed as the Bank wishes. The provisions of the Trust Deed allow the Bank not only to issue covered bonds with terms different from those previously issued, but also to “re-open” a previous issue of a Series of covered bonds and issue additional covered bonds of that Series. The Bank may issue covered bonds in amounts that exceed the total amount specified on the cover of the prospectus supplement at any time without the consent of holders of covered bonds and without notifying them.

This section summarizes the material terms of the covered bonds that are common to all Series subject to any modifications contained in an applicable prospectus supplement. As you read this section, please remember that the specific terms of your covered bonds as described in the applicable prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in this section. If there are any differences between the information in the applicable prospectus supplement and this prospectus, the information in the applicable prospectus supplement will control. Because this section is a summary of the material terms and provisions of the covered bonds, it does not describe every aspect of the covered bonds. This description is subject to and qualified in its entirety by reference to all the provisions of the Trust Deed and other Transaction Documents, including definitions of certain terms used in the Trust Deed and other Transaction Documents. In this description, the meaning of only some of the more important terms that are applicable to U.S. Registered Covered Bonds is described. Reference should be made to the Trust Deed and the other Transaction Documents for the most complete description of what is described in summary form in this prospectus.

This description is also subject to and qualified by reference to the description of the particular terms of your Series described in the prospectus supplement. Those terms may vary from the terms described in this prospectus. The applicable prospectus supplement relating to each Series or Tranche of U.S. Registered Covered Bonds will be attached to the front of this prospectus.

Credit Structure

The covered bonds will constitute deposit liabilities of the Bank for purposes of the Bank Act, however the covered bonds will not be insured under the Canada Deposit Insurance Corporation Act (Canada), and will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of the Bank and rank pari passu with all deposit liabilities of the Bank without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Bank, present and future, except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution).

The Guarantor has no obligation to pay the Guaranteed Amounts under the Covered Bond Guarantee until the occurrence of an Issuer Event of Default, service by the Bond Trustee on the Bank of an Issuer Acceleration Notice and on the Guarantor of a Notice to Pay or, if earlier, following the occurrence of a Guarantor Event of Default and service by the Bond Trustee of a Guarantor Acceleration Notice on the Bank and the Guarantor. The Bank will not be relying

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on payments by the Guarantor with respect to advances under the Intercompany Loan Agreement or receipt of Revenue Receipts or Principal Receipts from the Portfolio in order to pay interest or repay principal under the covered bonds. The recourse of the covered bondholders to the Guarantor under the Covered Bond Guarantee will be limited to the Portfolio and will be subject to the applicable Priorities of Payments.

The Program includes certain features relating to the timely, and, as applicable, ultimate payments of principal and interest to covered bondholders:

• the Covered Bond Guarantee and Portfolio provide credit support to the covered bondholders;

• the Pre-Maturity Test is intended to test the liquidity of the Guarantor’s assets with respect to principal due on the Final Maturity Date of Hard Bullet Covered Bonds;

• the Asset Coverage Test is intended to ensure that the asset coverage of the Guarantor’s assets with respect to the covered bonds is maintained at a certain level;

• the Amortization Test is intended to test the asset coverage of the Guarantor’s assets in respect of the covered bonds following the occurrence of an Issuer Event of Default and service of a Notice to Pay on the Guarantor;

• the Valuation Calculation is intended to ensure that the Program’s exposure to market risk is monitored;

• a Reserve Fund (if the Bank’s ratings fall below the Reserve Fund Required Amount Ratings) will be established by the Guarantor (or the Cash Manager on its behalf) in the GDA Account to reserve Available Revenue Receipts and Available Principal Receipts up to a specified amount; and

• under the terms of the Guaranteed Deposit Account Contract, the GDA Provider has agreed to pay a variable rate of interest on all amounts held by the Guarantor in the GDA Account at a floor of 0.10 percent below 1-month CDOR that appears on the Reuters Screen as of 10:00 a.m. (Toronto time) on the date of determination, as reported by the GDA Provider (and if such screen is not available, any successor or similar service as may be selected by the GDA Provider) or such greater amount as the Guarantor and the GDA Provider may agree from time to time.

Covered Bond Guarantee

The Covered Bond Guarantee provided by the Guarantor under the Trust Deed guarantees payment of Guaranteed Amounts when they become Due for Payment in connection with all covered bonds issued under the Program following the service of a Notice to Pay on the Guarantor. The Covered Bond Guarantee will not guarantee any amount becoming payable on the covered bonds for any other reason, including any accelerated payment pursuant to Condition 9 (Events of Default, Acceleration and Enforcement) of the Terms and Conditions of the Covered Bonds following service of a Notice to Pay on the Bank. Under this circumstance (and until a Guarantor Event of Default occurs and a Guarantor

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Acceleration Notice is served), the Guarantor’s obligations will only be to pay the Guaranteed Amounts as they fall Due for Payment. However, should any payments made by the Guarantor under the Covered Bond Guarantee be subject to any withholding or deduction on account of taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Canada or any province or territory thereof or by any authority therein or thereof having the power to tax, the Guarantor will not be obliged to pay any additional amount as a consequence. See “Summary of the Principal Documents.”

Pre-Maturity Test

Certain Series of covered bonds may be scheduled to be redeemed in full on their respective Final Maturity Dates without any provision for scheduled redemption other than on the Final Maturity Date (the “Hard Bullet Covered Bonds”). The applicable prospectus supplement will identify whether any Series of covered bonds is a Series of Hard Bullet Covered Bonds. The Pre-Maturity Test is intended to test the liquidity of the Guarantor’s assets with respect to the Hard Bullet Covered Bonds when the Bank’s ratings fall below a certain level. On each Canadian Business Day that falls within 12 months prior to the Final Maturity Date of any Series of Hard Bullet Covered Bonds, (each, a “Pre-Maturity Test Date”) prior to the occurrence of an Issuer Event of Default or the occurrence of a Guarantor Event of Default, the Guarantor or the Cash Manager on its behalf will determine if the Pre-Maturity Test has been breached, and if so, it will immediately notify the Seller and the Bond Trustee. The Cash Manager and the Guarantor are required to undertake certain actions upon the failure or breach of the Pre-Maturity Test by the Bank, including the sale of Selected Loans. See “Summary of the Principal Documents—Guarantor Agreement—Sales of Selected Loans following a breach of the Pre-Maturity Test.”

Asset Coverage Test

An Asset Coverage Test is conducted on the Portfolio on the last day of each calendar month (the “Calculation Date”). The Asset Coverage Test determines whether the assets and cashflows of the Guarantor satisfy the required overcollateralization which is intended to ensure that the Guarantor meets its obligations under the Covered Bond Guarantee following the occurrence of the Covered Bond Guarantee Activation Event. If the Asset Coverage Test is not met on two consecutive Calculation Dates, an Asset Coverage Test Breach Notice will be served to the Guarantor and if not revoked (in accordance with the terms of the Transaction Documents) on or before the Guarantor Payment Date immediately following the next Calculation Date after service of such Asset Coverage Test Breach Notice, will constitute an Issuer Event of Default and entitle the Bond Trustee to serve a Notice to Pay on the Guarantor.

The Bank will use all reasonable efforts to ensure that the Guarantor is in compliance with the Asset Coverage Test which should reduce the risk of there ever being a breach of the Asset Coverage Test although there is no assurance of this result and the sale of Loans and their Related Security by the Seller to the Guarantor, advances under the Intercompany Loan or additional Capital Contributions by the Limited Partner may be required to avoid or, before or after delivery of an Asset Coverage Test Breach Notice, remedy a breach of the Asset Coverage Test. There is no specific recourse available to the Guarantor in respect of any failure by the Bank to make a Capital Contribution in any circumstances, including following receipt of an Asset Coverage Test Breach Notice. See “Summary of the Principal Documents—Guarantor Agreement—Asset Coverage Test.”

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Amortization Test

The Amortization Test is conducted on the Portfolio on each Calculation Date following an Issuer Event of Default that is continuing. The Amortization Test has been structured to determine whether the assets of the Guarantor, including the Loans and their Related Security in the Portfolio, have fallen below the threshold required to ensure that the assets of the Guarantor are sufficient to meet its obligations under the Covered Bond Guarantee following service of a Notice to Pay. A breach of the Amortization Test will constitute a Guarantor Event of Default and will entitle the Bond Trustee to serve a Guarantor Acceleration Notice on the Guarantor. See “Summary of the Principal Documents—Guarantor Agreement—Amortization Test.”

Valuation Calculation

The Guarantor is required to perform on a monthly basis the Valuation Calculation to monitor exposure to the volatility to interest rate and currency exchange rates by measuring the present value of the Portfolio relative to the market value of the obligations guaranteed under the Covered Bond Guarantee. However, there is no obligation on the part of the Bank or the Guarantor to take any action in respect of the Valuation Calculation to the extent it shows the market value of the Portfolio is less than the market value of the obligations guaranteed under the Covered Bond Guarantee. See “Summary of the Principal Documents—Guarantor Agreement—Valuation Calculation.”

Reserve Fund

If at any time prior to the occurrence of an Issuer Event of Default, the Bank’s ratings fall below the Reserve Fund Required Amount Ratings, the Guarantor will be required to credit Available Revenue Receipts and Available Principal Receipts to the Reserve Fund up to an amount equal to the Reserve Fund Required Amount. The Reserve Fund Required Amount will be funded from Available Revenue Receipts and Available Principal Receipts, after the Guarantor has paid all of its obligations in respect of items ranking higher than the Reserve Ledger in the applicable Priorities of Payments on each Guarantor Payment Date and may in certain circumstances be funded through an advance under the Intercompany Loan or a Capital Contribution made in cash (a “Cash Capital Contribution”). Following the occurrence of an Issuer Event of Default, service of an Issuer Acceleration Notice and service of a Notice to Pay on the Guarantor, amounts standing to the credit of the Reserve Fund will be added to certain other income of the Guarantor in calculating Available Revenue Receipts.

Terms and Conditions

The covered bonds of each Series issued pursuant to this prospectus will be in fully registered form, without interest coupons.

A global covered bond will be deposited with a custodian for, and registered in the name of DTC, or its nominee. Persons holding beneficial interests in global covered bonds will be entitled or required, as the case may be, under the circumstances described below, to receive physical delivery of definitive covered bonds in registered form representing covered bonds issued under this prospectus (the “Definitive Covered Bonds”).

Interests in a global covered bond will be exchangeable (free of charge), in whole but not in part, for Definitive Covered Bonds without interest coupons only upon the occurrence of an

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Exchange Event. For these purposes, “Exchange Event” means that either DTC has notified the Bank that it is unwilling, or unable, to continue to act as depository for the covered bonds and no alternative clearing system is available or DTC has ceased to constitute a clearing agency registered under the Exchange Act. The Bank will promptly give notice to holders of covered bonds if an Exchange Event occurs by delivery of the notice to DTC for communication to the holders of the covered bonds. Notice will be deemed to have been given to the holders of the covered bonds on the day on which the notice is given to DTC. In the event of the occurrence of an Exchange Event, DTC (acting on the instructions of any holder of an interest in such global covered bond) may give notice to the Registrar requesting exchange and, in the event of the occurrence of an Exchange Event as described above, the Bank may also give notice to the Registrar requesting exchange. Any such exchange will occur not later than 10 days after the date of receipt of the first relevant notice by the Registrar.

No holder of covered bonds will be entitled to proceed directly against the Bank unless the Bond Trustee, having become bound so to proceed, fails to do so within a reasonable period of time and the failure is continuing, provided that the right of any holder of a covered bond to receive payment of principal and interest on or after the due date or to bring suit for enforcement of any such payment after the due date may not be impaired or affected without the holder’s consent.

The terms and conditions applicable to covered bonds will be endorsed on such covered bonds and will consist of the terms and conditions attached as Schedule 1 to the Trust Deed and the provisions of the applicable prospectus supplement that supplement, amend and/or replace such terms and conditions. The Terms and Conditions of the Covered Bonds set forth below, are the terms and conditions that will be applicable to U.S. Registered Covered Bonds, which may be supplemented, amended or replaced by the terms in the applicable prospectus supplement applicable to the covered bonds. Certain provisions of the Terms and Conditions attached as Schedule I to the Trust Deed are not applicable to U.S. Registered Covered Bonds and have therefore been intentionally omitted, but the numbering has been preserved to assist in a comparison to Schedule I.

The Terms and Conditions of the Covered Bonds set forth below are organized as follows:

	Condition	Page
1	Form, Denomination and Title		72
2.	Transfers of Registered Covered Bonds		73
3.	Status of the Covered Bonds and the Covered Bond Guarantee		74
4.	Interest		75
5.	Payments		92
6.	Redemption and Purchase		95
7.	Taxation		99
8.	Prescription		101
9.	Events of Default, Acceleration and Enforcement		101
10.	Replacement of Covered Bonds		106
11.	Principal Paying Agent, Paying Agents, Registrar, Transfer Agent and Exchange Agent		106
12.	Reserved
13.	Notices		107
14.	Meetings of Covered Bondholders, Modification, Waiver and Substitution		108
15.	Indemnification of the Bond Trustee. Contracting with the Bank and/or the Guarantor		110
16.	Further Issues		111
17.	Rating Agency Condition		112
18.	Governing Law		113

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The following is a general overview of key provisions of the Terms and Conditions applicable to the covered bonds:

Condition 3 (Status of the Covered Bonds and the Covered Bond Guarantee) provides that the covered bonds constitute deposit liabilities of the Bank for purposes of the Bank Act, but will not be insured under the Canada Deposit Insurance Corporation Act (Canada). The covered bonds will be direct obligations of the Bank, ranking equally with the deposit liabilities of the Bank and at least equally with all unsubordinated and unsecured obligations of the Bank, except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution).

Condition 3 (Status of the Covered Bonds and the Covered Bond Guarantee) also provides the terms of the Covered Bond Guarantee and the conditions precedent to the obligation of the Guarantor to make payment of Guaranteed Amounts. The obligations of the Guarantor, following the occurrence of a Covered Bond Guarantee Activation Event, are direct and unconditional, secured by the pledge of the assets of the Guarantor which includes the Portfolio pursuant to the terms of the Security Agreement. A “Covered Bond Guarantee Activation Event” will occur on the earlier of (i) an Issuer Event of Default, together with service by the Bond Trustee of an Issuer Acceleration Notice on the Bank and a Notice to Pay on the Guarantor and (ii) a Guarantor Event of Default, together with service by the Bond Trustee of a Guarantor Acceleration Notice on the Bank and the Guarantor.

Condition 4 (Interest) sets forth the terms of the interest rates that may apply to the covered bonds. The specific terms of interest payable on a covered bond that you purchase will be disclosed in the applicable prospectus supplement.

Condition 5 (Payments) provides that payments of principal, interest and any other amount in respect of the registered global covered bonds (other than the final installments of principal of a covered bond) will be made to the person shown on the Register as the registered holder of the registered global covered bonds. None of the Bank, any Paying Agent and the Registrar will have any responsibility or liability for any aspect of the records relating to or payments or deliveries made on account of beneficial ownership interests in the registered global covered bonds or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Final installments of principal will be made against presentation and surrender of the global covered bond at the specified office of the Registrar or any of the Paying Agents.

Condition 6 (Redemption and Purchase) provides for redemption of the covered bonds on their maturity dates and for the early payment of covered bonds under certain conditions, including for taxation reasons, changes in law, illegality or as the result of the exercise of call option or put option features of covered bonds, if applicable, as specified in the related prospectus supplement.

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Condition 7 (Taxation) provides that all payments by the Bank on the covered bonds will be paid free and clear of any taxes, duties, assessment, or charges of any kind imposed by Canada or any political subdivision of Canada or, if the covered bonds are issued by a branch of the Bank located outside Canada, by any taxing authority of the jurisdiction where the branch is located unless required by law. Except for certain conditions described in Condition 7 (Taxation) (including, among other things, certain circumstances where a covered bondholder would have been able to avoid such withholding or deduction or such withholding or deduction is imposed upon a covered bondholder by law), if a tax or other levy is imposed, the Bank will pay additional amounts sufficient so that the holder will receive the same net amount that would have been received absent the tax or other duty, assessment or charge.

Condition 9 (Events of Default, Acceleration and Enforcement) sets forth the conditions that will constitute an Issuer Event of Default and a Guarantor Event of Default. Condition 9.3 (Enforcement) provides for the enforcement of the obligations of the Bank and the Guarantor. Under the Condition, the Bond Trustee is not required to take proceedings against the Bank or the Guarantor to seek enforcement of the provisions of the Trust Deed and the covered bonds unless it will be directed by an Extraordinary Resolution of the holders of the covered bonds of all Series or by holders of not less than 25 percent of the aggregate Principal Amount Outstanding of the covered bonds of all Series then outstanding and it has been indemnified to its satisfaction.

Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) provides for convening meetings of holders of covered bonds to consider matters that affect one or more Series of covered bonds or all of the covered bonds under the Program, which may include, among other things, a modification of the Terms and Conditions or the provisions of the Trust Deed. A resolution adopted at a meeting to effect such a modification will be binding on all holders of all covered bonds of any Series for which the meeting was convened. Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) also provides that the Bond Trustee, the Guarantor and the Bank may agree to modifications set out in more detail in Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) without the consent of holders of covered bonds of any Series, which may include among other things, any modification of the terms and conditions applying to covered bonds of one or more Series, which in the sole opinion of the Bond Trustee is not materially prejudicial to the interest of any of the covered bondholders of any Series or is of a formal, minor or technical nature or is to correct an error, or is to comply with mandatory provisions of law.

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TERMS AND CONDITIONS OF THE COVERED BONDS

The following are the Terms and Conditions of the covered bonds which will be incorporated by reference into each Global Covered Bond (as defined below) and each Definitive Covered Bond (as defined below), in the latter case only if permitted by the relevant stock exchange or other relevant authority (if any) and agreed by the Bank and the relevant Dealer(s) at the time of issue but, if not so permitted and agreed, such Definitive Covered Bond will have endorsed thereon or attached thereto such Terms and Conditions. The applicable prospectus supplement in relation to any Tranche of covered bonds may specify other terms and conditions which will, to the extent so specified or to the extent inconsistent with the following Terms and Conditions, replace or modify the following Terms and Conditions for the purpose of such covered bonds. The applicable prospectus supplement (or the relevant provisions thereof) will be endorsed on, or attached to, each Global Covered Bond and Definitive Covered Bond. Reference should be made to “Form of the Covered Bonds” for a description of the content of the prospectus supplement which will specify which of such terms are to apply in relation to the relevant covered bonds.

This covered bond is one of a Series (as defined below) of covered bonds issued by the Bank constituted by a trust deed dated the Program Date made between the Bank, BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”) and Computershare Trust Company of Canada, as Bond Trustee (and such trust deed as further modified and/or supplemented and/or restated from time to time, the “Trust Deed”).

Save as provided for in Conditions 9 (Events of Default, Acceleration and Enforcement) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution), references herein to the covered bonds will be references to the covered bonds of this Series and will mean:

(a) any registered covered bond representing covered bonds (a “Global Covered Bond”); and

(b) any definitive covered bonds in registered form representing covered bonds issued under a registration statement under the Securities Act (the “Definitive Covered Bonds”) (whether or not issued in exchange for a Global Covered Bond in registered form).

The covered bonds have the benefit of an agency agreement dated the Program Date, made between the Bank, the Guarantor, the Bond Trustee, BNY Mellon as principal paying agent (in such capacity, the “Principal Paying Agent,” which expression will include any successor Principal Paying Agent, and together with any other paying agents, the “Paying Agents,” which expression will include any additional or successor Paying Agents), BNY Mellon as registrar (together, as the “Registrar,” which expression will include any successor Registrar), and BNY Mellon as transfer agent (the “Transfer Agent,” which expression will include any successor Transfer Agent), and BNY Mellon as the exchange agent (the “Exchange Agent,” which expression will include any successor Exchange Agent, and together with the Paying Agents, Registrar, and Transfer Agent, the “Agents”) (such agency agreement as further amended and/or supplemented and/or restated from time to time, the “Agency Agreement”).

The prospectus supplement for the covered bonds supplements these Terms and Conditions (the “Terms and Conditions” or “Conditions”) and may specify other terms and

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conditions which will, to the extent so specified or to the extent inconsistent with the Terms and Conditions, replace or modify the Terms and Conditions for the purposes of the covered bonds. References to the applicable prospectus supplement are to the prospectus supplement (or the relevant provisions thereof) endorsed on or attached to the covered bond.

The Bond Trustee acts for the benefit of the holders for the time being of the covered bonds (the “covered bondholders”), and for the holders of each other Series of covered bonds in accordance with the provisions of the Trust Deed.

As used herein, “Tranche” means covered bonds which are identical in all respects (including as to listing and admission to trading) and “Series” means a Tranche of covered bonds together with any further Tranche or Tranches of covered bonds which are (i) expressed to be consolidated and form a single Series, and (ii) identical in all respects (including as to listing and admission to trading) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices.

The Guarantor has, in the Trust Deed, irrevocably and unconditionally guaranteed payment of Guaranteed Amounts in respect of the covered bonds as and when the same will become Due for Payment, but only after service of a Notice to Pay on the Guarantor following service of an Issuer Acceleration Notice on the Bank (after the occurrence of an Issuer Event of Default) or service of a Guarantor Acceleration Notice on the Guarantor (after the occurrence of a Guarantor Event of Default) and subject to the applicable Priorities of Payments. The recourse of the covered bondholders to the Guarantor under the Covered Bond Guarantee will be limited to the Portfolio, certain contractual rights, and any Excess Proceeds and will be subject to the applicable Priorities of Payments.

The security for the obligations of the Guarantor under the Covered Bond Guarantee and the other Transaction Documents to which it is a party has been created in and pursuant to, and on the terms set out in, a security agreement dated the Program Date and made between the Guarantor, the Bond Trustee and certain other Secured Creditors (such security agreement as amended and/or supplemented and/or restated from time to time, the “Security Agreement”). The obligations of the Guarantor are secured against the Portfolio and recourse against the Guarantor is limited to the Portfolio, certain contractual rights, and any Excess Proceeds and is subject to the applicable Priorities of Payments.

These Terms and Conditions include summaries of, and are subject to, the provisions of the Trust Deed, the Security Agreement and the Agency Agreement.

Copies of the Trust Deed, the Security Agreement, the Master Definitions and Construction Agreement (as defined below), the Agency Agreement and each of the other Transaction Documents (in redacted or other general form and subject to any exclusions pursuant to applicable law, including, without limitation, privacy law, and policies of the Bank relating to confidentiality and privacy matters) are available for inspection during normal business hours at the office for the time being of the Bond Trustee being at 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, and at the specified office of each of the Paying Agents. Copies of the applicable prospectus supplement for all covered bonds of each Series (including in relation to unlisted covered bonds of any Series) are obtainable during normal business hours at the registered office of the Bank and at the specified office of each of the Paying Agents. The covered bondholders are deemed to have notice of, are bound by all the provisions of, and definitions contained in, the Trust Deed, the Security Agreement, the Master Definitions and Construction Agreement, the Agency Agreement, each of the other Transaction Documents and the applicable prospectus supplement which are applicable to them.

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Except where the context otherwise requires, capitalized terms used and not otherwise defined in these Terms and Conditions (including the preceding paragraphs) will bear the meanings given to them in the applicable prospectus supplement and/or the master definitions and construction agreement made between the parties to the Transaction Documents on the Program Date (and as further amended and/or supplemented and/or restated from time to time, the “Master Definitions and Construction Agreement”), a copy of each of which may be obtained as described above.

1. Form, Denomination and Title

The covered bonds are in registered form as specified in the applicable prospectus supplement and, in the case of Definitive Covered Bonds, serially numbered, in the Specified Denomination(s). Unless otherwise specified in the applicable prospectus supplement, covered bonds of one Specified Denomination may not be exchanged for covered bonds of another Specified Denomination.

The covered bonds in a Series may be Fixed Rate Covered Bonds, Floating Rate Covered Bonds, or a combination of any of the foregoing, depending upon the Interest Basis shown in the applicable prospectus supplement. Prior to issuing a Series of covered bonds (if such covered bonds are not Fixed Rate Covered Bonds or Floating Rate Covered Bonds), the Bank has obtained confirmation from each of the Rating Agencies that the covered bonds of all Series then outstanding will not be downgraded or withdrawn as a result of the issuance of this Series of covered bonds.

Other than as set out below, title to covered bonds in registered form (“Registered Covered Bonds”) will pass upon registration of transfers in accordance with the provisions of the Agency Agreement. The Bank, the Guarantor, the Paying Agents and the Bond Trustee will (except as otherwise required by law) deem and treat the registered holder of any Registered Covered Bond as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Covered Bond, without prejudice to the provisions set out in the next succeeding paragraph.

For so long as any of the covered bonds are represented by a Global Covered Bond held on behalf of or, as the case may be, registered in the name of DTC or its nominee, each person (other than DTC) who is for the time being shown in the records of DTC as the holder of a particular nominal amount of such covered bonds (in which regard any certificate or other document issued by DTC as to the nominal amount of such covered bonds standing to the account of any person will be conclusive and binding for all purposes save in the case of manifest or proven error and any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system in accordance with its usual procedures and in which the holder of a particular nominal amount of the covered bonds is clearly identified with the amount of such holding) will be treated by the Bank, the Guarantor, the Paying Agents and the Bond Trustee as the holder of such nominal amount of such covered bonds for all purposes other than with respect to the payment of principal or interest or other amounts on such nominal amount of such covered bonds and the expressions “covered bondholder” and “holder” and related expressions should be construed accordingly.

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Covered bonds which are represented by a Global Covered Bond will be transferable only in accordance with the rules and procedures for the time being of DTC or any other relevant clearing system, as the case may be.

References to DTC will, whenever the context so permits, be deemed to include a reference to any successor operator and/or successor clearing system and/or any additional or alternative clearing system specified in the applicable prospectus supplement or as may otherwise be approved by the Bank, the Principal Paying Agent and the Bond Trustee.

2. Transfers of Registered Covered Bonds

2.1 Transfers of interests in Registered Global Covered Bonds

Transfers of beneficial interests in registered global covered bonds will be effected by DTC and, in turn, by other participants and, if appropriate, indirect participants in DTC acting on behalf of beneficial transferors and transferees of such interests. The laws in some States within the United States require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer covered bonds represented by a Registered Covered Bond in global form (a “Registered Global Covered Bond”) to such persons may depend upon the ability to exchange such covered bonds for covered bonds in definitive form. Similarly, because DTC can only act on behalf of direct participants in the DTC system who in turn act on behalf of indirect participants, the ability of a person having an interest in covered bonds represented by a Registered Global Covered Bond accepted by DTC to pledge such covered bonds to persons or entities that do not participate in the DTC system or otherwise to take action in respect of such covered bonds may depend upon the ability to exchange such covered bonds for covered bonds in definitive form. A beneficial interest in a Registered Global Covered Bond will, subject to compliance with all applicable legal and regulatory restrictions, be exchangeable for Registered Covered Bonds in definitive form (“Registered Definitive Covered Bonds”) or for a beneficial interest in another Registered Global Covered Bond only in the Specified Denomination(s) set out in the applicable prospectus supplement and only in accordance with the rules and operating procedures for the time being of DTC and in accordance with the terms and conditions specified in the Agency Agreement.

2.2 Transfers of Registered Covered Bonds in definitive form

Subject as provided in Conditions 2.3 (Registration of transfer upon partial redemption) and 2.4 (Costs of registration), upon the terms and subject to the conditions set forth in the Agency Agreement, a Registered Definitive Covered Bond may be transferred in whole or in part in the Specified Denomination(s) set out in the applicable prospectus supplement. In order to effect any such transfer (a) the holder or holders must (i) surrender the Registered Definitive Covered Bond for registration of the transfer of the Registered Definitive Covered Bond (or the relevant part of the Registered Definitive Covered Bond) at the specified office of the Registrar or any Transfer Agent, with the form of transfer thereon duly executed by the holder or holders thereof or his or their attorney or attorneys duly authorized in writing, and (ii) complete and deposit such other certifications as may be required by the Registrar or, as the case may be, the relevant Transfer Agent, and (b) the Registrar or, as the case may be, the relevant Transfer Agent must, after due and careful enquiry, be satisfied with the documents of title and the identity of the person making the request.

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Any such transfer will be subject to such reasonable regulations as the Bank, the Bond Trustee and the Registrar may from time to time prescribe (the initial such regulations being set out in the Agency Agreement).

Subject as provided above, the Registrar or, as the case may be, the relevant Transfer Agent will, within three business days (being for this purpose a day on which banks are open for business in the city where the specified office of the Registrar or, as the case may be, the relevant Transfer Agent is located) of the request (or such longer period as may be required to comply with any applicable fiscal or other laws or regulations), authenticate and deliver, or procure the authentication and delivery of, at its specified office to the transferee or (at the risk of the transferee) send by uninsured mail to such address as the transferee may request, a new Registered Definitive Covered Bond of a like aggregate nominal amount to the Registered Definitive Covered Bond (or the relevant part of the Registered Definitive Covered Bond) transferred.

In the case of the transfer of only part of a Registered Definitive Covered Bond, a new Registered Definitive Covered Bond in respect of the balance of the Registered Definitive Covered Bond not transferred will (in addition to the new Registered Definitive Covered Bond in respect of the nominal amount transferred) be so authenticated and delivered or (at the risk of the transferor) sent by uninsured mail to the address specified by the transferor.

2.3 Registration of transfer upon partial redemption

In the event of a partial redemption of covered bonds under Condition 6 (Redemption and Purchase) of the Terms and Conditions of the Covered Bonds, the Bank will not be required to register the transfer of any Registered Covered Bond, or part of a Registered Covered Bond, called for partial redemption.

2.4 Costs of registration

Covered bondholders will not be required to bear the costs and expenses of effecting any registration of transfer as provided above, except for any costs or expenses of delivery other than by regular uninsured mail and except that the Bank, the Registrar or the Transfer Agent may require the payment of a sum sufficient to cover any stamp duty, Taxes or any other governmental charge that may be imposed in relation to the registration.

2.7 Definitions

In these Terms and Conditions, the following expression will have the following meanings:

“U.S. Registered Covered Bond” means a covered bond issued under a registration statement under the Securities Act.

3. Status of the Covered Bonds and the Covered Bond Guarantee

3.1 Status of the Covered Bonds

The covered bonds will constitute deposit liabilities of the Bank for purposes of the Bank Act, however the covered bonds will not be insured under the Canadian Deposit Insurance Corporation Act (Canada), and will constitute legal, valid and binding direct, unconditional,

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unsubordinated and unsecured obligations of the Bank and rank pari passu with all deposit liabilities of the Bank without any preference among themselves at least pari passu with all other unsubordinated and unsecured obligations of the Bank, present and future (except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution)).

3.2 Status of the Covered Bond Guarantee

The payment of Guaranteed Amounts in respect of the covered bonds when the same will become Due for Payment has been unconditionally (save as set out below) and irrevocably guaranteed by the Guarantor in favor of the Bond Trustee for and on behalf of the covered bondholders pursuant to the Covered Bond Guarantee. However, the Guarantor will have no obligation under the Covered Bond Guarantee to pay any Guaranteed Amounts when the same will become Due for Payment under the covered bonds or the Trust Deed until service of a Notice to Pay by the Bond Trustee on the Guarantor (which the Bond Trustee will be required to serve following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice by the Bond Trustee on the Bank) or, if earlier, the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice by the Bond Trustee on the Bank and the Guarantor. The obligations of the Guarantor under the Covered Bond Guarantee are subject to the applicable Priorities of Payments, and subject as aforesaid, are unsubordinated obligations of the Guarantor, which are secured and subject to limitations on recourse as provided in the Security Agreement.

As security for the Guarantor’s obligations under the Covered Bond Guarantee and the other Transaction Documents to which it is a party, the Guarantor has granted a security interest over all of its assets under the Security Agreement in favor of the Bond Trustee (for covered bondholders and on behalf of the other Secured Creditors).

4. Interest

4.1 Interest on Fixed Rate Covered Bonds

Each Fixed Rate Covered Bond bears interest on its Principal Amount Outstanding from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable, subject as provided in these Terms and Conditions, in arrears on the Interest Payment Date(s) in each year up to (and including) the Final Maturity Date.

If the covered bonds are in definitive form, except as provided in the applicable prospectus supplement, the amount of interest payable on each Interest Payment Date in respect of the Interest Period ending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if so specified in the applicable prospectus supplement, an amount which may be paid in addition to the interest payment amount on an Interest Payment Date, if so specified (the “Broken Amount”).

Except in the case of covered bonds in definitive form where a Fixed Coupon Amount or Broken Amount is specified in the applicable prospectus supplement, interest will be calculated in respect of any period by applying the Rate of Interest to (i) in the case of Fixed Rate Covered Bonds which are represented by a Global Covered Bond, the aggregate outstanding nominal amount of the Fixed Rate Covered Bonds represented by such Global Covered Bond, or (ii) in the case of Fixed Rate Covered Bonds in definitive form, the Calculation Amount; and in each case,

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multiplying such sum by a 30/360 day count basis or the applicable day count basis set forth in the applicable prospectus supplement, and rounding the resultant figure to the nearest sub unit of the relevant specified currency, half of any such sub unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Fixed Rate Covered Bond in definitive form comprises more than one Calculation Amount, the amount of interest payable in respect of such Fixed Rate Covered Bond will be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding.

The applicable prospectus supplement may provide that if the payment of the Final Redemption Amount of a Series of Fixed Rate Covered Bonds on its Final Maturity Date is deferred until the applicable Extended Due for Payment Date in accordance with the Terms and Conditions, interest will accrue and be payable on the unpaid portion of the Final Redemption Amount up to the Extended Due for Payment Date at the Rate of Interest specified in the applicable prospectus supplement which may provide that such Series of Fixed Rate Covered Bonds will continue to bear interest at a Fixed Rate or at a Floating Rate despite the fact that interest accrued and was payable on such covered bonds prior to the Final Maturity Date at a Fixed Rate.

4.2 Interest on U.S. Registered Covered Bonds

Condition 4.6 will only apply to U.S. Registered Covered Bonds.

Each covered bond will bear interest from its date of issue at the rate per annum, in the case of a Fixed Rate Covered Bond, or pursuant to the interest rate formula, in the case of a Floating Rate Covered Bond, in each case as specified in the prospectus supplement, until the principal thereof is paid. Interest payments on covered bonds will be made in respect of Fixed Rate Covered Bonds and Floating Rate Covered Bonds in an amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Final Maturity Date, as the case may be (each an “Interest Period”).

Interest on Fixed Rate Covered Bonds and Floating Rate Covered Bonds will be payable in arrears on each Interest Payment Date and on the Final Maturity Date. The first payment of interest on any covered bonds originally issued between a Regular Record Date (as defined below) and the related Interest Payment Date will be made on the Interest Payment Date immediately following the next succeeding record date to the registered holder on the next succeeding record date. The “Regular Record Date” will be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related Interest Payment Date. For the purpose of determining the holder at the close of business on a Regular Record Date when business is not being conducted, the close of business will mean 5:00 P.M., New York City time, on that day.

4.3 Interest Rates Applicable to U.S. Registered Covered Bonds

Condition 4.7 will only apply to U.S. Registered Covered Bonds.

The applicable prospectus supplement will specify the Interest Payment Dates for a Fixed Rate Covered Bond as well as the Final Maturity Date. Interest on Fixed Rate Covered Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months or such other day count basis set forth in the prospectus supplement.

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Fixed Rate Covered Bonds

If any Interest Payment Date, redemption date, repayment date or Final Maturity Date of a Fixed Rate Covered Bond falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

U.S. Registered Covered Bonds that are Floating Rate Covered Bonds

The following will only apply to Floating Rate Covered Bonds.

Interest Rate Basis. Floating Rate Covered Bonds will bear interest at rates based on one or more of the following interest rate bases:

• commercial paper rate;

• U.S. prime rate;

• LIBOR;

• EURIBOR;

• treasury rate;

• CMT rate;

• CD rate;

• CMS rate; and/or

• federal funds rate.

The applicable prospectus supplement will specify the interest rate basis that applies to a specific Series or Tranche of Floating Rate Covered Bonds.

Calculation of Interest. Calculations relating to Floating Rate Covered Bonds will be made by the Calculation Agent. The prospectus supplement for a particular Floating Rate Covered Bond will name the Calculation Agent for that covered bond as of its original issue date. A successor institution may be appointed to serve as Calculation Agent for such covered bonds from time to time after the original issue date of such covered bonds without the consent of covered bondholders or notification of the change.

For each Floating Rate Covered Bond, the Calculation Agent will determine, on the corresponding interest calculation date or on the interest determination date, as described below, the interest rate that takes effect on each interest reset date. In addition, the Calculation Agent will calculate the amount of interest that has accrued during each interest period that is, the period

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from and including the original issue date, or the last date to which interest has been paid or made available for payment, to but excluding the payment date. For each Interest Period, the Calculation Agent will calculate the amount of accrued interest by multiplying the face or other specified amount of the Floating Rate Covered Bond by an accrued interest factor for the Interest Period. This factor will equal the sum of the interest factors calculated for each day during the Interest Period. The interest factor for each day will be expressed as a decimal and will be calculated by dividing the interest rate, also expressed as a decimal, applicable to that day by 360 or by the actual number of days in the year, as specified in the applicable prospectus supplement.

Upon the request of the covered bondholder of any Floating Rate Covered Bond, the Calculation Agent will provide for that covered bond the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date. The Calculation Agent’s determination of any interest rate, and its calculation of the amount of interest for any Interest Period, will be final and binding in the absence of manifest error.

All percentages resulting from any calculation relating to a covered bond will be rounded upward or downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point, e.g., 9.876541% (or 0.09876541) being rounded down to 9.87654% (or 0.0987654) and 9.876545% (or 0.09876545) being rounded up to 9.87655% (or 0.0987655). All amounts used in or resulting from any calculation relating to a Floating Rate Covered Bond will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. Dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. Dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward.

In determining the interest rate basis that applies to a Floating Rate Covered Bond during a particular Interest Period, the Calculation Agent may obtain rate quotes from various banks or dealers active in the relevant market, as discussed below. Those reference banks and dealers may include the Calculation Agent itself and its affiliates, as well as any agent participating in the distribution of the relevant floating rate covered bonds and its affiliates, and they may include affiliates of the Bank.

Initial Interest Rate. For any Floating Rate Covered Bond, the interest rate in effect from the original issue date to the first interest reset date will be the initial interest rate. The initial interest rate or the manner in which it is determined will be set forth in the applicable prospectus supplement.

Spread or Spread Multiplier. In some cases, the interest rate basis for a Floating Rate Covered Bond may be adjusted:

• by adding or subtracting a specified number of basis points, called the spread, with one basis point being 0.01 percent; or

• by multiplying the interest rate basis by a specified percentage, called the spread multiplier.

For any Floating Rate Covered Bond, the applicable prospectus supplement will indicate whether a spread or spread multiplier will apply to the covered bond and, if so, the amount of the spread or spread multiplier.

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Maximum and Minimum Rates. The actual interest rate, after being adjusted by the spread or spread multiplier, may also be subject to either or both of the following limits:

• a maximum rate—i.e., a specified upper limit that the actual interest rate in effect at any time may not exceed; and/or

• a minimum rate—i.e., a specified lower limit that the actual interest rate in effect at any time may not fall below.

For any Floating Rate Covered Bond, the applicable prospectus supplement will indicate whether a maximum rate and/or minimum rate will apply to the covered bond and, if so, what those rates are.

Whether or not a maximum rate applies, the interest rate on a floating rate covered bond will in no event be higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application and the law of Ontario and the laws of Canada applicable therein.

Interest Reset Dates. The rate of interest on a Floating Rate Covered Bond will be reset, by the Calculation Agent described below, daily, weekly, monthly, quarterly, semi-annually or annually. The date on which the interest rate resets and the reset rate becomes effective is called the interest reset date. Except as otherwise specified in the applicable prospectus supplement, the interest reset date will be as follows:

• for Floating Rate Covered Bonds that reset daily, each Business Day;

• for Floating Rate Covered Bonds that reset weekly and are not treasury rate covered bonds, the Wednesday of each week;

• for treasury rate covered bonds that reset weekly, the Tuesday of each week;

• for Floating Rate Covered Bonds that reset monthly, the third Wednesday of each month;

• for Floating Rate Covered Bonds that reset quarterly, the third Wednesday of each of four months of each year as indicated in the applicable prospectus supplement;

• for Floating Rate Covered Bonds that reset semi-annually, the third Wednesday of each of two months of each year as indicated in the applicable prospectus supplement; and

• for Floating Rate Covered Bonds that reset annually, the third Wednesday of one month of each year as indicated in the applicable prospectus supplement.

For a Floating Rate Covered Bond, the interest rate in effect on any particular day will be the interest rate determined with respect to the latest interest reset date that occurs on or before that day. There are several exceptions, however, to the reset provisions described above.

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If any interest reset date for a Floating Rate Covered Bond would otherwise be a day that is not a Business Day, the interest reset date will be postponed to the next day that is a Business Day. For a LIBOR or EURIBOR covered bond, however, if that Business Day is in the next succeeding calendar month, the interest reset date will be the immediately preceding Business Day.

Interest Determination Dates. The interest rate that takes effect on an interest reset date will be determined by the Calculation Agent by reference to a particular date called an interest determination date. Except as otherwise indicated in the applicable prospectus supplement:

• for commercial paper rate, federal funds rate and U.S. prime rate covered bonds, the interest determination date relating to a particular interest reset date will be the Business Day preceding the interest reset date;

• for LIBOR covered bonds, the interest determination date relating to a particular interest reset date will be the second London business day preceding the interest reset date, unless the index currency is pounds sterling, in which case the interest determination date will be the interest reset date. An interest determination date for a LIBOR covered bond is referred to as a LIBOR interest determination date;

• for EURIBOR covered bonds, the interest determination date relating to a particular interest reset date will be the second Euro Business Day preceding the interest reset date. An interest determination date for a EURIBOR covered bond is referred to as a EURIBOR interest determination date;

• for treasury rate covered bonds, the interest determination date relating to a particular interest reset date, which is referred to as a treasury interest determination date, will be the day of the week in which the interest reset date falls on which treasury bills—i.e., direct obligations of the U.S. government—would normally be auctioned. Treasury bills are usually sold at auction on the Monday of each week, unless that day is not a Business Day, in which case the auction is usually held on the following Tuesday, except that the auction may be held on the preceding Friday. If as the result of a Monday not being a Business Day an auction is held on the preceding Friday, that Friday will be the treasury interest determination date relating to the interest reset date occurring in the next succeeding week; and

• for CD rate, CMT rate and CMS rate covered bonds, the interest determination date relating to a particular interest reset date will be the second Business Day preceding the interest reset date.

The interest determination date pertaining to a Floating Rate Covered Bond the interest rate of which is determined with reference to two or more interest rate bases will be the latest Business Day which is at least two Business Days before the related interest reset date for the applicable floating rate covered bond on which each interest rate basis is determinable.

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Interest Calculation Dates. As described above, the interest rate that takes effect on a particular interest reset date will be determined by reference to the corresponding interest determination date. Except for LIBOR covered bonds and EURIBOR covered bonds, however, the determination of the rate will actually be made on a day no later than the corresponding interest calculation date. The interest calculation date will be the earlier of the following:

• the tenth calendar day after the interest determination date or, if that tenth calendar day is not a Business Day, the next succeeding Business Day; and

• the Business Day immediately preceding the Interest Payment Date or the maturity, whichever is the day on which the next payment of interest will be due.

The Calculation Agent need not wait until the relevant interest calculation date to determine the interest rate if the rate information it needs to make the determination is available from the relevant sources sooner.

Interest Payment Dates. The Interest Payment Dates for a Floating Rate Covered Bond will depend on when the interest rate is reset and, unless otherwise specified in the applicable prospectus supplement, will be as follows:

• for Floating Rate Covered Bonds that reset daily, weekly or monthly, the third Wednesday of each month;

• for Floating Rate Covered Bonds that reset quarterly, the third Wednesday of the four months of each year specified in the applicable prospectus supplement;

• for Floating Rate Covered Bonds that reset semi-annually, the third Wednesday of the two months of each year specified in the applicable prospectus supplement; or

• for Floating Rate Covered Bonds that reset annually, the third Wednesday of the month specified in the applicable prospectus supplement.

Notwithstanding the above, if a covered bond is originally issued after the Regular Record Date and before the date that would otherwise be the first Interest Payment Date, the first Interest Payment Date will be the date that would otherwise be the second Interest Payment Date.

In addition, the following special provision will apply to a Floating Rate Covered Bond with regard to any Interest Payment Date other than one that falls on the maturity. If the Interest Payment Date would otherwise fall on a day that is not a Business Day, then the Interest Payment Date will be the next day that is a Business Day. However, if the floating rate covered bond is a LIBOR covered bond or a EURIBOR covered bond and the next Business Day falls in the next calendar month, then the Interest Payment Date will be advanced to the next preceding day that is a Business Day. If the Final Maturity Date of a Floating Rate Covered Bond falls on a day that is not a Business Day, the required payment of principal, premium, if any, and interest will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

Commercial Paper Rate Covered Bonds

A commercial paper rate covered bond will bear interest at an interest rate equal to the commercial paper rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

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The commercial paper rate will be the money market yield of the rate, for the relevant interest determination date, for commercial paper having the index maturity indicated in the applicable prospectus supplement, as published in H.15(519) under the heading “Commercial Paper—Nonfinancial.” If the commercial paper rate cannot be determined as described above, the following procedures will apply.

• If the rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the commercial paper rate will be the rate, for the relevant interest determination date, for commercial paper having the index maturity specified in the applicable prospectus supplement, as published in H.15 daily update or any other recognized electronic source used for displaying that rate, under the heading “Commercial Paper—Nonfinancial.”

• If the rate described above does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the commercial paper rate will be the money market yield of the arithmetic mean of the following offered rates for U.S. Dollar commercial paper that has the relevant index maturity and is placed for an industrial issuer whose bond rating is “Aa,” or the equivalent, from a nationally recognized rating agency: the rates offered as of 11:00 A.M., New York City time, on the relevant interest determination date, by three leading U.S. Dollar commercial paper dealers in New York City selected by the Calculation Agent.

• If fewer than three dealers selected by the Calculation Agent are quoting as described above, the commercial paper rate for the new interest period will be the commercial paper rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

U.S. Prime Rate Covered Bonds

A U.S. prime rate covered bond will bear interest at an interest rate equal to the U.S. prime rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

The U.S. prime rate will be the rate, for the relevant interest determination date, published in H.15(519) opposite the heading “Bank Prime Loan.” If the U.S. prime rate cannot be determined as described above, the following procedures will apply.

• If the rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the U.S. prime rate will be the rate, for the relevant interest determination date, as published in H.15 daily update or another recognized electronic source used for the purpose of displaying that rate, under the heading “Bank Prime Loan.”

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• If the rate described above does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the U.S. prime rate will be the arithmetic mean of the following rates as they appear on the Reuters screen US PRIME 1 page: the rate of interest publicly announced by each bank appearing on that page as that bank’s prime rate or base lending rate, as of 11:00 A.M., New York City time, on the relevant interest determination date.

• If fewer than four of these rates appear on the Reuters screen US PRIME 1 page, the U.S. prime rate will be the arithmetic mean of the prime rates or base lending rates, as of the close of business on the relevant interest determination date, of three major banks in New York City selected by the Calculation Agent. For this purpose, the Calculation Agent will use rates quoted on the basis of the actual number of days in the year divided by a 360-day year.

• If fewer than three banks selected by the Calculation Agent are quoting as described above, the U.S. prime rate for the new interest period will be the U.S. prime rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

LIBOR Covered Bonds

A LIBOR covered bond will bear interest at an interest rate equal to LIBOR, which will be the London interbank offered rate for deposits in U.S. Dollars or any other index currency, as specified in the applicable prospectus supplement. In addition, when LIBOR is the interest rate basis the applicable LIBOR rate will be adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement. LIBOR will be determined in the following manner:

• LIBOR will be the offered rate appearing on the Reuters Page LIBOR01 as of 11:00 A.M., London time, on the relevant LIBOR interest determination date, for deposits of the relevant index currency having the relevant index maturity beginning on the relevant interest reset date. The applicable prospectus supplement will indicate the index currency, the index maturity and the reference page that apply to the LIBOR covered bond. If no reference page is mentioned in the prospectus supplement, Reuters Page LIBOR01 will apply to the LIBOR covered bond.

• If Reuters Page LIBOR01 applies and the rate described above does not appear on that page, then LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the relevant LIBOR interest determination date, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent: deposits of the index currency having the relevant index maturity, beginning on the relevant interest reset date, and in a representative amount. The Calculation Agent will request the principal London office of each of these banks to provide a quotation of its rate. If at least two quotations are provided, LIBOR for the relevant LIBOR interest determination date will be the arithmetic mean of the quotations.

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• If fewer than two quotations are provided as described above, LIBOR for the relevant LIBOR interest determination date will be the arithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M., in the applicable principal financial center, on that LIBOR interest determination date, by three major banks in that financial center selected by the Calculation Agent: loans of the index currency having the relevant index maturity, beginning on the relevant interest reset date and in a representative amount.

• If fewer than three banks selected by the Calculation Agent are quoting as described above, LIBOR for the new interest period will be LIBOR in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

EURIBOR Covered Bonds

A EURIBOR covered bond will bear interest at an interest rate equal to the interest rate for deposits in euro, designated as “EURIBOR” and sponsored jointly by the European Banking Federation and ACI—the Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing that rate. In addition, when EURIBOR is the interest rate basis the EURIBOR base rate will be adjusted by the spread or spread multiplier, if any, specified in the applicable prospectus supplement. EURIBOR will be determined in the following manner:

• EURIBOR will be the offered rate for deposits in euros having the index maturity specified in the applicable prospectus supplement, beginning on the second Euro Business Day after the relevant EURIBOR interest determination date, as that rate appears on Reuters page EURIBOR01 as of 11:00 A.M., Brussels time, on the relevant EURIBOR interest determination date.

• If the rate described above does not appear on Reuters page EURIBOR01, EURIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., Brussels time, on the relevant EURIBOR interest determination date, at which deposits of the following kind are offered to prime banks in the euro-zone interbank market by the principal euro-zone office of each of four major banks in that market selected by the Calculation Agent: euro deposits having the relevant index maturity, beginning on the relevant interest reset date, and in a representative amount. The Calculation Agent will request the principal euro-zone office of each of these banks to provide a quotation of its rate. If at least two quotations are provided, EURIBOR for the relevant EURIBOR interest determination date will be the arithmetic mean of the quotations.

• If fewer than two quotations are provided as described above, EURIBOR for the relevant EURIBOR interest determination date will be the arithmetic mean of the rates for loans of the following kind to leading euro-zone banks quoted, at approximately 11:00 A.M., Brussels time on that EURIBOR interest determination date, by three major banks in the euro-zone selected by the Calculation Agent: loans of euros having the relevant index maturity, beginning on the relevant interest reset date, and in a representative amount.

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• If fewer than three banks selected by the Calculation Agent are quoting as described above, EURIBOR for the new interest period will be EURIBOR in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

Treasury Rate Covered Bonds

A treasury rate covered bond will bear interest at an interest rate equal to the treasury rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

The treasury rate will be the rate for the auction, on the relevant treasury interest determination date, of treasury bills having the index maturity specified in the applicable prospectus supplement, as that rate appears on Reuters page USAUCTION 10/11. If the treasury rate cannot be determined in this manner, the following procedures will apply.

• If the rate described above does not appear on either page by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, the treasury rate will be the bond equivalent yield of the rate, for the relevant interest determination date, for the type of treasury bill described above, as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “U.S. Government Securities/Treasury Bills/Auction High.”

• If the rate described in the prior paragraph does not appear in H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the treasury rate will be the bond equivalent yield of the auction rate, for the relevant treasury interest determination date and for treasury bills of the kind described above, as announced by the U.S. Department of the Treasury.

• If the auction rate described in the prior paragraph is not so announced by 3:00 P.M., New York City time, on the relevant interest calculation date, or if no such auction is held for the relevant week, then the treasury rate will be the bond equivalent yield of the rate, for the relevant treasury interest determination date and for treasury bills having a remaining maturity closest to the specified index maturity, as published in H.15(519) under the heading “U.S. Government Securities/Treasury Bills/Secondary Market.”

• If the rate described in the prior paragraph does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the treasury rate will be the rate, for the relevant treasury interest determination date and for treasury bills having a remaining maturity closest to

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the specified index maturity, as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “U.S. Government Securities/Treasury Bills/Secondary Market.”

• If the rate described in the prior paragraph does not appear in H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the treasury rate will be the bond equivalent yield of the arithmetic mean of the following secondary market bid rates for the issue of treasury bills with a remaining maturity closest to the specified index maturity: the rates bid as of approximately 3:30 P.M., New York City time, on the relevant treasury interest determination date, by three primary U.S. government securities dealers in New York City selected by the Calculation Agent.

• If fewer than three dealers selected by the Calculation Agent are quoting as described in the prior paragraph, the treasury rate in effect for the new interest period will be the treasury rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

CD Rate Covered Bonds

A CD rate covered bond will bear interest at an interest rate equal to the CD rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

The CD rate will be the rate, on the relevant interest determination date, for negotiable U.S. Dollar certificates of deposit having the index maturity specified in the applicable prospectus supplement, as published in H.15(519) under the heading “CDs (Secondary Market).” If the CD rate cannot be determined in this manner, the following procedures will apply.

• If the rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the CD rate will be the rate, for the relevant interest determination date, described above as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “CDs (Secondary Market).”

• If the rate described above does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the CD rate will be the arithmetic mean of the following secondary market offered rates for negotiable U.S. Dollar certificates of deposit of major U.S. money market banks with a remaining maturity closest to the specified index maturity, and in a representative amount: the rates offered as of 10:00 A.M., New York City time, on the relevant interest determination date, by three leading non-bank dealers in negotiable U.S. Dollar certificates of deposit in New York City, as selected by the Calculation Agent.

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• If fewer than three dealers selected by the Calculation Agent are quoting as described above, the CD rate in effect for the new interest period will be the CD rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

CMT Rate Covered Bonds

A CMT rate covered bond will bear interest at an interest rate equal to the CMT rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

The CMT rate will be the following rate displayed on the designated CMT Reuters page under the heading “. . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 Mondays Approximately 3:45 P.M.”, under the column for the designated CMT index maturity:

• if the designated CMT Reuters page is Reuters page FRBCMT, the rate for the relevant interest determination date; or

• if the designated CMT Reuters page is Reuters page FEDCMT, the weekly or monthly average, as specified in the applicable prospectus supplement, for the week that ends immediately before the week in which the relevant interest determination date falls, or for the month that ends immediately before the month in which the relevant interest determination date falls, as applicable.

If the CMT rate cannot be determined in this manner, the following procedures will apply.

• If the applicable rate described above is not displayed on the relevant designated CMT Reuters page at 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the CMT rate will be the applicable treasury constant maturity rate described above—i.e., for the designated CMT index maturity and for either the relevant interest determination date or the weekly or monthly average, as applicable—as published in H.15(519).

• If the applicable rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the CMT rate will be the treasury constant maturity rate, or other U.S. treasury rate, for the designated CMT index maturity and with reference to the relevant interest determination date, that:

• is published by the Board of Governors of the Federal Reserve System, or the U.S. Department of the Treasury; or

• as is otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which such CMT rate interest determination date falls; and

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• in either case, is determined by the Calculation Agent to be comparable to the applicable rate formerly displayed on the designated CMT Reuters page and published in H.15(519).

• If the rate described in the prior paragraph does not appear by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the CMT rate will be the yield to maturity of the arithmetic mean of the following secondary market bid rates for the most recently issued treasury covered bonds having an original maturity equal to the designated CMT index maturity and a remaining term to maturity of not less than the designated CMT index maturity minus one year, and in a representative amount: the bid rates, as of approximately 3:30 P.M., New York City time, on the relevant interest determination date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting these bid rates, the Calculation Agent will request quotations from five of these primary dealers and will disregard the highest quotation—or, if there is equality, one of the highest—and the lowest quotation—or, if there is equality, one of the lowest. Treasury covered bonds are direct, non-callable, fixed rate obligations of the U.S. government.

• If the Calculation Agent is unable to obtain three quotations of the kind described in the prior paragraph, the CMT rate will be the yield to maturity of the arithmetic mean of the following secondary market bid rates for treasury covered bonds with an original maturity longer than the designated CMT index maturity, with a remaining term to maturity closest to the designated CMT index maturity and in a representative amount: the bid rates, as of approximately 3:30 P.M., New York City time, on the relevant interest determination date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting these bid rates, the Calculation Agent will request quotations from five of these primary dealers and will disregard the highest quotation (or, if there is equality, one of the highest) and the lowest quotation (or, if there is equality, one of the lowest). If two treasury covered bonds with an original maturity longer than the designated CMT index maturity have remaining terms to maturity that are equally close to the designated CMT index maturity, the Calculation Agent will obtain quotations for the treasury covered bond with the shorter remaining term to maturity.

• If fewer than five but more than two of these primary dealers are quoting as described in the prior paragraph, then the CMT rate for the relevant interest determination date will be based on the arithmetic mean of the bid rates so obtained, and neither the highest nor the lowest of those quotations will be disregarded.

• If two or fewer primary dealers selected by the Calculation Agent are quoting as described above, the CMT rate in effect for the new interest period will be the CMT rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

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CMS Rate Covered Bonds

A CMS rate covered bond will bear interest at an interest rate equal to the CMS rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

The CMS rate will be the rate for U.S. Dollar swaps with a maturity for a specified number of years, expressed as a percentage in the applicable prospectus supplement, which appears on the Reuters page ISDAFIX1 as of 11:00 a.m., New York City time, on the interest rate determination date.

• If the CMS rate cannot be determined as described above, the following procedures will be used:

• If the applicable rate described above is not displayed on the relevant designated CMS Reuters page by 11:00 a.m., New York City time, on the interest rate determination date, then the CMS rate will be a percentage determined on the basis of the mid-market, semi-annual swap rate quotations provided by five leading swap dealers in the New York City interbank market at approximately 11:00 a.m., New York City time, on the interest rate determination date. For this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the maturity designated in the applicable prospectus supplement commencing on that interest rate determination date with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to “LIBOR Reuters” with a maturity of three months. The Calculation Agent will select the five swap dealers after consultation with us and will request the principal New York City office of each of those dealers to provide a quotation of its rate. If at least three quotations are provided, the CMS rate for that interest rate determination date will be the arithmetic mean of the quotations, eliminating the highest and lowest quotations or, in the event of equality, one of the highest and one of the lowest quotations.

• If fewer than three leading swap dealers selected by the Calculation Agent are quoting as described above, the CMS rate will remain the CMS rate in effect on that interest rate determination date or, if that interest rate determination date is the first reference rate determination date, the initial interest rate.

Federal Funds Rate Covered Bonds

A federal funds rate covered bond will bear interest at an interest rate equal to the federal funds rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable prospectus supplement.

The federal funds rate will be the rate for U.S. Dollar federal funds as of the relevant interest determination date, as published in H.15(519) under the heading “Federal Funds (Effective)”, as that rate is displayed on Reuters page FEDFUNDS1. If the federal funds rate cannot be determined in this manner, the following procedures will apply.

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• If the rate described above is not displayed on Reuters page FEDFUNDS1 by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the federal funds rate, as of the relevant interest determination date, will be the rate described above as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “Federal Funds (Effective).”

• If the rate described above is not displayed on Reuters page FEDFUNDS1 and does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the federal funds rate will be the arithmetic mean of the rates for the last transaction in overnight, U.S. Dollar federal funds arranged, before 9:00 A.M., New York City time, on the Business Day following the relevant interest determination date, by three leading brokers of U.S. Dollar federal funds transactions in New York City selected by the Calculation Agent.

• If fewer than three brokers selected by the Calculation Agent are quoting as described above, the federal funds rate in effect for the new interest period will be the federal funds rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

Special Rate Calculation Terms

For the purposes of this Condition 4.7:

The term “bond equivalent yield” means a yield expressed as a percentage and calculated in accordance with the following formula:

bond equivalent yield =	D x N	x 100
	360 – (D x M)

where,

“D” means the annual rate for treasury bills quoted on a bank discount basis and expressed as a decimal;

“N” means 365 or 366, as the case may be; and

“M” means the actual number of days in the applicable interest reset period.

The term “Business Day” means, for any covered bond, a day that meets all the following applicable requirements:

(a) for all covered bonds, is a Monday, Tuesday, Wednesday, Thursday or Friday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law to close in New York City or Toronto, and, in the case of a Floating Rate covered bond, London;

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(b) if the covered bond has a specified currency other than U.S. Dollars or euros, is also a day on which banking institutions are not authorized or obligated by law, regulation or executive order to close in the applicable principal financial center; and

(c) if the covered bond is a EURIBOR covered bond or has a specified currency of euros, or is a LIBOR covered bond for which the index currency is euros, is also a Euro Business Day.

The term “designated CMT index maturity” means the index maturity for a CMT rate covered bond and will be the original period to maturity of a U.S. treasury security—either 1, 2, 3, 5, 7, 10, 20 or 30 years—specified in the applicable prospectus supplement.

The term “designated CMT Reuters page” means the Reuters page that displays treasury constant maturities as reported in H.15(519). If no Reuters page is so specified, then the applicable page will be Reuters page FEDCMT. If Reuters page FEDCMT applies but the applicable prospectus supplement does not specify whether the weekly or monthly average applies, the weekly average will apply.

The term “Euro Business Day” means any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System, or any successor system, is open for business.

The term “euro-zone” means, at any time, the region comprised of the member states of the European Economic and Monetary Union that, as of that time, have adopted a single currency in accordance with the Treaty on European Union of February 1992.

“H.15(519)” means the weekly statistical release entitled “Statistical Release H.15(519)”, or any successor publication, published by the Board of Governors of the Federal Reserve System.

“H.15 daily update” means the daily update of H.15(519) available through the worldwide website of the Board of Governors of the Federal Reserve System, at http://www.federalreserve.gov/releases/h15/update, or any successor site or publication.

The term “index currency” means, with respect to a LIBOR covered bond, the currency specified as such in the applicable prospectus supplement. The index currency may be U.S. Dollars or any other currency, and will be U.S. Dollars unless another currency is specified in the prospectus supplement.

The term “index maturity” means, with respect to a floating rate covered bond, the period to maturity of the instrument or obligation on which the interest rate formula is based, as specified in the applicable prospectus supplement.

“Interest Period” has the meaning given to such term in Condition 4.6 (Interest on U.S. Registered Covered Bonds) of the Terms and Conditions of the Covered Bonds.

“London business day” means any day on which dealings in the relevant index currency are transacted in the London interbank market.

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The term “money market yield” means a yield expressed as a percentage and calculated in accordance with the following formula:

money market yield =	D x 360	x 100
	360 – (D x M)

where,

“D” means the annual rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and

“M” means the actual number of days in the relevant interest reset period.

The term “principal financial center” means the capital city of the country to which an index currency relates (or the capital city of the country issuing the specified currency, as applicable), except that with respect to U.S. Dollars, Australian dollars, Canadian Dollars, South African rands and Swiss francs, the “principal financial center” means The City of New York, Sydney, Toronto, Johannesburg and Zurich, respectively, and with respect to euros the principal financial center means London.

The term “representative amount” means an amount that, in the Calculation Agent’s judgment, is representative of a single transaction in the relevant market at the relevant time.

“Reuters Page LIBOR01” means the display designated as “LIBOR01” on Reuters 3000 Xtra (or any successor service) (or such other page as may replace Page LIBOR01 on Reuters 3000 Xtra or any successor service).

“Reuters screen US PRIME 1 page” means the display on the “US PRIME 1” page on the Reuters Monitor Money Rates Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks.

“Reuters page” means the display on Reuters 3000 Xtra, or any successor service or any replacement page or pages on that service.

If, when using the terms designated CMT Reuters page, H.15(519), H.15 daily update, Reuters screen US PRIME 1 page, Reuters Page LIBOR01 or Reuters page, a particular heading or headings is referenced on any of those pages, those references include any successor or replacement heading or headings as determined by the Calculation Agent.

5. Payments

5.1 Method of payment

Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in the place of payment but without prejudice to the provisions of Condition 7 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, official interpretations thereof, or (without prejudice to the provisions of Condition 7) any law implementing an intergovernmental approach thereto.

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5.4 Payments in respect of Registered Covered Bonds

Payments of principal in respect of each Registered Covered Bond (whether or not in global form) will be made against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the Registered Covered Bond at the specified office of the Registrar or any of the Paying Agents. Such payments will be made in accordance with Condition 5.1 (Method of Payment) by transfer to the Designated Account (as defined below) of the holder (or the first named of joint holders) of the Registered Covered Bond appearing in the register of holders of the Registered Covered Bonds maintained by the Registrar (the “Register”) at the close of business on the tenth business day (“business day” being for the purposes of this Condition 5.4 a day on which banks are open for business in the city where the specified office of the Registrar is located) before the relevant due date (the “Record Date”). Notwithstanding the previous sentence, if (i) a holder does not have a Designated Account, or (ii) the principal amount of the covered bonds held by a holder is less than U.S.$250,000 (or its approximate equivalent in any other specified currency), payment will instead be made by a check drawn on a Designated Bank (as defined below). For these purposes, “Designated Account” means the account (which, in the case of a payment in Yen to a non resident of Japan, will be a non resident account) maintained by a holder with a Designated Bank and identified as such in the Register and “Designated Bank” means a bank in the City of New York.

Payments of interest in respect of each Registered Covered Bond (whether or not in global form) will be made by a check in the specified currency drawn on a Designated Bank and mailed by uninsured mail on the business day immediately preceding the relevant due date to the holder (or the first named of joint holders) of the Registered Covered Bond appearing in the Register at the close of business on the Record Date at the holder’s address shown in the Register on the Record Date and at the holder’s risk. Upon application of the holder to the specified office of the Registrar not less than three business days before the due date for any payment of interest in respect of a Registered Covered Bond, the payment may be made by transfer on the due date in the manner provided in the preceding paragraph. Any such application for transfer will be deemed to relate to all future payments of interest (other than interest due on redemption) in respect of the Registered Covered Bonds which become payable to the holder who has made the initial application until such time as the Registrar is notified in writing to the contrary by such holder. Payment of the interest due in respect of each Registered Covered Bond on redemption will be made in the same manner as payment of the principal in respect of such Registered Covered Bond.

Holders of Registered Covered Bonds will not be entitled to any interest or other payment for any delay in receiving any amount due in respect of any Registered Covered Bond as a result of a check posted in accordance with this Condition arriving after the due date for payment or being lost in the post. No commissions or expenses will be charged to such holders by the Registrar or any of the Paying Agents in respect of any payments of principal or interest in respect of the Registered Covered Bonds.

None of the Bank, the Guarantor, the Bond Trustee or the Agents will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Registered Covered Bonds or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

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5.5 General provisions applicable to payments

The holder of a Global Covered Bond (or, as provided in the Trust Deed, the Bond Trustee) will be the only person entitled to receive payments in respect of covered bonds represented by such Global Covered Bond and the obligations of the Bank or, as the case may be, the Guarantor under the Covered Bond Guarantee will be discharged by payment to, or to the order of, the holder of such Global Covered Bond (or the Bond Trustee, as the case may be) in respect of each amount so paid. Each of the persons shown in the records of DTC as the beneficial holder of a particular nominal amount of covered bonds represented by such Global Covered Bond must look solely to DTC for his share of each payment so made by the Bank or the Guarantor under the Covered Bond Guarantee to, or to the order of, the holder of such Global Covered Bond (or the Bond Trustee, as the case may be). No person other than the holder of the relevant Global Covered Bond (or, as provided in the Trust Deed, the Bond Trustee) will have any claim against the Bank or the Guarantor under the Covered Bond Guarantee in respect of any payments due on that Global Covered Bond.

5.6 Payment Day

If the date for payment of any amount in respect of any covered bond is not a Payment Day (as defined below), the holder thereof will not be entitled to payment of the relevant amount due until the next following Payment Day and will not be entitled to any interest or other sum in respect of any such delay. In this Condition (unless otherwise specified in the applicable prospectus supplement), “Payment Day” means any day which (subject to Condition 8 (Prescription)) is a day on which commercial banks and foreign exchange markets in the City of New York settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits).

5.7 Interpretation of principal and interest

Any reference in these Terms and Conditions to principal in respect of the covered bonds will be deemed to include, as applicable:

(a) any additional amounts which may be payable with respect to principal under Condition 7 (Taxation) or under any undertakings or covenants given in addition thereto, or in substitution therefor, pursuant to the Trust Deed;

(b) the Final Redemption Amount of the covered bonds;

(c) the Early Redemption Amount of the covered bonds, but excluding any amount of interest referred to therein;

(d) the Optional Redemption Amount(s) (if any) of the covered bonds;

(e) any premium and any other amounts (other than interest) which may be payable under or in respect of the covered bonds; and

(f) any Excess Proceeds attributable to principal which may be deposited by the Bond Trustee into the GDA Account in respect of the covered bonds, and following a Guarantor Event of Default and service of a Guarantor Acceleration Notice deposited or paid in such other manner as the Bond Trustee may direct.

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Any reference in these Terms and Conditions to interest in respect of the covered bonds will be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 7 (Taxation) or under any undertakings given in addition thereto, or in substitution therefor, pursuant to the Trust Deed.

6. Redemption and Purchase

6.1 Final redemption

Unless previously redeemed or purchased and cancelled as specified below, each covered bond will be redeemed by the Bank at its Final Redemption Amount specified in, or determined in the manner specified in, the applicable prospectus supplement in the relevant specified currency on the Final Maturity Date.

Without prejudice to Condition 9 (Events of Default, Acceleration and Enforcement), if an Extended Due for Payment Date is specified in the applicable prospectus supplement for a Series of covered bonds and the Bank has failed to pay the Final Redemption Amount on the Final Maturity Date specified in the prospectus supplement (in each case after the expiry of the grace period set out in Condition 9.1(a) (Issuer Events of Default)) and following service of a Notice to Pay on the Guarantor by no later than the date falling one Business Day prior to the Extension Determination Date, the Guarantor has insufficient funds available under the Guarantee Priorities of Payments to pay the Guaranteed Amounts corresponding to the Final Redemption Amount in full in respect of the relevant Series of covered bonds on the date falling on the earlier of (a) the date which falls two Business Days after service of a Notice to Pay on the Guarantor or, if later, the Final Maturity Date (in each case after the expiry of the grace period set out in Condition 9.2(a) (Guarantor Events of Default)), and (b) the Extension Determination Date, under the Covered Bond Guarantee, then (subject as provided below) payment of the unpaid portion of the Final Redemption Amount by the Guarantor under the Covered Bond Guarantee will be deferred until the Extended Due for Payment Date, provided that any amount representing the Final Redemption Amount due and remaining unpaid on the earlier of (a) and (b) above will be paid by the Guarantor to the extent it has sufficient funds available under the Guarantee Priorities of Payments on any Interest Payment Date thereafter up to (and including) the relevant Extended Due for Payment Date.

The Bank will confirm to the Principal Paying Agent as soon as reasonably practicable and in any event at least four Business Days prior to the Final Maturity Date of a Series of covered bonds whether (a) payment will be made in full of the Final Redemption Amount in respect of a Series of covered bonds on that Final Maturity Date or (b) payment will not be made in full of the Final Redemption Amount in respect of a Series of covered bonds on that Final Maturity Date. Any failure by the Bank to notify the Principal Paying Agent will not affect the validity or effectiveness of the extension.

The Guarantor will notify the relevant covered bondholders (in accordance with Condition 13 (Notices)), the Rating Agencies, the Bond Trustee, the Principal Paying Agent and (in the case of Registered Covered Bonds) the Registrar as soon as reasonably practicable and in any event at least one Business Day prior to the date specified in (a) or (b) of the second preceding paragraph (as appropriate) of any inability of the Guarantor to pay in full the Guaranteed Amounts corresponding to the Final Redemption Amount in respect of a Series of covered bonds pursuant to the Covered Bond Guarantee. Any failure by the Guarantor to notify such parties will not affect the validity or effectiveness of the extension nor will any rights accrue to any of them by virtue thereof.

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In the circumstances outlined above, the Guarantor will on the earlier of (a) the date falling two Business Days after service of a Notice to Pay or, if later, the Final Maturity Date (in each case after the expiry of the grace period set out in Condition 9.2(a)) (Guarantor Events of Default), and (b) the Extension Determination Date, under the Covered Bond Guarantee, apply the funds (if any) available (after paying or providing for payment of higher ranking or pari passu amounts in accordance with the Guarantee Priorities of Payments) pro rata in part payment of an amount equal to the Final Redemption Amount of each covered bond of the relevant Series of covered bonds and will pay Guaranteed Amounts constituting the corresponding part of Scheduled Interest in respect of each such covered bond on such date. The obligation of the Guarantor under the Covered Bond Guarantee to pay any amounts in respect of the balance of the Final Redemption Amount not so paid will be deferred as described above. Such failure to pay by the Guarantor will not constitute a Guarantor Event of Default.

Any discharge of the obligations of the Bank as a result of the payment of Excess Proceeds to the Bond Trustee will be disregarded for the purposes of determining the liabilities of the Guarantor under the Covered Bond Guarantee in connection with this Condition 6.1 (Final redemption).

6.2 Redemption for taxation reasons

The covered bonds may be redeemed at the option of the Bank in whole, but not in part, at any time (if the relevant covered bond is not a Floating Rate Covered Bond) or on any Interest Payment Date (if the relevant covered bond is a Floating Rate Covered Bond), on giving not less than 30 nor more than 60 days’ notice to the Bond Trustee and, in accordance with Condition 13 (Notices), the covered bondholders (which notice will be irrevocable), if the Bank satisfies the Bond Trustee immediately before the giving of such notice that on the occasion of the next date for payment of interest on the relevant covered bonds, that the Bank is or would be required to pay additional amounts as provided or referred to in Condition 7 (Taxation). Covered bonds redeemed pursuant to this Condition 6.2 will be redeemed at their Early Redemption Amount referred to in Condition 6.7 (Early Redemption Amounts) together (if appropriate) with interest accrued to (but excluding) the date of redemption.

6.3 Redemption at the option of the Bank (“Issuer Call”)

If an Issuer Call is specified in the applicable prospectus supplement, the Bank may, having given not less than 15 nor more than 30 days’ notice or such other period of notice as may be specified in the applicable prospectus supplement to the Bond Trustee, the Principal Paying Agent, the Registrar (in the case of the redemption of Registered Covered Bonds) and, in accordance with Condition 13 (Notices), the covered bondholders (which notice will be irrevocable) redeem all or only some of the covered bonds then outstanding on any Optional Redemption Date(s) and at the Optional Redemption Amount(s) specified in, or determined in the manner specified in, the applicable prospectus supplement together, if applicable, with interest accrued to (but excluding) the relevant Optional Redemption Date(s). The Bank will be bound to redeem the covered bonds on the date specified in such notice. In the event of a redemption of only some of the covered bonds, such redemption must be of a nominal amount not less than the Minimum Redemption Amount and not more than the Maximum Redemption Amount (if any) as specified in the applicable prospectus supplement. In the case of a partial redemption of covered

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bonds, the covered bonds to be redeemed (the “Redeemed Covered Bonds”) will be selected individually by lot, in the case of Redeemed Covered Bonds represented by Definitive Covered Bonds, and in accordance with the rules of DTC, in the case of Redeemed Covered Bonds represented by a Global Covered Bond, in each case, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the “Selection Date”). In the case of Redeemed Covered Bonds represented by Definitive Covered Bonds, a list of the serial numbers of such Redeemed Covered Bonds will be published in accordance with Condition 13 (Notices) not less than 15 days (or such shorter period as may be specified in the applicable prospectus supplement) prior to the date fixed for redemption. The aggregate nominal amount of Redeemed Covered Bonds represented by Definitive Covered Bonds or represented by Global Covered Bonds will, in each case, bear the same proportion to the aggregate nominal amount of all Redeemed Covered Bonds as the aggregate nominal amount of Definitive Covered Bonds or Global Covered Bonds outstanding bears, in each case, to the aggregate nominal amount of the covered bonds outstanding on the Selection Date, provided that such nominal amounts will, if necessary, be rounded downwards to the nearest integral multiple of the Specified Denomination. No exchange of the relevant Global Covered Bond will be permitted during the period from (and including) the Selection Date to (and including) the date fixed for redemption pursuant to this Condition 6.3 and notice to that effect will be given by the Bank to the covered bondholders in accordance with Condition 13 (Notices) at least five days (or such shorter period as is specified in the applicable prospectus supplement) prior to the Selection Date.

6.4 Redemption at the option of the covered bondholders (“Investor Put”)

If an Investor Put is specified in the prospectus supplement for a covered bond, then if and to the extent specified in the applicable prospectus supplement and provided that an Issuer Event of Default has not occurred and is continuing, upon the covered bondholder giving to the Bank, in accordance with Condition 13 (Notices), not less than 30 nor more than 60 days’ notice (which notice will be irrevocable), the Bank will, upon the expiry of such notice provided that the Cash Manager has notified the Bond Trustee in writing that there will be sufficient funds available to pay any termination payment due to the Covered Bond Swap Provider, redeem subject to, and in accordance with, the terms specified in the applicable prospectus supplement in whole (but not in part) such covered bond on the Optional Redemption Date and at the relevant Optional Redemption Amount as specified in, or determined in the manner specified in, the applicable prospectus supplement, together, if applicable, with interest accrued to (but excluding) the relevant Optional Redemption Date.

If the covered bond is in definitive form, to exercise the right to require redemption of such covered bond, the covered bondholder must deliver such covered bond, on any Business Day falling within the above mentioned notice period at the specified office of any Paying Agent, accompanied by a duly signed and completed notice of exercise of the Investor Put in the form (for the time being currently) obtainable from any specified office of any Paying Agent and in which the holder must specify a bank account (or, if payment is by check, an address) to which payment is to be made under this Condition 6.4.

It may be that before an Investor Put can be exercised, certain conditions and/or circumstances will need to be satisfied. Where relevant, the provisions will be set out in the applicable prospectus supplement.

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6.5 Redemption due to illegality or invalidity

(a) The covered bonds of all Series may be redeemed at the option of the Bank in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the Bond Trustee, the Principal Paying Agent, the Registrar and, in accordance with Condition 13 (Notices), all covered bondholders (which notice will be irrevocable), if the Bank satisfies the Bond Trustee immediately before the giving of such notice that it has, or will, before the next Interest Payment Date of any covered bond of any Series, become unlawful for the Bank to make, fund or allow to remain outstanding any Guarantee Loan made by it to the Guarantor under the Intercompany Loan Agreement, as a result of any change in, or amendment to, the applicable laws or regulations or any change in the application or official interpretation of such laws or regulations, which change or amendment has become or will become effective before the next such Interest Payment Date.

(b) Covered bonds redeemed pursuant to Condition 6.5(a) will be redeemed at their Early Redemption Amount referred to in Condition 6.7 (Early Redemption Amounts) together (if appropriate) with interest accrued to (but excluding) the date of redemption.

6.6 General

Prior to the publication of any notice of redemption pursuant to Conditions 6.2 (Redemption for taxation reasons) or 6.5(a) (Redemption due to illegality or invalidity), the Bank will deliver to the Bond Trustee a certificate signed by two authorized signatories stating that the Bank is entitled or required to effect such redemption and setting forth a statement of facts showing that the conditions set out in Conditions 6.2 (Redemption for taxation reasons) or, as the case may be, 6.5(a) (Redemption due to illegality or invalidity) for such right or obligation (as applicable) of the Bank to arise have been satisfied and the Bond Trustee will be entitled to accept the certificate as sufficient evidence of the satisfaction of the conditions set out above, in which event it will be conclusive and binding on all covered bondholders.

6.7 Early Redemption Amounts

For the purpose of Conditions 6.2 (Redemption for taxation reasons), 6.5(a) (Redemption due to illegality or invalidity) and 9 (Events of Default, Acceleration and Enforcement), each covered bond will be redeemed (unless otherwise stated in the applicable prospectus supplement) at its Early Redemption Amount calculated at the amount specified in, or determined in the manner specified in, the applicable prospectus supplement or, if no such amount or manner is so specified in the applicable prospectus supplement, at its Principal Amount Outstanding, together with interest accrued to (but excluding) the date fixed for redemption (the “Early Redemption Amount”).

6.8 Purchases

The Bank or any of its subsidiaries, or the Guarantor, may at any time purchase or otherwise acquire covered bonds at any price in the open market either by tender or private agreement or otherwise. If purchases are made by tender, tenders must be available to all covered bondholders alike. Such covered bonds may be held, reissued, resold or, at the option of the Bank

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or the relevant subsidiary, surrendered to any Paying Agent and/or the Registrar for cancellation (except that any covered bonds purchased or otherwise acquired by the Guarantor must immediately be surrendered to any Paying Agent and/or the Registrar for cancellation).

6.9 Cancellation

All covered bonds which are redeemed will forthwith be cancelled. All covered bonds so cancelled and any covered bonds purchased and surrendered for cancellation pursuant to Condition 6.8 (Purchases) and cancelled will be forwarded to the Principal Paying Agent and cannot be reissued or resold.

6.10 Late Payment

If any amount payable in respect of any covered bond is improperly withheld or refused upon its becoming due and payable or is paid after its due date, the amount due and payable in respect of such covered bond (the “Late Payment”) will itself accrue interest (both before and after any judgment or other order of a court of competent jurisdiction) from (and including) the date on which such payment was improperly withheld or refused or, as the case may be, became due, to (but excluding) the Late Payment Date at the rate determined in accordance with Condition 4.1 (Interest on Fixed Rate Covered Bonds) and on the basis of the day count basis specified in the applicable prospectus supplement or, if none is specified, on a 30/360 basis.

For the purpose of this Condition 6.10, the “Late Payment Date” will mean the earlier of:

(i) the date which the Bond Trustee determines to be the date on which, upon further presentation of the relevant covered bond, payment of the full amount (including interest as aforesaid) in the relevant currency in respect of such covered bond is to be made; and

(ii) the seventh day after notice is given to the relevant covered bondholder (whether individually or in accordance with Condition 13 (Notices)) that the full amount (including interest as aforesaid) in the relevant currency in respect of such covered bond is available for payment,

provided that in the case of both (i) and (ii), upon further presentation thereof being duly made, such payment is made.

7. Taxation

All payments of principal and interest (if any) in respect of the covered bond by or on behalf of the Bank or the Guarantor under the Covered Bond Guarantee, as the case may be, will be made without withholding or deduction for, or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature unless such withholding or deduction of such taxes, duties, assessments or governmental charges is required by law or regulation or administrative practice of any jurisdiction.

In the event that any payments made by the Bank are or become subject to a withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of (i) the Government of Canada or

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any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, or (ii) in the case of covered bonds issued by a branch of the Bank located outside of Canada, the country in which such branch is located or any political subdivision thereof or any authority or agency therein or thereof having power to tax, in respect of any payment of principal and interest on the covered bonds, the Bank will pay such additional amounts as will be necessary in order that the net amounts received by the covered bondholders after such withholding or deduction will equal the respective amounts of principal and interest, if any, which would otherwise have been receivable in respect of the covered bonds, as the case may be, in the absence of such withholding or deduction; except that no such additional amounts will be payable with respect to any covered bond presented for payment:

(a) to, or to a third party on behalf of, a covered bondholder who is liable to such taxes, duties, assessments or government charges in respect of such covered bond by reason of such covered bondholder having some connection with Canada or the jurisdiction imposing such tax otherwise than the mere holding of such covered bond;

(b) presented for payment more than 30 days after the Relevant Date except to the extent that the holder thereof would have been entitled to such additional amount on presenting the same for payment on or before such thirtieth day;

(c) where such withholding or deduction is imposed on a payment and is required to be made pursuant to European Council Directive 2003/48/EC or any other law implementing or complying with, or introduced in order to conform to, such Directive;

(d) presented for payment by or on behalf of a covered bondholder who would have been able to avoid such withholding or deduction by presenting the relevant covered bond to another Paying Agent in any member state of the European Union (each a “Member State”);

(e) to, or to a third party on behalf of, a covered bondholder in respect of whom such tax, duty, assessment or governmental charge is required to be withheld or deducted by reason of such covered bondholder or other person entitled to payments on the covered bond being a person not dealing at arm’s length (within the meaning of the ITA) with the Bank; or

(f) to, or to a third party on behalf of, a covered bondholder who is liable for such taxes, duties, assessments or other charges by reason of such covered bondholder’s failure to comply with any certification, identification, documentation or other reporting requirement concerning the nationality, residence, identity or connection with Canada of such covered bondholder, if (i) compliance is required by law as a precondition to, exemption from, or reduction in the rate of, the tax, assessment or other charge and (ii) the Bank has given such covered bondholder or, if such covered bondholder is not the beneficial owner of

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the covered bond in question, the beneficial owner of such covered bond at least 30 days’ notice that such covered bondholder or beneficial owner will be required to provide such certification, identification, documentation or other requirement.

As used herein, the “Relevant Date” means the date on which payment in respect of the covered bond first becomes due and payable but, if the full amount of the funds payable on such date has not been received by the Principal Paying Agent or the Bond Trustee on or prior to such date, the Relevant Date will be the date on which such funds will have been so received and notice to that effect has been given to covered bondholders in accordance with Condition 13 (Notices).

If any payments made by the Guarantor under the Covered Bond Guarantee are or become subject to any withholding or deduction on account of any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Canada or any political subdivision thereof or by any authority therein or thereof having power to tax or, in the case of covered bonds issued by a branch of the Bank located outside of Canada, the country in which such branch is located or any political subdivision thereof or any authority or agency therein or thereof having power to tax, the Guarantor will not be obliged to pay any additional amount as a consequence.

8. Prescription

The covered bonds will become void unless presented for payment within 10 years (in the case of principal) and five years (in the case of interest) in each case from the Relevant Date (as defined in Condition 7 (Taxation)) therefor, subject in each case to the provisions of Condition 5 (Payments).

The Bank will be discharged from its obligation to pay principal on a Registered Covered Bond to the extent that the relevant Registered Covered Bond certificate has not been surrendered to the Registrar by, or a check which has been duly dispatched in the specified currency remains uncashed at, the end of the period of 10 years from the Relevant Date for such payment.

The Bank will be discharged from its obligation to pay interest on a Registered Covered Bond to the extent that a check which has been duly dispatched in the specified currency remains uncashed at the end of the period of five years from the Relevant Date in respect of such payment.

9. Events of Default, Acceleration and Enforcement

9.1 Issuer Events of Default

The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 25 percent of the aggregate Principal Amount Outstanding of the covered bonds (which for this purpose or the purpose of any Extraordinary Resolution referred to in this Condition 9.1 means the covered bonds of a Series together with the covered bonds of any other Series constituted by the Trust Deed) then outstanding as if they were a single Series (with the nominal amount of covered bonds not denominated in Canadian Dollars converted into Canadian Dollars at the relevant exchange rate specified in the applicable Covered Bond Swap Agreement) or if so directed by an Extraordinary Resolution of all the covered bondholders will (subject in each case

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to being indemnified and/or secured to its satisfaction), give notice (an “Issuer Acceleration Notice”) in writing to the Bank that as against the Bank (but not, for the avoidance of doubt, against the Guarantor under the Covered Bond Guarantee) each covered bond of each Series is, and each such covered bond will thereupon immediately become, due and repayable at its Early Redemption Amount together with (to the extent not included in the Early Redemption Amount) accrued interest as provided in the Trust Deed if any of the following events (each, an “Issuer Event of Default”) will occur and be continuing:

(a) if default is made by the Bank for a period of 10 Canadian Business Days or more in the payment of any principal or 30 days or more in the payment of any interest due in respect of the covered bonds or any of them; or

(b) if the Bank fails to perform or observe any of its other obligations not otherwise specified in subparagraph (a) above or subparagraph (f) below under the covered bonds of any Series or the Trust Deed or any other Transaction Documents to which the Bank is a party (other than any dealership agreement, subscription agreement or underwriting agreement), but excluding any obligation of the Bank to comply with the Asset Coverage Test or any Loan Representations and Warranties given by the Bank thereunder or pursuant thereto, and (except where the Bond Trustee considers such failure to be incapable of remedy when no such continuation or notice as is hereinafter referred to will be required) such failure continues for the period of 30 days (or such longer period as the Bond Trustee may permit) after written notice thereof has been given by the Bond Trustee to the Bank requiring the same to be remedied; or

(c) if an Insolvency Event has occurred with respect to the Bank; or

(d) if an Asset Coverage Test Breach Notice has been served and not revoked (in accordance with the terms of the Transaction Documents) on or before the immediately succeeding Calculation Date following service of such Asset Coverage Test Breach Notice; or

(e) if the Pre-Maturity Test in respect of any Series of Hard Bullet Covered Bonds is breached and the Guarantor has not taken the necessary actions to cure the breach before the earlier to occur of: (i) 10 Canadian Business Days from the date that the Seller is notified of the breach of the Pre-Maturity Test and (ii) the Final Maturity Date of that Series of Hard Bullet Covered Bonds; or

(f) if a Ratings Trigger prescribed by the Terms and Conditions or the Transaction Documents (and not otherwise specifically provided for in this Condition 9.1) is breached and the prescribed remedial action is not taken within the specified time period, unless, in respect of any Ratings Trigger other than the Account Bank Threshold Ratings, the Standby Account Bank Required Ratings, the Servicer Deposit Threshold Ratings or the Cash Management Deposit Ratings, such breach occurs at a time that the Guarantor is Independently Controlled and Governed,

provided that the condition, event or act described in subparagraphs (b) to (e) above will only constitute an Issuer Event of Default if the Bond Trustee has certified in writing to the Bank and the Guarantor that such condition, event or act is, in its opinion, materially prejudicial to the interests of the covered bondholders of any Series.

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Upon the covered bonds becoming immediately due and payable against the Bank pursuant to this Condition 9.1, the Bond Trustee will forthwith serve on the Guarantor a notice to pay (the “Notice to Pay”) pursuant to the Covered Bond Guarantee. If a Notice to Pay has been served, the Guarantor will be required to make payments of Guaranteed Amounts when the same will become Due for Payment in accordance with the terms of the Covered Bond Guarantee and the Trust Deed.

Following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice, the Bond Trustee may or will take such proceedings against the Bank in accordance with the first paragraph of Condition 9.3 (Enforcement).

The Trust Deed provides that all funds received by the Bond Trustee from the Bank or any liquidator or person with similar powers appointed in relation to the Bank following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice (the “Excess Proceeds”), will be deposited by the Bond Trustee on behalf of the covered bondholders, as soon as practicable, into the GDA Account, and following a Guarantor Event of Default and service of a Guarantor Acceleration Notice, deposited or paid in such other manner as the Bond Trustee may direct, and in either case, will be distributed in accordance with the applicable Priorities of Payments. The Excess Proceeds will thereafter form part of the Portfolio and, if deposited into the GDA Account, will be used by the Guarantor in the same manner as all other funds from time to time standing to the credit of the GDA Account and distributed in accordance with the applicable Priorities of Payments.

By subscribing for or purchasing covered bonds, each covered bondholder will be deemed to have irrevocably directed the Bond Trustee to deposit the Excess Proceeds into the GDA Account in the manner described above, or following a Guarantor Event of Default and service of a Guarantor Acceleration Notice, deposit or pay the Excess Proceeds in such other manner as the Bond Trustee may direct, provided that in each case, distributions thereof will be made in accordance with the applicable Priorities of Payments.

Upon deposit of any Excess Proceeds into the GDA Account, the Guarantor will be deemed to have assumed all of the obligations of the Bank (other than the obligation to make any payments in respect of additional amounts which may become payable by the Bank pursuant to Condition 7 (Taxation)), and be solely liable as principal obligor, and not as a guarantor, in respect of the obligation to pay to the covered bondholders interest and principal in respect of covered bonds to which the Excess Proceeds relate (to the extent distributable to covered bondholders under the applicable Priorities of Payments), and the covered bondholders will have no rights against the Bank with respect to payment of such Excess Proceeds.

9.2 Guarantor Events of Default

The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 25 percent of the aggregate Principal Amount Outstanding of the covered bonds (which for this purpose and the purpose of any Extraordinary Resolution referred to in this Condition 9.2 means the covered bonds of a Series together with the covered bonds of any other Series constituted by the Trust Deed) then outstanding as if they were a single Series (with the nominal amount of covered bonds not denominated in Canadian Dollars converted into Canadian Dollars

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at the relevant exchange rate specified in the applicable Covered Bond Swap Agreement) or if so directed by an Extraordinary Resolution of all the covered bondholders will (subject in each case to being indemnified and/or secured to its satisfaction), give a Guarantor Acceleration Notice in writing to the Bank and the Guarantor, that (i) each covered bond of each Series is, and each covered bond of each Series will as against the Bank (if not already due and repayable against the Bank following service of an Issuer Acceleration Notice), thereupon immediately become, due and repayable at its Early Redemption Amount together with (to the extent not already included in the Early Redemption Amount) accrued interest, and (ii) all amounts payable by the Guarantor under the Covered Bond Guarantee will thereupon immediately become due and payable at the Guaranteed Amount corresponding to the Early Redemption Amount for each covered bond of each Series together with (to the extent not already included in the Early Redemption Amount) accrued interest, in each case as provided in the Trust Deed and thereafter the Security will become enforceable if any of the following events (each, a “Guarantor Event of Default”) will occur and be continuing:

(a) if default is made by the Guarantor for a period of seven days or more in the payment of any Guaranteed Amounts which are Due for Payment on the relevant Guaranteed Amounts Due Date in respect of the covered bonds of any Series except in the case of the payments of a Guaranteed Amount which is Due for Payment under Condition 6.1 (Final redemption) of the Terms and Conditions of the Covered Bonds when the Guarantor will be required to make payments of Guaranteed Amounts which are Due for Payment on the dates specified therein; or

(b) if default is made by the Guarantor in the performance or observance of any obligation, condition or provision binding on it (other than any obligation for the payment of Guaranteed Amounts in respect of the covered bonds of any Series or as specified in subparagraph (f) below) under the Trust Deed, the Security Agreement or any other Transaction Document to which the Guarantor is a party (other than the obligation of the Guarantor to (i) repay the Demand Loan within 60 days of demand therefor or an obligation to do so pursuant to the terms of the Intercompany Loan Agreement, and (ii) to make a payment under a Swap Agreement if it has insufficient funds therefor), and (except where such default is or the effects of such default are, in the opinion of the Bond Trustee, not capable of remedy when no such continuation and notice as is hereinafter mentioned will be required), such default continues for 30 days (or such longer period as the Bond Trustee may permit) after written notice thereof has been given by the Bond Trustee to the Guarantor requiring the same to be remedied; or

(c) if an Insolvency Event has occurred with respect to the Guarantor; or

(d) if there is a failure to satisfy the Amortization Test (as set out in the Guarantor Agreement) on any Calculation Date following an Issuer Event of Default that is continuing, or

(e) if the Covered Bond Guarantee is not, or is claimed by the Guarantor not to be, in full force and effect; or

(f) if a Ratings Trigger prescribed by the Terms and Conditions or the Transaction Documents (and not otherwise specifically provided for in this Condition 9.2) is breached and the prescribed remedial action is not taken within the specified time

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period, unless, in respect of any Ratings Trigger other than the Account Bank Threshold Ratings, the Standby Account Bank Required Ratings, the Servicer Deposit Threshold Ratings or the Cash Management Deposit Ratings, such breach occurs at a time that the Guarantor is Independently Controlled and Governed,

provided that the condition, event or act described in subparagraphs (b) to (e) above will only constitute a Guarantor Event of Default if the Bond Trustee has certified in writing to the Bank and the Guarantor that such condition, event or act is, in its opinion, materially prejudicial to the interests of the covered bondholders of any Series.

Following the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice on the Guarantor, the Bond Trustee may or will take such proceedings or steps in accordance with the first and third paragraphs, respectively, of Condition 9.3 (Enforcement).

Upon service of a Guarantor Acceleration Notice, the covered bondholders will have a claim against the Guarantor, under the Covered Bond Guarantee, for an amount equal to the Early Redemption Amount in respect of each covered bond together with (to the extent not included in the Early Redemption Amount) accrued but unpaid interest and any other amount due under such covered bonds (other than additional amounts payable under Condition 7 (Taxation)) as provided in the Trust Deed.

9.3 Enforcement

The Bond Trustee may at any time, at its discretion and without further notice, take such proceedings against the Bank or the Guarantor, as the case may be, and/or any other person as it may think fit to enforce the provisions of the Trust Deed, the covered bonds or any other Transaction Document, but it will not be bound to take any such enforcement proceedings in relation to the Trust Deed, the covered bonds or any other Transaction Document unless (i) it has been so directed by an Extraordinary Resolution of all the covered bondholders of all Series (with the covered bonds of all Series taken together as a single Series as aforesaid) or so requested in writing by the holders of not less than 25 percent of the aggregate Principal Amount Outstanding of the covered bonds of all Series then outstanding (taken together and converted into Canadian Dollars at the relevant exchange rate specified in the applicable Covered Bond Swap Agreement as aforesaid), and (ii) it has been indemnified and/or secured to its satisfaction against all liabilities to which it may thereafter render itself liable or which it may incur by so doing.

In exercising any of its powers, trusts, authorities and discretions, the Bond Trustee will, subject to applicable law, only have regard to the interests of the covered bondholders of all Series and will not have regard to the interests of any other Secured Creditors.

The Bond Trustee may at any time, at its discretion and without further notice but subject to applicable law, take such proceedings against the Guarantor and/or any other person as it may think fit to enforce the provisions of the Security Agreement or any other Transaction Document in accordance with its terms and may, at any time after the Security has become enforceable, take such proceedings or steps as it may think fit to enforce the Security, but it will not be bound to take any such proceedings or steps unless (i) it has been so directed by an Extraordinary Resolution of all the covered bondholders of all Series (with the covered bonds of all Series taken together as a single Series as aforesaid) or a request in writing by the holders of not less than 25

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percent of the aggregate Principal Amount Outstanding of the covered bonds of all Series then outstanding (taken together and converted into Canadian Dollars at the relevant exchange rate specified in the applicable Covered Bond Swap Agreement as aforesaid), and (ii) it has been indemnified and/or secured to its satisfaction against all liabilities to which it may thereafter render itself liable or which it may incur by so doing. In exercising any of its powers, trusts, authorities and discretions under this paragraph, the Bond Trustee will only have regard to the interests of the covered bondholders of all Series and will not have regard to the interests of any other Secured Creditors.

No covered bondholder will be entitled to proceed directly against the Bank or the Guarantor or to take any action with respect to the Trust Deed, any other Transaction Document, the covered bonds, or the Security unless the Bond Trustee having become bound so to proceed, fails to do so within 30 days and such failure is continuing. Notwithstanding any other provision of these Conditions, for so long as there are U.S. Registered Covered Bonds outstanding, in accordance with Section 316(b) of the Trust Indenture Act, the right of any holder to receive payment of principal and interest on the covered bonds on or after the due date for such principal or interest, or to institute suit for the enforcement of payment of that principal or interest, may not be impaired or affected without the consent of the holders of the covered bonds, provided that no such right of enforcement will exist (i) in respect of a postponement of an interest payment which has been consented to by the holders of the covered bonds in accordance with the Trust Deed or (ii) to the extent that the institution or prosecution of such suit or the entry of judgment therein would, under applicable law, result in the surrender, impairment, waiver or loss of the security granted pursuant to the Trust Deed or the relevant Security Agreements upon any property subject to such security.

10. Replacement of Covered Bonds

If any covered bond is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Registrar (in the case of Registered Covered Bonds), or any other place approved by the Bond Trustee of which notice has been given to the covered bondholders in accordance with Condition 13 (Notices) upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Bank may reasonably require. Mutilated or defaced covered bonds must be surrendered before replacements will be issued.

11. Principal Paying Agent, Paying Agents, Registrar, Transfer Agent and Exchange Agent

The Bank is entitled, with the prior written approval of the Bond Trustee, to vary or terminate the appointment of any Agent and/or appoint additional or other Agents and/or approve any change in the specified office through which any Agent acts, provided that:

(a) there will at all times be a Principal Paying Agent and a Registrar;

(b) the Bank will, so long as any covered bond is outstanding, maintain a Paying Agent (which may be the Principal Paying Agent) having a specified office in a city in Europe approved by the Bond Trustee;

(c) so long as any covered bond is listed on any stock exchange or admitted to listing or trading by any other relevant authority, there will at all times be a Transfer

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Agent (in the case of Registered Covered Bonds) with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or, as the case may be, other relevant authority;

(d) so long as any of the registered global covered bonds payable in a currency other than U.S. Dollars are held through DTC or its nominee, there will at all times be an Exchange Agent; and

(e) the Bank will ensure that it maintains a Paying Agent in a Member State that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any other Directive implementing the conclusions of the ECOFIN Council Meeting of November 26 to 27, 2000 or any law implementing or complying with, or introduced in order to conform to any such Directive, provided that the Bank will not, under any circumstances, be obliged to maintain a Paying Agent with a specified office in such Member State unless at least one European Member State does not require a Paying Agent making payments through a specified office in that Member State to so withhold or deduct tax.

In addition, the Bank will forthwith appoint a Paying Agent having a specified office in the United States in the circumstances described in Condition 5.5 (General provisions applicable to payments). Notice of any such variation, termination, appointment or change will be given by the Bank to the covered bondholders as soon as reasonably practicable in accordance with Condition 13 (Notices).

In acting under the Agency Agreement, the Agents act solely as agents of the Bank and the Guarantor and, in certain circumstances specified therein, of the Bond Trustee and do not assume any obligation to, or relationship of agency or trust with, any covered bondholders. The Agency Agreement contains provisions permitting any entity into which any Agent is merged or converted or with which it is consolidated or to which it transfers all or substantially all of its assets to become the successor agent.

13. Notices

All notices regarding the Registered Covered Bonds will be deemed to be validly given if sent by first class mail or (if posted to an address overseas) by airmail to the holders (or the first named of joint holders) at their respective addresses recorded in the Register and will be deemed to have been given on the fourth day after mailing.

The Bond Trustee will be at liberty to sanction some other method of giving notice to the covered bondholders if, in its opinion, such other method is reasonable having regard to market practice then prevailing and to the requirements of the stock exchange on which the relevant covered bonds are then admitted to trading and provided that notice of such other method is given to the covered bondholders in such manner as the Bond Trustee will require.

Notices to be given by any covered bondholder will be in writing and given by lodging the same, together (in the case of any covered bond in definitive form) with the relevant covered bond or covered bonds, with the Registrar (in the case of Registered Covered Bonds). While any of the covered bonds are represented by a Global Covered Bond, such notice may be given by any holder of a covered bond to the Principal Paying Agent or the Registrar through DTC in such manner as the Principal Paying Agent, the Registrar and DTC may approve for this purpose.

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14. Meetings of Covered Bondholders, Modification, Waiver and Substitution

Covered bondholders and other Secured Creditors should note that the Bank, the Guarantor and the Principal Paying Agent may without their consent or the consent of the Bond Trustee agree to modify any provision of any prospectus supplement which is of a formal, minor or technical nature or is made to correct a proven or manifest error or to comply with any mandatory provisions of law.

The Trust Deed contains provisions for convening meetings of the covered bondholders of any Series to consider any matter affecting their interests, including the modification by Extraordinary Resolution of these Terms and Conditions or the provisions of the Trust Deed. Such a meeting may be convened by the Bank, the Guarantor or the Bond Trustee and will be convened by the Bank at the request in writing of covered bondholders holding not less than 10 percent of the aggregate Principal Amount Outstanding of the covered bonds of such Series for the time being outstanding. The quorum at any such meeting in respect of any covered bonds of any Series for passing an Extraordinary Resolution is one or more persons holding or representing not less than a clear majority of the aggregate Principal Amount Outstanding of the covered bonds of such Series for the time being outstanding, or at any adjourned meeting one or more persons being or representing covered bondholders of such Series whatever the nominal amount of the covered bonds of such Series so held or represented, except that at any meeting the business of which includes the modification of any Series Reserved Matter, the quorum will be one or more persons holding or representing not less than two thirds of the aggregate Principal Amount Outstanding of the covered bonds of such Series for the time being outstanding, or at any adjourned such meeting one or more persons holding or representing not less than one third of the aggregate Principal Amount Outstanding of the covered bonds of such Series for the time being outstanding. An Extraordinary Resolution passed at any meeting of the covered bondholders of a Series will, subject as provided below, be binding on all the covered bondholders of such Series, whether or not they are present at the meeting. Pursuant to the Trust Deed, the Bond Trustee may convene a single meeting of the covered bondholders of more than one Series if in the opinion of the Bond Trustee there is no conflict between the holders of such covered bonds, in which event the provisions of this paragraph will apply thereto mutatis mutandis.

Notwithstanding the provisions of the immediately preceding paragraph, any Extraordinary Resolution to direct the Bond Trustee to accelerate the covered bonds pursuant to Condition 9 (Events of Default, Acceleration and Enforcement) or to direct the Bond Trustee to take any enforcement action pursuant to Condition 9 (Events of Default, Acceleration and Enforcement) (each a “Program Resolution”) will only be capable of being passed at a single meeting of the holders of the covered bonds of all Series then outstanding. Any such meeting to consider a Program Resolution may be convened by the Bank, the Guarantor or the Bond Trustee or by covered bondholders, in the case of a direction to accelerate the covered bonds pursuant to Conditions 9.1 (Issuer Events of Default) and 9.2 (Guarantor Events of Default) or to take enforcement action pursuant to Condition 9.3 (Enforcement), holding at least 25 percent of the aggregate Principal Amount Outstanding of the covered bonds of all Series then outstanding. The quorum at any such meeting for passing a Program Resolution is one or more persons holding or representing at least a clear majority of the aggregate Principal Amount Outstanding of the covered bonds of all Series for the time being outstanding, or at any adjourned such meeting one or more persons holding or representing covered bonds whatever the nominal amount of the

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covered bonds of all Series then outstanding. A Program Resolution passed at any meeting of the covered bondholders of all Series will be binding on all covered bondholders of all Series, whether or not they are present at the meeting.

In connection with any meeting of the covered bondholders of more than one Series where such covered bonds are not denominated in Canadian Dollars, the nominal amount of the covered bonds of any Series not denominated in Canadian Dollars will be converted into Canadian Dollars at the relevant exchange rate specified in the applicable Covered Bond Swap Agreement.

The Bond Trustee, the Guarantor and the Bank may also agree, without the consent of the covered bondholders and without the consent of the other Secured Creditors (and for this purpose the Bond Trustee may disregard whether any such modification relates to a Series Reserved Matter), to:

(a) any modification of the terms and conditions applying to covered bonds of one or more Series (including these Terms and Conditions) or any Transaction Document provided that in the sole opinion of the Bond Trustee such modification is not materially prejudicial to the interests of any of the covered bondholders of any Series; or

(b) any modification of the terms and conditions applying to covered bonds of any one or more Series (including these Terms and Conditions) or any Transaction Document which is in the sole opinion of the Bond Trustee of a formal, minor or technical nature or is to correct a manifest error or an error which is, in the sole opinion of the Bond Trustee, proven, or is to comply with mandatory provisions of law.

Notwithstanding the above, the Bank, the Guarantor and the Principal Paying Agent may agree, without the consent of the Bond Trustee, the covered bondholders or any of the other Secured Creditors, to any modification of any of the provisions of any prospectus supplement which is of a formal, minor or technical nature or is made to correct a proven or manifest error or to comply with any mandatory provisions of law.

The Bond Trustee may also agree, without the consent of the covered bondholders of any Series, to the waiver or authorization of any breach or proposed breach of any of the provisions of the covered bonds of any Series, or determine, without any such consent as aforesaid, that any Issuer Event of Default or Guarantor Event of Default or Potential Issuer Event of Default or Potential Guarantor Event of Default will not be treated as such, provided that, in any such case, it is not, in the sole opinion of the Bond Trustee, materially prejudicial to the interests of any of the covered bondholders of any Series. The Bond Trustee may also agree, without the consent of the covered bondholders of any Series or any other Secured Creditor, to the waiver or authorization of any breach or proposed breach of any of the provisions of the Transaction Documents, provided that, in any such case, it is not, in the sole opinion of the Bond Trustee, materially prejudicial to the interests of any of the covered bondholders of any Series.

Any such modification, waiver, authorization or determination will be binding on all covered bondholders of all Series of covered bonds and the other Secured Creditors, any such modification will be notified by the Bank to the covered bondholders of all Series of covered bonds for the time being outstanding and the other Secured Creditors in accordance with the

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relevant Terms and Conditions as soon as practicable thereafter. Notwithstanding any other provision of these Conditions, for so long as there are U.S. Registered Covered Bonds outstanding, any such modification, waiver, authorization or determination will be made in accordance with and subject to Section 316 of the Trust Indenture Act. The right of any holder of U.S. Registered Covered Bonds to receive payment of principal and interest will not be impaired unless made in accordance with Section 316 of the Trust Indenture Act.

In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorization or determination), the Bond Trustee will have regard to the general interests of the covered bondholders of each Series as a class (but will not have regard to any interests arising from circumstances particular to individual covered bondholders (whatever their number)) and, in particular, but without limitation, will not have regard to the consequences of any such exercise for individual covered bondholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political subdivision thereof and the Bond Trustee will not be entitled to require, nor will any covered bondholder be entitled to claim, from the Bank, the Guarantor, the Bond Trustee or any other person any indemnification or payment in respect of any Tax or stamp duty consequences of any such exercise upon individual covered bondholders, except to the extent already provided for in Condition 7 (Taxation) and/or in any undertaking or covenant given in addition to, or in substitution for, Condition 7 (Taxation) pursuant to the Trust Deed.

Provided that the Bond Trustee has received a certificate signed by two authorized signatories of the Bank and a certificate from the Guarantor stating that immediately after giving effect to the matters set out below in this paragraph, no Issuer Event of Default or Potential Issuer Event of Default (in respect of the Bank) or Guarantor Event of Default or Potential Guarantor Event of Default (in respect of the Guarantor), respectively, has occurred and is continuing and certain other conditions as are specified in the Trust Deed are satisfied, but without the consent of the covered bondholders of any Series, or of any other Secured Creditor, another subsidiary of the Bank or any direct or indirect holding company of the Bank may assume the obligations of the Bank as principal obligor under the Trust Deed and the other Transaction Documents in respect of all Series of covered bonds on the same basis. The Trust Deed provides that any such assumption will be notified to the holders of all Series of covered bonds (in accordance with the relevant Terms and Conditions of such covered bonds).

For the purposes hereof:

“Potential Issuer Event of Default” means any condition, event or act which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfillment of any similar condition, would constitute an Issuer Event of Default; and

“Potential Guarantor Event of Default” means any condition, event or act which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfillment of any similar condition, would constitute a Guarantor Event of Default.

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15. Indemnification of the Bond Trustee. Contracting with the Bank and/or the Guarantor

If, in connection with the exercise of its powers, trusts, authorities or discretions, the Bond Trustee is of the opinion that the interests of the covered bondholders of any one or more Series would be materially prejudiced thereby, the Bond Trustee will not exercise such power, trust, authority or discretion without the approval of such covered bondholders by Extraordinary Resolution or by a direction in writing of such covered bondholders of at least 25 percent of the aggregate Principal Amount Outstanding of covered bonds of the relevant Series then outstanding.

The Trust Deed and the Security Agreement contain provisions for the indemnification of the Bond Trustee and for its relief from responsibility, including provisions relieving it from taking any action unless indemnified and/or secured to its satisfaction.

The Trust Deed and the Security Agreement also contain provisions pursuant to which the Bond Trustee is entitled, inter alia: (i) to enter into business transactions with the Bank, the Guarantor and/or any of the Bank’s subsidiaries and to act as trustee for the holders of any other securities issued or guaranteed by, or relating to, the Bank, the Guarantor and/or any of the Bank’s subsidiaries; (ii) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the covered bondholders or any other Secured Creditors; and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.

The Bond Trustee will not be responsible for any loss, expense or liability, which may be suffered as a result of any Loans or their Related Security, or any deeds or documents of title thereto, being uninsured or inadequately insured or being held by clearing organizations or their operators or by intermediaries such as banks, brokers or other similar persons on behalf of the Bond Trustee. The Bond Trustee will be responsible for: (i) supervising the performance by the Bank, the Guarantor or any other party to the Transaction Documents of their respective obligations under the Transaction Documents, and the Bond Trustee will be entitled to assume, until it has received written notice to the contrary, that all such persons are properly performing their duties; (ii) considering the basis on which approvals or consents are granted by the Bank, the Guarantor or any other party to the Transaction Documents under the Transaction Documents; (iii) monitoring the Portfolio, including, without limitation, whether the Portfolio is in compliance with the Asset Coverage Test or the Amortization Test; or (iv) monitoring whether Loans and their Related Security satisfy the Loan Representations and Warranties. The Bond Trustee will not be liable to any covered bondholder or other Secured Creditor for any failure to make or to cause to be made on its behalf the searches, investigations and enquiries which would normally be made by a prudent chargee in relation to the Security and has no responsibility in relation to the legality, validity, sufficiency and enforceability of the Security and the Transaction Documents.

16. Further Issues

The Bank will be at liberty from time to time (but subject to the Terms and Conditions) without the consent of the covered bondholders or any Secured Creditors to create and issue further covered bonds (whether in bearer or registered form) having terms and conditions the same as the covered bonds of any Series or the same in all respects and guaranteed by the

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Guarantor save for the amount and date of the first payment of interest thereon, Issue Date and/or Issue Price and so that the same will be consolidated and form a single Series with the outstanding covered bonds of such Series.

17. Rating Agency Condition

By subscribing for or purchasing the covered bond(s), each covered bondholder will be deemed to have acknowledged and agreed that a credit rating of a Series of covered bonds is an assessment of credit risk and does not address other matters that may be of relevance to covered bondholders, including, without limitation, in the case of satisfaction of the Rating Agency Condition, whether the related action or event is either (i) permitted by the terms of the relevant Transaction Document, or (ii) in the best interests of, or not prejudicial to, some or all of the covered bondholders.

With regard to the requirement for satisfaction of the Rating Agency Condition with respect to a particular Rating Agency, each of the Bank, the Guarantor, the Bond Trustee and the Secured Creditors (including the covered bondholders) is deemed to have acknowledged and agreed that the satisfaction of the Rating Agency Condition does not impose or extend any actual or contingent liability on the Rating Agencies to the Bank, the Guarantor, the Bond Trustee, the Secured Creditors (including the covered bondholders) or any other person or create any legal relations between the Rating Agencies and the Bank, the Guarantor, the Bond Trustee, the Secured Creditors (including the covered bondholders) or any other person whether by way of contract or otherwise.

By subscribing for or purchasing the covered bond(s), each covered bondholder will be deemed to have acknowledged and agreed that:

(a) confirmation of the satisfaction of the Rating Agency Condition, to the extent required, may or may not be given at the sole discretion of each Rating Agency;

(b) depending on the timing of delivery of the request and any information needed to be provided as part of any such request, it may be the case that a Rating Agency cannot provide confirmation of the satisfaction of the Rating Agency Condition in the time available, or at all, and the Rating Agency will not be responsible for the consequences thereof;

(c) a confirmation of satisfaction of the Rating Agency Condition, if given, will be given on the basis of the facts and circumstances prevailing at the relevant time, and in the context of cumulative changes to the transaction of which the covered bonds form a part; and

(d) a confirmation of satisfaction of the Rating Agency Condition represents only a restatement of the opinions given, and will not be construed as advice for the benefit of any covered bondholder or any other party.

If satisfaction of the Rating Agency Condition is a condition to any action or step under any Transaction Document or is otherwise required, or a written request for such a confirmation of satisfaction of the Rating Agency Condition is delivered to that Rating Agency by any of the Bank, the Guarantor, and/or the Bond Trustee, as applicable (each, a “Requesting Party”), and either (i) one or more of the Rating Agencies indicates that it does not consider satisfaction of the

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Rating Agency Condition necessary in the circumstances or (ii) no such confirmation or other response is received by one or more of the Rating Agencies within 30 days (or in the case of Moody’s or Fitch, 10 Business Days) of the date of actual receipt of such request by such Rating Agency (each, a “Non-Responsive Rating Agency”), the Requesting Party will be entitled to disregard the requirement for satisfaction of the Rating Agency Condition with respect to the Non-Responsive Rating Agency and proceed on the basis of the confirmations or other responses received by each other Rating Agency on the basis that satisfaction of the Rating Agency Condition with respect to the Non-Responsive Rating Agency is not required in the particular circumstances of the request. The failure by a Rating Agency to respond to a written request for a confirmation of satisfaction of the Rating Agency Condition will not be interpreted to mean that such Rating Agency has given any deemed confirmation or affirmation of rating or other response in respect of such action or step.

18. Governing Law

The Trust Deed, the Agency Agreement, the covered bonds, the Interest Rate Swap Agreement, the Covered Bond Swap Agreement, the Security Agreement, the Mortgage Sale Agreement, the Servicing Agreement, the Guarantor Agreement, the Program Agreement, the Intercompany Loan Agreement, the Cash Management Agreement, the Cover Pool Monitor Agreement, the Bank Account Agreement, the Standby Bank Account Agreement, the Guaranteed Deposit Account Contract and the Standby Guaranteed Deposit Account Contract will be governed by and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein, unless otherwise indicated. The Underwriting Agreement will be governed by the laws of the State of New York.

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SUMMARY OF THE PRINCIPAL DOCUMENTS

The principal document governing the relationship of the Bank and a purchaser of covered bonds is the Trust Deed and the Terms and Conditions attached to each covered bond. See “Terms and Conditions of the Covered Bonds.”

Prospectus Supplement

The prospectus supplement for a Series of covered bonds will set forth the specific terms of the covered bonds, including the currency for all payments, the applicable interest rate, interest payment dates, the maturity date, call or put option features applicable, and optional redemption features. The prospectus supplement may also provide modifications of or additions to the Terms and Conditions. Also, the prospectus supplement will include statistical disclosure of the Portfolio and historical information about the Portfolio, stratified by year of origination of the Loans.

Information about the providers of the Interest Rate Swap Agreement and the related Covered Bond Swap Agreement and, if not the Bank, the GDA Account will be included in the prospectus supplement.

A review by the Bank of randomly selected Loans in the Portfolio will be described in the prospectus supplement, together with the findings of that review.

Trust Deed

The Trust Deed, made between the Bank, the Guarantor and the Bond Trustee is the principal agreement governing the covered bonds. The Trust Deed contains provisions relating to, inter alia:

• the constitution of the covered bonds and the Terms and Conditions of the covered bonds (as more fully set out under “Terms and Conditions of the Covered Bonds” above);

• the covenants of the Bank and the Guarantor under the Covered Bond Guarantee;

• the terms of the Covered Bond Guarantee (as described below);

• the enforcement procedures relating to the covered bonds and the Covered Bond Guarantee; and

• the appointment, powers and responsibilities of the Bond Trustee and the circumstances in which the Bond Trustee may resign, or retire or be removed.

The Bond Trustee

Computershare Trust Company of Canada has been appointed the Bond Trustee under the Trust Deed. The Bank may maintain other banking relationships in the ordinary course of business with the Bond Trustee.

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Computershare Trust Company of Canada is a trust company incorporated under the laws of Canada, whose registered office is at 100 University Avenue, 9th Floor, Toronto, Ontario, Canada M5J 2Y1. Computershare Trust Company of Canada has acted as trustee on numerous covered bond programs since November 2007 and on asset-backed securities transactions involving pools of mortgage loans since 1990. While the structure of the transactions referred to in the preceding sentence may differ among such transactions, Computershare Trust Company of Canada is experienced in administering transactions of the kind contemplated by this prospectus.

Computershare Trust Company of Canada has provided the information in the prior paragraph. Other than the prior paragraph, Computershare Trust Company of Canada has not participated in the preparation of, and is not responsible for, any other information contained in this prospectus or the prospectus supplement.

The Bond Trustee will be required to perform only those duties specifically required of it under the Transaction Documents, as described below. Upon receipt of the various certificates, statements, reports or other instruments required to be furnished to it, the Bond Trustee will be required to examine them to determine whether they are in the form required the applicable Transaction Document; however, the Bond Trustee will not be responsible for the accuracy or content of any documents furnished to it.

The Bond Trustee will not be responsible for (a) the calculation of payments to holders of the covered bonds; (b) compliance by others with covenants under the Transaction Documents; (c) the substitution, purchase or removal of Portfolio assets; or (d) the maintenance of data regarding the Asset Coverage Test, Amortization Test, Pre-Maturity Test or the Valuation Calculation, among others.

As compensation for the performance of its obligations under the Trust Deed, the Bond Trustee will receive reasonable compensation as provided in the Trust Deed.

The Trust Deed contains provisions for the indemnification of the Bond Trustee and its officers, directors, employees and agents for any loss, claims, damages, suits, liability or expense incurred without gross negligence, willful misconduct, dishonesty, reckless disregard or bad faith on its part, arising out of or in connection with the acceptance or administration of the Trust Deed.

The Bond Trustee may retire at any time on giving not less than three months’ prior written notice to the Bank and the Guarantor. The Bond Trustee may be removed (i) by the covered bondholders in accordance with the terms of an Extraordinary Resolution, or (ii) by the Guarantor in the event that there is a breach by the Bond Trustee of certain representations and warranties or a failure by the Bond Trustee to perform certain covenants made by it under the Trust Deed. Other than in respect of a removal described in clause (ii) of the previous sentence, no retirement or removal of the Bond Trustee will be effective until a replacement bond trustee that meets the requirements provided for in the Trust Deed and in the CMHC Guide has been appointed. In the event that a replacement bond trustee has not been appointed within 60 days of notice of retirement from the Bond Trustee or the Extraordinary Resolution of the covered bondholders, as applicable, the Bond Trustee will be entitled to appoint a replacement bond trustee that meets the requirements provided for in the Trust Deed and in the CMHC Guide, which appointment must be approved by an Extraordinary Resolution of the covered bondholders prior to taking effect.

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So long as there are U.S. Registered Covered Bonds outstanding, the Bond Trustee (or if there is more than one bond trustee at least one bond trustee) will be a trustee qualified to act under the US Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

Trust Indenture Act

The Trust Deed includes certain provisions required by the Trust Indenture Act. These provisions include, but are not limited to:

• maintenance of a covered bondholder list by the Bond Trustee;

• provision of annual reports and other information by the Bank to the Bond Trustee;

• ability of covered bondholders to waive certain past defaults of the Bank;

• duty of the Bond Trustee (following an Issuer Event of Default) to use the same degree of care in exercising its responsibilities as would be exercised by a prudent person conducting their own affairs;

• duty of the Bond Trustee to notify all covered bondholders of any Issuer Event of Default of which it has actual knowledge; and

• the right of each covered bondholder to receive payments of principal and interest on a covered bond on or after the respective due dates expressed in the covered bond, or to bring suit for enforcement of any such payment on or after such respective dates.

Further, in compliance with Section 315(d) of the Trust Indenture Act, the Trust Deed provides that nothing in the Trust Deed will, in any case in which the Bond Trustee has failed to show the degree of care and diligence required of it as Bond Trustee having regard to the provisions of the Trust Deed conferring on the Bond Trustee any powers, authorities or any discretion, exempt the Bond Trustee from or indemnify the Bond Trustee against any liability for breach of trust. The Trust Deed will be discharged with respect to the Covered Bond Guarantee and collateral securing such Covered Bond Guarantee upon the delivery to the Bond Trustee for cancellation of all the covered bonds or, with certain limitations, upon deposit with the Bond Trustee of funds sufficient for the payment in full of all covered bonds outstanding.

Trust Indenture Act Prevails

The Trust Deed contains a stipulation that, if any provision of the Trust Deed limits, qualifies or conflicts with another provision which is required to be included in the Trust Deed by, and is not subject to a contractual waiver under, the Trust Indenture Act, the required provision of the Trust Indenture Act will be deemed to be incorporated into the Trust Deed and prevail; provided that all provisions relating to the Trust Indenture Act will only apply to U.S. Registered Covered Bonds.

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Covered Bond Guarantee

Under the terms of the Covered Bond Guarantee, if the Bank defaults in the payment on the due date of any funds due and payable under or pursuant to the Trust Deed or the covered bonds, or if any other Issuer Event of Default occurs (other than by reason of non-payment), and, in either case, if the Bond Trustee has served an Issuer Acceleration Notice, the Guarantor has agreed (subject as described below) to pay or procure to be paid (following service of a Notice to Pay) unconditionally and irrevocably to or to the order of the Bond Trustee (for the benefit of the covered bondholders) an amount equal to that portion of the Guaranteed Amounts which will become Due for Payment but would otherwise be unpaid, as of any Original Due for Payment Date or, if applicable, the Extended Due for Payment Date, by the Bank. Payment by the Guarantor of the Guaranteed Amounts pursuant to the Covered Bond Guarantee will be made on the later of (a) the day which is two Canadian Business Days following service of a Notice to Pay on the Guarantor and (b) the day on which the Guaranteed Amounts are otherwise Due for Payment (the “Guaranteed Amounts Due Date”). In addition, the Guarantor will, to the extent it has funds available to it, make payments in respect of the unpaid portion of the Final Redemption Amount on any Original Due for Payment Date up until the Extended Due for Payment Date. The Bond Trustee will be required to serve a Notice to Pay following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice.

Under the Covered Bond Guarantee, the Guaranteed Amounts will become due and payable on any earlier date on which, following the occurrence of a Guarantor Event of Default, a Guarantor Acceleration Notice is served in accordance with Condition 9.2 (Guarantor Events of Default) of the Terms and Conditions of the Covered Bonds. Following service of a Guarantor Acceleration Notice, the covered bonds will (if an Issuer Acceleration Notice has not already been served) become immediately due and payable as against the Bank and the obligations of the Guarantor under the Covered Bond Guarantee will be accelerated.

All payments of Guaranteed Amounts by or on behalf of the Guarantor will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or other governmental charges of whatever nature, unless the withholding or deduction of such taxes, assessments or other governmental charges are required by law or regulation or administrative practice of Canada or any political subdivision thereof or any authority therein or thereof having the power to tax. If any such withholding or deduction is required, the Guarantor will pay the Guaranteed Amounts net of such withholding or deduction and will account to the appropriate tax authority for the amount required to be withheld or deducted. The Guarantor will not be obliged to pay any amount to the Bond Trustee or any holder of covered bonds in respect of the amount of such withholding or deduction. See further, “Taxation—Canadian Taxation—Holders Not Resident in Canada—Payments by the Guarantor under the Covered Bond Guarantee.”

Under the terms of the Covered Bond Guarantee, the Guarantor has agreed that its obligations under the Covered Bond Guarantee will be as guarantor and will be absolute and unconditional (subject to Notice to Pay being given), irrespective of, and unaffected by, any invalidity, irregularity or unenforceability of, or defect in, any provisions of the Trust Deed or the covered bonds or the absence of any action to enforce the same or the waiver, modification or consent by the Bond Trustee or any of the covered bondholders in respect of any provisions of the same or the obtaining of any judgment or decree against the Bank or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

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As consideration for providing the Covered Bond Guarantee, the Guarantor will be entitled to receive guarantee fees from the Bank as agreed between the Bank and the Guarantor from time to time in accordance with the Trust Deed. Any failure on the part of the Bank to pay all or any part of the guarantee fees will not affect the obligations of the Guarantor under the Covered Bond Guarantee.

Subject to the grace period specified in Condition 9.1(a) (Issuer Events of Default) of the Terms and Conditions of the Covered Bonds, failure by the Guarantor to pay the Guaranteed Amounts which are Due for Payment on the relevant Guaranteed Amounts Due Date will result in a Guarantor Event of Default.

The Trust Deed provides that any Excess Proceeds will be paid by the Bond Trustee on behalf of the covered bondholders of the relevant Series to the Guarantor for its own account, as soon as practicable, and will be held by the Guarantor in the GDA Account and the Excess Proceeds will thereafter form part of the Security and will be used by the Guarantor in the same manner as all other funds from time to time standing to the credit of the GDA Account.

By subscribing for or purchasing covered bond(s), each covered bondholder will be deemed to have irrevocably directed the Bond Trustee to pay the Excess Proceeds to the Guarantor in the manner as described above.

Exchange Rate Indemnity

Pursuant to the terms of the Trust Deed, each of the Bank and, following the occurrence of a Covered Bond Guarantee Activation Event, the Guarantor, will jointly and severally indemnify the Bond Trustee and the covered bondholders and keep them indemnified against:

(a) any liability incurred by any of them arising from the non-payment by the Bank or the Guarantor of any amount due to the Bond Trustee or the covered bondholders hereunder by reason of any variation in the rates of exchange between those used for the purposes of calculating the amount due under a judgment or order in respect thereof and those prevailing at the date of actual payment by the Bank or the Guarantor; and

(b) any deficiency arising or resulting from any variation in rates of exchange between (i) the date as of which the local currency equivalent of the amounts due or contingently due under the Trust Deed is calculated for the purposes of any bankruptcy, insolvency or liquidation of the Bank or, as the case may be, the Guarantor; and (ii) the final date for ascertaining the amount of claims in such bankruptcy, insolvency or liquidation. The amount of such deficiency will be deemed not to be reduced by any variation in rates of exchange occurring between the said final date and the date of any distribution of assets in connection with any such bankruptcy, insolvency or liquidation.

Such indemnities will constitute obligations of the Bank and the Guarantor separate and independent from their other obligations under the other provisions under the Trust Deed and will apply irrespective of any indulgence granted by the Bond Trustee or the covered bondholders or the couponholders from time to time and will continue in full force and effect notwithstanding the

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judgment or filing of any proof or proofs in any bankruptcy, insolvency or liquidation of the Bank or, as the case may be, the Guarantor for a liquidated sum or sums in respect of amounts due under the Trust Deed. Any deficiency will be deemed to constitute a loss suffered by the covered bondholders and the couponholders and no proof or evidence of any actual loss will be required by the Bank or the Guarantor or its or their liquidator or liquidators.

The Trust Deed, including the provisions of the Covered Bond Guarantee, is governed by the laws of the Province of Ontario and federal laws of Canada applicable therein.

Intercompany Loan Agreement

The Intercompany Loan Agreement between the Bank, the Guarantor and the Bond Trustee as amended and/or restated and/or supplemented from time to time, is the governing agreement with respect to the Intercompany Loan.

Under the Intercompany Loan Agreement, the Bank represents and warrants to, and covenants with, the Guarantor and the Bond Trustee that as of the date of the Intercompany Loan Agreement and for so long as it remains a party to the Intercompany Loan Agreement: (i) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations thereunder and under the other Transaction Documents to which it is a party; (ii) it is and will continue to be in good standing with OSFI; (iii) it is and will continue to be in regulatory good standing and in material compliance with and under all laws applicable to its duties and obligations thereunder and under the other Transaction Documents to which it is a party; and (iv) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations thereunder and under the other Transaction Documents to which it is a party.

Under the terms of the Intercompany Loan Agreement, prior to the issuance of the first Series of covered bonds, the Bank will make available to the Guarantor an interest-bearing Intercompany Loan, comprised of a Guarantee Loan and a Demand Loan, in an initial combined aggregate amount equal to the Total Credit Commitment, subject to increases and decreases as described below. The initial advance on the Intercompany Loan will be an amount sufficient to acquire the Initial Portfolio. The Intercompany Loan is denominated in Canadian Dollars. The interest rate on the Intercompany Loan will be a Canadian Dollar floating rate determined by the Bank from time to time, subject to a maximum of the floating rate received by the Guarantor pursuant to the Interest Rate Swap Agreement less a minimum spread and an amount for certain expenses of the Guarantor.

The Guarantee Loan will be in an amount equal to the balance of outstanding covered bonds at any relevant time plus that portion of the Portfolio required to collateralize the covered bonds to ensure that the Asset Coverage Test is met (see “—Guarantor Agreement—Asset Coverage Test”). The Demand Loan is a revolving credit facility, the outstanding balance of which will be equal to the difference between the balance of the Intercompany Loan and the balance of the Guarantee Loan at any relevant time. The balance of the Guarantee Loan and Demand Loan will fluctuate with the issuances and redemptions of covered bonds and the requirements of the Asset Coverage Test.

At any time prior to a Demand Loan Repayment Event, the Guarantor may re-borrow any amount repaid by the Guarantor under the Intercompany Loan for a permitted purpose provided, among other things: (i) such drawing does not result in the Intercompany Loan exceeding the

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Total Credit Commitment; and (ii) no Issuer Event of Default or Guarantor Event of Default has occurred and is continuing. Unless otherwise agreed to by the Bank and subject to satisfaction of the Rating Agency Condition, no further advances will be made to the Guarantor under the Intercompany Loan following the occurrence of a Demand Loan Repayment Event.

To the extent the Portfolio increases or is required to be increased to meet the Asset Coverage Test, the Bank may increase the Total Credit Commitment to enable the Guarantor to acquire Loans and their Related Security from the Seller.

The Demand Loan or any portion thereof will be repayable no later than the first Canadian Business Day following 60 days after a demand therefor is served on the Guarantor, unless (i) a Demand Loan Repayment Event has occurred and is continuing (see below in respect of the repayment of the Demand Loan in such circumstance), or (ii) the Asset Coverage Test will not be satisfied on the date of repayment after giving effect to such repayment. At any time the Guarantor makes a repayment on the Demand Loan, in whole or in part, the Cash Manager will calculate the Asset Coverage Test, as of the date of repayment, to confirm the then outstanding balance on the Demand Loan and that the Asset Coverage Test will be met on the date of repayment after giving effect to such repayment.

If (i) the Bank is required to assign the Interest Rate Swap Agreement to a third party (due to a failure by the Bank to meet the ratings levels specified in the Interest Rate Swap Agreement or as otherwise required by the Interest Rate Swap Agreement); (ii) a Notice to Pay has been served on the Guarantor; (iii) the Intercompany Loan Agreement is terminated; or (iv) to the extent Fitch is a Rating Agency, if the Bank is assigned (x) a short-term issuer default rating by Fitch of less than F2, or (y) a long-term issuer default rating by Fitch of less than BBB+ (each of (i), (ii), (iii) and (iv), a “Demand Loan Repayment Event”), the Guarantor will, subject to the applicable Priorities of Payments, be required to repay any amount of the Demand Loan that exceeds the Demand Loan Contingent Amount on the first Guarantor Payment Date following 30 days, or if the Guarantor does not have sufficient funds on such date, following 60 days, in either case after the occurrence of such Demand Loan Repayment Event. Following such Demand Loan Repayment Event, the Guarantor will be required to repay the full amount of the then outstanding Demand Loan on the date on which the Asset Percentage is calculated (whether or not such calculation is a scheduled calculation or a calculation made at the request of the Bank); provided that the Asset Coverage Test will be met on the date of repayment after giving effect to such repayment. For the purposes of the foregoing, the “Demand Loan Contingent Amount” will be equal to the lesser of:

(i) the aggregate amount of the Intercompany Loan then outstanding, minus the aggregate amount of the Guarantee Loan then outstanding (as determined by an Asset Coverage Test run on the relevant repayment date); and

(ii) 1 percent of the amount of the Guarantee Loan then outstanding (as determined by an Asset Coverage Test calculated on the relevant repayment date),

provided, for greater certainty, that in calculating the amount of the Guarantee Loan and the Demand Loan for purposes of determining the Demand Loan Contingent Amount, no credit will be given to the Guarantor in the Asset Coverage Test for any Excess Proceeds received by the Guarantor from the Bond Trustee.

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The Guarantor may repay the principal on the Intercompany Loan in accordance with the Priorities of Payments and the terms of the Intercompany Loan Agreement, using (i) funds being held for the account of the Guarantor by its service providers and/or funds in the Guarantor Accounts (other than any amount in the Pre-Maturity Liquidity Ledger); and/or, (ii) proceeds from the sale of Substitution Assets; and/or (iii) proceeds from the sale, pursuant to the Guarantor Agreement, of Portfolio assets to the Seller or to another person subject to a right of pre-emption on the part of the Seller; and/or (iv) by selling, transferring and assigning to the Seller all of the Guarantor’s right, title and interest in and to Loans and their Related Security (a “Payment in Kind”). The Guarantor is restricted from paying the Demand Loan in the manner described in clause (iii) if the proceeds of such sale are less than the True Loan Balance of the Loans and their Related Security included in the Portfolio. Upon any Payment in Kind, the outstanding amount of the Demand Loan will be reduced by the Fair Market Value of such Loans determined as of the date of the Payment in Kind, less an amount equal to the collections received by or on behalf of the Guarantor after the date of the notice of the Payment in Kind and prior to the date of the Payment in Kind in respect of the Loans listed in the notice of the Payment in Kind. In addition, if the Payment in Kind occurs on or after a Covered Bond Guarantee Activation Event and the Intercompany Loan Provider is the Limited Partner, the Limited Partner will be deemed to have made a Capital Contribution to the Guarantor on the date of the Payment in Kind in an amount equal to the excess, if any, of the True Loan Balance of the Loans and their Related Security applied towards the Payment in Kind over the aggregate Fair Market Value of such Loans and their Related Security, and such Capital Contribution will be deemed to have been applied by the Guarantor against the Demand Loan, such that the outstanding amount of the Demand Loan will be reduced by the greater of (x) the True Loan Balance of such Loans, and (y) the Fair Market Value of such Loans. See “Cashflows.”

The Guarantor will be entitled to set off amounts paid by the Guarantor under the Covered Bond Guarantee first against any amounts (other than interest and principal) owing by the Guarantor to the Bank in respect of the Intercompany Loan Agreement, then against interest due under the Intercompany Loan, and then against the outstanding principal balance owing on the Intercompany Loan.

The Guarantor will use advances under the Intercompany Loan (i) to purchase Loans and their Related Security pursuant to the terms of the Mortgage Sale Agreement; and/or (ii) to invest in Substitution Assets in an amount not exceeding the prescribed limit under the CMHC Guide; and/or (iii) subject to complying with the Asset Coverage Test, to make Capital Distributions to the Limited Partner; and/or (iv) to make deposits of the proceeds in the Guarantor Accounts (including, without limitation, to fund the Reserve Fund and the Pre-Maturity Liquidity Ledger (in each case up to an amount not exceeding the prescribed limit).

The Intercompany Loan Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Mortgage Sale Agreement

The Seller

Loans and their Related Security will be sold to the Guarantor from time to time on a fully serviced basis pursuant to the terms of the Mortgage Sale Agreement between the Bank (in its capacity as Seller, Servicer and Cash Manager), the Guarantor, the Custodian and the Bond Trustee.

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Sale by the Seller of the Loans and Related Security

The Loans included in the Portfolio will be residential mortgages which are not insured by a Prohibited Insurer and which otherwise meet the Eligibility Criteria and with respect to which each of the Loan Representations and Warranties are correct as at the related Purchase Date. The types of Loans forming the Portfolio will vary over time provided that the Loan Representations and Warranties are met on the relevant Purchase Date. Accordingly, the Portfolio may, at any time, include Loans originated by different originators, Loans with different characteristics from Loans that were included in the Portfolio or being offered to borrowers on previous Purchase Dates.

The Guarantor may from time to time acquire Loans and their Related Security from the Seller as described below:

(a) the Guarantor will use the proceeds of an advance under the Intercompany Loan (which may be applied in whole or in part by the Guarantor) and/or Available Principal Receipts to acquire Loans and their Related Security from the Seller. As consideration for the sale of the Loans and their Related Security to the Guarantor, the Seller will receive a cash payment or deemed cash payment equal to the Fair Market Value of those Loans sold by it as at the relevant Purchase Date; and

(b) the Guarantor may receive Capital Contributions in Kind in accordance with the Guarantor Agreement. As consideration for the sale by way of Capital Contributions of the Loans and their Related Security to the Guarantor, the Seller will receive an additional interest in the capital of the Guarantor equal to the Fair Market Value of those Loans sold by it as at the relevant Purchase Date minus any cash considerations received by the Seller described in paragraph (a).

If Selected Loans are sold by or on behalf of the Guarantor as described below under “Guarantor Agreement—Sale of Selected Loans at any time an Asset Coverage Test Breach Notice is outstanding” and “Guarantor Agreement—Sale of Selected Loans following service of a Notice to Pay,” the obligations of the Seller insofar as they relate to those Selected Loans will cease to apply.

The Seller will also be required to repurchase Loans and their Related Security sold to the Guarantor in the circumstances described below under “—Repurchase of Loans.”

See “Loan Representations and Warranties” below for Loan Representations and Warranties relating Loans and their Related Security and “Servicing Agreement—Undertakings of the Servicer” below regarding undertakings of the Servicer in respect of the Loans comprised in the Portfolio.

Pursuant to the terms of the Mortgage Sale Agreement, the Seller will provide to the Custodian, on each Purchase Date, the Eligible Loan Details with respect to the Loans and Related Security to be sold to the Guarantor by the Seller on such Purchase Date. The Seller will also be required to provide updated Eligible Loan Details with respect to the Loans included in the Portfolio to the Custodian on a quarterly basis and forthwith upon the occurrence of a Registered Title Event. The “Eligible Loan Details” are as follows with respect to each Loan:

(a) the Seller’s loan number;

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(b) the mortgagor(s) full name;

(c) the mortgaged property address (street number, city/town, province, postal code);

(d) the principal balance amount;

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

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

(g) the mortgage maturity date; and

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

The Custodian is required to provide access to such Eligible Loan Details to CMHC in order to allow CMHC to ensure compliance by the Guarantor and the Seller with the CMHC Guide and the Transaction Documents. The Seller will pay to the Custodian such fees as may be agreed between the Seller and the Custodian from time to time. If the Seller breaches its obligation to pay such fees, the Custodian will be paid such fees by the Guarantor in accordance with the applicable Priorities of Payments.

Eligibility Criteria

The sale of Loans and their Related Security to the Guarantor will be subject to various conditions (the “Eligibility Criteria”) being satisfied on the relevant Purchase Date. These are as follows:

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

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

(c) no Loan that is proposed to be sold to the Guarantor on the relevant Purchase Date has an Outstanding Principal Balance of more than $3,000,000.00;

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

(e) such Loan is not secured by a Mortgage that also secures one or more other loans that has the benefit of insurance from any Prohibited Insurer;

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

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

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

(i) the related Mortgage constitutes a valid first-ranking mortgage lien or hypothecary lien over the related Property under which no claims have been made and subject to certain permitted security interests;

(j) at the time of transfer, the Guarantor will acquire the entire legal and beneficial ownership interest of the Seller in the applicable Loans and their Related Security, excluding registered title therein, free and clear of any encumbrances or ownership interests, other than (i) certain permitted security interests, and (ii) security interests that are reflected in a security sharing agreement and the subject of a release of security in favor of the Guarantor, in each case that complies with the CMHC Guide;

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

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

(m) neither the Mortgage Conditions for the Loan nor the terms of any other documentation applicable to the Loan and enforceable by the borrower expressly affords the borrower a right of set-off;

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

(o) as at the Purchase Date immediately prior to the transfer by the Seller to the Guarantor of such Loan and the Related Security for such Loan, such Loan, the Related Security and each Related Retained Loan, if any, are owned or beneficially owned by the Seller; and

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

The CMHC Guide currently defines an “Eligible Loan” as a loan (i) which is made on the security of residential property that is located in Canada and consists of not more than four residential units, (ii) which, together with the amount outstanding of any mortgage or hypothecary loan having an equal or prior claim against the property, does not exceed 80% of the value of the related property at the time of the loan, and (iii) which must, at a minimum, meet the following requirements or qualifications:

(a) a loan will not qualify as an Eligible Loan if, at the time of transfer to the Guarantor, one or more payments of principal or interest payable thereunder are in arrears;

(b) a loan will not qualify as an Eligible Loan until one or more payments of principal or interest (or blended payment(s) of principal and interest) have been made in accordance with the terms of the Loan;

(c) a loan will not qualify as an Eligible Loan for so long as the mortgage or other hypothecary instrument charging the mortgaged property securing such loan does not represent a first priority perfected security interest (subject to encumbrances or claims customarily permitted by a prudent lender);

(d) a loan will not qualify as an Eligible Loan (i) unless, at the time of transfer to the Guarantor, the loan, the Mortgage securing the Loan and (in the case of a loan extended or advanced upon the security of a mortgage or hypothecary instrument also securing Retained Loans) all Retained Loans are beneficially owned (or owned) by the Seller (disregarding, for such purposes, nominee title holders) and (ii) for so long as the loan, all sums derived from the loan (whether on account of principal, interest or otherwise and whether received from the borrower or a guarantor thereof) and the Mortgage charging the Property securing the loan are not clear of any ownership interests, security interests, encumbrances or other claims other than (A) encumbrances or claims customarily permitted by a prudent lender or that will cease to apply to such loan, sums and Mortgage upon the purchase by or contribution to the Guarantor of the loan, (B) those of the Guarantor, (C) those in favor of holders of covered bondholders (or the Bond Trustee on behalf of such holders) or in favor of other Secured Creditors (in each case to secure the payment of amounts owing to them by the Guarantor) and (D) those which may be reflected in a security sharing agreement and are the subject of a release of security delivered by each lender to the Custodian in trust upon and subject to the provisions of the security sharing agreement or are otherwise provided for (in compliance with the requirements of the CMHC Guide) under the Transaction Documents;

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(e) a loan will not qualify as an Eligible Loan if one or more other loans advanced under the same Mortgage have been insured by a Prohibited Insurer;

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

(g) a loan will not qualify as an Eligible Loan if, at the time of transfer to the Guarantor, it is the subject of any dispute proceeding, set-off, counterclaim or defense whatsoever;

(h) a loan will not qualify as an Eligible Loan if its terms and conditions or the provisions of the Mortgage securing the loan or other documentation applicable to the loan and enforceable by the borrower expressly afford the borrower a right of set-off;

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

(j) a loan will not qualify as an Eligible Loan unless it was originated or otherwise complies with the Seller’s approved underwriting policies (in effect or otherwise applicable at the time the loan was originated).

On the relevant Purchase Date, the Loan Representations and Warranties (described below in “—Loan Representations and Warranties”) will be given by the Seller in respect of the Loans and their Related Security sold by the Seller to the Guarantor.

If the Seller or as applicable, an Originator, accepts an application from, or makes an offer (which is accepted) to, a borrower for a Product Switch which constitutes an unconditional obligation on the part of the Seller to make such Product Switch, then the Seller will be obligated to repurchase the relevant Loan and the Related Security to which the Product Switch relates.

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Transfer of Title to the Loans to the Guarantor

Loans sold, transferred and assigned by the Seller to the Guarantor pursuant to the Mortgage Sale Agreement will have legal title to the related Mortgages remain registered in the name of the Seller or the applicable Originator and notice of the sale, transfer and assignment will not be given to the borrowers or, in respect of the Related Security, any relevant guarantor of any borrower. Such notice and, where appropriate, the registration or recording in the appropriate land registry or land titles offices of the transfer by the Seller to the Guarantor of legal title to the Mortgages will be deferred and will only take place in the circumstances described below.

On each Purchase Date, the Seller will:

(a) hold registered title to the related Loans and Related Security as agent, bare trustee and nominee in trust for and on behalf of the Guarantor; and

(b) deliver such agreements and take all actions with respect to the Loans and Related Security as the Guarantor may direct in accordance with the Mortgage Sale Agreement and the Servicing Agreement. On the First Purchase Date, the Seller will deliver registrable powers of attorney appointing the Guarantor and the Bond Trustee, as its true and lawful attorney and agent, with full power of substitution, to execute, sign, seal and deliver, in the name of the Seller all conveyances, assignments, transfers, documents and instruments necessary to record the sale, assignment and transfer to the Guarantor, or any other person as the Guarantor and the Bond Trustee may direct, of all Loans and their Related Security (including all documents comprising the Customer Files) in all applicable land registry or land titles offices, including directions to borrowers directing them to remit all payments under their related Loans to the Guarantor (or as the Guarantor may otherwise direct), and to register and record all such sales, assignments, transfers, documents and instruments in such land registry or land titles offices. The powers of attorney will not be exercisable by the Guarantor or the Bond Trustee (or such other person) until the occurrence of a Registered Title Event (as described below).

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

(a) give notice of the Guarantor’s ownership interest in the relevant Loans and Related Security to each borrower thereunder, which notice will direct that payments be made directly to the Guarantor or its designee, and upon such instruction from the Guarantor, the Seller will give such notice at the expense of the Seller; provided, that if the Seller fails to so notify each such borrower, the Guarantor may so notify such borrowers at the expense of such Seller;

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

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

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

The duty of the Seller in paragraph (c) above will be fulfilled no later than the 60th day, and the duties in paragraphs (a), (b) and (d) will be fulfilled by the Guarantor no later than 20 Canadian Business Days, following the day on which the Registered Title Event occurs. The Seller will be liable for all costs and expenses associated with such duties. The Seller will co-operate fully to do all such further acts and things and execute any further documents that may be necessary or desirable by the Guarantor (or the Bond Trustee) to give full effect to such duties.

Subject to the following paragraph, notice of the sale, assignment and transfer of the Loans and their Related Security and a direction to make all future repayments of the Loans to the Standby Account Bank for the account of the Guarantor will be sent by the Seller or the applicable Originator, or, as necessary, by the Guarantor (or the Servicer on behalf of the Guarantor) on behalf of the Seller or the applicable Originator (under applicable powers of attorney granted to the Guarantor) and where required, registration of the transfer of legal title to the related Mortgages will be made in the appropriate land registry or land titles offices, as soon as practicable and in any event on or before the 60th day following the earliest to occur of any of the following (each, a “Registered Title Event”):

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

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(b) an Issuer Event of Default (other than an actual or impending Insolvency Event with respect to the Bank) that has not been remedied within 30 days or such shorter period permitted by Condition 9.1 (Issuer Events of Default) as described in Terms and Conditions of the Covered Bonds;

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

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

(e) the Seller, the Originators and/or the Guarantor being required: (i) by law; (ii) by an order of a court of competent jurisdiction; or (iii) by a regulatory authority which has jurisdiction over the Seller, the Originators or the Guarantor, to effect such notice and registration; and

(f) the date on which the rating of the Bank’s unsecured, unsubordinated and unguaranteed debt obligations or its issuer default rating ceases to be at least A3 by Moody’s, BBB (low) or R-1 (middle) by DBRS or BBB- by Fitch.

Notwithstanding the occurrence of any event or circumstance described in clauses (a) through (c) immediately above, none of the steps relating to a Registered Title Event are required to be taken if (A) the Rating Agency Condition has been satisfied with respect to the Seller not fulfilling such requirements, and (B) satisfactory assurances are provided to the Guarantor and the Bond Trustee by OSFI or such other supervisory authority having jurisdiction over the Seller permitting registered title to the Mortgages to remain with the Seller until such time as (i) the Loans and their Related Security are to be sold or otherwise disposed of by the Guarantor or the Bond Trustee in the performance of their respective obligations under the Transaction Documents, or (ii) the Guarantor or the Bond Trustee is required to take actions to enforce or otherwise deal with the Loans and their Related Security.

If the Seller fails to co-operate in the performance of any of the foregoing duties, the Guarantor will use the powers of attorney to transfer registered or recorded title to the Mortgages evidencing and securing the Loans sold by the Seller and their Related Security into its name or the name of a nominee on its behalf.

The Seller will undertake in the Mortgage Sale Agreement to pay the cost associated with the transfer of registered title or recorded title to the Loans.

The Seller will be required to provide updated powers of attorney to the Custodian from time to time under the Mortgage Sale Agreement, together with related opinions of counsel, in order to ensure the continued effectiveness of such powers of attorney.

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Seller Representations and Warranties

Under the Mortgage Sale Agreement, the Seller makes the following representations and warranties (in addition to the Loan Representations and Warranties described below) in favor of the Guarantor on each Purchase Date:

(a) it is a Canadian chartered bank under the Bank Act and has, in all material respects, full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under the Mortgage Sale Agreement;

(b) it is qualified under all applicable law, and has obtained all necessary licenses and approvals and is in good standing thereunder, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Mortgage unenforceable by the Seller, any other purchaser, the Guarantor or the Bond Trustee, as applicable, or would have a material adverse effect on the Guarantor’s rights thereunder;

(c) the execution and delivery of the Mortgage Sale Agreement and each of the documents, agreements or instruments to be executed and delivered thereunder by the Seller, and the performance by the Seller of its obligations thereunder, have been duly authorized by the Seller by all necessary corporate action on the part of the Seller and are enforceable against the Seller in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);

(d) the execution and delivery by the Seller of the Mortgage Sale Agreement and each of the documents, agreements or instruments to be executed and delivered thereunder, the performance of the transactions contemplated thereunder, and the fulfillment of the terms thereof applicable to the Seller, will not (i) conflict with or violate the constating documents or by-laws of the Seller, any resolution of the board of directors (or any committee thereof) or, to the knowledge of the Seller, the shareholders of the Seller or any law applicable to the Seller or (ii) conflict with, or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Seller is a party or by which it or its properties are bound, in any such case in a manner that would have a material adverse effect on the Guarantor’s rights thereunder or would materially and adversely affect the validity or enforceability of the Mortgage Sale Agreement;

(e) there are no proceedings or investigations, to the best knowledge of the Seller, pending or threatened against the Seller before any governmental authority: (i) asserting the invalidity of the Mortgage Sale Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Mortgage Sale Agreement, (iii) seeking any determination or ruling that, in the reasonable judgment of the Seller, would materially and adversely affect the performance by

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the Seller of its obligations under the Mortgage Sale Agreement, or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of the Mortgage Sale Agreement;

(f) all authorizations, consents, orders or approvals of or registrations or declarations with any governmental authority required to be obtained, effected or given by the Seller in connection with the execution and delivery by the Seller of the Mortgage Sale Agreement and the performance of the transactions contemplated by the Mortgage Sale Agreement have been duly obtained, effected or given and are in full force and effect, other than any such authorizations, consents, orders or approvals of or registrations or declarations the absence of which would not materially and adversely affect the validity or enforceability of the Mortgage Sale Agreement or any Mortgage;

(g) it is not a non-resident of Canada for purposes of the ITA;

(h) none of the transactions contemplated thereunder require compliance with any applicable bulk sales legislation; and

(i) it has duly and timely paid all amounts that it is liable to pay under the ITA, including all installments on account of such amounts for the current year, that are due and payable by it whether or not assessed by the appropriate governmental authority and, in respect of amounts that it is liable to pay under the ITA in or in respect of the current year that are not yet due and payable, will pay such amounts when due, other than such amounts that are subject to a continued dispute or reassessment and for which the Seller has established sufficient reserves.

Loan Representations and Warranties

Neither the Guarantor nor the Bond Trustee has made or has caused to be made on its behalf any enquiries, searches or investigations in respect of the Loans and their Related Security to be sold to the Guarantor. Instead, each is relying entirely on the Loan Representations and Warranties by the Seller contained in the Mortgage Sale Agreement. The parties to the Mortgage Sale Agreement may, with the prior written consent of the Bond Trustee (which consent will only be given if the Rating Agency Condition has been satisfied in respect of the proposed amendments), amend or waive the Loan Representations and Warranties in the Mortgage Sale Agreement. The loan representations and warranties set out in the Mortgage Sale Agreement (the “Loan Representations and Warranties”) as of the date of this prospectus are as follows and are given on the relevant Purchase Date to the Guarantor, the Custodian and the Bond Trustee in respect of the Loans and Related Security to be sold to the Guarantor only on that date:

• the Loan meets the Eligibility Criteria and is an “Eligible Loan” as defined in the CMHC Guide from time to time;

• the Loan is a Fixed Rate Loan or a variable rate loan;

• the borrower thereunder is a resident of Canada and is not, to the knowledge of the Seller, the subject of any insolvency proceeding;

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• the Seller or the relevant Originator is permitted to assign its rights under the Loan (including all Related Security) in whole or in part without notice to or the consent of the borrower or any other person and neither the Loan nor the Related Security contains any restriction on the sale, assignment or transfer of the Loan and the Related Security or an interest therein, and the Loan permits its assignment without the consent of the borrower;

• the Loan is fully advanced as of the date of transfer and is not subject to any contingent performance requirements of the Seller or the relevant Originator unless such requirements are guaranteed or insured by third parties acceptable to a reasonable and prudent institutional mortgage lender in the Seller’s market;

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

• the Loan has a remaining amortization period of less than 40 years as of the relevant Purchase Date;

• the Loan contains standard terms and conditions generally contained in conventional residential first mortgages originated by the Seller or the relevant Originator and contains a restriction on the borrower’s ability to set-off any payments owing thereunder against any amounts payable by the Seller or, as applicable, the relevant Originator to such borrower;

• the Property subject to the related Mortgage is a freehold or condominium interest in real or immovable property located in Canada which is zoned residential, or is zoned agricultural or rural and residential use is permitted by such zoning, and on which, at the time the Loan was underwritten or purchased by the Seller or the applicable Originator, a family dwelling has been constructed;

• the related Mortgage has been duly registered or recorded in the name of the Seller or, as applicable, the applicable Originator, in the appropriate land titles or land registry office or similar place of public registration for the province or territory in which the Property is located;

• the Loan is accompanied by a solicitor’s or notary’s report on title from a solicitor or notary qualified to practice law in the province or territory in which the Property is located to the effect that, at the time of origination of such Loan, the borrower had good title to, and the related Mortgage created a first charge, mortgage or hypothec against, such Property, subject only to adverse claims which, in the reasonable opinion of the Seller, do not in the aggregate materially impair the marketability of the title to such property or, if no such report on title was obtained, the Loan is accompanied by a policy of title insurance to the same effect from a provider acceptable to a reasonable and prudent institutional mortgage lender in the Seller’s market;

• the Loan has been duly authorized, executed and delivered by the Seller or the applicable Originator and the borrower, which Loan, together with all Related Security, is in full force and effect and constitutes the legal, valid and binding obligation of the borrower enforceable in accordance with its terms, subject to

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applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and to equitable principles of general application (regardless of whether endorsements is sought in a proceeding at law or in equity);

• the Loan or applicable law permits realization by the Seller or the applicable Originator and their respective assigns against the Property securing such Loan in accordance with the terms of such Loan, subject to applicable law, including, without limitation, the notice requirements and other limitations contained in the Bankruptcy and Insolvency Act (Canada) and statutory limitations on the rights of mortgagees to exercise their remedies, and the Loan constitutes the borrower’s obligation to pay to the Seller or the applicable Originator and their respective assigns, in accordance with the scheduled payments set forth therein, the amounts owing thereunder;

• the Loan was, when underwritten or purchased by the Seller or the applicable Originator, and is, on the date of transfer to the Guarantor, in compliance, in all material respects, with all requirements of applicable law that would affect the validity or enforceability thereof, including consumer protection legislation, privacy and interest rate disclosure legislation;

• the Seller has ensured, in accordance with its customary servicing procedures, or, as applicable, has procured the relevant Originator to ensure in accordance with its customary servicing procedures, that policies of insurance satisfying the requirements set forth in the Credit and Collection Policy are in force and the Seller, or as applicable, the relevant Originator, is named as first mortgagee or hypothecary creditor, as the case may be, under such policies with the benefit of a standard mortgage clause or endorsement;

• the Loan has not been satisfied or rescinded, no rights of the mortgagee thereunder have been postponed or subordinated, no Property has been discharged, reconveyed or released from the charge created by the related Mortgage in whole or in part, and no provision of the Loan has been waived, altered or modified in any respect, except in each case, (x) as permitted pursuant to Credit and Collection Policy, and (y) pursuant to a document, instrument or writing included in the related Customer File; and

• the Loan has not been originated in, and is not subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Loan by the applicable Originator to the Seller, if applicable, and by the Seller to the Guarantor, is unlawful, void or voidable.

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If New Loan Types are proposed to be sold to the Guarantor, then the Loan Representations and Warranties and Eligibility Criteria may be modified as required, with the prior consent of the Bond Trustee and subject to satisfaction of the Rating Agency Condition and compliance with the CMHC Guide, to accommodate these New Loan Types. The prior consent of the covered bondholders to the requisite amendments will not be required to be obtained.

Repurchase of Loans

If the Seller receives a Loan Repurchase Notice from the Guarantor identifying a Loan or its Related Security in the Portfolio which (i) did not, as at the relevant Purchase Date, materially comply with the Loan Representations and Warranties set out in the Mortgage Sale Agreement or, (ii) is subject to a Product Switch or a request by a borrower for an advance under the relevant Loan in respect of amounts previously paid by the borrower thereunder, in accordance with the terms of the Loan, then the Seller will be required to repurchase (a) any such Loan and its Related Security and (b) any other Loan secured or intended to be secured by that Related Security or any part of it. The repurchase price payable upon the repurchase of any Loans and their Related Security in such circumstances will be an amount equal to the greater of (i) the aggregate fair market value of all such Loans, and (ii) the aggregate Repurchase Amount of all such Loans. The repurchase proceeds received by the Guarantor will be applied (other than accrued interest and arrears of interest and other than in cases where the repurchase is made in connection with the repayment of an advance) in accordance with the Pre-Acceleration Principal Priorities of Payments (see “Cashflows” below). Any breach of the Loan Representations and Warranties with respect to a Loan meeting the Eligibility Criteria will be deemed to be material and incapable of being cured.

A Loan will be deemed to be subject to a “Product Switch” if there is a variation in the financial terms and conditions applicable to the relevant borrower’s Loan other than:

• any variation agreed with a borrower to control or manage arrears on the Loan;

• any variation imposed by statute;

• any change in the repayment method of the Loan; or

• any change to a borrower under the Loan or the addition of a new borrower under a Loan.

General ability to repurchase

Prior to the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice or a Guarantor Event of Default and service of a Guarantor Acceleration Notice, the Seller may from time to time offer to repurchase a Loan (including a Non-Performing Loan) and its Related Security from the Guarantor for a purchase price equal to the Fair Market Value of such Loan. The Guarantor may accept such offer at its sole discretion, provided such repurchase will be subject to the Asset Coverage Test being met on the date of such repurchase, after giving effect thereto, and any such Loans and their Related Security will have been selected in a manner that would not reasonably be expected to adversely affect the interests of the covered bondholders. If an Issuer Event of Default has

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occurred but no liquidator has been appointed to the Seller, the Seller’s right to request the repurchase of Loans and their Related Security will be conditional upon the delivery by the Seller of a solvency certificate to the Guarantor and the Bond Trustee. Amounts paid by the Seller pursuant to such option will be deposited into the GDA Account.

Defaulted Loans

The Cash Manager will identify any Loans that are not Performing Eligible Loans in the Portfolio and upon identification serve a Non-Performing Loans Notice on the Bank and the Servicer. Loans that are not Performing Eligible Loans (as defined below) will be given no credit in the Asset Coverage Test or the Amortization Test, as applicable.

Since both the Seller and the Cash Manager will be the Bank (or an affiliate), there are conflicts of interest associated with the Cash Manager’s performance of its role in identifying Loans that are Non-Performing Loans in the Portfolio. See “Risk Factors—Reliance on certain transaction parties.”

Maturing Loans

Without prejudice to the Seller’s general ability to repurchase, the Seller (or an affiliate of the Seller designated by the Seller) will have the option exercisable at any time prior to the date which is 90 days prior to the date of maturity of a Loan to repurchase such Loan on the maturity date thereof at the purchase price of not less than the aggregate Outstanding Principal Balance of the relevant Loan and all arrears of interest and accrued interest relating thereto in accordance with the Mortgage Sale Agreement as at the date of repurchase.

If the Seller does not deliver to the Guarantor on or before the required date a written notice specifying the Loans in respect of which it will not exercise such option, the Seller will be deemed to have irrevocably exercised its option to repurchase and will repurchase each such Loan on the Calculation Date next following the applicable maturity date of such Loan, provided, however, that the Seller will not repurchase and will not be required to repurchase any Loan which (i) is or becomes a Non-Performing Loan on its maturity date, or (ii) is repaid in full on its maturity date from funding provided to the borrower under such Loan by a person other than the Seller. On the Calculation Date next following the maturity date on which the Seller purchases any such Loan, such Seller will pay to the GDA Account an amount equal to the greater of (i) the Fair Market Value of such Loan at such maturity date, and (ii) the Repurchase Amount of such Loan at such maturity date.

Right of Pre-emption

Under the terms of the Mortgage Sale Agreement, the Seller has a right of pre-emption in respect of any sale, in whole or in part, of Selected Loans; provided, however, that such right will not be available at any time during which the Seller is in default of any of its obligations under the Transaction Documents.

If, (i) following service of an Asset Coverage Test Breach Notice (which has not been revoked), (ii) following service of a Notice to Pay, (iii) following a breach of the Pre-Maturity Test or (iv) prior to the service of an Asset Coverage Test Breach Notice or a Notice to Pay, a Demand Loan Repayment Event has occurred or the Bank has demanded that the Demand Loan

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be repaid, the Guarantor may be required to sell Selected Loans, and in certain circumstances may elect to sell certain Selected Loans, in accordance with the Guarantor Agreement, and provided that the Seller is not in default of any of its obligations in the Mortgage Sale Agreement or under any other Transaction Document to which it is a party, the Guarantor will by serving on the Seller a Selected Loan Offer Notice, prior to the Guarantor making any offer to sell Selected Loans to other Purchasers, offer immediately to sell to the Seller those Selected Loans in accordance with the Guarantor Agreement for an offer price equal to the amount specified in the Guarantor Agreement. See “—Guarantor Agreement—Method of sale of Portfolio assets” below.

If the Seller accepts the Guarantor’s offer to sell the relevant Selected Loans by signing the Selected Loan Offer Notice in a manner indicating acceptance and delivering it to the Guarantor with a copy to the Bond Trustee within 10 Canadian Business Days from and including the date of the Selected Loan Offer Notice and provided that (if an Issuer Event of Default has occurred and is continuing) the Seller has provided a solvency certificate in a form acceptable to the Guarantor and the Bond Trustee (each acting reasonably), the Guarantor will within three Canadian Business Days of receipt of such acceptance serve a notice accepting the offer set out in the Selected Loan Offer Notice (a “Selected Loan Repurchase Notice”) on the Seller.

The Guarantor will offer for sale the Selected Loans in respect of which the Seller rejects or fails within the requisite time limit to accept the Guarantor’s offer to sell to Purchasers in the manner and on the terms set out in the Guarantor Agreement. See “—Guarantor Agreement—Sale of Selected Loans at any time an Asset Coverage Test Breach Notice is outstanding or a Notice to Pay has been served to the Guarantor.”

Upon receipt of the Selected Loan Repurchase Notice duly signed on behalf of the Guarantor, the Seller will promptly sign and return the Selected Loan Repurchase Notice and will repurchase from the Guarantor, and the Guarantor will re-assign or re-transfer to the Seller the Selected Loans (and any other Loan secured or intended to be secured by that Related Security or any part of it) referred to in the relevant Selected Loan Repurchase Notice and, subject to the Security Agreement, upon execution of the Selected Loan Repurchase Notice by the Bond Trustee, on its own behalf such Selected Loans will be re-assigned or re-transferred to the Seller free from the Security created by and pursuant to the Security Agreement and all related rights of the Bond Trustee and the Guarantor in respect thereof, without the need for any further action. Completion of such repurchase will take place on the Guarantor Payment Date next occurring after receipt by the Seller of such Selected Loan Repurchase Notice or such other date as the Guarantor may direct in the Selected Loan Repurchase Notice (provided that, where a Notice to Pay has been served, such date is not to be later than the earlier to occur of the date which is (a) 10 Canadian Business Days after receipt by the Guarantor of the returned Selected Loan Repurchase Notice, or (b) the Final Maturity Date of, as applicable, the Hard Bullet Covered Bonds or the Earliest Maturing Covered Bonds) and the Seller will pay to the GDA Account (or as the Guarantor will direct) an amount in cash equal to the offer price specified in the relevant Selected Loan Repurchase Notice.

At any time when there is no Asset Coverage Test Breach Notice outstanding and no Notice to Pay or Guarantor Acceleration Notice has been served on the Guarantor, it will be a condition to the Guarantor’s right to sell Loans and their Related Security that the Asset Coverage Test will be met on the date of such sale after giving effect to the sale and taking into account amounts that will be paid or provided for on the next following Guarantor Payment Date in accordance with the Priorities of Payments.

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Termination of Custodian

The Guarantor may, at any time, but subject to the prior written consent of the Bond Trustee (if the Custodian is not the Bond Trustee), terminate the appointment of the Custodian upon providing the Custodian with at least 60 days’ prior written notice, provided that, subject to the following sentence, such termination may not be effected unless and until a replacement approved by the Bond Trustee, acting reasonably, has been found by the Guarantor which agrees to perform the duties (or substantially similar duties) of the Custodian set out in the Mortgage Sale Agreement. In the event that there is a breach by the Custodian of certain representations and warranties or a failure by the Custodian to perform certain covenants made by it under the Mortgage Sale Agreement, the Guarantor will have the right to terminate the Custodian and appoint a replacement Custodian, without the need for a replacement having been appointed upon such termination.

The Mortgage Sale Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Servicing Agreement

Pursuant to the terms of the Servicing Agreement between the Seller, the Guarantor, the Servicer and the Bond Trustee, the Servicer has agreed to service on behalf of the Guarantor the Loans and their Related Security comprised in the Portfolio.

The Servicer, as agent for the Guarantor (to the extent provided in the Servicing Agreement), will perform its duties under the Servicing Agreement with reasonable care and diligence, using that degree of skill and attention that the Servicer exercises in managing, servicing, administering, collecting on and performing similar functions relating to comparable loans that it services for itself or other persons and in accordance with the Credit and Collection Policy.

The Servicer’s actions in servicing the Loans in accordance with its procedures will be binding on the Guarantor, the Seller and the other Secured Creditors.

The Servicer will have the power to exercise the rights, powers and discretions and to perform the duties of the Guarantor and the Seller (according to their respective estates and interests) in relation to the Loans and their Related Security that it is servicing pursuant to the terms of the Servicing Agreement, and to do anything which it reasonably considers necessary, convenient or incidental to the administration of the Loans and their Related Security.

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Right of delegation by the Servicer

Subject to certain conditions, the Servicer may from time to time sub-contract or delegate the performance of its duties under the Servicing Agreement, provided that it will nevertheless remain responsible for the performance of those duties to the Guarantor and the Bond Trustee and, in particular, will remain liable at all times for servicing the Loans and their Related Security and for the acts or omissions of any delegate or sub-contractor. Any such sub-contracting or delegation will be at the expense of the Servicer, may be varied or terminated at any time by the Servicer and will be subject to the prior consent of the Guarantor and the Bond Trustee and subject to satisfaction of the Rating Agency Condition.

Undertakings of the Servicer

Pursuant to the terms of the Servicing Agreement, the Servicer will undertake in relation to those Loans and their Related Security that it is servicing, inter alia, to:

• keep records and books of account on behalf of the Guarantor in relation to the Loans and their Related Security comprised in the Portfolio;

• keep the Customer Files in its possession or under its control in safe custody and maintain records necessary to enforce each Mortgage and to provide the Guarantor and the Bond Trustee with access to the Customer Files and other records relating to the administration of the Loans and their Related Security in its possession;

• keep and maintain records in respect of the Portfolio for the purposes of identifying amounts paid by each borrower, any amount due from a borrower and the Outstanding Principal Balance of each Loan and such other records as would be kept by a reasonable and prudent institutional mortgage lender in the Seller’s market;

• take such steps as are necessary to maintain the perfection and priority of the security interests created pursuant to the Loans and their Related Security;

• notify each Rating Agency of any changes made to its credit and collection policy;

• assist the Cash Manager in the preparation of Investor Reports in accordance with the Cash Management Agreement;

• take all reasonable steps to recover all sums due to the Guarantor, including instituting proceedings and enforcing any relevant Loan or its Related Security using the discretion of a reasonable and prudent institutional mortgage lender in the Seller’s market in applying the enforcement procedures forming part of the Seller’s policy;

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• hold as trust property for and on behalf of the Guarantor, free of any adverse claim and the proceeds of any claims made in respect thereof; and

• enforce any Loan which is in default in accordance with the Seller’s or, as applicable, an Originator’s enforcement procedures or, to the extent that such enforcement procedures are not applicable having regard to the nature of the default in question, with the procedures that would be undertaken by a reasonable and prudent institutional mortgage lender in the Seller’s market on behalf of the Guarantor.

Remuneration

Pursuant to the Mortgage Sale Agreement, the Seller will sell Loans and their Related Security to the Guarantor on a fully serviced basis, and will not receive a fee for such services. If the Servicer is not the Seller, or an affiliate of the Seller, the Guarantor will pay to the Servicer a servicing fee (inclusive of applicable taxes) for its services agreed upon by the Guarantor and the Servicer. Such fee will be calculated in relation to each Calculation Period and will be payable to the Servicer in arrears on each Guarantor Payment Date in accordance with the applicable Priorities of Payments.

Representations and Warranties of the Servicer

Under the Servicing Agreement, the Servicer represents and warrants to the Guarantor, the Seller, the Cash Manager and the Bond Trustee that (i) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations thereunder; (ii) it is and will continue to be in good standing with OSFI; (iii) it is and will continue to be in regulatory good standing and in material compliance with and under all laws applicable to its duties and obligations thereunder and under the other Transaction Documents to which it is a party; (iv) the unsecured, unsubordinated and unguaranteed debt obligations (or in the case of Fitch, the issuer default ratings) of the Servicer are rated by each of the Rating Agencies at ratings that are at or above the Servicer Replacement Ratings; and (v) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations thereunder.

Removal or resignation of the Servicer

The Guarantor and the Bond Trustee may, upon written notice to the Servicer, terminate the Servicer’s rights and obligations (unless otherwise specified below) if any of the following events (each a “Servicer Termination Event” and, each of the events set out in (a), (b), (d) and (g) below, a “Servicer Event of Default”) occurs:

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

(b) the Servicer defaults in the payment of any amount due to the Guarantor under the Servicing Agreement and fails to remedy that default for a period of three Canadian Business Days after the earlier of the Servicer becoming aware of the default and receipt by the Servicer of written notice from the Bond Trustee or the Guarantor requiring the same be remedied;

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

(d) default is made by the Servicer (or any delegate thereof) in the performance of its obligations under the Servicing Agreement with respect to the requirements with respect to the deposit of funds at any time that one or more Rating Agencies has downgraded the Servicer’s unsecured, unguaranteed and unsubordinated debt obligations, or its issuer default ratings, below the Servicer Deposit Threshold Ratings, and such default continues unremedied for a period of one (1) Canadian Business Day after the earlier of the Servicer becoming aware of such default and receipt by the Servicer of written notice from the Bond Trustee or the Guarantor requiring the same to be remedied;

(e) there is a breach by the Servicer of certain representations and warranties or a failure by the Servicer to perform certain covenants made by it under the Servicing Agreement;

(f) if the Servicer is the Bank or an affiliate of the Bank, an Issuer Event of Default (i) occurs and is continuing, or (ii) previously occurred and is continuing, at any time that the Guarantor is not Independently Controlled and Governed; or

(g) the Servicer fails to comply with any of its other covenants and obligations under the Servicing Agreement which failure in the reasonable opinion of the Bond Trustee is materially prejudicial to the interests of the holders of the covered bonds and does not remedy such failure within the earlier of 20 Canadian Business Days after becoming aware of the failure and receipt by the Servicer of written notice from the Bond Trustee or the Guarantor requiring the same to be remedied.

In the case of the occurrence of the first Servicer Termination Event described above at any time that the Guarantor is not Independently Controlled and Governed, the Guarantor will by notice in writing to the Servicer terminate its appointment as Servicer with effect from a date (not earlier than the date of the notice) specified in the notice.

Any resolution to terminate the Servicer’s appointment under the Servicing Agreement will be notified to the Rating Agencies. Any such termination will become effective upon the appointment of a successor Servicer in place of the Servicer.

Subject to the fulfillment of a number of conditions, the Servicer may voluntarily resign by giving not less than 12 months’ written notice to the Bond Trustee, the Guarantor and each Rating Agency provided that a Servicer or sub-Servicer duly licensed to act as such under applicable provincial mortgage broker legislation and with a management team with experience of administering mortgages in Canada of the type then comprised in the Portfolio has been appointed and enters into a servicing agreement with the Guarantor substantially on the same terms as the Servicing Agreement and subject to the consent of the Bond Trustee having been received in respect of such appointment if the Servicer is the Bank. The resignation of the Servicer is also conditional upon satisfaction of the Rating Agency Condition unless the covered bondholders agree otherwise by Extraordinary Resolution.

If the appointment of the Servicer is terminated, the Servicer must promptly deliver the Customer Files relating to the Loans comprised in the Portfolio in its possession to, or at the direction of, the Guarantor. The Servicing Agreement will terminate at such time as the Guarantor has no further interest in any of the Loans or their Related Security serviced under the Servicing Agreement that have been comprised in the Portfolio.

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The Bond Trustee is not obliged to act as Servicer in any circumstances.

The Servicing Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Cover Pool Monitor Agreement

Under the terms of the Cover Pool Monitor Agreement entered into on the Program Date between the Cover Pool Monitor, the Guarantor, the Bank, the Cash Manager and the Bond Trustee, the Cover Pool Monitor has agreed, subject to due receipt of the information to be provided by the Cash Manager to the Cover Pool Monitor, to carry out arithmetic testing of, and report on the arithmetic accuracy of the calculations performed by the Cash Manager once each year and more frequently in certain circumstances as required by the terms of the Cover Pool Monitor Agreement with a view to (i) confirming that the Asset Coverage Test or the Amortization Test, as applicable, is met on each applicable Calculation Date, and (ii) confirming the accuracy of the Valuation Calculation.

If the arithmetic testing conducted by the Cover Pool Monitor reveals any errors in the calculations performed by the Cash Manager, the Cover Pool Monitor will be required to conduct such arithmetic tests and report on such arithmetic accuracy for (a) the last Calculation Period of each calendar quarter of the preceding year, (b) each Calculation Period of the current year until such arithmetic testing demonstrates no arithmetical inaccuracy for three consecutive Calculation Periods, and (c) thereafter, the last Calculation Period of each remaining calendar quarter of the current year.

In addition to the arithmetic testing described above, the Cover Pool Monitor will also perform certain specified procedures in relation to the Portfolio and verify compliance by the Bank, the Guarantor and the Program with certain aspects of the Legislative Framework and the CMHC Guide.

The Cover Pool Monitor is entitled, in the absence of manifest error, to assume that all information provided to it by the Cash Manager for the purpose of performing its duties under the Cover Pool Monitor Agreement is true and correct and not misleading and is not required to report as such or otherwise take steps to verify the accuracy of any such information. Each report of the Cover Pool Monitor delivered in accordance with the terms of the Cover Pool Monitor Agreement will be delivered to the Cash Manager, the Guarantor, the Bank, the Bond Trustee and CMHC.

The Guarantor will pay to the Cover Pool Monitor a fee per report (exclusive of applicable taxes), equal to the amount set out in the Cover Pool Monitor Agreement from time to time, for the reports to be performed by the Cover Pool Monitor.

The Guarantor may, at any time, but subject to the prior written consent of the Bond Trustee, terminate the appointment of the Cover Pool Monitor by giving at least 60 days’ prior written notice to the Cover Pool Monitor (unless the Cover Pool Monitor defaults in the performance or observance of certain of its covenants or breaches certain of its representations and warranties made, respectively, under the Cover Pool Monitor Agreement, in which case such

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consent will not be required), provided that such termination may not be effected unless and until a replacement Cover Pool Monitor has been appointed by the Guarantor (such replacement to be approved by the Bond Trustee (such approval to be given if the replacement is an accountancy firm of national standing in Canada)) which agrees to perform the duties of the Cover Pool Monitor set out in the Cover Pool Monitor Agreement (or substantially similar duties).

The Cover Pool Monitor may, at any time, resign by giving at least 60 days’ prior written notice to the Guarantor (or the Cash Manager on its behalf) and the Bond Trustee. The Cover Pool Monitor may resign immediately by giving written notice if any action taken by a recipient of a report delivered by the Cover Pool Monitor causes a professional conflict of interest for the Cover Pool Monitor under the rules of the professional and/or regulatory bodies regulating the activities of the Cover Pool Monitor. The Cover Pool Monitor will inform the recipients of its report as soon as reasonably practicable of any action of which the Cover Pool Monitor is aware that may cause a professional conflict of interest for the Cover Pool Monitor which could result in its resignation.

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

The Bond Trustee will not be obliged to act as Cover Pool Monitor in any circumstances.

The Cover Pool Monitor Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Guarantor Agreement

The general and limited partners of the Guarantor operate the business of the Guarantor in accordance with the terms of the Guarantor Agreement between the Managing GP, as managing general partner, the Liquidation GP, as liquidation general partner, the Bank, as Limited Partner and the Bond Trustee, together with such other persons as may become partners of the Guarantor. Any Partner must be a resident of Canada for purposes of the ITA.

General Partner and Limited Partners of the Guarantor

The Managing GP is the initial managing general partner and the Liquidation GP is the initial liquidation general partner and the Bank is currently the sole limited partner of the Guarantor. The Partners have the duties and obligations, rights, powers and privileges specified in the Limited Partnership Act (Ontario) and pursuant to the terms of the Guarantor Agreement.

No new limited partner may be otherwise appointed, and no new general partner may be added or general partner replaced without, among other requirements, (i) the consent of the Partners and, while there are covered bonds outstanding, the Bond Trustee, and (ii) satisfaction of the Rating Agency Condition.

Under the Guarantor Agreement, the Limited Partner represents and warrants to the other Partners that (i) it is a validly created chartered bank under the laws of Canada and is validly

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subsisting under such laws; (ii) it has taken all necessary action to authorize the execution, delivery and performance of the Guarantor Agreement; (iii) it has the capacity and corporate authority to enter into and perform its obligations under the Guarantor Agreement and such obligations do not conflict with nor do they result in a breach of any of its constating documents or by-laws or any agreement by which it is bound; (iv) no authorization, consent or approval of, or filing with or notice to, any person is required in connection with the execution, delivery or performance of the Guarantor Agreement by the Limited Partner, other than whose which have been obtained; (v) it is not a non-resident of Canada for purposes of the ITA and will retain such status during the term of the partnership governed by the Guarantor Agreement; (vi) it will not transfer any interest it holds in the Guarantor to a non-resident of Canada for purposes of the ITA; (vii) it will at all times comply with the CMHC Guide; and (viii) it will at all times comply with, and perform its obligations under, the provisions of the Guarantor Agreement and each other Transaction Document to which it is a party in any capacity.

Capital Contributions

The Managing GP and the Liquidation GP hold 99 percent and 1 percent respectively of the 0.05 percent general partner interest. The Limited Partner holds the substantial economic interest in the Guarantor (approximately 99.95 percent). The Limited Partner may from time to time make additional Capital Contributions. Such Capital Contributions may be Cash Capital Contributions or Capital Contributions in Kind. In the case of the latter, the Limited Partner will have an additional interest in the capital of the Guarantor equal to the Fair Market Value of those Loans contributed by it as at the Purchase Date recorded in the Capital Account Ledger.

New Limited Partners

In the future, any person that wishes to become a new Limited Partner will, subject to the following paragraph, require the consent of the Limited Partner and, while there are covered bonds outstanding, the Bond Trustee, and be required to accede to the Mortgage Sale Agreement and any other Transaction Documents to which the Limited Partner is a party and deliver such other agreements and provide such other assurances as may be required by the Guarantor and/or the Bond Trustee (acting reasonably). Subject to compliance with the foregoing, the consent of the covered bondholders will not be required to the accession of a new Limited Partner to the Guarantor. The admission of a new Limited Partner will also be subject to satisfaction of the Rating Agency Condition.

Subject to the satisfaction of the Rating Agency Condition and the requirement that such assignment will not cause, or would not reasonably be expected to cause, a breach of the related provisions of the Guarantor Agreement, the Limited Partner may assign all or some portion of its interest in the Guarantor to any subsidiary by giving written notice of such assignment to CMHC, the Managing GP, the Liquidation GP, and the Bond Trustee, and the assignee of such interest acceding to the Guarantor Agreement. Any such assignment will not require the consent of the general partners, Bond Trustee, the holders of the covered bonds or, if applicable, any other Limited Partner, provided that such subsidiary is not a non-resident of Canada for the purposes of the ITA.

Capital Distributions

Provided the Asset Coverage Test will be met after giving effect to any Capital Distribution, the Managing GP, may from time to time, in its discretion, make Capital

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Distributions to the Partners in accordance with the Guarantor Agreement, and provided that such Capital Distributions are permitted under the applicable Priorities of Payments and the Security Agreement. Pursuant to the terms of the Guarantor Agreement distributions to the Liquidation GP will be limited to an amount which may be less than the Liquidation GP’s pro rata interest in the Guarantor.

Asset Coverage Test

Under the terms of the Guarantor Agreement, the Guarantor is required to ensure that, as of each Calculation Date, the ACT Asset Value (as defined below) is in an amount at least equal to the ACT Liability Value (as defined below) as calculated as of the relevant Calculation Date.

If as of any Calculation Date the ACT Asset Value (as defined below) is less than the ACT Liability Value (as defined below) as of the relevant Calculation Date, then the Managing GP (or the Cash Manager on its behalf) will notify the Guarantor, CMHC, the Partners and the Bond Trustee thereof. In such circumstances, the Partners (other than the Liquidation GP) will use all reasonable efforts to ensure that the Guarantor satisfies the Asset Coverage Test prior to the next Calculation Date. If the ACT Asset Value is less than the ACT Liability Value as of the next following Calculation Date, the Asset Coverage Test will be breached and the Managing GP (or the Cash Manager on its behalf) the Bond Trustee will serve an Asset Coverage Test Breach Notice on the Guarantor, the Partners and the Bond Trustee in accordance with the Guarantor Agreement. Under the Guarantor Agreement, the Managing GP (or the Cash Manager on its behalf) will revoke an Asset Coverage Test Breach Notice if, as of any Calculation Date falling on or prior to the Guarantor Payment Date immediately following the Calculation Date after the service of an Asset Coverage Test Breach Notice, the Asset Coverage Test is subsequently satisfied and neither a Notice to Pay nor a Guarantor Acceleration Notice has been served. In such circumstances where the Asset Coverage Test is not satisfied, the Limited Partner will use all reasonable efforts to, in its sole discretion, (i) make advances under the Intercompany Loan, (ii) sell Loans and their Related Security to the Guarantor, or (iii) make a Capital Contribution in cash or in kind, in any case on or before the next Calculation Date in amounts sufficient to ensure that the Guarantor is in compliance with the Asset Coverage Test prior to the next following Calculation Date.

Following service of an Asset Coverage Test Breach Notice (which has not been revoked):

(a) the Guarantor may be required to sell Selected Loans (as described further under Sale of Selected Loans following service of an Asset Coverage Test Breach Notice below); and

(b) prior to the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice or, if earlier, the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice, the Pre-Acceleration Revenue Priorities of Payments and the Pre-Acceleration Principal Priorities of Payments will be modified as more particularly described in “Cashflows—Allocation and distribution of Available Revenue Receipts and Available Principal Receipts when an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred” below.

If an Asset Coverage Test Breach Notice has been served and not revoked on or before the Guarantor Payment Date immediately following the Calculation Date after service of such

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Asset Coverage Test Breach Notice, then an Issuer Event of Default will occur and the Bond Trustee will be entitled (and, in certain circumstances may be required) to serve an Issuer Acceleration Notice. Following service of an Issuer Acceleration Notice, the Bond Trustee will be required to serve a Notice to Pay on the Guarantor.

For the purposes hereof:

“Asset Coverage Test” = ACT Asset Value – ACT Liability Value

“ACT Asset Value” = A + B + C + D + E – F

where:

A = the lower of (1) and (2):

(1) the sum of the LTV Adjusted Loan Balance of each Loan in the Portfolio, net of Adjustments; and

(2) the sum of the Asset Percentage Adjusted Loan Balance of each Loan in the Portfolio, net of Adjustments

B = Principal Receipts up to the related Calculation Date not otherwise applied on such Calculation Date

C = the aggregate Cash Capital Contributions made by Partners or proceeds advanced under the Intercompany Loan Agreement or proceeds from any sale of Eligible Loans or other cash exclusive of Revenue Receipts up to the related Calculation Date

D = the outstanding principal amount of any Substitution Assets

E = the amount credited to the Reserve Fund balance and/or amount credited to the Pre-Maturity Liquidity Ledger, as applicable

F = the product of:

(1) the weighted average remaining maturity of all outstanding covered bonds (in years and, where less than a year, deemed to be a year);

(2) the Principal Amount Outstanding of all covered bonds; and

(3) the Negative Carry Factor

“LTV Adjusted Loan Balance” = the lower of (1) and (2):

(1) the True Loan Balance of the relevant Loan; and

(2) if such Loan is a Performing Eligible Loan, 80% of the Market Value of the related Property or, if such loan is not a Performing Eligible Loan, zero

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“Asset Percentage Adjusted Loan Balance” = the Asset Percentage x the lower of (1) and (2):

(1) the True Loan Balance of the relevant Loan; and

(2) if such Loan is a Performing Eligible Loan, the Market Value of the related Property or, if such loan is not a Performing Eligible Loan, zero

“Performing Eligible Loans” = Eligible Loans that are less than three months in arrears

“Adjustments” = the sum of:

(1) the LTV Adjusted Loan Balance or Asset Percentage Adjusted Loan Balance (as the case may be) of any Performing Eligible Loan in breach of the Loan Representations and Warranties or otherwise subject to the Seller’s repurchase obligation (but yet to be repurchased) under the Mortgage Sale Agreement; and

(2) financial losses (yet to be recompensed) resulting from any breach by the Seller of any other material warranty in the Mortgage Sale Agreement or from any breach by the Servicer of a material term of the Servicing Agreement

“True Loan Balance” = sum of:

(1) the outstanding loan balance of the relevant Loan; and

(2) all arrears of interest and accrued interest in respect of the relevant Loan

“Asset Percentage” = As determined below

“Negative Carry Factor” =

(1) if the weighted average margin of the interest rate payable on the outstanding covered bonds relative to the interest rate receivable on the Portfolio is less than or equal to 0.1% per annum, then 0.5%; and

(2) if the weighted average margin of the interest rate payable on the outstanding covered bonds relative to the interest rate receivable on the Portfolio is greater than 0.1% per annum, then the sum of (x) 0.5% and (y) the weighted average margin of the interest rate payable on the outstanding covered bonds less 0.1 %,

unless the interest rate risk represented by the weighted average margin of the interest rate payable on the outstanding covered bonds relative to the interest rate receivable on the Portfolio is addressed or mitigated by the Interest Rate Swap Agreement, whereupon the Negative Carry Factor will be nil

“ACT Liability Value” = the nominal amount of covered bond liabilities outstanding in Canadian Dollars (with currency transaction undertaken using or at foreign exchange rates reflected in the related Covered Bond Swap Agreement)

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The “Asset Percentage” will be determined as follows:

On or prior to the Guarantor Payment Date immediately following the Calculation Date falling in February, May, August and November of each year, and on such other date as the Limited Partner may request following the date on which the Limited Partner is required to assign the Interest Rate Swap Agreement to a third party (each such date a “Cash Flow Model Calculation Date”), the Managing GP (or the Cash Manager on its behalf) will determine the percentage figure selected by it as the Asset Percentage based on such methodologies as the Rating Agencies may prescribe from time to time (to ensure sufficient credit enhancement for the Covered Bond Guarantee will be maintained) for the Portfolio based on the value of the Loans and their Related Security in the Portfolio as at the Calculation Date immediately preceding the Cash Flow Model Calculation Date as a whole or on the basis of a sample of Randomly Selected Loans (as described below) in the Portfolio, such calculations to be made on the same basis throughout unless the Rating Agency Condition has been satisfied in respect thereof.

The Asset Percentage will from time to time be adjusted in accordance with the various methodologies of the Rating Agencies to ensure that sufficient credit enhancement for the Covered Bond Guarantee will be maintained.

The Managing GP (or the Cash Manager on its behalf) will, or will use all reasonable efforts to cause one or more Rating Agencies to, determine the Asset Percentage at least two days prior to the Guarantor Payment Date following the Cash Flow Model Calculation Date and the Asset Percentage so determined will be the lowest percentage so determined by any of the Rating Agencies in the manner set forth above and will apply to any calculations in respect of the Calculation Period ending on such Cash Flow Model Calculation Date and each Calculation Period thereafter to but excluding the last day of the following Calculation Period ending on a Cash Flow Model Calculation Date. To the extent a Rating Agency does not respond to a request for a newly-determined Asset Percentage, the Asset Percentage last determined by such Rating Agency will continue to be the applicable percentage with respect to such Rating Agency.

The Asset Percentage will at all times be less than or equal to [95]%, as determined in accordance with the Guarantor Agreement, provided that the Asset Percentage will not be less than [80]% unless otherwise agreed by the Bank (and following an Issuer Event of Default, the Guarantor for the purposes of making certain determinations in respect of the Intercompany Loan). Any increase in the maximum Asset Percentage will be deemed to be a material amendment to the Trust Deed and will require satisfaction of the Rating Agency Condition.

“Randomly Selected Loans” means Loans and, if applicable, their Related Security, in the Portfolio, selected in accordance with the terms of the Guarantor Agreement on a basis that (i) such Loans would not, or would not reasonably be expected to, adversely affect the interests of the covered bondholders, and (ii) such Loans are not designed to favor the selection of any identifiable class or type or quality of Loans and their Related Security over all Loans and their Related Security in the Portfolio.

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Amortization Test

The Guarantor must ensure that as of each Calculation Date following an Issuer Event of Default that is continuing, the Amortization Asset Value will be in an amount at least equal to the Amortization Liability Value as calculated as of the relevant Calculation Date.

If on any Calculation Date following an Issuer Event of Default that is continuing, the Amortization Asset Value is less than the Amortization Liability Value as calculated as of the relevant Calculation Date, then the Amortization Test will be deemed to be breached and a Guarantor Event of Default will occur. The Guarantor or the Cash Manager, as the case may be, will immediately notify the Partners, CMHC and the Bond Trustee of any breach of the Amortization Test.

“Amortization Test” = Amortization Asset Value – Amortization Liability Value

“Amortization Asset Value” = A + B + C – D

where:

A = the aggregate Amortization True Loan Balance of each Loan in the Portfolio:

B = the amount of any cash standing to the GDA Account (exclusive of any Revenue Receipts up to the Calculation Date not otherwise applied)

C = the outstanding principal amount of any Substitution Assets

D = the product of:

(1) the weighted average remaining maturity of all outstanding covered bonds (in years and, where less than a year, deemed to be a year);

(2) the Principal Amount Outstanding of all covered bonds; and

(3) the Negative Carry Factor

“Amortization True Loan Balance” = the lower of (1) and (2)

(1) the True Loan Balance of the relevant Loan; and

(2) if such Loan is a Performing Eligible Loan, 80% of the Market Value of the related Property, or if such Loan is not a Performing Eligible Loan, zero

“Negative Carry Factor” =

(1) if the weighted average margin of the interest rate payable on the outstanding covered bonds relative to the interest rate receivable on the Portfolio is less than or equal to 0.1% per annum, then 0.5%; and

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(2) if the weighted average margin of the interest rate payable on the outstanding covered bonds relative to the interest rate receivable on the Portfolio is greater than 0.1% per annum, then the sum of (x) 0.5% and (y) the weighted average margin of the interest rate payable on the outstanding covered bonds less 0.1%,

unless the interest rate risk represented by the weighted average margin of the interest rate payable on the outstanding covered bonds relative to the interest rate receivable on the Portfolio is addressed or mitigated by the Interest Rate Swap Agreement whereupon the Negative Carry Factor will be nil

“Amortization Liability Value” = the nominal amount of covered bond liabilities outstanding in Canadian Dollars (with currency translations undertaken using or at foregoing exchange rates reflected in the related Covered Bond Swap Agreement or, to the extent the foreign exchange risk of a non-Canadian Dollar denominated covered bond liability is not or no longer the subject of (or otherwise addressed or mitigated by) a Covered Bond Swap Agreement (by reason of termination or otherwise) end of day spot foreign exchange rates).

Valuation Calculation

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

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

A + B + C + D + E + F

where:

A    =    the aggregate “LTV Adjusted Loan Present Value” of (i) each Loan that is a Performing Eligible Loan, which will be the lower of (1) the Present Value of the relevant Loan on such Calculation Date, and (2) 80% multiplied by the Latest Valuation relating to that Loan, and (ii) each Loan that is not a Performing Eligible Loan, which will be equal to zero

minus

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

(1) a Loan or its Related Security was, in the immediately preceding Calculation Period, in breach of the Loan Representations and Warranties contained in the Mortgage Sale Agreement or subject to any other obligation of the Seller to repurchase the relevant Loan and its Related Security, and in each case the Seller has not repurchased the Loan or Loans of the relevant borrower and its or their Related Security to the extent required by

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the terms of the Mortgage Sale Agreement. In this event, the aggregate LTV Adjusted Loan Present Value of the Loans in the Portfolio on such Calculation Date will be deemed to be reduced by an amount equal to the LTV Adjusted Loan Present Value of the relevant Loan or Loans on such Calculation Date of the relevant borrower; and/or

(2) the Seller, in any preceding Calculation Period, was in breach of any other material warranty under the Mortgage Sale Agreement and/or the Servicer was, in any preceding Calculation Period, in breach of a material term of the Servicing Agreement. In this event, the aggregate LTV Adjusted Loan Present Value of the Loans in the Portfolio on such Calculation Date will be deemed to be reduced by an amount equal to the resulting financial loss incurred by the Guarantor in the immediately preceding Calculation Period (such financial loss to be calculated by the Cash Manager without double counting and to be reduced by any amount paid (in cash or in kind) to the Guarantor by the Seller to indemnify the Guarantor for such financial loss);

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

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

D    =    the Trading Value of any Substitution Assets;

E    =    the balance, if any, of the Reserve Fund and the amounts credited to the Pre-Maturity Liquidity Ledger, as applicable; and

F    =    the Trading Value of the Swap Collateral, if applicable.

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

(a) the last selling price;

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

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

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

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

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

plus accrued return where applicable (with currency translations undertaken using or at the average close of day foreign exchange rates posted on the Bank of Canada website for the month in relation to which the calculation is made), provided that, in each case, the methodology selected, the reasons therefor and the determination of value pursuant to such selected methodology will be duly documented.

Sale of Selected Loans following a breach of the Pre-Maturity Test

The Pre-Maturity Test will be breached if one or more Rating Agencies downgrades the Bank’s unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating, as applicable, below the Pre-Maturity Required Ratings and a Hard Bullet Covered Bond is due for repayment within a specified period of time thereafter. See “Description of the Covered Bonds—Credit Structure—Pre-Maturity Test.” If the Pre-Maturity Test is breached, the Guarantor will offer to sell Selected Loans pursuant to the terms of the Guarantor Agreement (see “—Method of sale of Portfolio assets” below), subject to:

(a) any right of pre-emption of the Seller pursuant to the terms of the Mortgage Sale Agreement;

(b) a Capital Contribution in Kind made by one or more of the Partners (as recorded in the Capital Account Ledger for such Partners) of certain Substitution Assets in accordance with the Guarantor Agreement with an aggregate principal amount up to the Pre-Maturity Liquidity Required Amount (which will be a credit to the Pre-Maturity Liquidity Ledger); or

(c) Cash Capital Contributions made by one or more of the Partners (as recorded in the Capital Account Ledger for each applicable Partner) or proceeds advanced under the Intercompany Loan Agreement which have not been applied to acquire further Portfolio assets or otherwise applied in accordance with the Guarantor Agreement and/or the other Transaction Documents with an aggregate principal amount up to the Pre-Maturity Liquidity Required Amount (which will be a credit to the Pre-Maturity Liquidity Ledger).

If the Bank fails to repay any Series of Hard Bullet Covered Bonds on the Final Maturity Date thereof, then following the occurrence of an Issuer Event of Default and service of a Notice to Pay on the Guarantor, funds standing to the credit of the Pre-Maturity Liquidity Ledger will be applied to repay the relevant Series of Hard Bullet Covered Bonds. Otherwise, the proceeds will be applied as set out in “Description of the Covered Bonds—Credit Structure—Pre-Maturity Test” above.

Sale of Selected Loans after a Demand Loan Repayment Event has occurred or the Bank has otherwise demanded that the Demand Loan be repaid

If, prior to the service of an Asset Coverage Test Breach Notice or a Notice to Pay, a Demand Loan Repayment Event has occurred or the Bank has demanded that the Demand Loan be repaid, the Guarantor may (a) sell Selected Loans in accordance with the Guarantor

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Agreement (see “—Method of sale of Portfolio assets” below), subject to the rights of pre-emption enjoyed by the Seller to purchase the Portfolio assets pursuant to the terms of the Mortgage Sale Agreement, or (b) make a Payment in Kind in accordance with the terms of the Intercompany Loan Agreement. Any such sale will be subject to the condition that the Asset Coverage Test is satisfied after the receipt of the proceeds of such sale and repayment, after giving effect to such repayment.

Sale of Selected Loans at any time an Asset Coverage Test Breach Notice is outstanding or a Notice to Pay has been served to the Guarantor

At any time an Asset Coverage Test Breach Notice is outstanding or a Notice to Pay has been served to the Guarantor, but prior to service of a Guarantor Acceleration Notice on the Guarantor, the Guarantor will be obliged to sell Selected Loans in accordance with the Guarantor Agreement (see “—Method of sale of Portfolio assets” below), subject to the rights of pre-emption enjoyed by the Seller to buy the Portfolio assets pursuant to the terms of the Mortgage Sale Agreement and subject to additional advances on the Intercompany Loan and any Cash Capital Contribution made by the Limited Partner. The proceeds from any such sale or refinancing will be credited to the GDA Account and applied as set out in the Priorities of Payments (see “Cashflows” below).

Method of sale of Portfolio assets

If the Guarantor is required to sell Selected Loans to Purchasers following a breach of the Pre-Maturity Test, the occurrence of a Demand Loan Repayment Event, the Demand Loan being demanded by the Bank, the service of an Asset Coverage Test Breach Notice (if not revoked) or a Notice to Pay on the Guarantor, the Guarantor will be required to ensure that before offering Selected Loans for sale:

(a) the Loans being sold are Randomly Selected Loans (as described above); and

(b) the Selected Loans have an aggregate True Loan Balance in an amount that is as close as possible to the amount calculated as follows:

(i) following a Demand Loan Repayment Event or the Demand Loan being demanded by the Bank but prior to service of an Asset Coverage Test Breach Notice, such amount that would ensure that, if the Selected Loans were sold at their True Loan Balance, the Demand Loan as calculated on the date of the demand could be repaid, subject to satisfaction of the Asset Coverage Test; or

(ii) following the service of an Asset Coverage Test Breach Notice (but prior to service of a Notice to Pay on the Guarantor), such amount that would ensure that, if the Selected Loans were sold at their True Loan Balance, the Asset Coverage Test would be satisfied as at the next Calculation Date taking into account the payment obligations of the Guarantor on the Guarantor Payment Date following that Calculation Date (assuming for this purpose that the Asset Coverage Test Breach Notice is not revoked on the next Calculation Date); or

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(iii) following a breach of the Pre-Maturity Test or service of a Notice to Pay on the Guarantor:

N x A/B

where:

“N” is an amount equal to

(x) in respect of Selected Loans being sold following a breach of the Pre-Maturity Test, the Pre-Maturity Liquidity Required Amount less amounts standing to the credit of the Pre-Maturity Liquidity Ledger; or

(y) in respect of Selected Loans being sold following service of a Notice to Pay, the Canadian Dollar Equivalent of the Required Redemption Amount of the Earliest Maturing Covered Bonds less amounts standing to the credit of the Guarantor Accounts and the principal amount of any Substitution Assets (excluding all amounts to be applied on the next following Guarantor Payment Date to repay higher ranking amounts in the Guarantee Priorities of Payments and those amounts that are required to repay any Series of covered bonds which mature prior to or on the same date as the relevant Series of covered bonds);

“A” is an amount equal to the True Loan Balance of all the Loans and their Related Security in the Portfolio; and

“B” is an amount equal to the Canadian Dollar Equivalent of the Required Redemption Amount in respect of each Series of covered bonds then outstanding less the Canadian Dollar Equivalent of the Required Redemption Amount in respect of each Series of covered bonds then outstanding which has been provided for in cash.

“Required Redemption Amount” is an amount, in respect of a Series of covered bonds, equal to the product of (i) the Principal Amount Outstanding of the relevant Series of covered bonds multiplied by (ii) the sum of 1 plus the Negative Carry Factor multiplied by (iii) the quotient of the number of days to maturity of the relevant Series of covered bonds divided by 365.

The Guarantor will offer the Selected Loans for sale to Purchasers for the best price reasonably available but in any event:

(a) following (i) a Demand Loan Repayment Event, the Demand Loan being demanded by the Bank or (ii) the service of an Asset Coverage Test Breach Notice (but prior to the service of a Notice to Pay on the Guarantor), in each case, for an amount not less than the True Loan Balance of the Loans;

(b) following a breach of the Pre-Maturity Test or service of a Notice to Pay on the Guarantor, for an amount not less than the Adjusted Required Redemption Amount; and

(c) at any other time, for an amount not less than the Fair Market Value of such Selected Loans.

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Following the service of a Notice to Pay on the Guarantor, if the Selected Loans have not been sold (in whole or in part) in an amount equal to the Adjusted Required Redemption Amount by the date which is six months prior to, as applicable, if the covered bonds are not subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee, the Final Maturity Date or, if the covered bonds are subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee, the Extended Due for Payment Date in respect of the Earliest Maturing Covered Bonds (after taking into account all payments, provisions and credits to be made in priority thereto), or the Final Maturity Date of the relevant Series of Hard Bullet Covered Bonds in respect of a sale in connection with the Pre-Maturity Test, then the Guarantor will offer the Selected Loans for sale for the best price reasonably available notwithstanding that such amount may be less than the Adjusted Required Redemption Amount.

The Guarantor will through a tender process appoint a portfolio manager of recognized standing on a basis intended to incentivize the portfolio manager to achieve the best price for the sale of the Portfolio assets (if such terms are commercially available in the market) and to advise it in relation to the sale of the Portfolio assets to Purchasers (except where the Seller is buying the Portfolio assets in accordance with its right of pre-emption in the Mortgage Sale Agreement). The terms of the agreement giving effect to the appointment in accordance with such tender will be approved by the Bond Trustee.

In respect of any sale or refinancing (as applicable) of Selected Loans at any time an Asset Coverage Test Breach Notice is outstanding, there has been a breach of the Pre-Maturity Test, or a Notice to Pay has been served to the Guarantor, the Guarantor will instruct the portfolio manager to use all reasonable efforts to procure that Selected Loans are sold or refinanced (as applicable) as quickly as reasonably practicable (in accordance with the recommendations of the portfolio manager) taking into account the market conditions at that time and the scheduled repayment dates of the covered bonds and the terms of the Guarantor Agreement.

The terms of any sale and purchase agreement with respect to the sale of Selected Loans (which will give effect to the recommendations of the portfolio manager) will be subject to the prior written approval of the Bond Trustee. The Bond Trustee will not be required to release the Loans and their Related Security from the Security unless the conditions relating to the release of the Security (as described under “Security Agreement—Release of Security”, below) are satisfied.

Any such sale will not include any representations, warranties or indemnities from the Guarantor.

Following the service of a Notice to Pay on the Guarantor, if Purchasers accept the offer or offers from the Guarantor so that some or all of the Selected Loans will be sold prior to the next following Final Maturity Date or, if the covered bonds are subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee, the next following Extended Due for Payment Date in respect of the Earliest Maturing Covered Bonds, then the Guarantor will, subject to the foregoing paragraph, enter into a sale and purchase agreement with the relevant Purchasers which will require among other things a cash payment from the relevant Purchasers.

Covenants of the General Partner and Limited Partner of the Guarantor

Each of the Partners covenants that, subject to the terms of the Transaction Documents, it will not sell, transfer, convey, create or permit to arise any security interest on, create any beneficial interest in or otherwise dispose of its interest in the Guarantor without the prior written consent of the Managing GP and, while the covered bonds are outstanding, the Bond Trustee.

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The Guarantor covenants that it will not, save with the prior written consent of the Limited Partner (and, for so long as any covered bonds are outstanding, the consent of the Bond Trustee) or as envisaged by the Transaction Documents:

(a) have an interest in a bank account;

(b) have any employees, premises or subsidiaries;

(c) acquire any material assets;

(d) sell, exchange, deal with or grant any option, present or future right to acquire any of the assets or undertakings of the Guarantor or any interest therein or thereto;

(e) enter into any contracts, agreements or other undertakings;

(f) incur any indebtedness or give any guarantee or indemnity in respect of any such indebtedness;

(g) create or permit to subsist any security interest over the whole or any part of the assets or undertakings, present or future of the Guarantor;

(h) change the name or business of the Guarantor or do any act in contravention of, or make any amendment to, the Guarantor Agreement;

(i) do any act which makes it impossible to carry on the ordinary business of the Guarantor, including winding up the Guarantor;

(j) compromise, compound or release any debt due to it;

(k) commence, defend, consent to a judgment, settle or compromise any litigation or other claims relating to it or any of its assets;

(l) permit a person to become a general or limited partner (except in accordance with the terms of the Guarantor Agreement); or

(m) consolidate or merge with another person or convey or transfer its properties or assets substantially as an entirety to any other person.

Limit on investing in Substitution Assets

At any time that no Asset Coverage Test Breach Notice is outstanding and prior to a Notice to Pay having been served to the Guarantor, the Guarantor will be permitted to hold Substitution Assets provided that the aggregate value of the Substitution Assets does not at any time exceed an amount equal to 10 percent of the aggregate value of (i) the aggregate loan balance of the Loans in the Portfolio, (ii) the face value of the Substitution Assets in the Portfolio, and (iii) all cash held by the Guarantor (subject to the Prescribed Cash Limitation), and provided that investments in Substitution Assets are made in accordance with the terms of the Cash Management Agreement and subject to the applicable Priorities of Payments.

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At any time an Asset Coverage Test Breach Notice is outstanding or a Covered Bond Guarantee Activation Event has occurred, the Substitution Assets held by or on behalf of the Guarantor must be sold as quickly as reasonably practicable with proceeds credited to the GDA Account, subject at all times to the Prescribed Cash Limitation.

The Guarantor may not hold cash in excess of (such limitation, the “Prescribed Cash Limitation”) (i) the amount necessary to meet its payment obligations for the immediately succeeding six months pursuant to the terms of the Transaction Documents, or (ii) such greater amount as CMHC may at its discretion permit in accordance with the Legislative Framework and the CMHC Guide; provided that to the extent that cash receipts of the Guarantor cause it to hold cash in excess of the amount in clause (i), the Guarantor will not be in breach of this covenant if it uses such excess amount to (x) purchase Loans and their Related Security for the Portfolio pursuant to the terms of the Mortgage Sale Agreement; and/or (y) to invest in Substitution Assets in an amount not exceeding the prescribed limit under the CMHC Guide; and/or (z) subject to complying with the Asset Coverage Test, to make Capital Distributions to the Limited Partner, in each case, within 31 days of receipt.

For greater certainty, amounts standing to the credit of the Pre-Maturity Liquidity Ledger and the Reserve Fund (other than, in each case, those amounts that constitute Substitution Assets) constitute cash and are subject to the Prescribed Cash Limitation. In the event that the Guarantor is required to fund the Pre-Maturity Liquidity Ledger and/or the Reserve Fund in accordance with the Transaction Documents and such funding would cause the Guarantor to hold cash in excess of the Prescribed Cash Limitation, any cash held by the Guarantor in excess of such cash standing to the credit of the Pre-Maturity Liquidity Ledger and the Reserve Fund will be used by the Guarantor in accordance with clauses (x), (y) and (z) in the immediately preceding paragraph above to ensure that the Guarantor is not in breach of the Prescribed Cash Limitation. In the event that (i) the Guarantor is in breach of the Prescribed Cash Limitation and it does not hold any cash other than the amounts it is required to hold in order to fund the Pre-Maturity Liquidity Ledger and the Reserve Fund in accordance with the Transaction Documents or (ii) a Notice to Pay has been served to the Guarantor, the Guarantor will request that CMHC, in accordance with the discretion granted to it under the Legislative Framework and the CMHC Guide, permit the Guarantor to hold such amount of cash in excess of the Prescribed Cash Limitation as may be required to allow it to comply with the Transaction Documents in the circumstances.

The Guarantor Agreement provides that, upon the occurrence of any of the following events:

(a) the passing of any resolution of the directors or the shareholder of the Managing GP requiring or approving the bankruptcy, dissolution, liquidation or winding up of the Managing GP;

(b) the making of any assignment for the benefit of creditors of the Managing GP, or upon the appointment of a receiver of the assets and undertaking of the Managing GP,

(c) the appointment of a receiver of the assets and undertaking of the Managing GP, or

(d) the occurrence of a Covered Bond Guarantee Activation Event,

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(each a “Managing GP Default Event”), the initial Managing GP (being BMO Covered Bond GP, Inc.) will cease to be the Managing GP of the Guarantor, and the Liquidation GP will be automatically appointed the new Managing GP without the need for consent on the part of any person.

Other Provisions

The allocation and distribution of Revenue Receipts, Principal Receipts and all other amounts received by the Guarantor is described under “Cashflows” below.

For so long as any covered bonds are outstanding, each of the Partners has agreed that it will not terminate or purport to terminate the Guarantor or institute any winding-up, administration, insolvency or other similar proceedings against the Guarantor or any of its general partners. Furthermore, each of the Partners has agreed, among other things, except as otherwise specifically provided in the Transaction Documents not to demand or receive payment of any amounts payable to such Partners by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee unless all amounts then due and payable by the Guarantor to all other creditors ranking higher in the relevant Priorities of Payments have been paid in full.

Each of the Partners will be responsible for the payment of its own tax liabilities and will be required to indemnify the other from any liabilities which they incur as a result of the relevant partner’s non-payment.

Following the appointment of a liquidator or receiver to any partner, any decisions of the Guarantor that are reserved to the Partners or a unanimous decision of the Partners in the Guarantor Agreement will be made by the Partner(s) not in liquidation or receivership only.

The Guarantor Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Cash Management Agreement

The Cash Manager (initially the Bank) will provide certain cash management services to the Guarantor pursuant to the terms of the Cash Management Agreement between the Guarantor, the Cash Manager, GDA Provider, Seller and Servicer and the Bond Trustee.

The Cash Manager’s services include but are not limited to:

(a) maintaining the Ledgers on behalf of the Guarantor;

(b) distributing the Revenue Receipts and the Principal Receipts in accordance with the Priorities of Payments described under “Cashflows” below;

(c) determining whether the Asset Coverage Test is satisfied as of each Calculation Date in accordance with the Guarantor Agreement, as more fully described under “Description of the Covered Bonds—Credit Structure—Asset Coverage Test” below;

(d) determining whether the Amortization Test is satisfied as of each Calculation Date following the service of a Notice to Pay in accordance with the Guarantor Agreement, as more fully described under “Description of the Covered Bonds—Credit Structure—Amortization Test” above;

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(e) preparation of Investor Reports for the covered bondholders, the Rating Agencies and the Bond Trustee; and

(f) on each Canadian Business Day, determining whether the Pre-Maturity Test for each Series of Hard Bullet Covered Bonds, if any, is satisfied as more fully described under “Description of the Covered Bonds—Credit Structure—Pre-Maturity Test” above.

Under the Cash Management Agreement, the Cash Manager represents and warrants to the Guarantor and the Bond Trustee that (i) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities under the Cash Management Agreement and the other Transaction Documents to which it is a party and it will devote all due skill, care and diligence to the performance of its obligations and the exercise of its discretions thereunder; (ii) it is rated at or above each of the Cash Manager Required Ratings by each of the Rating Agencies; (iii) it is and will continue to be in regulatory good standing; (iv) it is and will continue to be in material compliance with its internal policies and procedures relevant to the services to be provided by it pursuant to the Cash Management Agreement and the other Transaction Documents to which it is party; and (v) it is and will continue to be in material compliance with all laws, regulations and rules applicable to it in relation to the services provided by it pursuant to the Cash Management Agreement and the other Transaction Documents to which it is a party.

In the event of a Rating Agency withdrawing or downgrading the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating of the Cash Manager by one or more Rating Agency below any of the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, the Cash Manager will be required to direct the Servicer to deposit all Revenue Receipts and Principal Receipts received by the Servicer directly into the GDA Account.

In the event of a Rating Agency withdrawing or downgrading the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating of the Cash Manager below any of the Cash Manager Required Ratings, the Guarantor and the Bond Trustee will, in certain circumstances, each have the right to terminate the appointment of the Cash Manager, and will be obligated to terminate the appointment of the Cash Manager if its ratings fall below the Cash Manager Required Ratings at any time that the Guarantor is not Independently Controlled and Governed. Upon any such termination, the Guarantor will appoint a substitute (the identity of which will be subject to the Bond Trustee’s written approval). Any substitute cash manager will have substantially the same rights and obligations as the Cash Manager (although the fee payable to the substitute cash manager may be higher).

Pursuant to the Cash Management Agreement, for so long as the Bank or an affiliate of the Bank is the Cash Manager no fee will be payable to the Cash Manager for its services thereunder. Any substitute Cash Manager that is not an affiliate of the Bank will be entitled to such fee as may be agreed between such substitute Cash Manager and the Guarantor, which fee will be paid by the Guarantor pursuant to the applicable Priorities of Payments.

The Cash Management Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

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Interest Rate Swap Agreement

To provide a hedge against possible variances in the rates of interest payable on the Portfolio assets and related amounts in the Portfolio (which may, for instance, include variable rates of interest or fixed rates of interest) and the interest amounts payable on the Intercompany Loan and (following the Covered Bond Swap Effective Date) the Covered Bond Swap Agreement, the Guarantor will enter into the Interest Rate Swap Agreement with the Interest Rate Swap Provider (initially the Bank). The Guarantor and the Interest Rate Swap Provider will agree to swap the amount of interest received by the Guarantor from borrowers and related amounts in the Portfolio in exchange for an amount sufficient to pay the interest payable on the Intercompany Loan plus a certain amount for expenses. Amounts payable under the Interest Rate Swap Agreement will be in Canadian Dollars.

The Interest Rate Swap Agreement will terminate (unless terminated earlier by an Interest Rate Swap Early Termination Event) on the date on which the notional amount thereunder is reduced to zero.

The Interest Rate Swap Agreement may also be terminated in certain other circumstances (each referred to as an “Interest Rate Swap Early Termination Event”), including:

• at the option of any party to the Interest Rate Swap Agreement, if there is a failure by the other party to pay any amounts due under the Interest Rate Swap Agreement, however, no such failure to pay by the Guarantor will entitle the Interest Rate Swap Provider to terminate the Interest Rate Swap Agreement, if such failure is due to the assets available at such time to the Guarantor being insufficient to make the required payment in full;

• at the option of the Guarantor, if the Interest Rate Swap Provider is the Bank and an Issuer Event of Default has occurred which has resulted in the covered bonds becoming due and payable under their respective terms;

• at the option of the Guarantor, in the event that (i) the short-term unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term unsecured, unsubordinated and unguaranteed debt obligations of the Interest Rate Swap Provider or any credit support provider, as applicable, cease to be rated at least P-1 or A2, respectively, by Moody’s, or, if the short-term unsecured, unsubordinated and unguaranteed debt obligations of any such person do not have a rating assigned by Moody’s, the long-term unsecured, unsubordinated and unguaranteed debt obligations of such person cease to be rated at least A1 by Moody’s, (ii) the short-term issuer default rating and the long-term issuer default rating of the Interest Rate Swap Provider or any credit support provider, as applicable, cease to be at least F1 and A, respectively, by Fitch, or (iii) the short-term unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term unsecured, unsubordinated and unguaranteed debt obligations of the Interest Rate Swap Provider or any credit support provider, as applicable, cease to be rated at least R-1(middle) or A (high), respectively, by DBRS, (each such event, an “Initial Downgrade Trigger Event”) and the Interest Rate Swap Provider does not provide credit support to the Guarantor within 10 Canadian Business Days of the occurrence of such Initial Downgrade Trigger Event pursuant to the terms of the applicable credit support annex, or arrange for its obligations under the Interest Rate Swap Agreement to be guaranteed by, or transferred to, an entity with rating(s) required by the relevant Rating Agencies;

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• at the option of the Guarantor, in the event that (i) the short-term unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term unsecured, unsubordinated and unguaranteed debt obligations of the Interest Rate Swap Provider or any credit support provider, as applicable, cease to be rated at least P-2 or A3, respectively, by Moody’s, (ii) the short-term issuer default rating and the long-term issuer default rating of the Interest Rate Swap Provider or any credit support provider, as applicable, cease to be at least F3 and BBB-, respectively, by Fitch, or (iii) the short-term unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term unsecured, unsubordinated and unguaranteed debt obligations of the Interest Rate Swap Provider or any credit support provider, as applicable, cease to be rated at least R-2 (high) or BBB (high), respectively, by DBRS, (each such event, a “Subsequent Downgrade Trigger Event,” and together with the Initial Downgrade Trigger Events, the “Downgrade Trigger Events”) and the Interest Rate Swap Provider does not arrange for its obligations under the Interest Rate Swap Agreement to be guaranteed by, or transferred to, an entity with rating(s) required by the relevant Rating Agencies, and does not provide additional credit support to the Guarantor within 10 Canadian Business Days of the occurrence of such Subsequent Downgrade Trigger Event pursuant to the terms of the applicable credit support annex; and

• upon the occurrence of the insolvency of the Interest Rate Swap Provider, or any credit support provider and certain insolvency-related events in respect of the Guarantor, or the merger of the Interest Rate Swap Provider without an assumption of the obligations under the Interest Rate Swap Agreement,

provided, however, that if, at any time, the Guarantor (a) is Independently Controlled and Governed, the Guarantor has the discretion, but is not required to, (i) waive any requirement of the Interest Rate Swap Provider to provide credit support, obtain an eligible guarantee or replace itself upon the occurrence of a Downgrade Trigger Event, and (ii) refrain from forthwith terminating the Interest Rate Swap Agreement or finding a replacement Interest Rate Swap Provider, in each case, upon the occurrence of an event of default or additional termination event caused solely by the Interest Rate Swap Provider, and (b) is not Independently Controlled and Governed, the Guarantor will not have the rights set out under clause (a)(i) and (a)(ii) of this paragraph.

Upon the termination of the Interest Rate Swap Agreement pursuant to an Interest Rate Swap Early Termination Event, the Guarantor or the Interest Rate Swap Provider may be liable to make a termination payment to the other in accordance with the provisions of the Interest Rate Swap Agreement.

Swap Collateral Excluded Amounts, if applicable, will be paid to the Interest Rate Swap Provider directly and not via the Priorities of Payments.

The notional amount of the Interest Rate Swap Agreement will generally be equal to the aggregate value of the Portfolio, and will be adjusted to correspond to any sale of Portfolio assets following each of a Demand Loan Repayment Event, the Demand Loan being demanded by the Bank, breach of the Pre-Maturity Test, service of an Asset Coverage Test Breach Notice and service of a Notice to Pay and swap termination payments may be due and payable in accordance with the terms of the Interest Rate Swap Agreement as a consequence thereof.

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If withholding taxes are imposed on payments made by the Interest Rate Swap Provider under the Interest Rate Swap Agreement, the Interest Rate Swap Provider will always be obliged to gross up these payments. If withholding taxes are imposed on payments made by the Guarantor to the Interest Rate Swap Provider under the Interest Rate Swap Agreement, the Guarantor will not be obliged to gross up those payments.

All of the interest and obligations of the Interest Rate Swap Provider under the Interest Rate Swap Agreement may be transferred by it to a replacement swap counterparty upon the Interest Rate Swap Provider providing five Canadian Business Days’ prior written notice to Guarantor and the Bond Trustee, provided that (i) such replacement swap counterparty has the rating(s) required by the relevant Rating Agencies (or the obligations of such replacement swap counterparty under the Interest Rate Swap Agreement are guaranteed by an entity having the rating(s) required by the relevant Rating Agencies), (ii) as of the date of such transfer, such replacement swap counterparty will not be required to withhold or deduct any taxes under the Interest Rate Swap Agreement as a result of such transfer, (iii) no termination event or event of default will occur under the Interest Rate Swap Agreement as a result of such transfer, (iv) no additional amount will be payable by the Guarantor under the Interest Rate Swap Agreement as a result of such transfer, (v) the Rating Agency Condition will have been satisfied, and (vi) such replacement swap counterparty enters into documentation substantially identical to the Interest Rate Swap Agreement. The Bond Trustee’s consent to such transfer is required if such transfer is obligatory due to a ratings downgrade, provided that such consent will be given if such replacement swap counterparty has the rating(s) required by the relevant Rating Agencies and the Rating Agency Condition has been satisfied.

The Interest Rate Swap Agreement will be in the form of an ISDA Master Agreement, including a schedule and confirmation thereto and credit support annex. Under the Interest Rate Swap Agreement, the Guarantor makes the following representations with respect to itself and/or the Interest Rate Swap Agreement, as applicable, and the Interest Rate Swap Provider makes the following representations (other than those in (x)) with respect to itself and/or the Interest Rate Swap Agreement: (i) that it is duly organized and validly existing, (ii) that it has the power and authority to enter into the Interest Rate Swap Agreement, (iii) that it is not in violation or conflict with any applicable law, its constitutional documents, any court order or judgment or any contractual restriction, (iv) it has obtained all necessary consents, (v) its obligations under the Interest Rate Swap Agreement are valid and binding, (vi) no event of default, potential event of default or termination event has occurred and is continuing under the Interest Rate Swap Agreement, (vii) there is no pending or, to its knowledge, any threatened litigation which is likely to affect its ability to perform under the Interest Rate Swap Agreement, (viii) all information furnished in writing is true, accurate and complete in every material respect, (ix) all payments will be made without any withholding and deduction, (x) that it is a “Canadian partnership” under the ITA and a limited partnership organized under the laws of the Province of Ontario, (xi) that it is entering into the agreement as principal and not as agent, and (xii) that it is not relying on the other party for any investment advice, that is capable of assessing the merits of and understanding the risks of entering into the relevant transaction and that the Interest Rate Swap Provider is not acting as fiduciary to it.

Under the Interest Rate Swap Agreement, the Guarantor’s obligations will be limited in recourse to the Portfolio.

The Interest Rate Swap Agreement will be governed by, and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

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Covered Bond Swap Agreement

To provide a hedge against currency risks in respect of amounts received by the Guarantor under the Interest Rate Swap Agreement and amounts payable in respect of its obligations under the Covered Bond Guarantee, the Guarantor will enter into the Covered Bond Swap Agreement with the Covered Bond Swap Provider (initially the Bank), and may enter into a new ISDA Master Agreement, schedule and confirmation(s) and credit support annex, if applicable, for each Tranche and/or Series of covered bonds issued at the time such covered bonds are issued. The Covered Bond Swap Provider and the Guarantor will agree to swap Canadian Dollar floating rate amounts received by the Guarantor under the Interest Rate Swap Agreement (described above) into the exchange rate specified in the Covered Bond Swap Agreement relating to the relevant Tranche or Series of covered bonds to hedge certain currency risks in respect of amounts received by the Guarantor under the Interest Rate Swap Agreement and amounts payable or that may become payable in respect of its obligations under the Covered Bond Guarantee. No cash flows will be exchanged under the Covered Bond Swap Agreement unless and until the Covered Bond Swap Effective Date has occurred.

If prior to (i) the Final Maturity Date in respect of the relevant Series or Tranche of covered bonds, or (ii) any Interest Payment Date or the Extended Due for Payment Date following a deferral of the Original Due for Payment Date to the Extended Due for Payment Date by the Guarantor pursuant to Condition 6.1 (Final redemption) (if an Extended Due for Payment Date is specified as applicable in the prospectus supplement for a Series of covered bonds and the payment of the Final Redemption Amount or any part of it by the Guarantor under the Covered Bond Guarantee is deferred pursuant to Condition 6.1 (Final redemption)) of the Terms and Conditions of the Covered Bonds, the Guarantor notifies the Covered Bond Swap Provider (pursuant to the terms of the Covered Bond Swap Agreement) of the amount in the specified currency to be paid by such Covered Bond Swap Provider on such Final Maturity Date or Interest Payment Date thereafter (such amount being equal to the Final Redemption Amount or the relevant portion thereof payable by the Guarantor on such Final Maturity Date or Interest Payment Date under the Covered Bond Guarantee in respect of the relevant Series or Tranche of covered bonds), then the Covered Bond Swap Provider will pay the Guarantor such amount and the Guarantor will pay the Covered Bond Swap Provider the Canadian Dollar Equivalent of such amount. Further, if on any day an Early Redemption Amount is payable pursuant to Condition 9.2 (Guarantor Events of Default) of the Terms and Conditions of the Covered Bonds, the Covered Bond Swap Provider will pay the Guarantor such Early Redemption Amount (or the relevant portion thereof) and the Guarantor will pay the Covered Bond Swap Provider the Canadian Dollar Equivalent thereof, following which the notional amount of the Covered Bond Swap Agreement will reduce accordingly.

The Covered Bond Swap Agreement will (unless terminated earlier by a Covered Bond Swap Early Termination Event) terminate in respect of any relevant Tranche or Series of covered bonds, on the earlier of:

(a) the Final Maturity Date for, or if earlier, the date of redemption in whole of, such Series of covered bonds or, if the Guarantor notifies the Covered Bond Swap Provider, prior to the Final Maturity Date for such Tranche or Series of covered bonds, of the inability of the Guarantor to pay in full Guaranteed Amounts corresponding to the Final Redemption Amount in respect of such Tranche or Series of covered bonds, the final Interest Payment Date on which an amount representing the Final Redemption Amount for such Tranche or Series of covered bonds is paid (but in any event not later than the Extended Due for Payment Date for such Tranche or Series of covered bonds); and

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(b) the date designated therefor by the Bond Trustee and notified to the Covered Bond Swap Provider and the Guarantor for purposes of realizing the Security in accordance with the Security Agreement and distributing the proceeds therefrom in accordance with the Post-Enforcement Priorities of Payments following the enforcement of the Security pursuant to Condition 9.3 (Enforcement) of the Terms and Conditions of the Covered Bonds.

The Covered Bond Swap Agreement may also be terminated in certain other circumstances (each referred to as a “Covered Bond Swap Early Termination Event”), including:

• at the option of any party to the Covered Bond Swap Agreement, if there is a failure by the other party to pay any amounts due under the Covered Bond Swap Agreement, however, no such failure to pay by the Guarantor will entitle the Covered Bond Swap Provider to terminate the Covered Bond Swap Agreement, if such failure is due to the assets available at such time to the Guarantor being insufficient to make the required payment in full);

• at the option of the Guarantor, if the Covered Bond Swap Provider is the Bank and an Issuer Event of Default has occurred which has resulted in the covered bonds becoming due and payable under their respective terms;

• an Initial Downgrade Trigger Event has occurred and the Covered Bond Swap Provider does not provide credit support to the Guarantor within 10 Canadian Business Days of the occurrence of such Initial Downgrade Trigger Event pursuant to the terms of the applicable credit support annex, or arrange for its obligations under the Covered Bond Swap Agreement to be guaranteed by, or transferred to, an entity with rating(s) required by the relevant Rating Agencies;

• at the option of the Guarantor, a Subsequent Downgrade Trigger Event has occurred and the Covered Bond Swap Provider does not arrange for its obligations under the Covered Bond Swap Agreement to be guaranteed by, or transferred to, an entity with rating(s) required by the relevant Rating Agencies, and does not provide additional credit support to the Guarantor within 10 Canadian Business Days of the occurrence of such Subsequent Downgrade Trigger Event pursuant to the terms of the applicable credit support annex; and

• upon the occurrence of the insolvency of the Covered Bond Swap Provider or any credit support provider, and certain insolvency-related events in respect of the Guarantor or the merger of the Covered Bond Swap Provider without an assumption of the obligations under the Covered Bond Swap Agreement.

Provided, however, that if, at any time, the Guarantor (a) is Independently Controlled and Governed, the Guarantor has the discretion, but is not required to, (i) waive any requirement of the Covered Bond Swap Provider to provide credit support, obtain an eligible guarantee or replace itself upon the occurrence of a Downgrade Trigger Event, and (ii) refrain from forthwith terminating the Covered Bond Swap Agreement or finding a replacement Covered Bond Swap Provider, in each case, upon the occurrence of an event of default or additional termination event

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caused solely by the Covered Bond Swap Provider, and (b) is not Independently Controlled and Governed, the Guarantor will not have the rights set out under clause (a)(i) and (a)(ii) of this paragraph.

Upon the termination of the Covered Bond Swap Agreement pursuant to a Covered Bond Swap Early Termination Event, the Guarantor or the Covered Bond Swap Provider may be liable to make a termination payment to the other in accordance with the provisions of the Covered Bond Swap Agreement.

Any termination payment made by the Covered Bond Swap Provider to the Guarantor in respect of the Covered Bond Swap Agreement will first be used to the extent necessary (prior to the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice) to pay a replacement Covered Bond Swap Provider to enter into a replacement Covered Bond Swap Agreement with the Guarantor, unless a replacement Covered Bond Swap Agreement has already been entered into on behalf of the Guarantor. Any premium received by the Guarantor from a replacement Covered Bond Swap Provider entering into a Covered Bond Swap Agreement will first be used to make any termination payment due and payable by the Guarantor with respect to the Covered Bond Swap Agreement, unless such termination payment has already been made on behalf of the Guarantor.

Swap Collateral Excluded Amounts, if applicable, will be paid to the Covered Bond Swap Provider directly and not via the Priorities of Payments.

All of the interest and obligations of the Covered Bond Swap Provider under the Covered Bond Swap Agreement may be transferred by it to a replacement swap counterparty upon the Covered Bond Swap Provider providing five Canadian Business Days’ prior written notice to Guarantor and the Bond Trustee, provided that (i) such replacement swap counterparty has the rating(s) required by the relevant Rating Agencies (or the obligations of such replacement swap counterparty under the Covered Bond Swap Agreement are guaranteed by an entity having the rating(s) required by the relevant Rating Agencies), (ii) as of the date of such transfer, such replacement swap counterparty will not be required to withhold or deduct any taxes under the Covered Bond Swap Agreement as a result of such transfer, (iii) no termination event or event of default will occur under the Covered Bond Swap Agreement as a result of such transfer, (iv) no additional amount will be payable by the Guarantor under the Covered Bond Swap Agreement as a result of such transfer, (v) the Rating Agency Condition will have been satisfied, and (vi) such replacement swap counterparty enters into documentation substantially identical to the Covered Bond Swap Agreement. The Bond Trustee’s consent to such transfer is required if such transfer is obligatory due to a ratings downgrade, provided that such consent will be given if such replacement swap counterparty has the rating(s) required by the relevant Rating Agencies and the Rating Agency Condition has been satisfied.

If withholding taxes are imposed on payments made by the Covered Bond Swap Provider to the Guarantor under the Covered Bond Swap Agreement, the Covered Bond Swap Provider will always be obliged to gross up those payments. If withholding taxes are imposed on payments made by the Guarantor to the Covered Bond Swap Provider under the Covered Bond Swap Agreement, the Guarantor will not be obliged to gross up those payments.

The Covered Bond Swap Agreement will be in the form of an ISDA Master Agreement, including a schedule and confirmation and credit support annex, if applicable, in relation to each particular Tranche or Series of covered bonds, as the case may be. Under the Covered Bond

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Swap Agreement, the Guarantor makes the following representations with respect to itself and/or the Covered Bond Swap Agreement, as applicable, and the Covered Bond Swap Provider makes the following representations (other than those in (x)) with respect to itself and/or the Covered Bond Swap Agreement: (i) that it is duly organized and validly existing, (ii) that it has the power and authority to enter into the Covered Bond Swap Agreement, (iii) that it is not in violation or conflict with any applicable law, its constitutional documents, any court order or judgment or any contractual restriction, (iv) it has obtained all necessary consents, (v) its obligations under the Covered Bond Swap Agreement are valid and binding, (vi) no event of default, potential event of default or termination event has occurred and is continuing under the Covered Bond Swap Agreement, (vii) there is no pending or, to its knowledge, any threatened litigation which is likely to affect its ability to perform under the Covered Bond Swap Agreement, (viii) all information furnished in writing is true, accurate and complete in every material respect, (ix) all payments will be made without any withholding and deduction, (x) that it is a “Canadian partnership” under the ITA and a limited partnership organized under the laws of the Province of Ontario, (xi) that it is entering into the agreement as principal and not as agent, and (xii) that it is not relying on the other party for any investment advice, that is capable of assessing the merits of and understanding the risks of entering into the relevant transaction and that the Covered Bond Swap Provider is not acting as fiduciary to it.

Under the Covered Bond Swap Agreement, the Guarantor’s obligations will be limited in recourse to the Portfolio.

The Covered Bond Swap Agreement will be governed by, and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Bank Account Agreement

Pursuant to the terms of the Bank Account Agreement between the Guarantor, the Account Bank (initially the Bank), the GDA Provider (initially the Bank), the Cash Manager (initially the Bank) and the Bond Trustee, the Guarantor will maintain with the Account Bank the Transaction Account (to the extent maintained), into which amounts may be deposited by the Guarantor prior to their transfer to the GDA Account. Funds standing to the credit of the Transaction Account will be transferred to the GDA Account on each Guarantor Payment Date and applied by the Cash Manager in accordance with the Priorities of Payments described below under “Cashflows.” The Transaction Account will be operated in accordance with the Cash Management Agreement, the Guarantor Agreement, and the Security Agreement.

Under the Bank Account Agreement, the Account Bank represents and warrants to the Cash Manager, the GDA Provider, the Guarantor and the Bond Trustee on the Program Date and on each date on which an amount is credited to the Guarantor Accounts and on each Guarantor Payment Date that: (i) it is a bank listed in Schedule I to the Bank Act and duly qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified, (ii) the execution, delivery and performance by it of the Bank Account Agreement (x) are within its corporate powers, (y) have been duly authorized by all necessary corporate action, and (z) do not contravene or result in a default under or conflict with (A) its charter or by-laws, (B) any law, rule or regulation applicable to it, or (C) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting it or its property, (iii) it is not a non-resident of Canada for purposes of the ITA, (iv) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities under the Transaction Documents to which it is a party, (v) it is rated at or above the Account Bank Threshold Ratings by each of the

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Rating Agencies, (vi) it is and will continue to be in good standing with OSFI, (vii) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to the services to be provided by it pursuant to the Bank Account Agreement and the other Transaction Documents to which it is party, (ix) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party, and (x) it will comply with the CMHC Guide and all Transaction Documents to which it is a party and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations under the Bank Account Agreement and the other Transaction Documents to which it is a party.

If one or more Rating Agencies downgrade the unsecured, unsubordinated and unguaranteed debt obligations of the Account Bank below the Account Bank Required Ratings (as defined below), or if certain other events occur and the Account Bank is terminated, then the GDA Account and the Transaction Account (to the extent maintained) will be required to be closed and all amounts standing to the credit thereof transferred to accounts held with the Standby Account Bank.

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

In addition to the requirement that the Guarantor Accounts be moved to the Standby Account Bank if the Account Bank breaches the Account Bank Required Ratings as described above, the Guarantor may (in the case of (i) through (iii) below) or will (in the case of (iv) through (vii) below) (in the case of each of the events below other than (vii), with the prior consent of the Bond Trustee, which consent will not be withheld unless the Bond Trustee determines that the termination of the Bank Account Agreement would be materially prejudicial to the covered bondholders) terminate the Bank Account Agreement and move the Guarantor Accounts to the Standby Account Bank if: (i) a deduction or withholding for or on account of any taxes is imposed or is likely to be imposed in respect of the interest payable on any Guarantor Account, (ii) there is a breach by the Account Bank of certain representations and warranties or a failure by the Account Bank to perform certain covenants made by it under the Bank Account Agreement, (iii) the Account Bank fails to comply with any of its other covenants and obligations under the Bank Account Agreement, which failure in the reasonable opinion of the Bond Trustee is materially prejudicial to the interests of the covered bondholders and such failure is not remedied within 30 days of the earlier of the Account Bank becoming aware of the failure and receipt by the Account Bank of notice from the Bond Trustee requiring the same to be remedied, (iv) the Account Bank ceases or threatens to cease carrying on the business of the Account Bank, (v) an order is made for the winding up of the Account Bank, (vi) an Insolvency Event occurs with respect to the Account Bank, or (vii) if the Account Bank is the Bank or an affiliate thereof, an Issuer Event of Default has occurred.

The Bank Account Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Standby Bank Account Agreement

Pursuant to the terms of a standby bank account agreement (the “Standby Bank Account Agreement”) between the Guarantor, Royal Bank of Canada (the “Standby Account Bank”), the Standby GDA Provider, the Cash Manager, the Bank and the Bond Trustee (as amended and/or restated and/or supplemented from time to time), the Standby Account Bank will open and

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maintain a standby GDA account (the “Standby GDA Account”) and standby transaction account (the “Standby Transaction Account”) in the name of the Guarantor following delivery by the Guarantor (or the Cash Manager on its behalf) of a standby account bank notice (the “Standby Account Bank Notice”) to the Standby Account Bank.

Pursuant to the terms of the Cash Management Agreement, the Cash Manager will deliver a Standby Account Bank Notice to the Standby Account Bank if the funds held in the GDA Account and the Transaction Account (to the extent maintained) are required to be transferred to the Standby Account Bank pursuant to the terms of the Bank Account Agreement or the Bank Account Agreement is terminated for any reason.

The Standby Bank Account Agreement provides that the Standby GDA Account and the Standby Transaction Account, when opened, will be subject to the security interest in favor of the Bond Trustee (for itself and on behalf of the other Secured Creditors) granted under the Security Agreement and that payments of amounts owing to the Standby Account Bank in respect of fees or otherwise will be subject to the relevant Priorities of Payments set out in the Guarantor Agreement and the Security Agreement.

Under the Standby Bank Account Agreement, the Standby Account Bank represents and warrants to the Guarantor and the Bond Trustee on the Program Date and on each date on which an amount is credited to any Guarantor Account that is held with the Standby Account Bank and on each Guarantor Payment Date that: (i) it is a bank listed in Schedule I to the Bank Act and duly qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified, (ii) the execution, delivery and performance by it of the Standby Bank Account Agreement (x) are within its corporate powers, (y) have been duly authorized by all necessary corporate action, and (z) do not contravene or result in a default under or conflict with (A) its charter or by-laws, (B) any law, rule or regulation applicable to it, or (C) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting it or its property, (iii) it is not a non-resident of Canada for purposes of the ITA, (iv) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities under the other Transaction Documents to which it is a party, (v) it is rated at or above the Standby Account Bank Required Ratings by each of the Rating Agencies, (vi) it is and will continue to be in good standing with OSFI, (vii) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to the services to be provided by it pursuant to the Standby Bank Account Agreement and the other Transaction Documents to which it is party, (viii) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party, (ix) it will comply with the CMHC Guide and all Transaction Documents to which it is a party and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations under the Standby Bank Account Agreement and the other Transaction Documents to which it is a party.

The Standby Bank Account Agreement further provides that if one or more Rating Agencies downgrades or withdraws the ratings of the unsecured, unsubordinated and unguaranteed debt obligations, or issuer default rating, as applicable, of the Standby Account Bank below the Standby Account Bank Required Ratings, then the Standby GDA Account and the Standby Transaction Account (to the extent maintained) will be required to be closed and all amounts standing to the credit thereof transferred to accounts held with a bank having the Standby Account Bank Required Ratings.

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“Standby Account Bank Required Ratings” means the threshold ratings of (i) P-1 with respect to the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank by Moody’s, (ii) F1 with respect to the short-term issuer default rating of the Standby Account Bank by Fitch, (iii) A with respect to long-term issuer default rating of the Standby Account Bank by Fitch; and (iv) either (A) R-1 (middle) with respect to the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank by DBRS, or (B) A (low) with respect to the long-term unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank by DBRS.

In addition to the requirement that the Guarantor Accounts be moved from the Standby Account Bank to a bank having the Standby Account Bank Required Ratings if one or more Rating Agencies downgrades or withdraws the ratings of the unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank, or the issuer default rating of the Standby Account Bank, as applicable, below the Standby Account Bank Required Ratings as described above, the Guarantor may (in the case of (i) through (iii) below) or will (in the case of (iv) through (vi) below) (in the case of each of the events below other than (vii), with the prior consent of the Bond Trustee, which consent will not be withheld unless the Bond Trustee determines that the termination of the Standby Bank Account Agreement would be materially prejudicial to the covered bondholders) terminate the Standby Bank Account Agreement and move the Guarantor Accounts from the Standby Account Bank to a bank having the Standby Account Bank Required Ratings if: (i) a deduction or withholding for or on account of any taxes is imposed or is likely to be imposed in respect of the interest payable on any Guarantor Account, (ii) there is a breach by the Standby Account Bank of certain representations and warranties or a failure by the Standby Account Bank to perform certain covenants made by it under the Standby Bank Account Agreement, (iii) the Standby Account Bank materially breaches any of its other covenants and obligations under the Standby Bank Account Agreement or the Standby Guaranteed Deposit Account Contract, (iv) the Standby Account Bank ceases or threatens to cease carrying on the business of the Standby Account Bank, (v) an order is made for the winding up of the Standby Account Bank, or (vi) an Insolvency Event occurs with respect to the Standby Account Bank.

References herein to the GDA Account or the Transaction Account include, unless otherwise stated, references to the Standby GDA Account or the Standby Transaction Account when the Standby GDA Account and the Standby Transaction Account become operative.

The Standby Bank Account Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Guaranteed Deposit Account Contract

The Guarantor has entered into a guaranteed deposit account contract (“Guaranteed Deposit Account Contract” or “GDA”) with the GDA Provider, the Cash Manager and the Bond Trustee pursuant to which the GDA Provider has agreed to pay interest on the moneys standing to the credit thereof at the GDA Rate. Under the Guaranteed Deposit Account Contract, the GDA Provider makes the same representations and warranties to the Cash Manager, the Guarantor and the Bond Trustee on the Program Date and on each date on which an amount is credited to the GDA Account and on each Guarantor Payment Date as are made by the Account Bank and which are described under “Bank Account Agreement” above.

The Guaranteed Deposit Account Contract is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

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Standby Guaranteed Deposit Account Contract

The Guarantor has entered into a standby guaranteed deposit account contract with Royal Bank of Canada (the “Standby GDA Provider”), the Cash Manager, and the Bond Trustee on the Program Date (as amended and/or supplemented and/or restated from time to time, the “Standby Guaranteed Deposit Account Contract”), pursuant to which the Standby GDA Provider has agreed to pay interest on the Standby GDA Account at the Standby GDA Rate. Under the Standby Guaranteed Deposit Account Contract, the Standby GDA Provider makes the same representations and warranties to the Guarantor and the Bond Trustee on the Program Date and on each date on which an amount is credited to the Standby GDA Account and on each Guarantor Payment Date as are made by the Standby Account Bank and which are described under “—Standby Bank Account Agreement” above.

Funds on deposit in the GDA Account and the Transaction Account (to the extent maintained) will be transferred to the Standby GDA Account if the Cash Manager has delivered a Standby Account Bank Notice to the Standby Account Bank that such funds are required to be transferred to the Standby Account Bank pursuant to the terms of the Bank Account Agreement or the Bank Account Agreement is terminated for any reason, and funds that were previously required to be deposited to the GDA Account and the Transaction Account (to the extent maintained) pursuant to the terms of the Transaction Documents will thereafter be deposited only to the Standby GDA Account.

The Standby Guaranteed Deposit Account Contract is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Security Agreement

Pursuant to the terms of the Security Agreement entered into on the Program Date by the Guarantor, the Bond Trustee and other Secured Creditors, the secured obligations of the Guarantor and all other obligations of the Guarantor under or pursuant to the Transaction Documents to which it is a party owed to the Bond Trustee and the other Secured Creditors are secured by a first ranking security interest (the “Security”) over all present and future assets of the Guarantor, including without limitation the Portfolio, certain contractual rights and any Excess Proceeds, subject to the right of the Guarantor to sell such Portfolio pursuant to and in accordance with the Transaction Documents.

Representations and Warranties of the Guarantor

Under the Security Agreement, the Guarantor represents and warrants to the Secured Creditors that:

(a) The Security Agreement creates a valid first priority security interest in the present and future personal property and undertaking of the Guarantor and all proceeds thereof (the “Collateral”).

(b) It is the legal and beneficial owner of all Collateral.

(c) The Collateral, including the Portfolio, is free and clear of all liens other than those created in favor of the Bond Trustee and customary permitted liens and the Security in the Collateral has been perfected.

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(d) The Bond Trustee has obtained control pursuant to the applicable personal property security legislation of the Portfolio that consists of investment property, the Bond Trustee is a “protected purchaser” within the meaning of such legislation, and no other person has control or the right to obtain control of such investment property.

(e) No authorization, consent or approval from, or notices to, any governmental authority or other person is required for the due execution and delivery by it of the Security Agreement or the performance or enforcement of its obligations thereunder, other than those that have been obtained or made.

(f) The address of the Guarantor’s chief executive office is that given at the end of the Security Agreement.

(g) No encumbrance exists over or in respect of any of its assets except for encumbrances created by the Security Agreement and certain permitted security interests.

(h) It is validly formed and existing as a limited partnership under the Limited Partnership Act (Ontario) pursuant to a declaration of limited partnership filed under the Limited Partnership Act (Ontario).

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

(j) It is not the subject of any governmental or official investigation or inquiry and to its knowledge, none is progressing or pending or has been threatened in writing against it, which may have a material adverse effect on any of it, any relevant Transaction Document (other than the Guarantor Agreement), and/or the issue and offering of covered bonds under the Program.

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

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

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

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

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

(i) its declaration of limited partnership under the Limited Partnership Act (Ontario);

(ii) any law applicable to it; or

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

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

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

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

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

(t) It does not require the consent of any other party except for such consents as have been obtained by it prior to the date hereof or the consent, license, approval or authorization of any governmental authority in connection with the entering into or performance of the relevant Transaction Documents.

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

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

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

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

Release of Security

In the event of any sale of Loans (including Selected Loans) and their Related Security by the Guarantor pursuant to and in accordance with the Transaction Documents, the Bond Trustee will (subject to the written request of the Guarantor), release those Loans from the Security created by and pursuant to the Security Agreement on the date of such sale but only if (i) the Bond Trustee provides its prior written consent to the terms of such sale in accordance with the Guarantor Agreement, and (ii) the Guarantor provides a certificate to the Bond Trustee that such sale of Loans and their Related Security has been made in accordance with the terms of the Transaction Documents.

In the event of the repurchase of a Loan and its Related Security by the Seller pursuant to and in accordance with the Transaction Documents, the Bond Trustee will release that Loan from the Security created by and pursuant to the Security Agreement on or prior to the date of the repurchase.

Enforcement

If a Guarantor Event of Default occurs and a Guarantor Acceleration Notice is served on the Bank and the Guarantor, the Bond Trustee will be entitled to appoint a Receiver, and/or enforce the Security constituted by the Security Agreement (including selling the Portfolio), and/or take such steps as it will deem necessary, subject in each case to being indemnified and/or secured to its satisfaction. All proceeds (other than any Third Party Amount or Swap Collateral Excluded Amounts) received by the Bond Trustee from the enforcement of the Security will be applied in accordance with the Post-Enforcement Priorities of Payments described under “Cashflows.”

The Security Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein (other than certain other provisions relating to real property located outside of the Province of Ontario which will be governed by the law of the jurisdiction in which such property is located).

Corporate Services Agreement

Pursuant to the terms of a corporate services agreement (such corporate services agreement as amended and/or restated and/or supplemented from time to time, the “Corporate Services Agreement”) between the Corporate Services Provider, the Liquidation GP, the Bank and the Guarantor, the Corporate Services Provider will provide corporate services to the Liquidation GP.

The Corporate Services Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Agency Agreement

Under the terms of the Agency Agreement between the Agents, the Bank, the Guarantor and the Bond Trustee, the Agents have been appointed by the Bank and the Guarantor to carry out various issuing and paying agency, exchange agency, transfer agency, calculation agency and registrar duties in respect of the covered bonds. Such duties include, but are not limited to, dealing with any applicable stock exchanges and clearing system on behalf of the Bank and the Guarantor in connection with an issuance of covered bonds and making payments of interest and principal in respect of the covered bonds upon receipt of such amounts from the Bank or the Guarantor, as applicable.

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Upon the occurrence of an Issuer Event of Default, Potential Issuer Event of Default, a Guarantor Event of Default or Potential Guarantor Event of Default, as applicable, the Bond Trustee may, by notice in writing to the Bank, the Guarantor and the Agents, require the Agents to thereafter act as agents of the Bond Trustee.

Any Agent or Calculation Agent may resign its appointment under the Agency Agreement and/or in relation to any Series of covered bonds upon 60 days’ notice to the Bank, the Guarantor and the Bond Trustee, provided that any such resignation by the Principal Paying Agent, the Registrar or any Calculation Agent will not be effective unless a successor has been appointed.

The Bank or the Guarantor may, with the prior written consent of the Bond Trustee, revoke its appointment of any Agent or Calculation Agent under the Agency Agreement and/or in relation to any Series of covered bonds upon 45 days’ notice to such Agent or Calculation Agent, provided that in certain circumstances, such revocation will not be effective unless a successor has been appointed. Notwithstanding the foregoing, the Guarantor may revoke the appointment of any Agent or Calculation Agent in the event that there is a breach by such Agent or Calculation Agent of certain representations and warranties or a failure by such Agent or Calculation Agent to perform certain covenants made by it under the Agency Agreement. In addition, if the unsecured, unsubordinated and unguaranteed debt obligations or issuer default ratings of a Paying Agent cease to be rated by the Rating Agencies at or above each of the Paying Agent Required Ratings at any time that (a) the Guarantor is Independently Controlled and Governed, the Guarantor may, and (b) the Guarantor is not Independently Controlled and Governed, the Guarantor will, terminate the appointment of such Paying Agent and appoint one or more further or other Agents. Furthermore, if an Issuer Event of Default (A) occurs and is continuing, or (B) has previously occurred and is continuing, at any time that the Guarantor is Independently Controlled and Governed, the Guarantor may terminate the appointment of an Agent which is the Bank or an affiliate of the Bank and appoint one or more further or other Agents.

The appointment of any Agent or Calculation Agent under the Agency Agreement and in relation to each relevant Series of covered bonds will terminate if any of the following events or circumstances will occur or arise, namely: such Agent or Calculation Agent becomes incapable of acting; such Agent or Calculation Agent is adjudged bankrupt or insolvent; such Agent or Calculation Agent files a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of a receiver, administrator or other similar official of all or any substantial part of its property or admits in writing its inability to pay or meet its debts as they mature or suspends payment thereof; a receiver, administrator or other similar official of such Agent or Calculation Agent or of all or any substantial part of its property is appointed; an order of any court is entered approving any petition filed by or against such Agent or Calculation Agent under the provisions of any applicable bankruptcy or insolvency law; or any public officer takes charge or control of such Agent or Calculation Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation.

The Agency Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Modification of Transaction Documents

The provisions of the Transaction Documents generally require that all amendments thereto be in writing and executed by the parties thereto. In addition, any material amendment to a

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Transaction Document will be subject to satisfaction of the Rating Agency Condition. Pursuant to the terms of the Security Agreement and the Trust Deed, the Bond Trustee is permitted to consent to and/or execute amendments without consulting the other Secured Creditors if the amendment is of a minor or technical nature or the Bond Trustee is otherwise satisfied that the amendment is not reasonably expected to be materially prejudicial to the interests of the covered bondholders.

In addition to the general amendment provisions, the Managing GP has the authority to make amendments to the Guarantor Agreement without the consent of any other party in order to cure any ambiguity or correct or supplement any provision thereof, provided that such amendments do not adversely affect the interests of the other Partners, or, while covered bonds are outstanding, the Bond Trustee (on behalf of the covered bondholders). If the interests of any such party would be adversely affected by a proposed amendment to the Guarantor Agreement, such amendment may only be made by the Managing GP with the consent of such adversely affected Partner and/or the Bond Trustee, as applicable.

For greater certainty, all amendments to the Transaction Documents must comply with the CMHC Guide.

Modification of Ratings Triggers and Consequences

Any amendment to (a) a Ratings Trigger provided for in any Transaction Document that lowers the threshold ratings specified therein, or (b) the consequences of breaching any such Ratings Trigger provided for in any Transaction Document that makes such consequences less onerous, will, with respect to each affected Rating Agency only, be deemed to be a material amendment and will be subject to satisfaction of the Rating Agency Condition with respect to each affected Rating Agency.

Notwithstanding the foregoing, if at any time the Bank determines that any one of DBRS, Fitch or Moody’s will not be a Rating Agency in respect of the Program, then, so long as (a) the Program is in compliance with the terms of the CMHC Guide with respect to ratings of the covered bonds, and (b) each outstanding Series of covered bonds is rated by at least two Rating Agencies, the Ratings Triggers for such rating agency will not be applicable to the Program without any further action or formality, including for greater certainty satisfaction of the Rating Agency Condition or consent or approval of the Bond Trustee or the holders of the covered bonds. Any amendments to the Transaction Documents to reflect the foregoing will be deemed not to be a material amendment and may be made by the parties thereto without the requirement for satisfaction of the Rating Agency Condition with respect to any Rating Agency or consent or approval of the Bond Trustee or the holders of the covered bonds.

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CASHFLOWS

As described above under “Description of the Covered Bonds—Credit Structure,” until the occurrence of a Covered Bond Guarantee Activation Event, the covered bonds will be obligations of the Bank only. The Bank is liable to make payments when due on the covered bonds, whether or not it has received any corresponding payment from the Guarantor under the Intercompany Loan.

This section summarizes the Priorities of Payments of the Guarantor, as to the allocation and distribution of amounts standing to the credit of the Guarantor on the Ledgers and their order of priority:

(a) when no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred;

(b) when an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred;

(c) following service of a Notice to Pay on the Guarantor; and

(d) following service of a Guarantor Acceleration Notice and enforcement of the Security.

Allocation and distribution of Available Revenue Receipts when no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred.

At any time when no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred, Available Revenue Receipts will be allocated and distributed as described below.

The Guarantor or the Cash Manager on its behalf will, as of each Calculation Date, calculate:

(i) the amount of Available Revenue Receipts available for distribution on the immediately following Guarantor Payment Date;

(ii) the Reserve Fund Required Amount (if applicable);

(iii) where the Pre-Maturity Test has been breached in respect of a Series of Hard Bullet Covered Bonds, on each Calculation Date falling in the twelve months prior to the Final Maturity Date of the relevant Series of Hard Bullet Covered Bonds, whether or not the amount standing to the credit of the Pre-Maturity Liquidity Ledger including the principal amount of any Substitution Assets standing to the credit of the Pre-Maturity Liquidity Ledger at such date is less than the Pre-Maturity Liquidity Required Amount.

On each Guarantor Payment Date, the Guarantor (or the Cash Manager on its behalf) will transfer Available Revenue Receipts from the Revenue Ledger to the Payment Ledger, and use

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Available Revenue Receipts held by the Cash Manager for and on behalf of the Guarantor and, as necessary, transfer Available Revenue Receipts from the GDA Account to the Transaction Account (to the extent maintained), in an amount equal to the lower of (a) the amount required to make the payments or credits described below, and (b) the amount of Available Revenue Receipts.

Pre-Acceleration Revenue Priorities of Payments

At any time no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred, Available Revenue Receipts will be applied by or on behalf of the Guarantor (or the Cash Manager on its behalf) on each Guarantor Payment Date (except for amounts due to third parties by the Guarantor under paragraph (a) or Third Party Amounts, which will be paid when due) in making the following payments and provisions (the “Pre-Acceleration Revenue Priorities of Payments”) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full):

(a) first, in or towards satisfaction of any amounts due and payable by the Guarantor to third parties and incurred without breach by the Guarantor of the Transaction Documents to which it is a party (and for which payment has not been provided for elsewhere in the relevant Priorities of Payments) and to provide for any such amounts expected to become due and payable by the Guarantor in the immediately succeeding Guarantor Payment Period and to pay and discharge any liability of the Guarantor for taxes;

(b) second, any amounts in respect of interest due to the Bank in respect of the Demand Loan pursuant to the terms of the Intercompany Loan;

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

(i) any remuneration then due and payable to the Servicer and any costs, charges, liabilities and expenses then due or to become due and payable to the Servicer under the provisions of the Servicing Agreement in the immediately succeeding Guarantor Payment Period, together with applicable Goods and Services Tax (“GST”) (or other similar taxes) thereon to the extent provided therein;

(ii) any remuneration then due and payable to the Cash Manager and any costs, charges, liabilities and expenses then due or to become due and payable to the Cash Manager under the provisions of the Cash Management Agreement in the immediately succeeding Guarantor Payment Period, together with applicable GST (or other similar taxes) thereon to the extent provided therein, provided that if the Cash Manager is the Bank or a member of the BMO Group, it will not receive any fees;

(iii) amounts (if any) due and payable to the Account Bank (or, as applicable, the Standby Account Bank) (including costs) pursuant to the terms of the Bank Account Agreement (or, as applicable, the Standby Bank Account Agreement), together with applicable GST (or other similar taxes) thereon to the extent provided therein;

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(iv) amounts due and payable to the Cover Pool Monitor pursuant to the terms of the Cover Pool Monitor Agreement (other than the amounts referred to in paragraph (j) below), together with applicable GST (or other similar taxes) thereon to the extent provided therein; and

(v) amounts due and payable to the Custodian pursuant to the terms of the Mortgage Sale Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein;

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

(i) payment due to the Interest Rate Swap Provider (including any termination payment due and payable by the Guarantor under the Interest Rate Swap Agreement (but excluding any Excluded Swap Termination Amount)) pursuant to the terms of the Interest Rate Swap Agreement; and

(ii) payment due to the Covered Bond Swap Provider (including any termination payment due and payable by the Guarantor under the Covered Bond Swap Agreement (but excluding any Excluded Swap Termination Amount)) pursuant to the terms of the Covered Bond Swap Agreement;

(e) fifth, in or towards payment on the Guarantor Payment Date of, or to provide for payment on such date in the future of such proportion of the relevant payment falling due in the future as the Cash Manager may reasonably determine (in the case of any such payment or provision, after taking into account any provisions previously made and any amounts receivable from the Interest Rate Swap Provider under the Interest Rate Swap Agreement) any amounts due or to become due and payable (excluding principal amounts) to the Bank in respect of the Guarantee Loan pursuant to the terms of the Intercompany Loan Agreement;

(f) sixth, if a Servicer Event of Default has occurred, all remaining Available Revenue Receipts to be credited to the GDA Account (with a corresponding credit to the Revenue Ledger maintained in respect of that account) until such Servicer Event of Default is either remedied by the Servicer or waived by the Bond Trustee or a new servicer is appointed to service the Portfolio (or the relevant part thereof);

(g) seventh, in or towards a credit to the GDA Account (with a corresponding credit to the Reserve Ledger) of an amount up to but not exceeding the amount by which the Reserve Fund Required Amount (if applicable) exceeds the existing balance on the Reserve Ledger as calculated on the immediately preceding Calculation Date;

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(h) eighth, if the Guarantor is required to make a deposit to the Pre-Maturity Liquidity Ledger due to a breach of the Pre-Maturity Test in respect of any Series of Hard Bullet Covered Bonds, towards a credit to the GDA Account (with a corresponding credit to the Pre-Maturity Liquidity Ledger) of an amount up to but not exceeding the difference between:

(i) the Pre-Maturity Liquidity Required Amount as calculated on the immediately preceding Calculation Date; and

(ii) the sum of any amounts standing to the credit of the Pre-Maturity Liquidity Ledger on the immediately preceding Calculation Date;

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

(i) payment of any Excluded Swap Termination Amounts due and payable by the Guarantor under the Interest Rate Swap Agreement; and

(ii) payment of any Excluded Swap Termination Amounts due and payable by the Guarantor under the Covered Bond Swap Agreement;

(j) tenth, in or towards payment pro rata and pari passu in accordance with the respective amounts thereof of any indemnity amount due to the Cover Pool Monitor pursuant to the Cover Pool Monitor Agreement, and any indemnity amount due to any Partner pursuant to the Guarantor Agreement;

(k) eleventh, in or towards payment of the fee due to the Corporate Services Provider by the Guarantor pursuant to the terms of the Corporate Services Agreement; and

(l) twelfth, towards such distributions of profit to the Partners as may be payable in accordance with the terms of the Guarantor Agreement.

See “—Summary of Fees and Expenses” for further details on the fees and expenses expected to be paid from the Available Revenue Receipts.

Any amounts received by the Guarantor under the Interest Rate Swap Agreement and the Covered Bond Swap Agreement (other than, in each case, amounts in respect of Swap Collateral Excluded Amounts) on or after the Guarantor Payment Date but prior to the next following Guarantor Payment Date will be applied, together with any provision for such payments made on any preceding Guarantor Payment Date, to make payments (other than in respect of principal) due and payable in respect of the Intercompany Loan Agreement and then the expenses of the Guarantor unless an Asset Coverage Test Breach Notice is outstanding or otherwise to make provision for such payments on such date in the future of such proportion of the relevant payment falling due in the future as the Cash Manager may reasonably determine.

Any amounts received under the Interest Rate Swap Agreement and the Covered Bond Swap Agreement on the Guarantor Payment Date or on any date prior to the next succeeding Guarantor Payment Date which are not applied towards a payment or provision in accordance with paragraph (d) above or the preceding paragraph will be credited to the Revenue Ledger and applied as Available Revenue Receipts on the next succeeding Guarantor Payment Date.

Amounts (if any) held by the Cash Manager for and on behalf of the Guarantor or standing to the credit of the Transaction Account which are not required to be applied in accordance with paragraphs (a) to (k) of the Pre-Acceleration Revenue Priorities of Payments or paragraphs (a) to (g) of the Pre-Acceleration Principal Priorities of Payments below will, if applicable, be deposited by the Cash Manager and, in each case be credited to the appropriate ledger in the GDA Account on the Guarantor Payment Date.

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If any Swap Collateral Available Amounts are received by the Guarantor on a Guarantor Payment Date, such amounts will be applied by the Guarantor (or by the Cash Manager on its behalf) on that Guarantor Payment Date in the same manner as it would have applied the receipts which such Swap Collateral Available Amounts replace.

Each Partner acknowledges that the distribution paid pursuant to paragraph (l) above to such Partner represents a reasonable commercial return to the Partner from its involvement in the Guarantor and also agrees that such profits will not be paid to the Partners at a time when they know or ought to know that there was no reasonable prospect of avoiding an insolvent liquidation of the Guarantor as a result of such profit distribution.

Allocation and Distribution of Available Principal Receipts when no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred

At any time no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred, Available Principal Receipts will be allocated and distributed as described below.

The Guarantor or the Cash Manager on its behalf will, as of each Calculation Date, calculate the amount of Available Principal Receipts available for distribution on the immediately following Guarantor Payment Date.

On each Guarantor Payment Date, the Guarantor (or the Cash Manager on its behalf) will transfer Available Principal Receipts from the Principal Ledger to the Payment Ledger, and use Available Principal Receipts held by the Cash Manager for and on behalf of the Guarantor and, as necessary, transfer Available Principal Receipts from the GDA Account to the Transaction Account (to the extent maintained), in an amount equal to the lower of (a) the amount required to make the payments or credits described below, and (b) the amount of Available Principal Receipts.

Pre-Acceleration Principal Priorities of Payments

At any time no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred, Available Principal Receipts will be applied by or on behalf of the Guarantor on each Guarantor Payment Date in making the following payments and provisions (the “Pre-Acceleration Principal Priorities of Payments”) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full):

(a) first, if the Pre-Maturity Test has been breached by the Bank in respect of any Series of Hard Bullet Covered Bonds, towards a credit to the Pre-Maturity Liquidity Ledger in an amount up to but not exceeding the difference between:

(i) the Pre-Maturity Liquidity Required Amount as calculated on the immediately preceding Calculation Date; over

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(ii) any amounts standing to the credit of the Pre-Maturity Liquidity Ledger on the immediately preceding Calculation Date;

(b) second, to pay amounts in respect of principal outstanding on the Demand Loan pursuant to the terms of the Intercompany Loan Agreement;

(c) third, to acquire Loans and their Related Security offered to the Guarantor, if necessary or prudent to ensure that, taking into account the other resources available to the Guarantor, the Asset Coverage Test is met and thereafter to acquire (in the discretion of the Guarantor or the Cash Manager on its behalf) Substitution Assets up to the prescribed limit in the CMHC Guide;

(d) fourth, to deposit the remaining Principal Receipts in the GDA Account (with a corresponding credit to the Principal Ledger) in an amount sufficient to ensure that, taking into account the other resources available to the Guarantor, the Asset Coverage Test is met;

(e) fifth, in or towards repayment on the Guarantor Payment Date (or to provide for repayment on such date in the future of such proportion of the relevant payment falling due in the future as the Cash Manager may reasonably determine) of amounts (in respect of principal) due or to become due and payable to the Bank in respect of the Guarantee Loan pursuant to the terms of the Intercompany Loan;

(f) sixth, in or towards a credit to the GDA Account (with a corresponding credit to the Reserve Ledger) of an amount up to but not exceeding the amount by which the Reserve Fund Required Amount (if applicable) exceeds the existing balance on the Reserve Ledger as calculated on the immediately preceding Calculation Date; and

(g) seventh, subject to complying with the Asset Coverage Test, to make Capital Distributions in accordance with the terms of the Guarantor Agreement.

Allocation and distribution of Available Revenue Receipts and Available Principal Receipts when an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred

At any time an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred, all Available Revenue Receipts and Available Principal Receipts will continue to be applied in accordance with the Pre-Acceleration Revenue Priorities of Payments and the Pre-Acceleration Principal Priorities of Payments save that, while any covered bonds remain outstanding, no funds will be applied under paragraphs (b), (c), (j) (to the extent only that such Indemnity Amounts are payable to a Partner), (k) or (l) of the Pre-Acceleration Revenue Priorities of Payments or paragraphs (b), (c), (e) or (g) of the Pre-Acceleration Principal Priorities of Payments, and for greater certainty no Capital Distribution will be made to the Limited Partner and no payments will be made to the Intercompany Loan Provider.

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Allocation and distribution of Available Revenue Receipts and Available Principal Receipts following service of a Notice to Pay on the Guarantor

At any time after service of a Notice to Pay on the Guarantor, but prior to service of a Guarantor Acceleration Notice, all Available Revenue Receipts and Available Principal Receipts (other than Third Party Amounts and amounts credited to the Pre-Maturity Liquidity Ledger) will be applied as described below under “—Guarantee Priorities of Payments.”

On each Guarantor Payment Date, but prior to service of a Notice to Pay on the Guarantor, the Guarantor or the Cash Manager on its behalf will transfer Available Revenue Receipts and Available Principal Receipts from the Revenue Ledger, the Reserve Ledger, the Principal Ledger or the Capital Account Ledger, as the case may be, to the Payment Ledger, in an amount equal to the lower of (a) the amount required to make the payments set out in the Guarantee Priorities of Payments and (b) the amount of all Available Revenue Receipts and Available Principal Receipts standing to the credit of such Ledgers.

The Guarantor will create and maintain ledgers for each Series of covered bonds and record amounts allocated to such Series of covered bonds in accordance with paragraph (e) of the Guarantee Priorities of Payments below, and such amounts, once allocated, will only be available to pay amounts due under the Covered Bond Guarantee and amounts due in respect of the relevant Series of covered bonds under the Covered Bond Swap Agreement on the scheduled repayment dates thereof.

Guarantee Priorities of Payments

If a Notice to Pay is served on the Guarantor, the Guarantor will on the relevant Final Maturity Date for any Series of Hard Bullet Covered Bonds, apply all funds standing to the credit of the Pre-Maturity Liquidity Ledger with respect to such Series of Hard Bullet Covered Bonds (and transferred to the Transaction Account on the relevant Guarantor Payment Date) to repay the relevant Series of Hard Bullet Covered Bonds. Subject thereto, on each Guarantor Payment Date after the service of a Notice to Pay on the Guarantor (but prior to service of a Guarantor Acceleration Notice), the Guarantor or the Cash Manager on its behalf will apply Available Revenue Receipts and Available Principal Receipts to make the following payments, provisions or credits in the following order of priority (the “Guarantee Priorities of Payments”) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full):

(a) first, to pay any amounts in respect of principal and interest due to the Bank in respect of the Demand Loan pursuant to the terms of the Intercompany Loan Agreement;

(b) second, in or towards payment of all amounts due and payable or to become due and payable to the Bond Trustee with respect to the performance of its obligations as Bond Trustee in the immediately succeeding Guarantor Payment Period under the provisions of the Trust Deed and the Security Agreement together with interest and applicable GST (or other similar taxes) thereon as provided therein;

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

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(i) any remuneration then due and payable to the Agents under the provisions of the Agency Agreement together with applicable GST (or other similar taxes) thereon as provided therein, other than any Indemnity Amounts payable to the Agents in excess of $150,000; and

(ii) any amounts then due and payable by the Guarantor to third parties, including the Corporate Services Provider, and incurred without breach by the Guarantor of the Transaction Documents to which it is a party (and for which payment has not been provided for elsewhere) and to provide for any such amounts expected to become due and payable by the Guarantor in the immediately succeeding Guarantor Payment Period and to pay or discharge any liability of the Guarantor for taxes;

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

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

(ii) any remuneration then due and payable to the Cash Manager and any costs, charges, liabilities and expenses then due or to become due and payable to the Cash Manager in the immediately succeeding Guarantor Payment Period under the provisions of the Cash Management Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Cash Manager in excess of $150,000, provided that if the Cash Manager is the Bank or a member of the BMO Group, it will not receive any fees;

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

(iv) amounts due and payable to the Cover Pool Monitor pursuant to the terms of the Cover Pool Monitor Agreement, together with applicable GST (or other similar taxes) thereon as provided therein, other than any Indemnity Amounts payable to the Cover Pool Monitor in excess of $150,000; and

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

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(e) fifth, to pay pro rata and pari passu according to the respective amounts thereof:

(i) the amounts due and payable to the Interest Rate Swap Provider pro rata and pari passu according to the respective amounts thereof (including any termination payment due and payable by the Guarantor under the Interest Rate Swap Agreement but excluding any Excluded Swap Termination Amount) in accordance with the terms of the Interest Rate Swap Agreement;

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

(iii) to the Bond Trustee or (if so directed by the Bond Trustee) the Principal Paying Agent on behalf of the holders of the covered bonds pro rata and pari passu Scheduled Interest that is Due for Payment (or will become Due for Payment in the immediately succeeding Guarantor Payment Period) under the Covered Bond Guarantee in respect of each Series of covered bonds,

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

(f) sixth, to pay or provide for pro rata and pari passu according to the respective amounts thereof, of:

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

(ii) to the Bond Trustee or (if so directed by the Bond Trustee) the Principal Paying Agent on behalf of the holders of the covered bonds pro rata, and pari passu Scheduled Principal that is Due for Payment (or will become

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

(g) seventh, to deposit the remaining funds into the GDA Account for application on the next following Guarantor Payment Date in accordance with the Priorities of Payments described in paragraphs (a) to (f) (inclusive) above, until the covered bonds have been fully repaid or provided for (such that the Required Redemption Amount has been accumulated in respect of each outstanding Series of covered bonds);

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

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

(j) tenth, any remaining funds will be applied in and towards repayment in full of amounts outstanding under the Intercompany Loan Agreement;

(k) eleventh, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof of any indemnity amount due to the Partners pursuant to the Guarantor Agreement; and

(l) twelfth, thereafter any remaining funds will be applied in accordance with the Guarantor Agreement

Any amounts received by the Guarantor under the Interest Rate Swap Agreement after the Guarantor Payment Date but prior to the next following Guarantor Payment Date will be applied, together with any provision for such payment made on any preceding Guarantor Payment Date, to make payments (other than in respect of principal) due and payable pro rata and pari passu in respect of the Covered Bond Swap Agreement or, as the case may be, in respect of interest due under the Covered Bond Guarantee pro rata and pari passu in respect of each relevant Series of covered bonds.

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Any amounts received by the Guarantor under the Covered Bond Swap Agreement (whether or not in respect of principal) after the Guarantor Payment Date but prior to the next following Guarantor Payment Date will be applied, together with any provision for such payment made on any preceding Guarantor Payment Date, to make payments of interest or principal, as the case may be, in respect of the Covered Bond Guarantee pro rata and pari passu in respect of each relevant Series of covered bonds.

Any amounts received under the Interest Rate Swap Agreement or any Covered Bond Swap Agreement on the Guarantor Payment Date or any date prior to the next succeeding Guarantor Payment Date which are not put towards a payment or provision in accordance with paragraphs (e) or (f) above or the two preceding paragraphs will be credited to the Revenue Ledger or the Principal Ledger on the GDA Account (as appropriate) and applied as Available Revenue Receipts or Available Principal Receipts, as the case may be, on the next succeeding Guarantor Payment Date.

If the Guarantor requires any available funds to be exchanged into a currency other than Canadian Dollars, and such exchange would not be subject to or covered by the terms of the Covered Bond Swap Agreement, then the Guarantor (or the Cash Manager on its behalf) will perform all necessary currency conversions at the then prevailing spot rate of exchange.

If any Swap Collateral Available Amounts are received by the Guarantor on a Guarantor Payment Date, such amounts will be applied by the Guarantor (or by the Cash Manager on its behalf) on that Guarantor Payment Date in the same manner as it would have applied the receipts which such Swap Collateral Available Amounts replace.

Termination payments received in respect of the Swap Agreements, premiums received in respect of replacement Swap Agreements

If the Guarantor receives any termination payment from a Swap Provider in respect of a Swap Agreement, such termination payment will first be used, to the extent necessary (prior to the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice) to pay a replacement Swap Provider to enter into a replacement Swap Agreement with the Guarantor, unless a replacement Swap Agreement has already been entered into on behalf of the Guarantor. If the Guarantor receives any premium from a replacement Swap Provider in respect of a replacement Swap Agreement, such premium will first be used to make any termination payment due and payable by the Guarantor with respect to the previous Swap Agreement, unless such termination payment has already been made on behalf of the Guarantor.

Any amounts received by the Guarantor which are not applied to pay a replacement Swap Provider to enter into a replacement Swap Agreement will be credited to the Revenue Ledger and applied as Available Revenue Receipts on the next succeeding Guarantor Payment Date.

Application of funds received by the Bond Trustee following service of a Guarantor Acceleration Notice and enforcement of the Security

Following a Guarantor Event of Default, service of a Guarantor Acceleration Notice and enforcement of the Security granted under the terms of the Security Agreement, all funds received or recovered by the Bond Trustee (or a receiver appointed on its behalf) (excluding all amounts due or to become due in respect of any tax credits, Swap Collateral Excluded Amounts or Third Party Amounts) will be applied in the following order of priority (the “Post-

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Enforcement Priorities of Payments”) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full):

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

(i) all amounts due and payable or to become due and payable to the Bond Trustee under the provisions of the Trust Deed and the Security Agreement with respect to the performance of its obligations thereunder together with interest and applicable GST (or other similar taxes) thereon as provided therein; and

(ii) all amounts due and payable or to become due and payable to the Bond Trustee or any Receiver under the provisions of the Security Agreement together with interest and applicable GST (or other similar taxes) thereon as provided therein;

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

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

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

(ii) any remuneration then due and payable to the Cash Manager and any costs, charges, liabilities and expenses then due or to become due and payable to the Cash Manager under the provisions of the Cash Management Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Cash Manager in excess of $150,000, provided that if the Cash Manager is the Bank or a member of the BMO Group, it will not receive any fees;

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

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

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

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

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

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

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

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

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

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

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

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

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

If the Guarantor receives any tax credits in respect of a Swap Agreement following the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice, such tax credits will be used to reimburse the relevant Swap Provider for any gross-up in respect of any withholding or deduction made under the relevant Swap Agreement. Following the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice, any Swap Collateral Excluded Amounts in respect of a Swap Agreement will be returned to the relevant Swap Provider subject to the terms of the relevant Swap Agreement, and any Third Party Amounts will be returned to the Seller, with the Seller paying such Third Party Amounts to the relevant third party.

Any Third Party Amounts received by the Bond Trustee or any Receiver after service of a Guarantor Acceleration Notice will be held by it on trust for the Seller until they have been returned to the Seller.

Summary of Fees and Expenses

Prior to the occurrence of a Covered Bond Guarantee Activation Event, the following fees and expenses will be paid from the Available Revenue Receipts.

Fee Description	Payable To	Purpose	Amount (% or $ per annum)	Current Provider
Agent Fees	US Paying Agent Principal Paying Agent Exchange Agent Calculation Agent	Making payments on bonds issued through DTC	Up to $10,000	Bank of Montreal
		For bond issued outside the US, the issuing and paying agent		Bank of Montreal
Bond Trustee Fee	Bond Trustee	Trustee for bond holders	Up to $22,000*	Computershare Trust Company of Canada
Servicing Fee and Expenses of Servicer	Replacement Servicer	Servicing the mortgage loans	Up to 0.20% (expected fee for replacement servicer)	Bank of Montreal
Cash Manager Fee and expenses of Cash Manager	Replacement Cash Manager	Hold cash	Up to $10,000	Bank of Montreal
Account Bank Fee	Replacement Account Bank		None	Bank of Montreal
Cover Pool Monitor Fee	Cover Pool Monitor	Check accuracy of records and confirm mathematical accuracy of tests and calculations	Up to $75,000	KPMG LLP

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GDA Provider Fee	Standby GDA Provider		None	Standby GDA Provider: Royal Bank of Canada
Custodial Fee	Custodian		Up to $10,000	Computershare Trust Company of Canada
Corporate Service Fees, Asset Trustee Fees, and Liquidation General Partner Fees	Corporate Service Provider, Covered Bond – Asset Trustee, Liquidation General Partner		Up to approximately $120,000**	Computershare Trust Company of Canada
CMHC registration fees	CMHC	Ongoing fees to maintain registration with CMHC	Up to $750,000	CMHC

* Expenses may be in excess of this amount depending on the amount of the annual fees

** Expenses may be in excess of this amount in an Issuer Event of Default

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PORTFOLIO

The Portfolio consists of cash, Loans and their Related Security, and in some cases Substitution Assets up to certain prescribed limits. The Loans sold to the Guarantor were randomly selected from the Bank’s uninsured residential mortgage portfolio after applying the Eligibility Criteria. For details on the Eligibility Criteria and representations and warranties provided with respect to the Loans in the Portfolio, see “Summary of the Principal Documents—Mortgage Sale Agreement—Eligibility Criteria and Summary of the Principal Documents—Mortgage Sale Agreement—Loan Representations and Warranties.” The Asset Coverage Test and the Amortization Test performed by the Cash Manager are intended to determine whether the assets and cashflows of the Guarantor, including the Loans and their Related Security in the Portfolio and cashflows in respect thereof, will be adequate to enable the Guarantor to meet its obligations under the Covered Bond Guarantee following the occurrence of a Covered Bond Guarantee Activation Event and the Valuation Calculation performed by the Cash Manager is intended to monitor exposure to volatility in interest rate and currency exchange rates.

Because the Portfolio is not a static pool of assets, statistical data for the Portfolio will be provided in the applicable prospectus supplement that will be distributed to investors with respect to an offering of a specific Series of covered bonds. In addition, the Cash Manager will prepare and provide Investor Reports to the Bank, the Guarantor, the Bond Trustee, and the Rating Agencies that will set out certain information in relation to the Portfolio, the calculation of the Asset Coverage Test, the Valuation Calculation, if applicable the Amortization Test, statistical information about the Loans in the Portfolio, performance information about the Loans, information on proceeds received on assets in the Portfolio and the application of such proceeds and other information prescribed by the requirements of the CMHC Guide. The Investor Reports will be available to covered bondholders at the Bank’s website at www.bmo.com/home/about/banking/investor-relations/financial-information/covered-bonds and through the CMHC’s covered bond registry at www.cmhc-schl.gc.ca/coveredbonds and filed with the SEC on its EDGAR system under cover of Form 10-D on the 20th day of each month (or if such day is not a Business Day, the first following Business Day).

Characteristics of the Loans

Mortgage loans originated by the Seller are secured by a first mortgage on the residential property to which they relate and are full recourse against the borrower (subject to exceptions in Alberta and Saskatchewan, as described below) and if guaranteed to the guarantor and against the property securing the mortgage loan.

Interest is calculated using either a fixed or variable rate. Fixed rate mortgage loans provide for interest based on a fixed annual rate agreed to at the time the mortgage loan is advanced with interest calculated semi-annually, not in advance. Variable rate mortgage loans provide for interest based on the Bank’s annual rate of interest announced from time to time as a reference rate then in effect for determining interest rates on Canadian Dollar commercial loans in Canada (the “Bank’s Prime Rate”) plus or minus a set percentage, calculated on the outstanding balance when each regular payment is due. In the case of variable rate mortgage loans, the interest rate varies automatically with changes in the Bank’s Prime Rate. If the Bank’s Prime Rate changes between scheduled payment dates, the revised rate becomes effective from the date of such change and is reflected on the next payment date. The total regular monthly payment amount due will not change (only the split between interest and principal is adjusted) unless that amount is insufficient to cover the interest amount due on the mortgage. In some circumstances the interest rate on a variable rate mortgage loan may be capped at a maximum rate.

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Mortgage loans can either be open or closed to pre-payment and can be for terms up to 18 years (with a typical term of five years) with amortization periods that do not exceed 40 years. They provide for regular payments (e.g. weekly, bi-weekly or monthly) and early and/or increased payment options subject to pre-payment charges in certain circumstances. In the case of variable rate mortgage loans, in the event that the borrower’s regular payment is insufficient to pay all interest when due, the mortgage loan terms and conditions allow the Bank to increase the regular payment amount payable by the borrower to cover interest costs. Interest which is not paid when due is subject to interest.

Where a mortgage loan is in default all amounts owing due under the mortgage loan will become due and payable and the Bank is allowed to require immediate payment of all amounts due. In Alberta and Saskatchewan the law restricts a lender’s recourse against a borrower where the proceeds from enforcement of the mortgage by way of a foreclosure action are insufficient to repay the amounts owing on a mortgage loan. Accordingly, if the proceeds from a foreclosure action are insufficient to repay the amounts due on a mortgage loan, the lender will suffer a loss.

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LOAN ORIGINATION AND LENDING CRITERIA

The description of the Bank’s Lending Criteria and procedures that follows describes the Bank’s Lending Criteria and procedures for the origination of mortgage loans as of the date of this prospectus. There is no requirement for the Bank to maintain the Lending Criteria or procedures described below and the Bank reserves the right to change its Lending Criteria and procedures at any time.

All of the Bank’s residential mortgages are originated by employees of the Bank. The Bank does not directly originate mortgage loans from external broker channels at this time. The Bank may purchase residential mortgage loans from third parties; however, such loans are not expected to form part of the Portfolio. All mortgages funded through third party arrangements are subject to the same credit standards as if they were originated through a Bank-owned channel.

Mortgage Origination and Renewal

The Bank primarily uses two proprietary channels for the origination of residential mortgages: Mortgage specialists (a mobile sales force of Bank employees) and the Bank’s branch network employees, including its private banking locations. The Bank uses real estate secured lending decision models to adjudicate conventional residential mortgages. These models are updated from time to time.

Mortgage Specialists

Mortgage specialists primarily focus on obtaining home financing business from new customers and do not participate in mortgage renewals. Mortgage specialists have credit training, but they do not have the authority to approve loans. All mortgage applications from this channel are independently adjudicated by the Bank’s Credit Department. Completion of mortgage specialist applications consists of a two stage process where the mortgage specialist receives and reviews the required documentation and then submits it to a dedicated team of support officers for an independent review enabling any corrective action prior to funding. A separate support team conducts regular quality reviews on transactions completed by the support officers to ensure adherence to the Bank’s policies and standards. Additionally, transactions completed in this channel also are subject to the Bank’s loan review process described below.

Branch Network

The branch channel, which also includes private banking locations, internet and telephone applications, focuses on the refinancing needs of existing clients as well as new clients. All lenders in the branch channel typically have extensive credit training. Transaction authority for branch originated mortgage applications is limited to systematic credit decisions generated through the Bank’s Automated Lending Decision (“ALD”) process. Some Private Banking lenders and Customer Contact Centre lenders may have credit decision authority based on extensive credit training and skill evaluation. All remaining mortgage applications are independently adjudicated by the Bank’s Credit Department. Completion of branch channel applications is undertaken in a similar two stage process where the branch lender receives and reviews the required documentation and then submits it to a designated in branch

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“funder” for an independent review enabling any corrective action prior to funding. Additionally, transactions completed in this channel are also subject to the Bank’s loan review process described below. The Bank is currently in the process of centralizing execution process activities in this channel to align this process with the execution process described in “—Mortgage Specialist” above.

Mortgage Renewals

All mortgages which are not in arrears are automatically available for renewal. Customers are typically contacted to choose their preferred term. A customer may be contacted by their branch or through a centralized call center team. Customers renewing their mortgage may change their payment structure (including amount and frequency of payments) however, remaining amortization cannot be extended past original commitment.

Valuations, Appraisals and Credit Strategy

Mortgage Valuations and Appraisals

The Bank Act (Canada) requires that all residential mortgage loans that have a LTV greater than 80% at origination be default insured by a mortgage default insurer. These loans are referred to in this prospectus as “insured mortgage loans” or “insured Loans.” Mortgage loans that have an LTV less than or equal to 80% at origination are referred to as “conventional mortgages.”

LTV is calculated on the outstanding balance or authorized amount and the most recent property valuation or purchase price (whichever is lower), which generally will be at the time of origination of the mortgage loan.

For all residential mortgage loans that have a LTV ratio of 80 percent or less, the Bank’s mortgage policy requires a property value assessment. The type of property value assessment applied will depend on a combination of factors, including property location, value, mortgage amount, borrower risk and LTV.

• Drive-by appraisals—a Bank approved appraiser’s opinion of the property based on an exterior inspection of the property

• Full appraisal—a Bank approved appraiser’s opinion of the property based on an exterior and interior inspection of the property

• Low ratio risk assessment—a third party model for property risk assessment may be used in limited circumstances (maximum financed amount of $500,000, owner occupied, conventional mortgages within certain LTV ranges)

• Waiving a property value risk assessment is available in limited circumstances based on internal guidelines and subject to a maximum 65% LTV for a purchase and 60% for refinancing. In these circumstances, the property value risk assessment is obtained through a multiple listing service for a purchase or a tax assessment for a refinancing.

The Bank uses three independent mortgage appraisal companies to ensure that appraisals are completed independent of the mortgage application.

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When the third party risk assessment model is used and the property does not pass the Bank’s established risk tolerance, a full appraisal is required.

Use of the Third Party Risk Assessment Model

In order for a mortgage to be eligible to be risk-assessed using a third party risk assessment model, the mortgage must meet the following criteria as established by the Bank: (i) the LTV range for a purchase is between 65% and less than or equal to 80% and the LTV range is between 60% and less than or equal to 80% for a refinance, (ii) the zoning regulations applicable to the property are residential, (iii) the mortgage is not a home equity line of credit, (iv) the property is not a new construction and (v) the mortgage is a single advance.

The third party risk assessment model looks at the specific characteristics of the property in question and uses different information sources, including:

• the physical characteristics of the property (such as square footage, lot size, age, style of the home, etc.)

• the municipal property tax assessment

• historical and current sales activity within the local housing market, and

• prior sales activity of the property being assessed, when available.

Mortgage Application

All mortgage applications undergo a due diligence process by qualified personnel related to the borrower’s background, credit history (using updated credit reports from either Equifax Information Services LLC or TransUnion LLC) and capacity to service the debt obligation. This credit risk analysis will help inform the underwriting decision as to the borrower’s ability and propensity to repay a mortgage loan as agreed. Excluding specialized programs such as loans for “new Canadians,” full disclosure of all requisite financial information (including assets, liabilities, recurring payment obligations, level of income) are obtained and validated.

The Bank’s underwriting policies and procedures require each prospective borrower to submit a mortgage loan application that discloses the applicant’s credit history, assets, liabilities, income and employment history, and includes consent to the Bank obtaining a credit report in respect of such applicant.

All mortgage refinance applications require a new credit application and risk assessment, including full adjudication and appraisal.

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Credit Adjudication

The Bank’s consumer credit decision is based on the 5C’s of credit at the time of application, which includes: (i) Character (the overall description of an individual’s personal history), (ii) Capacity (the customer’s ability to pay based on its circumstances), (iii) Credit (the customer’s repayment history with creditors generally), (iv) Capital (the availability of assets) and (v) Collateral (available security). In addition, a credit bureau report is used to support the credit decision.

Based on the data provided in the prospective borrower’s application and certain verifications, if required, and per the measures described above, the Bank determines whether the applicant’s monthly income will be sufficient to enable such applicant to meet the obligations under the proposed mortgage loan and to pay other expenses relating to the mortgaged property, including taxes and other fixed obligations.

All consumer loan applications are entered into the Bank’s loan processing system (“CCAPS”) which is an automated credit application system. The CCAPS system provides an automated method of capturing, investigating and executing various tasks associated with all mortgage applications, including: capturing the applicant’s personal information (residence, assets, liabilities, employment and income), obtaining a credit bureau report, calculating transaction values such as Total Debt Service Ratio and Gross Debt Service Ratio. CCAPS contains an access and security system allowing management to manage the activities of credit personnel. This facility consists of multiple levels designed to ensure credit limits are properly utilized by lending qualified staff.

CCAPS also has ALD component. ALD is model-driven and produces system generated decisions based on the information entered. Once a decision is returned the lender takes appropriate action. Any decision that is not a system generated approval requires adjudication by the Bank’s Credit Department in order for the loan to be approved. In addition, all mortgage specialist loans are adjudicated by the Bank’s Credit department. Any request that is an exception to the Bank’s policies and procedures and is credit related must be authorized by the Bank’s Credit Department.

Suspicious or potentially fraudulent activity is monitored throughout the process. Fraud detection systems are designed to look for inconsistencies in applications and suspicious facts. Suspicious applications are referred to the Bank’s Fraud Investigation group for investigation.

Loan Review Process

The Bank has an independent loan review process. This process includes the review of supporting documentation used to assess the quality of the credit and is completed monthly based on a random selection of applications. Additionally, a loan review procedure is conducted by the Canadian Consumer Credit department within the Bank’s Risk Management Unit. This loan review process requires the loan review manager to re-adjudicate the loan to ensure that the credit quality of the loan fits within the Bank’s risk appetite and was booked in accordance with policy. The loan review process also assesses the quality of the overall rationale used to support the final decision which includes an analysis of any risk mitigation that enabled the loan to fall within acceptable risk parameters set forth by the Bank. A loan review officer will review approximately two loans per credit officer per week. Weekly and monthly performance reports are submitted to lending managers and are designed to assist in determining when corrective action is required.

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THE SERVICER

General

The Bank is the servicer (the “Servicer”) of the Loans and Related Security pursuant to a servicing agreement (the “Servicing Agreement”) dated September 30, 2013 between the Bank, in its capacity as the Servicer and Seller, the Guarantor, as owner of the Loans and Related Security, and Computershare Trust Company of Canada, as the Bond Trustee. The Servicer will not be liable in respect of any loss, liability, claim, expense or damage suffered or incurred by the Guarantor and/or any other person as a result of the proper performance by the Servicer of its servicing obligations under the Servicing Agreement unless such loss, liability, claim, expense or damage is suffered or incurred as a result of any gross negligence, dishonesty, bad faith, fraud or willful misconduct of the Servicer or as a result of a breach by the Servicer of the terms and provisions of the Servicing Agreement or the other Transaction Documents in relation to such functions.

Servicing Activities

The Servicer began originating and servicing residential mortgage loans in 1954. The Servicer services its own portfolio of mortgage loans and generally retains the servicing rights with respect to any mortgage loans it sells or securitizes. As at August 31, 2013, the Servicer acted as primary servicer and owned the corresponding servicing rights on approximately 373,000 residential mortgage loans having an aggregate unpaid balance of approximately $72.1 billion.

The following table sets forth the dollar amount of mortgage loans serviced by the Servicer for the periods indicated, and the number of such loans for the same period.

		Year Ended October 31,
		2012			2011			2010			2009
Conventional mortgages	No. of Loans (thousands)		113			96			100			105
	Dollar Amount of Loans (Cdn$ millions)		23,878			18,045			18,074			17,494
	Percentage Change from Prior Year		32.32	%		-0.16	%		3.32	%		29.41	%
Insured mortgages	No. of Loans (thousands)		245			253			262			269
	Dollar Amount of Loans (Cdn$ millions)		42,438			42,312			41,744			41,069
	Percentage Change from Prior Year		0.30	%		1.36	%		1.65	%		-8.15	%
Total mortgage loans serviced	No. of Loans (thousands)		358			349			362			374
	Dollar Amount of Loans (Cdn$ millions)		66,316			60,357			59,819			58,563
	Percentage Change from Prior Year		9.87	%		0.90	%		2.14	%		0.57	%

Servicing Procedures with respect to Loans and Related Security

Following the sale of a mortgage loan to the Guarantor, the Servicer keeps and maintains records in relation to the Loans and Related Security sold to the Guarantor on a loan by loan basis, for the purposes of identifying amounts paid by each borrower, any amount due from a borrower and the principal balance (and, if different, the total balance) from time to time outstanding on a borrower’s account and such other records as would be customarily kept by a reasonable and prudent mortgage lender. The Servicer also identifies the Loans and Related Security as belonging to the Guarantor and maintains a computer record of the location and

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identification of the Loans and Related Security by reference to an account number and pool identifier so as to be able to distinguish them from other mortgage loans and security serviced by the Servicer for retrieval purposes. In the event the ratings of the Servicer by the Rating Agencies falls below certain ratings, the Servicer will use reasonable efforts to ensure that files relating to the Loans and their Related Security are identified as distinct from the conveyancing deeds and documents which make up the title and security of other properties and mortgages which do not form part of the Portfolio.

The Servicer provides customary servicing functions with respect to the Loans and Related Security. The Servicer makes reasonable efforts to collect all payments called for under the loan documents and follows such collection procedures as are customary with respect to such Loans. The Servicer collects and remits mortgage loan payments, responds to borrower inquiries, accounts for principal and interest, holds escrow account information and funds for payment of property taxes, monitors property insurance and in the case of lapses notifies borrowers and obtains lender-placed insurance at the borrower’s expense as necessary, counsels or otherwise works with delinquent borrowers, supervises power of sale, judicial sales or foreclosures, and property dispositions and generally administers the Loans and is required to take all reasonable steps to recover all sums due to the Guarantor in respect of the Loans and Related Security. The Bank will administer the Loans and the Related Security in the same way it administers mortgage loans for its own account. The Servicing Agreement requires that the Loans and the Related Security are to be serviced as if the Loans had not been sold to the Guarantor but remained with the Bank.

The Servicer may act as collection agent for the Guarantor under a scheme for either the manual or automated debiting of bank accounts (the “Direct Debiting System”) provided such Direct Debiting System is operated in accordance with policies and procedures which would be acceptable to a reasonable and prudent mortgage lender. Borrowers provide authorization for regular payments (made monthly or on a greater frequency) to be deducted automatically from bank accounts on the date each schedule payment is due.

The Servicer has the power to exercise the rights, powers and discretions and to perform the duties of the Guarantor in relation to the Loans and their Related Security and to do anything which it reasonably considers necessary or convenient or incidental to the administration of the Loans and their Related Security. This includes the authority to accept applications for product switches or advances in respect of the Loans in its sole discretion. The Bank, as seller of the Loans and Related Security to the Guarantor is required to provide the funding for any product switches or advances approved by the Servicer. The Servicer is not restricted from, in its discretion, (i) waiving any assumption fee, late payment or other charge in connection with a Loan; or (ii) waiving, varying or modifying any term of any Loan or consenting to the postponement of strict compliance with any such term or in any other matter grant indulgence with respect to any borrower.

With respect to collections, the Servicer may institute proceedings and enforce any relevant Loan which is in default in accordance with the Bank’s enforcement procedures and the usual procedures undertaken by a reasonable and prudent institutional mortgage lender.

The Servicer’s collections policy is designed to identify payment problems sufficiently early to permit the Servicer to address such delinquency problems and, when necessary, to act to preserve the lender’s equity in the property. A Loan is considered delinquent if a scheduled payment remains unpaid for 30 days or more after the due date. If timely payment is not received,

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the Servicer’s automated loan servicing system automatically places the Loan in the assigned collection queue. The account remains in the queue unless and until a payment is received, at which point the Servicer’s automated loan servicing system automatically removes the Loan from that collection queue.

When a Loan appears in a collection queue, various collection techniques are employed to remind the borrower that a payment is due. Such techniques include subsequent automated attempts to contact the borrower as well as automated letters, with the borrower ultimately telephoned by a collector. Follow-up telephone contacts with the borrower are attempted until the account is current or other payment arrangements have been made. When contact is made with a delinquent borrower, collectors present the borrower with alternative payment methods, in order to expedite payments. Standard form letters are utilized when attempts to reach the borrower by telephone fail and/or in some circumstances, to supplement the phone contacts. Collectors have computer access to telephone numbers, payment histories, loan information, and all past collection notes. The Servicer supplements the collectors’ efforts with advanced technology such as predictive dialers and software used to determine the optimal times to call a particular customer. Additionally, collectors may attempt to mitigate losses through the use of behavioral or other models that are designed to assist in identifying workout options in the early stages of delinquency. For those Loans in which collection efforts have been exhausted without success, the Servicer determines whether mortgage enforcement proceedings are appropriate. The course of action elected with respect to a delinquent Loan generally will be guided by a number of factors, including the related borrower’s payment history, ability and willingness to pay, the condition and occupancy of the Related Security, the amount of borrower equity in the Related Security, and whether there are any tax arrears, condominium or strata arrears, or construction liens.

Prior to a foreclosure or sale by power of sale, once the Servicer is in possession of the Related Security, it obtains an appraisal from a Bank approved appraiser. The Servicer then hires a real-estate agent to sell the property. The real-estate agent performs a current market analysis which includes: (i) a current valuation of the Related Security; (ii) an evaluation of the amount owed, if any, for real estate taxes; and (iii) estimated carrying costs, brokers’ fees, repair costs, and other related costs associated with real estate owned properties. The Servicer bases the sale price at the foreclosure process or power of sale on this analysis and its own appraisal.

The foreclosure process and power of sale process vary by jurisdiction across Canada and there are two different ways that the Servicer can acquire the right to sell the Related Security. If the Servicer acquires title to a property at a foreclosure process or a Certificate of Power of Sale at a power of sale process, it obtains an estimate of the sale price of the property and then hires one or more real estate agents to begin marketing the property. If the Related Security is not vacant when acquired, the lawyers that have been hired to facilitate the mortgage enforcement commence eviction proceedings and/or negotiations are held with occupants in an attempt to get them to vacate without incurring the additional time and cost of eviction. Repairs are performed if it is determined that they will increase the net liquidation proceeds, taking into consideration the cost of repairs, the carrying costs during the repair period and the marketability of the property both before and after the repairs.

Any loss, if any, on a Loan is determined based on the aggregate amount due on the Loan less the aggregate proceeds of sale of the mortgaged property minus related expenses.

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The Servicer’s collections procedures are updated regularly and continue to evolve on a regular basis to improve its efficiency and effectiveness.

Servicing and Other Compensation and Payment of Expenses

Each Loan acquired by the Guarantor is a serviced interest. The Guarantor does not have any obligation or liability to the Servicer on account of costs, expenses, disbursements, charges, or fees of the Servicer, the sole responsibility in that connection being that of the Servicer.

Payments on Loans; Deposits to Custodial Accounts

Any collections received by the Servicer in respect of Loans and Related Security to which the Guarantor is entitled are required to be held by the Servicer in trust for the Guarantor and to be kept distinguishable from all other funds held by the Servicer and following a downgrade in ratings by the Rating Agencies below certain thresholds, to be deposited directly into the GDA Account. All other sums received by the Servicer in respect of the Loans and their Related Security will be held by the Servicer for itself.

Replacement of Servicer

The Guarantor and the Bond Trustee may terminate the Servicing Agreement in the circumstances described under “Summary of the Principal Documents—Servicing Agreement.”

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DESCRIPTION OF THE CANADIAN REGISTERED COVERED BOND PROGRAMS REGIME

The CMHC Guide elaborates on the role and powers of CMHC as administrator of the Legislative Framework and sets out the conditions and restrictions applicable to registered issuers and registered covered bond programs.

Eligible Issuers

The Legislative Framework provides that in order to apply for registration as a registered issuer, a proposed issuer of covered bonds must be a “federal financial institution”, as defined in section 2 of the Bank Act (Canada), or, following the order of the Governor in Council, a cooperative credit society that is incorporated and regulated by or under an act of the legislature of a province of Canada.

Eligible Covered Bond Collateral and Coverage Tests

Assets held by a guarantor as collateral for covered bonds issued under a registered program may not include mortgages or other secured residential loans that (i) are insured by the CMHC or other Prohibited Insurers, or (ii) have a loan-to-value ratio that exceeds 80%. A guarantor may hold substitution assets consisting of Government of Canada securities and repos of such securities, provided that the value of such substitution assets may not exceed 10% of the total value of the assets of the guarantor held as covered bond collateral. The Legislative Framework, as further described in the CMHC Guide, further restricts assets comprising covered bond collateral by limiting cash held by the guarantor at any time to the amount necessary to meet the guarantor’s payment obligations for the next six months, subject to certain exceptions.

While the CMHC Guide does not impose a specified minimum or maximum level of overcollateralization, registered issuers must establish a minimum and maximum level of overcollateralization and disclose such levels in the registered issuer’s offering documents and in the Registry. The methodology to be employed for the asset coverage and amortization tests is specified in the CMHC Guide. Commencing July 1, 2014, in performing such tests registered issuers will be required to adjust the market values of the residential properties securing the mortgages or other residential loans comprising covered bond collateral to account for subsequent price adjustments.

The CMHC Guide also requires that the Guarantor engage in certain risk-monitoring and risk-mitigation practices, including (i) measurement of the present value of the assets comprising covered bond collateral as compared to the outstanding covered bonds (the “Valuation Calculation”), and (ii) hedging of its interest rate and currency exchange risks.

Bankruptcy and Insolvency

The Legislative Framework contains provisions that will limit the application of the laws of Canada and the provinces and territories relating to bankruptcy, insolvency and fraudulent conveyance to the assignments of loans and other assets to be held by a guarantor as covered bond collateral under a registered covered bond program. Such provisions will not be applicable to any covered bonds that are issued under a registered program at a time that the registered issuer has been suspended by CMHC in accordance with the powers afforded to it under the Legislative Framework and the CMHC Guide.

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Qualifications of Counterparties

The CMHC Guide prescribes certain qualifications for each of the counterparties to a registered covered bond program, including that such counterparty (i) possess the necessary experience, qualifications and facilities to perform its obligations under the program, (ii) meet or exceed any minimum standards prescribed by an applicable rating agency, (iii) if regulated, be in regulatory good standing, (iv) be in material compliance with any internal policies and procedures relevant to its role as a counterparty, and (v) be in material compliance with all laws, regulations and rules applicable to that aspect of its business relevant to its role as a counterparty (collectively, the “Counterparty Qualifications”). In connection with the Program, the counterparties are the Swap Providers, the Servicer, the Cash Manager, the Cover Pool Monitor, the Custodian, the Bond Trustee, the Account Bank and the Standby Account Bank (collectively, the “Counterparties”). Each of the Counterparties has represented and warranted in the Transaction Documents that it meets the Counterparty Qualifications.

Cover Pool Monitor

The role of the cover pool monitor, as well as the specified procedures to be carried out by the cover pool monitor, are also detailed in the CMHC Guide. The cover pool monitor’s responsibilities include confirmation of the arithmetical accuracy of the tests required by the CMHC Guide to be carried out under the registered covered bond program and the preparation and delivery of an annual report detailing the results of the specified procedures undertaken in respect of the covered bond collateral and the program. In addition to the Counterparty Qualifications, the cover pool monitor must be either (i) a firm engaged in the practice of accounting that is qualified to be an auditor of the registered issuer under the Bank Act (Canada) and Canadian auditing standards, or (ii) otherwise approved by CMHC (the “Cover Pool Monitor Qualifications”). The Cover Pool Monitor has represented and warranted in the Transaction Documents that it meets the Cover Pool Monitor Qualifications.

Custodian

The CMHC Guide requires that a registered issuer appoint a custodian for each of its registered covered bond programs. The custodian’s responsibilities include holding on behalf of the Guarantor applicable powers of attorney granted by the Bank to the Guarantor and details of the Portfolio assets and Substitution Assets. In addition to the Counterparty Qualifications, the custodian must satisfy certain other qualifications, including that it (i) be a federally or provincially chartered institution authorized to act in a fiduciary capacity with respect to valuable documents, or a chartered bank as described in Schedule I to the Bank Act (Canada), (ii) be equipped with secure, fireproof storage facilities, with adequate controls on access to assure the safety, confidentiality and security of the documents in accordance with customary standards for such facilities, (iii) use employees who are knowledgeable in the handling of mortgage and security documents and in the duties of a mortgage and security custodian, (iv) have computer systems that can accept electronic versions of asset details and be able to transmit that data as required by the CMHC Guide, and (v) be at arm’s length from (and otherwise independent and not an affiliate of) the registered issuer (collectively, the “Custodian Qualifications”). The Custodian has represented and warranted in the Transaction Documents that it meets the Custodian Qualifications.

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Bond Trustee

A registered issuer is required to appoint a bond trustee to represent the views and interests, and to enforce the rights, of the covered bondholders. In addition to the Counterparty Qualifications, a bond trustee must be at arm’s length from (and otherwise independent and not an affiliate of) the registered issuer (the “Bond Trustee Qualifications”). The Bond Trustee has represented and warranted in the Transaction Documents that it meets the Bond Trustee Qualifications.

Ratings

If there are covered bonds outstanding under a registered covered bond program, at least two rating agencies must at all times have current ratings assigned to at least one series or tranche of covered bonds outstanding, provided that such ratings need not be for the same series or tranche.

Disclosure and Reporting

The CMHC Guide sets out a number of disclosure and reporting obligations for registered issuers. Underlying these obligations is the principle that investors should have access to all material information with respect to the registered issuer and the relevant Series of covered bonds in order to make an informed investment decision with respect to buying, selling or holding such covered bonds. Registered issuers will be required to maintain a website where investors can access, among other things, material transaction documents, monthly reports on the covered bond collateral and static covered bond collateral portfolio data that users may download and analyze. The provisions of the CMHC Guide permit registered issuers to restrict access to such website (for example, through the use of a password) in order to comply with securities laws or otherwise. The Bank’s website will be specified in the applicable prospectus supplement.

Status of the Bank and the Program

On                     , the Bank was accepted as a registered issuer under Part I.1 of the NHA and the CMHC Guide in accordance with their terms and on                     , the Program was registered as a registered program under Part I.1 of the NHA and the CMHC Guide.

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PLAN OF DISTRIBUTION (AND CONFLICTS OF INTEREST)

We may sell any Series of covered bonds to be issued pursuant to this prospectus at any time after effectiveness of the Registration Statement of which this prospectus forms a part in one or more of the following ways from time to time:

• through underwriters or Dealers;

• through agents; or

• directly to one or more purchasers.

The offered covered bonds may be distributed periodically in one or more transactions at:

• a fixed price or prices, which may be changed;

• market prices prevailing at the time of sale;

• prices related to the prevailing market prices; or

• negotiated prices.

The applicable prospectus supplements will include:

• the initial public offering price;

• the names of any underwriters, dealers or agents;

• the purchase price of the covered bonds;

• our proceeds from the sale of the covered bonds;

• any underwriting discounts or commissions or agency fees and other underwriters’ or agents’ compensation;

• any discounts or concessions allowed or reallowed or paid to dealers;

• the place and time of delivery of the covered bonds; and

• any securities exchange on which the covered bonds may be listed.

If underwriters are used in the sale of covered bonds issued pursuant to this prospectus, they will buy the covered bonds for their own account. The underwriters may then resell the covered bonds in one or more transactions, at any time or times at a fixed public offering price or at varying prices. The underwriters may change from time to time any fixed public offering price and any discounts or commissions allowed or re-allowed or paid to dealers. If dealers are utilized in the sale of covered bonds issued pursuant to this prospectus, we will sell the covered bonds to the dealers as principals. The dealers may then resell the covered bonds to the public at varying prices to be determined by such dealers.

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In connection with the offering of covered bonds pursuant to this prospectus, we may grant to the underwriters an option to purchase additional covered bonds to cover over-allotments, if any, at the initial public offering price (with an additional underwriting commission), as may be set forth in the applicable supplements for such covered bonds. If we grant any over-allotment option, the terms of the option will be set forth in the applicable supplements for the covered bonds.

This prospectus may be delivered by underwriters and dealers in connection with short sales undertaken to hedge exposures under commitments to acquire our covered bonds to be issued on a delayed or contingent basis.

Underwriters, dealers and agents that participate in the distribution of the covered bonds issued pursuant to this prospectus may be underwriters as defined in the Securities Act. Any discounts or commissions that we pay them and any profit they receive when they resell the covered bonds may be treated as underwriting discounts and commissions under the Securities Act. We may have agreements with underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act, to contribute with respect to payments which they may be required to make in respect of such liabilities and to reimburse them for certain expenses.

Underwriters, dealers and agents, and their affiliates or associates, may engage in transactions with us or perform services for us in the ordinary course of business and receive compensation from us.

Each Series of offered covered bonds issued pursuant to this prospectus will be a new issue of covered bonds and will have no established trading market. Covered bonds may or may not be listed on a national or foreign securities exchange or automated quotation system. Any underwriters or agents to whom covered bonds are sold for public offering or sale may make, but are not required to make, a market in the covered bonds, and the underwriters or agents may discontinue making a market in the covered bonds at any time without notice. No assurance can be given as to the liquidity or the existence of trading markets for any covered bonds.

Any underwriters utilized with the issuance of the covered bonds pursuant to this prospectus may engage in stabilizing transactions and syndicate covering transactions in accordance with Rule 104 of Regulation M under the Exchange Act. Stabilizing transactions permit bids to purchase the offered covered bonds or any underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of covered bonds in the open market after the distribution has been completed in order to cover syndicate short positions. Such stabilizing transactions and syndicate covering transactions may cause the price of the offered covered bonds to be higher than would be the case in the absence of such transactions.

Selling Restrictions Outside the United States

Except as described in an applicable prospectus supplement, the Bank has taken no action that would permit a public offering of the covered bonds or possession or distribution of this prospectus or any other offering material in any jurisdiction outside the United States where action for that purpose is required. Accordingly, each underwriter will be required to represent, warrant and agree, that it will comply with all applicable laws and regulations in force in any jurisdiction in which it purchases, offers or sells covered bonds or possesses or distributes this

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prospectus or any other offering material and will obtain any consent, approval or permission required by it for the purchase, offer or sale by it of covered bonds under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers or sales and the Bank will have no responsibility in relation to this.

With regard to each covered bond, the relevant purchaser will be required to comply with those restrictions that the Bank and the relevant purchaser will agree and as will be set out in an applicable supplement.

Conflicts of Interest

Our affiliate, BMO Capital Markets Corp. may participate in the distribution of the covered bonds as an underwriter, dealer or agent. Any offering of covered bonds in which BMO Capital Markets Corp. participates will be conducted in compliance with the applicable requirements of FINRA Rule 5121, a rule of the Financial Industry Regulatory Authority, Inc. (“FINRA”). BMO Capital Markets Corp. will not participate in the distribution of an offering of covered bonds that do not have a bona fide public market within the meaning of Rule 5121 or are not investment grade rated within the meaning of Rule 5121 or covered bonds issued pursuant to this prospectus in the same Series that have equal rights and obligations as investment grade rated covered bonds unless either (1) each member firm responsible for managing the public offering does not have a conflict of interest within the meaning of Rule 5121, is not an affiliate of any member that does have a conflict of interest, and meets the requirements of Rule 5121 with respect to disciplinary history or (2) a qualified independent underwriter has participated in the preparation of the prospectus supplement or other offering document for the offering of covered bonds and has exercised the usual standards of due diligence with respect thereto. Neither BMO Capital Markets Corp. nor any other FINRA member participating in an offering of these covered bonds issued pursuant to this prospectus that has a conflict of interest will confirm initial sales to any discretionary accounts over which it has authority without the prior specific written approval of the customer.

In compliance with the guidelines of FINRA, the maximum commission or discount to be received by the participating FINRA members may not exceed 8% of the aggregate principal amount of covered bonds offered pursuant to this prospectus. We anticipate, however, that the maximum commission or discount to be received in any particular offering of covered bonds issued pursuant to this prospectus will be significantly less than this amount.

Market-Making Resale by Affiliates

This prospectus may be used by BMO Capital Markets Corp. or one more of our affiliates in connection with offers and sales of the covered bonds in market-making transactions. In a market-making transaction, BMO Capital Markets Corp. or one of our affiliates may resell a security it acquires from other holders, after the original offering and sale of security. Resales of this kind may occur in the open market or may be privately negotiated, at prevailing market prices at the time of resale or at related or negotiated prices. In these transactions, BMO Capital Markets Corp. or one of our affiliates may act as principal or agent, including as agent for the counterparty in a transaction in which BMO Capital Markets Corp. or one our affiliates, as applicable, acts as principal, or as agent for both counterparties in a transaction in which BMO Capital Markets Corp. or such affiliate, as applicable, does not act as principal. BMO Capital Markets Corp. or one of our affiliates may receive compensation in the form of discounts and commissions, including from both counterparties in some cases.

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The covered bonds to be sold in market-making transactions include covered bonds to be issued after the date of this prospectus, as well as covered bonds previously issued. We do not expect to receive any proceeds from market-making transactions. We do not expect that BMO Capital Markets Corp. or any other affiliate that engages in these transactions will pay any proceeds from its market-making resales to us.

Information about the trade and settlements dates, as well as the purchase price, for a market-making transaction will be provided to the purchaser in a separate confirmation of sale.

Unless we or an agent informs you in your confirmation of sale that your security is being purchased in its original offering and sale, you may assume that you are purchasing your security in a market-making transaction.

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TAXATION

U.S. FEDERAL INCOME TAXATION

The following describes the material U.S. federal income tax consequences that may be relevant with respect to the purchase, ownership and disposition of the covered bonds by an initial holder of a covered bond. It is the opinion of Allen & Overy LLP, counsel to the Bank. This summary addresses only the U.S. federal income tax considerations of holders that acquire the covered bonds at their original issuance and that will hold the covered bonds as capital assets.

This summary does not purport to address all U.S. federal income tax matters that may be relevant to a particular holder of covered bonds. This summary does not address tax considerations applicable to U.S. Holders (as defined below) that may be subject to special tax rules including, without limitation, the following: (i) financial institutions; (ii) insurance companies; (iii) dealers or traders in stocks, securities, currencies or notional principal contracts; (iv) regulated investment companies; (v) tax-exempt entities; (vi) persons that will hold the covered bonds as part of a “hedging” or “conversion” transaction or as a position in a “straddle” or as a part of a “synthetic security” or other integrated transaction for U.S. federal income tax purposes; (vii) persons that have a “functional currency” other than the U.S. Dollar; (viii) real estate investment trusts; (ix) persons that own (or are deemed to own) ten percent or more of the voting shares (or interests treated as equity) of the Bank; (x) partnerships, pass-through entities, or persons that hold covered bonds through pass-through entities; and (xi) U.S. expatriates and former long-term residents of the United States. Further, this summary does not address alternative minimum tax consequences, the Medicare tax on net investment income or the indirect effects on the holders of equity interests in a U.S. Holder. This summary also does not address the U.S. federal estate and gift tax consequences to holders of covered bonds.

This summary is based on the Code, U.S. Treasury Regulations and judicial and administrative interpretations thereof, in each case as in effect and available on the date of this Prospectus. All of the foregoing are subject to change, which change could apply retroactively and could affect the tax consequences described below.

For the purposes of this summary, a “U.S. Holder” is a beneficial owner of a covered bond that is, for U.S. federal income tax purposes: (i) a citizen or individual resident of the United States; (ii) a corporation or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof (including the District of Columbia); (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust if (x) a court within the U.S. is able to exercise primary supervision over its administration and (y) one or more U.S. persons have the authority to control all of the substantial decisions of such trust. A “Non-U.S. Holder” is a beneficial owner of covered bonds that is not a U.S. Holder. If a partnership holds covered bonds, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of partnerships holding covered bonds should consult their tax advisor.

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Taxation of U.S. Holders

This discussion deals only with covered bonds that are treated as debt instruments not subject to the contingent payment debt instrument rules for U.S. federal income tax purposes. The United States federal income tax consequences of owning covered bonds whose terms are not described in this prospectus will be discussed in an applicable supplement.

Payments of Interest

Interest paid on a covered bond, other than interest on a “Discount Bond” that is not “qualified stated interest” (each as defined below under “—Original Issue Discount—General”), will be taxable to a U.S. Holder as ordinary interest income at the time it is received or accrued, depending on the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes.

A U.S. Holder utilizing the cash method of accounting for U.S. federal income tax purposes that receives an interest payment denominated in a currency other than U.S. Dollars (a “foreign currency”) will be required to include in income the U.S. Dollar value of that interest payment, based on the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. Dollars.

If interest on a covered bond is payable in a foreign currency, an accrual basis U.S. Holder is required to include in income the U.S. Dollar value of the amount of interest income accrued on a covered bond during the accrual period. An accrual basis U.S. Holder may determine the amount of the interest income to be recognized in accordance with either of two methods. Under the first accrual method, the amount of income accrued will be based on the average spot exchange rate in effect during the interest accrual period or, with respect to an accrual period that spans two taxable years, the part of the period within the taxable year. Under the second accrual method, the U.S. Holder may elect to determine the amount of income accrued on the basis of the exchange rate in effect on the last day of the accrual period or, in the case of an accrual period that spans two taxable years, the exchange rate in effect on the last day of the part of the period within the taxable year. If the last day of the accrual period is within five business days of the date the interest payment is actually received, an electing accrual basis U.S. Holder may instead translate that interest expense at the exchange rate in effect on the day of actual receipt. Any election to use the second accrual method will apply to all debt instruments held by the U.S. Holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the U.S. Holder and will be irrevocable without the consent of the U.S. Internal Revenue Service (the “IRS”).

A U.S. Holder utilizing either of the foregoing two accrual methods will recognize ordinary income or loss with respect to accrued interest income on the date of receipt of the interest payment (including a payment attributable to accrued but unpaid interest upon the sale or retirement of a covered bond). The amount of ordinary income or loss will equal the difference between the U.S. Dollar value of the interest payment received (determined on the date the payment is received or on the date the covered bond is disposed of) in respect of the accrual period and the U.S. Dollar value of interest income that has accrued during that accrual period (as determined under the accrual method utilized by the U.S. Holder).

Foreign currency received as interest on the covered bonds will have a tax basis equal to its U.S. Dollar value at the time the interest payment is received. Gain or loss, if any, realized by

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a U.S. Holder on a sale or other disposition of that foreign currency will be ordinary income or loss and will generally be income from sources within the United States. for U.S. foreign tax credit limitation purposes.

Interest on the covered bonds received by a U.S. Holder will be treated as foreign source income for the purposes of calculating that holder’s U.S. foreign tax credit limitation. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and timing thereof are complex. U.S. Holders should consult their own tax advisors regarding the availability of a foreign tax credit in their particular situation.

Original Issue Discount

General. A covered bond, other than a covered bond with a term of one year or less (a “Short-Term Bond”), will be treated as issued at an original issue discount (“OID,” and a covered bond issued with OID, a “Discount Bond”) for U.S. federal income tax purposes if the excess of the sum of all payments provided under the covered bond, other than “qualified stated interest” payments (as defined below), over the “Issue Price” of the covered bond is more than a “de minimis amount” (as defined below). “Qualified stated interest” is generally interest paid on a covered bond that is unconditionally payable at least annually at a single fixed rate. The “Issue Price” of the covered bonds under the applicable prospectus supplement will be the first price at which a substantial amount of such covered bonds are sold to persons other than bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers. Special rules for “Variable Rate Bonds” are described below under “—Original Issue Discount—Variable Rate Bonds.”

In general, if the excess of the sum of all payments provided under the covered bond other than qualified stated interest payments (the covered bond’s “stated redemption price at maturity”) over its Issue Price is less than one quarter of one percent of the covered bond’s stated redemption price at maturity multiplied by the number of complete years to its maturity (the “de minimis amount”), then such excess, if any, constitutes “de minimis OID” and the covered bond is not a Discount Bond. Unless the election described below under “—Original Issue Discount—Election to Treat All Interest as OID” is made, a U.S. Holder of a covered bond with de minimis OID must include such de minimis OID in income as stated principal payments on the covered bond are made. The includable amount with respect to each such payment will equal the product of the total amount of the covered bond’s de minimis OID and a fraction, the numerator of which is the amount of the principal payment made and the denominator of which is the stated principal amount of the covered bond.

A U.S. Holder will be required to include OID on a Discount Bond in income for U.S. federal income tax purposes as it accrues calculated on a constant yield method (described below) before the actual receipt of cash attributable to that income, regardless of the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes. Under this method, U.S. Holders generally will be required to include in income increasingly greater amounts of OID over the life of Discount Bonds.

The amount of OID includable in income by a U.S. Holder of a Discount Bond is the sum of the daily portions of OID with respect to the covered bond for each day during the taxable year or portion of the taxable year on which the U.S. Holder holds that covered bond (“accrued OID”). The daily portion is determined by allocating to each day in any “accrual period” a pro

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rata portion of the OID allocable to that accrual period. Accrual periods with respect to a covered bond may be of any length selected by the U.S. Holder and may vary in length over the term of the covered bond as long as (i) no accrual period is longer than one year and (ii) each scheduled payment of interest or principal on the covered bond occurs on either the final or first day of an accrual period.

The amount of OID allocable to an accrual period equals the excess of (a) the product of the covered bond’s “adjusted issue price” at the beginning of the accrual period and the covered bond’s yield to maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) over (b) the sum of the payments of qualified stated interest on the covered bond allocable to the accrual period. The “adjusted issue price” of a covered bond at the beginning of any accrual period is the Issue Price of the covered bond increased by (x) the amount of accrued OID for each prior accrual period and decreased by (y) the amount of any payments previously made on the covered bond that were not qualified stated interest payments.

For the purposes of determining the amount of OID allocable to an accrual period, if an interval between payments of qualified stated interest on the covered bond contains more than one accrual period, the amount of qualified stated interest payable at the end of the interval (including any qualified stated interest that is payable on the first day of the accrual period immediately following the interval) is allocated pro rata on the basis of relative lengths to each accrual period in the interval, and the adjusted issue price at the beginning of each accrual period in the interval must be increased by the amount of any qualified stated interest that has accrued prior to the first day of the accrual period but that is not payable until the end of the interval.

The amount of OID allocable to an initial short accrual period may be computed using any reasonable method if all other accrual periods other than a final short accrual period are of equal length. The amount of OID allocable to the final accrual period is the difference between (x) the amount payable at the maturity of the covered bond (other than any payment of qualified stated interest) and (y) the covered bond’s adjusted issue price as of the beginning of the final accrual period.

OID for any accrual period on a covered bond that is denominated in, or determined by reference to, a foreign currency will be determined in that foreign currency and then translated into U.S. Dollars in the same manner as interest payments accrued by an accrual basis U.S. Holder, as described under Payments of Interest above. Upon receipt of an amount attributable to OID in these circumstances, a U.S. Holder may recognize ordinary income or loss.

OID on a Discount Bond will be treated as foreign source income for the purposes of calculating a U.S. Holder’s foreign tax credit limitation. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and timing thereof are complex. U.S. Holders should consult their own tax advisors regarding the availability of a foreign tax credit in their particular situation.

Acquisition Premium. A U.S. Holder that purchases a covered bond for an amount less than or equal to the sum of all amounts payable on the covered bond after the purchase date other than payments of qualified stated interest but in excess of its adjusted issue price (as determined above under “—Original Issue Discount—General) (any such excess being “acquisition premium”) and that does not make the election described below under “—Original Issue

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Discount—Election to Treat All Interest as OID” will reduce the daily portions of OID by a fraction, the numerator of which is the excess of the U.S. Holder’s adjusted basis in the covered bond immediately after its purchase over the adjusted issue price of the covered bond, and the denominator of which is the excess of the sum of all amounts payable on the covered bond after the purchase date, other than payments of qualified stated interest, over the covered bond’s adjusted issue price.

Market Discount. A covered bond, other than a Short-Term Bond, will be treated as purchased at a market discount (a “Market Discount Bond”) if the covered bond’s stated redemption price at maturity or, in the case of a Discount Bond, the covered bond’s “revised issue price”, exceeds the amount for which the U.S. Holder purchased the covered bond by at least one quarter of one percent of such covered bond’s stated redemption price at maturity or revised issue price, respectively, multiplied by the number of complete years to the covered bond’s maturity. If such excess is not sufficient to cause the covered bond to be a Market Discount Bond, then such excess constitutes “de minimis market discount” and such covered bond is not subject to the rules discussed in the following paragraphs. For these purposes, the “revised issue price” of a covered bond generally equals its Issue Price, increased by the amount of any OID that has accrued on the covered bond.

Any gain recognized on the maturity or disposition of a Market Discount Bond will be treated as ordinary income to the extent that such gain does not exceed the accrued market discount on such covered bond. Alternatively, a U.S. Holder of a Market Discount Bond may elect to include market discount in income currently over the life of the covered bond. Such an election will apply to all debt instruments with market discount acquired by the electing U.S. Holder on or after the first day of the first taxable year to which the election applies. This election may not be revoked without the consent of the IRS.

Market discount on a Market Discount Bond will accrue on a straight-line basis unless the U.S. Holder elects to accrue such market discount on a constant yield method. Such an election will apply only to the covered bond with respect to which it is made and may not be revoked. A U.S. Holder of a Market Discount Bond that does not elect to include market discount in income currently generally will be required to defer deductions for interest on borrowings allocable to such covered bond in an amount not exceeding the accrued market discount on such covered bond until the maturity or disposition of such covered bond.

Election to Treat All Interest as OID. A U.S. Holder may elect to include in gross income all interest that accrues on a covered bond using the constant yield method described above under the heading “—Original Issue Discount—General,” with the modifications described below. For the purposes of this election, interest includes stated interest, OID, de minimis OID, market discount, de minimis market discount and unstated interest, as adjusted by any amortizable bond premium or acquisition premium.

In applying the constant yield method to a covered bond with respect to which this election has been made, the issue price of the covered bond will equal its cost to the electing U.S. Holder, the issue date of the covered bond will be the date of its acquisition by the electing U.S. Holder, and no payments on the covered bond will be treated as payments of qualified stated interest. This election will generally apply only to the covered bond with respect to which it is made and may not be revoked without the consent of the IRS. If this election is made with respect to a covered bond with “amortizable bond premium” (as defined below under “Covered Bonds Purchased at a Premium”), then the electing U.S. Holder will be deemed to have elected to apply

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amortizable bond premium against interest with respect to all debt instruments with amortizable bond premium (other than debt instruments the interest on which is excludible from gross income) held by the electing U.S. Holder as of the beginning of the taxable year in which the covered bond with respect to which the election is made is acquired or thereafter acquired. The deemed election with respect to amortizable bond premium may not be revoked without the consent of the IRS.

If the election to apply the constant yield method to all interest on a covered bond is made with respect to a Market Discount Bond, the electing U.S. Holder will be treated as having made the election discussed above under “—Original Issue Discount—Market Discount” to include market discount in income currently over the life of all debt instruments held or thereafter acquired by such U.S. Holder.

Variable Rate Bonds. A “Variable Rate Bond” is a covered bond that:

(a) has an Issue Price that does not exceed the total noncontingent principal payments by more than the lesser of (i) the product of (x) the total noncontingent principal payments, (y) the number of complete years to maturity from the issue date and (z) 0.015, or (ii) 15 percent of the total noncontingent principal payments; and

(b) does not provide for stated interest other than stated interest compounded or paid at least annually at (i) one or more “qualified floating rates,” (ii) a single fixed rate and one or more qualified floating rates, (iii) a single “objective rate” or (iv) a single fixed rate and a single objective rate that is a “qualified inverse floating rate.”

A qualified floating rate or objective rate in effect at any time during the term of the instrument must be set at a “current value” of that rate. A “current value” of a rate is the value of the rate on any day that is no earlier than three months prior to the first day on which that value is in effect and no later than one year following that first day.

A variable rate is a “qualified floating rate” if (i) variations in the value of the rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the covered bond is denominated or (ii) it is equal to the product of such a rate and either (a) a fixed multiple that is greater than 0.65 but not more than 1.35, or (b) a fixed multiple greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate. If a covered bond provides for two or more qualified floating rates that (i) are within 0.25 percentage points of each other on the issue date or (ii) can reasonably be expected to have approximately the same values throughout the term of the covered bond, the qualified floating rates together constitute a single qualified floating rate. A rate is not a qualified floating rate, however, if the rate is subject to certain restrictions (including caps, floors, governors, or other similar restrictions) unless such restrictions are fixed throughout the term of the covered bond or are not reasonably expected to significantly affect the yield on the covered bond.

An “objective rate” is a rate, other than a qualified floating rate, that is determined using a single fixed formula and that is based on objective financial or economic information that is not within the control of or unique to the circumstances of the Bank or a related party (such as dividends, profits or the value of the Bank’s stock). A variable rate is not an objective rate, however, if it is reasonably expected that the average value of the rate during the first half of the covered bond’s term will be either significantly less than or significantly greater than the average

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value of the rate during the final half of the covered bond’s term. An objective rate is a “qualified inverse floating rate” if (i) the rate is equal to a fixed rate minus a qualified floating rate, and (ii) the variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate.

If interest on a covered bond is stated at a fixed rate for an initial period of one year or less followed by either a qualified floating rate or an objective rate for a subsequent period and (i) the fixed rate and the qualified floating rate or objective rate have values on the issue date of the covered bond that do not differ by more than 0.25 percentage points or (ii) the value of the qualified floating rate or objective rate is intended to approximate the fixed rate, the fixed rate and the qualified floating rate or the objective rate constitute a single qualified floating rate or objective rate.

In general, if a Variable Rate Bond provides for stated interest at a single qualified floating rate or objective rate, all stated interest on the covered bond is qualified stated interest and the amount of OID, if any, is determined under the rules applicable to fixed rate debt instruments by using, in the case of a qualified floating rate or qualified inverse floating rate, the value as of the issue date of the qualified floating rate or qualified inverse floating rate, or, in the case of any other objective rate, a fixed rate that reflects the yield reasonably expected for the covered bond.

If a Variable Rate Bond does not provide for stated interest at a single qualified floating rate or a single objective rate and also does not provide for interest payable at a fixed rate (other than at a single fixed rate for an initial period), the amount of interest and OID accruals on the covered bond are generally determined by (i) determining a fixed rate substitute for each variable rate provided under the Variable Rate Bond (generally, the value of each variable rate as of the issue date or, in the case of an objective rate that is not a qualified inverse floating rate, a rate that reflects the reasonably expected yield on the covered bond), (ii) constructing the equivalent fixed rate debt instrument (using the fixed rate substitutes described above), (iii) determining the amount of qualified stated interest and OID with respect to the equivalent fixed rate debt instrument, and (iv) making the appropriate adjustments for actual variable rates during the applicable accrual period.

If a Variable Rate Bond provides for stated interest either at one or more qualified floating rates or at a qualified inverse floating rate, and in addition provides for stated interest at a single fixed rate (other than at a single fixed rate for an initial period), the amount of interest and OID accruals are determined as in the immediately preceding paragraph with the modification that the Variable Rate Bond is treated, for the purposes of the first three steps of the determination, as if it provided for a qualified floating rate (or a qualified inverse floating rate, as the case may be) rather than the fixed rate. The qualified floating rate (or qualified inverse floating rate) replacing the fixed rate must be such that the fair market value of the Variable Rate Bond as of the issue date would be approximately the same as the fair market value of an otherwise identical debt instrument that provides for the qualified floating rate (or qualified inverse floating rate) rather than the fixed rate.

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Prospective purchasers should consult their own tax advisors regarding the applicability and consequences of the variable rate debt instrument rules to any of the covered bonds issued under the Program.

Covered bonds Subject to Redemption. If the covered bonds are redeemable at the option of the Bank prior to their maturity or are repayable at the option of the U.S. Holder prior to their stated maturity, such covered bonds may be subject to rules that are different from the general rules discussed above. Investors intending to purchase covered bonds with such features should consult their own tax advisors, since the OID consequences will depend, in part, on the particular terms and features of the purchased covered bonds.

Short-Term Bonds. Short-Term Bonds will be treated as having been issued with OID. In general, an individual or other cash method U.S. Holder is not required to accrue such OID unless the U.S. Holder elects to do so. If such an election is not made, any gain recognized by the U.S. Holder on the sale, exchange or maturity of the Short-Term Bond will be ordinary income to the extent of the OID accrued on a straight-line basis, or upon election under the constant yield method (based on daily compounding), through the date of sale or maturity, and a portion of the deductions otherwise allowable to the U.S. Holder for interest on borrowings allocable to the Short-Term Bond will be deferred until a corresponding amount of income is realized. U.S. Holders who report income for U.S. federal income tax purposes under the accrual method, and certain other holders including banks and dealers in securities, are required to accrue OID on a Short-Term Bond on a straight-line basis unless an election is made to accrue the original issue discount under a constant yield method (based on daily compounding).

Covered Bonds Purchased at a Premium

A U.S. Holder that purchases a covered bond for an amount in excess of its principal amount may elect to treat such excess as “amortizable bond premium.” If such election is made, the amount required to be included in the U.S. Holder’s income each year with respect to interest on the covered bond will be reduced by the amount of amortizable bond premium allocable (based on the covered bond’s yield to maturity) to such year. In the case of a covered bond that is denominated in, or determined by reference to, a foreign currency, amortizable bond premium will be computed in units of foreign currency, and amortizable bond premium will reduce interest income in units of foreign currency. At the time amortizable bond premium offsets interest income, a U.S. Holder realizes exchange gain or loss (taxable as ordinary income or loss) equal to the difference between exchange rates at that time and at the time of the acquisition of the covered bonds. Any election to amortize bond premium will apply to all bonds (other than bonds the interest in which is excludible from gross income) held by the U.S. Holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the U.S. Holder and is irrevocable without the consent of the IRS.

Sale, Exchange or Retirement of the Covered Bonds

A U.S. Holder’s tax basis in a covered bond will generally equal its “U.S. Dollar cost,” increased by the amount of any OID or market discount included in the U.S. Holder’s income with respect to the covered bond and the amount, if any, of income attributable to de minimis OID and de minimis market discount included in the U.S. Holder’s income with respect to the covered bond (each as determined above), and reduced by the amount of any payments with respect to the covered bond that are not qualified stated interest payments and the amount of any amortizable bond premium applied to reduce interest on the covered bond. The “U.S. Dollar

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cost” of a covered bond purchased with a foreign currency will generally be the U.S. Dollar value of the purchase price on the date of purchase or, in the case of covered bonds traded on an established securities market (as defined in the applicable U.S. Treasury Regulations) that are purchased by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), on the settlement date for the purchase.

A U.S. Holder will generally recognize gain or loss on the sale, exchange or retirement of a covered bond equal to the difference between the amount realized on the sale, exchange or retirement and the tax basis of the covered bond. The amount realized on the sale, exchange or retirement of a covered bond for an amount in foreign currency will be the U.S. Dollar value of that amount on (1) the date the payment is received in the case of a cash basis U.S. Holder, (2) the date of disposition in the case of an accrual basis U.S. Holder, or (3) in the case of covered bonds traded on an established securities market (as defined in the applicable U.S. Treasury Regulations), that are sold by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), on the settlement date for the sale.

Gain or loss recognized by a U.S. Holder on the sale, exchange or retirement of a covered bond that is attributable to changes in currency exchange rates will be ordinary income or loss and will consist of OID exchange gain or loss and principal exchange gain or loss. OID exchange gain or loss will equal the difference between the U.S. Dollar value of the amount received on the sale, exchange or retirement of a covered bond that is attributable to accrued but unpaid OID as determined by using the exchange rate on the date of the sale, exchange or retirement and the U.S. Dollar value of accrued but unpaid OID as determined by the U.S. Holder under the rules described above under “—Original Issue Discount—General.” Principal exchange gain or loss will equal the difference between the U.S. Dollar value of the U.S. Holder’s purchase price of the covered bond in foreign currency determined on the date of the sale, exchange or retirement, and the U.S. Dollar value of the U.S. Holder’s purchase price of the covered bond in foreign currency determined on the date the U.S. Holder acquired the covered bond. The foregoing foreign currency gain or loss will be recognized only to the extent of the total gain or loss realized by the U.S. Holder on the sale, exchange or retirement of the covered bond, and will generally be treated as from sources within the U.S. for U.S. foreign tax credit limitation purposes.

Any gain or loss recognized by a U.S. Holder in excess of foreign currency gain recognized on the sale, exchange or retirement of a covered bond (except for a Short-Term Bond, as discussed above) would generally be U.S. source capital gain or loss (except to the extent such amounts are attributable to market discount, accrued but unpaid interest, or subject to the general rules governing contingent payment obligations).

Prospective investors should consult their own tax advisors with respect to the treatment of capital gains (which may be taxed at lower rates than ordinary income for taxpayers who are individuals, trusts or estates that held the covered bonds for more than one year) and capital losses (the deductibility of which is subject to limitations).

A U.S. Holder will have a tax basis in any foreign currency received on the sale, exchange or retirement of a covered bond equal to the U.S. Dollar value of the foreign currency at the time of the sale, exchange or retirement. Gain or loss, if any, realized by a U.S. Holder on a sale or other disposition of that foreign currency will be ordinary income or loss and will generally be income from sources within the U.S. for foreign tax credit limitation purposes.

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Taxation of Non-U.S. Holders

A Non-U.S. Holder generally should not be subject to U.S. federal income or withholding tax on any payments on the covered bonds and gain from the sale, redemption or other disposition of the covered bonds unless: (i) that payment and/or gain is effectively connected with the conduct by that Non-U.S. Holder of a trade or business in the U.S.; (ii) in the case of any gain realized on the sale or exchange of a covered bond by an individual Non-U.S. Holder, that holder is present in the U.S. for 183 days or more in the taxable year of the sale, exchange or retirement and certain other conditions are met; or (iii) the Non-U.S. Holder is subject to tax pursuant to provisions of the Code applicable to certain expatriates.

Non U.S. Holders should consult their own tax advisors regarding the U.S. federal income and other tax consequences of owning covered bonds.

Backup Withholding and Information Reporting

Under current U.S. federal income tax law, backup withholding tax and information reporting requirements apply in the case of certain non-corporate U.S. beneficial owners of a covered bond to certain payments of principal of, and interest on, an obligation, and of proceeds of the sale of an obligation before maturity. The Bank, its agent, a broker, or any paying agent, as the case may be, may be required to withhold tax from any payment that is subject to backup withholding if the U.S. Holder fails to furnish the U.S. Holder’s taxpayer identification number (usually on IRS Form W-9), to certify that such U.S. Holder is not subject to backup withholding, or to otherwise comply with the applicable requirements of the backup withholding rules. Certain U.S. Holders (including, among others, corporations) are not subject to the backup withholding and information reporting requirements.

Non-U.S. Holders may be required to comply with applicable certification procedures to establish that they are not U.S. Holders in order to avoid the application of such information reporting requirements and backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder generally may be claimed as a credit against such U.S. Holder’s U.S. federal income tax liability provided that the required information is furnished to the IRS.

U.S. Holders should consult their own tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

Certain U.S. Holders may be required to report to the IRS certain information with respect to their beneficial ownership of the covered bonds. Investors who fail to report required information could be subject to substantial penalties.

IRS Disclosure Reporting Requirements

Certain U.S. Treasury Regulations relating to Section 6011 of the Internal Revenue Code (the “Disclosure Regulations”) meant to require the reporting of certain tax shelter transactions (“Reportable Transactions”) could be interpreted to cover transactions generally not regarded as tax shelters. Under the Disclosure Regulations it may be possible that certain transactions with respect to the covered bonds may be characterized as Reportable Transactions requiring a covered bondholder who is required to disclose such transaction, such as a sale, exchange, retirement or other taxable disposition of a covered bond that results in a loss that exceeds certain thresholds

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and other specified conditions are met. Prospective investors in the covered bonds should consult with their own tax advisors to determine the tax return obligations, if any, with respect to an investment in the covered bonds, including any requirement to file IRS Form 8886 (Reportable Transaction Disclosure Statement).

The above summary does not describe other tax consequences which will arise from purchasing, holding and disposing of covered bonds because the precise terms of covered bonds will vary from issue to issue. Persons who are unsure of their tax position are advised to consult their professional advisors.

Foreign Account Tax Compliance Act

Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended, (“FATCA”) impose a new reporting regime and potentially a 30% withholding tax with respect to certain payments to any non-U.S. financial institution (a “foreign financial institution,” or “FFI” (as defined in the Code)) that does not become a “Participating FFI” by entering into an agreement with the IRS to provide the IRS with certain information in respect of its account holders and investors or is not otherwise exempt from or in deemed compliance with FATCA. The Bank is classified as an FFI.

The new withholding regime will be phased in beginning July 1, 2014 for payments from sources within the United States and will apply to “foreign passthru payments” (a term not yet defined) no earlier than January 1, 2017. This withholding would potentially apply to payments in respect of any covered bonds that are issued on or after the “grandfathering date”, which is the later of (a) July 1, 2014 and (b) the date that is six months after the date on which final U.S. Treasury regulations defining the term foreign passthru payment are filed with the Federal Register, or which are materially modified on or after the grandfathering date. If covered bonds are issued before the grandfathering date, and additional covered bonds of the same Series are issued on or after that date, the additional covered bonds may not be treated as grandfathered, which may have negative consequences for the existing covered bonds, including a negative impact on market price.

The United States and a number of other jurisdictions have announced their intention to negotiate intergovernmental agreements to facilitate the implementation of FATCA (each, an “IGA”). Pursuant to FATCA and the “Model 1” and “Model 2” IGAs released by the United States, an FFI in an IGA signatory country could be treated as a “Reporting FI” not subject to withholding under FATCA on any payments it receives. Further, an FFI in a Model 1 IGA jurisdiction would not be required to withhold under FATCA or an IGA (or any law implementing an IGA) (any such withholding being: “FATCA Withholding”) from payments it makes (unless it has agreed to do so under the U.S. “qualified intermediary”, “withholding foreign partnership”, or “withholding foreign trust” regimes). The Model 2 IGA leaves open the possibility that a Reporting FI might in the future be required to withhold as a Participating FFI on foreign passthru payments. Under each Model IGA, a Reporting FI would still be required to report certain information in respect of its account holders and investors to its home government or to the IRS. The United States and Canada have announced an intention to enter into an agreement (a “US-Canada IGA”).

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If the Bank becomes a Participating FFI, the Bank and financial institutions through which payments on the covered bonds are made may be required to withhold FATCA Withholding if any FFI through or to which payment on such covered bonds is made is not a Participating FFI, a Reporting FI, or otherwise exempt from or in deemed compliance with FATCA.

Whilst the covered bonds are in global form and held within the clearing systems, it is expected that FATCA will not affect the amount of any payments made under, or in respect of, the covered bonds by the Bank, the Guarantor or any paying agent, given that each of the entities in the payment chain between the Bank and the participants in the clearing systems is a major financial institution whose business is dependent on compliance with FATCA and that any alternative approach introduced under an IGA will be unlikely to affect the covered bonds. The documentation expressly contemplates the possibility that the covered bonds may go into definitive form and therefore that they may take out of the clearing systems. If this were to happen, then a non-FATCA compliant holder could be subject to FATCA withholding. However, definitive covered bonds will only be printed in remote circumstances.

If an amount in respect of FATCA withholding were to be deducted or withheld from interest, principal or other payments made in respect of the covered bonds, neither the Bank nor any paying agent nor any other person would, pursuant to the conditions of the covered bonds, be required to pay additional amounts as a result of the deduction or withholding. As a result, investors may receive less interest or principal than expected.

FATCA is particularly complex and its application is uncertain at this time. The above description is based in part on regulations, official guidance and model IGAs, all of which are subject to change or may be implemented in a materially different form. Prospective investors should consult their tax advisers on how these rules may apply to the Bank and to payments they may receive in connection with the covered bonds.

CANADIAN TAXATION

The following summary describes the principal Canadian federal income tax considerations applicable to a holder of covered bonds who acquires covered bonds, including entitlement to all payments thereunder, as a beneficial owner pursuant to this prospectus, and who, at all relevant times, for the purposes of the ITA, deals at arm’s length with the Bank and the Guarantor (a “Holder”).

This summary assumes that no amount paid or payable as, on account or in lieu of payment of, or in satisfaction of, interest will be in respect of a debt or other obligation to pay an amount to a person who does not deal at arm’s length with the Bank or the Guarantor, as the case may be, for the purposes of the ITA.

This summary is based upon the provisions of the ITA and the regulations thereunder (the “Regulations”) in force on the date hereof and counsel’s understanding of the current administrative and assessing practices and policies of the Canada Revenue Agency published in writing by it prior to the date hereof. This summary takes into account all specific proposals to amend the ITA and Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative policy or assessing practice, whether by legislative, regulatory, administrative or judicial action, nor does it take into account provincial, territorial or foreign income tax legislation.

Canadian federal income tax considerations applicable to covered bonds may be described more particularly when such covered bonds are offered (and then only to the extent material) in the prospectus supplement related thereto if they are not addressed by the comments following and, in that event, the following will be superseded thereby to the extent indicated in such prospectus supplements.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular holder. This summary is not exhaustive of all federal income tax considerations. Accordingly, prospective purchasers of covered bonds should consult their own tax advisors with respect to their particular circumstances.

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Currency Conversion

While the covered bonds may be denominated in a currency other than Canadian Dollars, all amounts relating to the acquisition, holding or disposition of the covered bonds must be converted into Canadian Dollars based on exchange rates determined in accordance with the ITA. The amount of interest required to be included in the income of, and capital gains or capital losses realized by, a Holder may be affected by fluctuations in relevant exchange rates.

Holders Resident in Canada

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the application of the ITA, is, or is deemed to be resident in Canada and is not affiliated with the Bank or the Guarantor and holds the covered bonds as capital property (a “Resident Holder”). Generally, the covered bonds will be capital property to a Holder provided the Holder does not acquire or hold those covered bonds in the course of carrying on a business or as part of an adventure or concern in the nature of trade. Certain Holders may be entitled to make or may have already made the irrevocable election permitted by subsection 39(4) of the ITA the effect of which may be to deem to be capital property any covered bonds (and all other “Canadian securities,” as defined in the ITA) owned by such Holder in the taxation year in which the election is made and in all subsequent taxation years. Holders whose covered bonds might not otherwise be considered to be capital property should consult their own tax advisors concerning this election. This portion of the summary is not applicable to (i) a purchaser that has entered into, with respect to the covered bonds, a “derivative forward agreement” as that term is defined in the March 21, 2013 Proposed Amendments, (ii) a purchaser an interest in which is a “tax shelter investment,” (iii) a purchaser that is, for purposes of certain rules (referred to as the mark-to-market rules) applicable to securities held by financial institutions, a “financial institution,” or (iv) a purchaser that reports its “Canadian tax results” in a currency other than Canadian currency, each as defined in the ITA. Such purchasers should consult their own tax advisors.

Taxation of Interest and Other Amounts

A Resident Holder that is a corporation, partnership, unit trust or trust of which a corporation or partnership is a beneficiary will be required to include in computing its income for a taxation year any interest or amount that is considered for the purposes of the ITA to be interest on the covered bond that accrues or is deemed to accrue to such holder to the end of the year or became receivable or is received by the holder before the end of the year, to the extent that such amount was not included in computing the holder’s income for a preceding taxation year.

A Resident Holder (other than a holder referred to in the previous paragraph) will be required to include in computing the holder’s income for a taxation year any amount received or receivable (depending upon the method regularly followed by the holder in computing income) by the holder as interest in the year on the covered bond, to the extent that such amount was not included in computing the holder’s income for a preceding taxation year.

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Dispositions

On a disposition or deemed disposition of the covered bond, including a purchase or redemption by the Bank prior to maturity or a repayment by the Bank upon maturity, a Resident Holder will generally be required to include in computing its income for the taxation year in which the disposition occurs the amount of interest (including amounts deemed to accrue as interest) that has accrued on the covered bond to the date of disposition to the extent that such amount has not otherwise been included in computing the holder’s income for the year in which the disposition occurred or a preceding taxation year.

In general, on a disposition or deemed disposition of a covered bond, a Resident Holder will realize a capital gain (or a capital loss) equal to the amount, if any, by which the proceeds of disposition, net of any amount included in the holder’s income as interest and any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of such covered bond to the holder immediately before the disposition or deemed disposition. Generally, a Resident Holder is required to include in computing its income for a taxation year one-half of the amount of any such capital gain (a “taxable capital gain”). Subject to and in accordance with the provisions of the ITA, a Resident Holder is required to deduct one-half of the amount of any such capital loss (an “allowable capital loss”) realized in a taxation year from taxable capital gains realized by the holder in the year and allowable capital losses in excess of taxable capital gains may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years.

In the event of an Issuer Event of Default and receipt by the Guarantor of any Excess Proceeds, holders should consult their own tax advisors as to whether they are required to recognize a capital gain at such time and whether any capital loss otherwise arising will be deferred until a subsequent disposition of the covered bonds.

Additional Refundable Tax

A Resident Holder that is throughout the year a Canadian controlled private corporation (as defined in the ITA) may be liable to pay an additional refundable tax on certain investment income including amounts in respect of interest and taxable capital gains.

Eligibility for Investment

The covered bonds, if issued on the date hereof, would be qualified investments under the ITA and the Regulations for trusts governed by a registered retirement savings plan (“RRSP”), registered retirement income fund (“RRIF”), registered education savings plan, registered disability savings plan, deferred profit sharing plan (other than trusts governed by a deferred profit sharing plan for which any of the employers is the Bank, or an employer with which the Bank does not deal at arm’s length within the meaning of the ITA) and a tax-free savings account (“TFSA”). The covered bonds will not be a “prohibited investment” for a trust governed by a TFSA, RRSP or RRIF on the date hereof provided the holder of the TFSA or the annuitant of the RRSP or RRIF, for purposes of the ITA, (i) deals at arm’s length with the Bank and the Guarantor, (ii) does not have a “significant interest” (as defined in the ITA for purposes of the “prohibited investment” rules) in the Bank or Guarantor, and (iii) does not have a significant interest in any corporation, partnership or trust with which the Bank does not deal at arm’s length for purposes of the ITA. Prospective purchasers should consult with their own tax advisors regarding the prohibited investment rules (including having regard to Proposed Amendments issued on December 21, 2012, which propose to delete the condition in clause (iii) above).

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Holders Not Resident in Canada

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the application of the ITA, is not, and is not deemed to be, resident in Canada, deals at arm’s length with the Bank, the Guarantor and any transferee resident (or deemed to be resident) in Canada to whom the Holder disposes of the covered bonds, is not a “specified shareholder” (as defined in the ITA) of the Bank or a person that does not deal at arm’s length with a specified shareholder of the Bank for purposes of the thin capitalization rules contained in subsection 18(4) of the ITA, and does not use or hold the covered bonds in a business carried on (or deemed to be carried on) in Canada (a “Non-Resident Holder”). A “specified shareholder” of the Bank is a person who owns, or is deemed to own, alone or together with persons with whom that person does not deal at arm’s length, shares entitled to 25% or more of the votes that could be cast at an annual shareholders’ meeting or shares having a Fair Market Value of 25% or more of the Fair Market Value of all the issued and outstanding shares of the Bank. Special rules, which are not discussed in this summary, may apply to a non-Canadian holder that is an insurer that carries on an insurance business in Canada and elsewhere.

Payments by the Bank in Respect of the covered bonds

Interest paid or credited or deemed to be paid or credited by the Bank on a covered bond (including amounts on account of or in lieu of, or in satisfaction of, interest) to a Non-Resident Holder will not be subject to Canadian non-resident withholding tax, unless all or any portion of such interest (other than on a “prescribed obligation” described below) is contingent or dependent on the use of or production from property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class or Series of shares of the capital stock of a corporation. A “prescribed obligation” is a debt obligation the terms or conditions of which provide for an adjustment to an amount payable in respect of the obligation for a period during which the obligation was outstanding which adjustment is determined by reference to a change in the purchasing power of money and no amount payable in respect thereof, other than an amount determined by reference to a change in the purchasing power of money, is contingent or dependent upon any of the criteria described in the preceding sentence. If any interest payable on a covered bond, or any portion of the principal amount of a covered bond in excess of its issue price, is to be calculated by reference to an index or formula, interest on the covered bond together with such portion of principal, may be subject to Canadian non-resident withholding tax. The prospectus supplement in respect of each particular Tranche of covered bonds of a Series will confirm the exemption from (or application of) Canadian non-resident withholding tax based upon the terms of that particular Tranche.

In the event that a covered bond the interest on which is not exempt from Canadian non-resident withholding tax upon its terms is redeemed, cancelled, repurchased or purchased by the Bank or any other person resident or deemed to be resident in Canada from a Non-Resident Holder or is otherwise assigned or transferred by a Non-Resident Holder to a person resident or deemed to be resident in Canada for an amount which exceeds, generally, the issue price thereof, the excess may be deemed to be interest and may, together with any interest that has accrued on the covered bond to that time, be subject to Canadian non-resident withholding tax. Such excess will not be subject to Canadian non-resident withholding tax, however, if the covered bond is considered to be an “excluded obligation” for purposes of the ITA. A covered bond that is not an “indexed debt obligation” (described below), that was issued for an amount not less than 97 percent of the principal amount (as defined in the ITA) of the covered bond, and the yield from

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which, expressed in terms of an annual rate (determined in accordance with the ITA) on the amount for which the covered bond was issued does not exceed 4/3 of the interest stipulated to be payable on the covered bond, expressed in terms of an annual rate on the outstanding principal amount from time to time, will be an “excluded obligation” for this purpose. An “indexed debt obligation” is a debt obligation the terms or conditions of which provide for an adjustment to an amount payable in respect of the obligation, for a period during which the obligation was outstanding, that is determined by reference to a change in the purchasing power of money.

If interest is subject to Canadian non-resident withholding tax, the rate is 25%, subject to reduction under the terms of an applicable income tax treaty or convention between Canada and the country of residence of the Non-Resident Holder.

Generally, there are no other taxes on income (including taxable capital gains) payable by a Non-Resident Holder on interest, discount, or premium on a covered bond or on the proceeds received by a Non-Resident Holder on the disposition of a covered bond (including redemption, cancellation, purchase or repurchase).

Payments by the Guarantor under the Covered Bond Guarantee

Payments by the Guarantor under the Covered Bond Guarantee in respect of interest, amounts in lieu of interest on the covered bonds or in respect of the principal amount of the covered bonds will not be subject to Canadian non-resident withholding tax to the same extent such payments, if made by the Bank on the covered bonds, would be free of Canadian non-resident withholding tax, as discussed above.

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BENEFIT PLAN INVESTOR CONSIDERATIONS

Unless otherwise provided in any supplement to this prospectus, the covered bonds should be eligible for purchase by employee benefit plans and other plans subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the provisions of Section 4975 of the Code and by governmental, church and non-U.S. plans that are subject to state, local, other federal or non-U.S. law that is substantially similar to ERISA or the Code (“Similar Law”) subject to consideration of the issues described in this Section. ERISA imposes certain requirements on “employee benefit plans” (as defined in Section 3(3) of ERISA) subject to ERISA, including entities such as collective investment funds and separate accounts whose underlying assets include the assets of such plans (collectively, “ERISA Plans”), and on those persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements, including the requirements of investment prudence and diversification and the requirement that an ERISA Plan’s investments be made in accordance with the documents governing the ERISA Plan. The prudence of a particular investment must be determined by the responsible fiduciary of an ERISA Plan by taking into account the ERISA Plan’s particular circumstances and all of the facts and circumstances of the investment including, but not limited to, the matters discussed under “Risk factors.”

Section 406 of ERISA and Section 4975 of the Code prohibit certain transactions involving the assets of an ERISA Plan (as well as those plans that are not subject to ERISA but which are subject to Section 4975 of the Code, such as individual retirement accounts (together with ERISA Plans, the “Plans”)) and certain persons (referred to as “parties in interest” or “disqualified persons”) having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction. A party in interest or disqualified person, including a Plan fiduciary, who engages in a prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code.

The Bank, the Guarantor, the Dealers, the Bond Trustee or any other party to the transactions referred to in this prospectus may be parties in interest or disqualified persons with respect to many Plans. Prohibited transactions within the meaning of Section 406 of ERISA or Section 4975 of the Code may arise if any of the covered bonds is acquired or held by a Plan, including but not limited to where the Bank, the Guarantor, the Dealers, the Bond Trustee or any other party to such transactions is a party in interest or a disqualified person. Certain exemptions from the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code may be applicable, however, depending in part on the type of Plan fiduciary making the decision to acquire any covered bonds and the circumstances under which such decision is made. Included among these exemptions are Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code (relating to transactions between a person that is a party in interest (other than a fiduciary or an affiliate that has or exercises discretionary authority or control or renders investment advice with respect to assets involved in the transaction) solely by reason of providing services to the plan, provided that there is adequate consideration for the transaction), Prohibited Transaction Class Exemption (“PTCE”) 91-38 (relating to investments by bank collective investment funds), PTCE 84-14 (relating to transactions effected by a qualified professional asset manager), PTCE 95-60 (relating to transactions involving insurance company general accounts), PTCE 90-1 (relating to investments by insurance company pooled separate accounts) and PTCE 96-23 (relating to transactions determined by in-house asset managers). Prospective investors should consult with their advisors regarding the prohibited transaction rules and these exceptions. There can be no assurance that any of these exemptions or any other exemption will be available with respect to any particular transaction involving any covered bonds.

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Governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and non-U.S. plans (as described in Section 4(b)(4) of ERISA), while not subject to the fiduciary responsibility provisions of ERISA or the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code, may nevertheless be subject to substantially Similar Law. Fiduciaries of any such plans should consult with their counsel before purchasing the covered bonds to determine the need for, if necessary, and the availability of, any exemptive relief under any Similar Law.

Accordingly, except as otherwise provided in any supplement to this prospectus, each purchaser and subsequent transferee of any covered bonds will be deemed by such purchase or acquisition of any such covered bonds to have represented and warranted, on each day from the date on which the purchaser or transferee acquires such covered bonds (or any interest therein) through and including the date on which the purchaser or transferee disposes of such covered bonds (or any interest therein), either that (a) it is not a Plan or any entity whose underlying assets include, or are deemed for purposes of ERISA or the Code to include, the assets of any Plan or a governmental, church or non-U.S. plan which is subject to any substantially Similar Law or (b) its acquisition, holding and disposition of such covered bonds (or any interest therein) will not constitute or result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in the case of a governmental, church or non-U.S. plan subject to Similar Law, a violation of any substantially Similar Law) for which an exemption is not available.

In addition, any purchaser, that is a Plan or that is acquiring the covered bonds on behalf of a Plan, including any fiduciary purchasing on behalf of a Plan, will be deemed to have represented, in its corporate and its fiduciary capacity, by its purchase and holding of the covered bonds that (a) none of the Bank, the Guarantor, the Dealers, the Bond Trustee, or any of their respective affiliates (the “Affiliated Parties”) is a “fiduciary” (under Section 3(21) of ERISA, or under any final or proposed regulations thereunder, or with respect to a governmental, church, or non-U.S. plan under any Similar Laws) with respect to the acquisition, holding or disposition of the covered bonds, or as a result of any exercise by us or our affiliates of any rights in connection with the covered bonds, (b) no advice provided by any of the Affiliated Parties has formed a primary basis for any investment decision by or on behalf of such purchaser in connection with the covered bonds and the transactions contemplated with respect to the covered bonds, and (c) such purchaser recognizes and agrees that any communication from any of the Affiliated Parties to the purchaser with respect to the covered bonds is not intended by the Affiliated Parties to be impartial investment advice and is rendered in its capacity as a seller of such covered bonds and not a fiduciary to such purchaser.

Each Plan fiduciary who is responsible for making the investment decisions whether to purchase or commit to purchase and to hold any of the covered bonds should determine whether, under the documents and instruments governing the Plan, an investment in such covered bonds is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio. Any Plan proposing to invest in such covered bonds (including any governmental, church or non-U.S. plan) should consult with its counsel to confirm that such investment will not constitute or result in a non-exempt prohibited transaction and will satisfy the other requirements of ERISA and the Code (or, in the case of a governmental, church or non-U.S. plan, any substantially Similar Law).

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The sale of any covered bonds to a Plan is in no respect a representation by the Bank, the Guarantor, the Dealers, the Bond Trustee or any other party to the transactions that such an investment meets all relevant legal requirements with respect to investments by Plans generally or any particular Plan, or that such an investment is appropriate for Plans generally or any particular Plan.

Any further ERISA considerations with respect to covered bonds may be found in the relevant supplement to this prospectus.

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OWNERSHIP AND BOOK-ENTRY

The covered bonds will be issued in registered form as global covered bonds through DTC. In this section, we describe special considerations that will apply to the covered bonds issued in global i.e., book-entry, form. First we describe the difference between registered ownership and indirect ownership of the covered bonds. Then we describe special provisions that apply to global covered bonds.

Who is the Registered Owner of a Covered Bond?

The covered bonds will be represented by one or more global covered bonds. We refer to those who have covered bonds registered in their own names, on the books that we or the trustee maintain for this purpose, as the “registered holders” of those securities. Subject to limited exceptions, we and the trustee are entitled to treat the registered holder of a covered bond as the person exclusively entitled to vote, to receive notices, to receive any interest or other payment in respect of the covered bond, and to exercise all the rights and power as an owner of the covered bond. We refer to those who own beneficial interests in covered bonds that are not registered in their own names as indirect owners of those covered bonds. As we discuss below, indirect owners are not registered holders, and investors in covered bonds issued in book-entry form or in street name will be indirect owners.

Book-Entry Owners. Unless otherwise noted in your prospectus supplement, we will issue each covered bond issued pursuant to this prospectus in book-entry form only. This means covered bonds issued pursuant to this prospectus will be represented by one or more global covered bonds registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, in turn, hold beneficial interests in such covered bonds on behalf of themselves or their customers.

Under the Trust Deed, subject to limited exceptions, only the person in whose name a covered bond is registered is recognized as the holder of that covered bond. Consequently, for global covered bonds, we will recognize only the applicable depositary as the holder of the covered bonds and we will make all payments on the covered bonds, including deliveries of any property other than cash, to the applicable depositary. The applicable depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The applicable depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the covered bonds.

As a result, investors will not own the covered bonds directly. Instead, they will own beneficial interests in a global covered bond, through a bank, broker, or other financial institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the covered bonds are issued in global form, investors will be indirect owners, and not registered holders, of the covered bonds.

Registered Holders. Subject to limited exceptions, our obligations, as well as the obligations of the Bond Trustee and the obligations, if any, of any other third parties employed by us, run only to the registered holders of the covered bonds. We do not have obligations to investors who hold beneficial interests in global covered bonds by any indirect means. This will

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be the case whether an investor chooses to be an indirect owner of a covered bond or has no choice because we are issuing the covered bonds issued pursuant to this prospectus only in global form.

For example, once we make a payment or give a notice to the registered holder, we have no further responsibility for that payment or notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to the indirect owners but does not do so. Similarly, if we want to obtain the approval of the holders for any purpose—for example, to amend the Trust Deed for a Series of covered bonds or to relieve us of the consequences of a default or of our obligation to comply with a particular provision of the Trust Deed—we would seek the approval only from the registered holders, and not the indirect owners, of the relevant covered bonds. Whether and how the registered holders contact the indirect owners is up to the registered holders.

When we refer to “you” in this prospectus, we mean all purchasers of the covered bonds being issued pursuant to this prospectus, whether they are the registered holders or only indirect owners of those covered bonds.

Special Considerations for Indirect Owners. If you hold covered bonds through a bank, broker or other financial institution in book-entry form, you should check with your own institution to find out:

• how it handles payments and notices;

• whether it imposes fees or charges;

• how it would handle a request for the holders’ consent, if ever required;

• how it would exercise rights under the covered bonds if there were a default or other

• event triggering the need for holders to act to protect their interests; and

• how the depositary’s rules and procedures will affect these matters.

What is a Global Covered Bond?

Unless otherwise noted in the applicable prospectus supplement, we will issue each covered bond issued pursuant to this prospectus in book-entry form only. Each covered bond issued in book-entry form will be represented by a global covered bond that we deposit with and register in the name of one or more financial institutions or clearing systems, or their nominees, which we select. A financial institution or clearing system that we select for any covered bond for this purpose is called the “depositary” for that covered bond. Each Series of covered bonds issued pursuant to this prospectus will have one or more of the following as the depositaries: DTC and/or any other clearing system or financial institution named in the prospectus supplement.

The depositary or depositaries for your covered bonds will be named in your prospectus supplement; if none is named, the depositary will be DTC. Covered bonds may have different depositaries or be held directly.

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A global covered bond may represent one or any other number of individual covered bonds. All covered bonds represented by the same global covered bond will have the same terms.

A global covered bond may not be transferred to or registered in the name of anyone other than the depositary or its nominee. As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all covered bonds represented by a global covered bond, and investors will be permitted to own only indirect interests in a covered bond represented by a global covered bond. Indirect interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, an investor whose covered bonds are represented by a global covered bond will not be a holder of the covered bonds, but only an indirect owner of an interest in the global covered bond.

If the prospectus supplement for a particular Series of covered bonds indicates that the covered bonds will be issued in global form only, then the covered bonds will be represented by a global covered bond at all times.

Special considerations for global covered bonds.

As an indirect owner, an investor’s rights relating to a global covered bond will be governed by the account rules of the depositary and those of the investor’s bank, broker, financial institution or other intermediary through which it holds its interest, as well as general laws relating to securities transfers. We do not recognize this type of investor or any intermediary as a holder of covered bonds and instead deal only with the depositary that holds the global covered bond.

For covered bonds issued only in the form of a global covered bond, an investor should be aware of the following:

• except in limited circumstances, an investor cannot cause the covered bonds to be registered in his or her own name, and cannot obtain non-global certificates for his or her interest in the covered bond;

• an investor will be an indirect holder and must look to his or her own bank, broker, or other financial institution for payments on the covered bonds and protection of his or her legal rights relating to the covered bonds, as we describe above under “—Who Is the Registered Owner of a Covered Bond?”;

• an investor may not be able to sell interests in the covered bonds to some insurance companies and other institutions that are required by law to own their securities in non-book-entry form;

• an investor may not be able to pledge his or her interest in a global covered bond in circumstances in which certificates representing the covered bonds must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective;

• the depositary’s policies will govern payments, deliveries, transfers, exchanges, notices and other matters relating to an investor’s interest in a global covered bond, and those policies may change from time to time. We and the Bond Trustee

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will have no responsibility for any aspect of the depositary’s policies, actions or records of ownership interests in a global covered bond. We and the Bond Trustee also do not supervise the depositary in any way;

• the depositary may require that those who purchase and sell interests in a global covered bond within its book-entry system use immediately available funds and your bank, broker or other financial institution may require you to do so as well; and

• financial institutions that participate in the depositary’s book-entry system and through which an investor holds its interest in the global covered bonds, directly or indirectly, may also have their own policies affecting payments, deliveries, transfers, exchanges, notices and other matters relating to the securities, and those policies may change from time to time. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the policies or actions or records of ownership interests of any of those intermediaries.

Considerations Relating to DTC

DTC has advised us as follows:

• DTC is:

(1) a limited purpose trust company organized under the laws of the State of New York;

(2) a “banking organization” within the meaning of New York Banking Law;

(3) a member of the Federal Reserve System;

(4) a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and

(5) a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

• DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes to accounts of its participants. This eliminates the need for physical movement of securities.

• Participants in DTC include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. DTC is partially owned by some of these participants or their representatives.

• Indirect access to the DTC system is also available to banks, brokers, and dealers and trust companies that have custodial relationships with participants.

• The rules applicable to DTC and DTC participants are on file with the SEC.

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EXPERTS

The consolidated financial statements incorporated by reference in this prospectus from the Bank’s 2012 Annual Report, and the effectiveness of the Bank’s internal control over financial reporting have been audited by KPMG LLP, Independent Registered Public Accounting Firm, as stated in their reports, which are incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

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LEGAL MATTERS

The legality of the covered bonds will be passed upon by Osler, Hoskin & Harcourt LLP, Toronto, Ontario, as to matters of Ontario law and applicable matters of Canadian federal law. Allen & Overy LLP, New York, New York, is advising the Bank as to certain legal matters in connection with the offering. Certain legal matters will be passed upon by Morrison & Foerster LLP, New York, New York, for the Dealers. McCarthy Tetrault LLP, Toronto, Ontario is advising the Dealers as to certain matters of Ontario law and applicable Canadian federal law in connection with the offering.

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OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses in connection with this offering, other than underwriting discounts and commissions, are as follows (in U.S. Dollars):

Registration Statement filing fee	$	1,364,000
Trustees’ fees and expenses	$	100,000
Legal fees and expenses	$	850,000
Accounting fees and expenses	$	300,000
Printing costs	$	30,000
Miscellaneous (including CMHC fees)	$	750,000
Total		3,394,000

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GLOSSARY

“30/360”	The meaning given in the applicable prospectus supplement
“Actual/360”	The meaning given in the applicable prospectus supplement
“Adjusted Required Redemption Amount”	The Canadian Dollar Equivalent of the Required Redemption Amount, plus or minus the Canadian Dollar Equivalent of any swap termination amounts payable under the Covered Bond Swap Agreement to or by the Guarantor in respect of the relevant Series of covered bonds less (where applicable) amounts held by the Cash Manager for and on behalf of the Guarantor and amounts standing to the credit of the Guarantor Accounts and the Canadian Dollar Equivalent of the principal balance of any Substitution Assets (excluding all amounts to be applied on the next following Guarantor Payment Date to repay higher ranking amounts in the Guarantee Priorities of Payments and those amounts that are required to repay any Series of covered bonds which mature prior to or on the same date as the relevant Series of covered bonds) plus or minus any swap termination amounts payable to or by the Guarantor under the Interest Rate Swap Agreement in respect of the relevant Series of covered bonds, determined on a pro rata basis amongst all Series of covered bonds according to the respective Principal Amount Outstanding thereof, minus amounts standing to the credit of the Pre-Maturity Liquidity Ledger that are not otherwise required to provide liquidity for any Series of Hard Bullet Covered Bonds which mature within 12 months of the date of such calculation
“Arrangers”	Barclays Capital Inc. and BMO Capital Markets
“Asset Coverage Test Breach Notice”	The notice required to be served in accordance with the Guarantor Agreement if the Asset Coverage Test has not been met on two consecutive Calculation Dates
“Available Principal Receipts”	As of a relevant Calculation Date, an amount equal to the aggregate of (without double counting):
	(1)    the amount of Principal Receipts received during the immediately preceding Calculation Period and credited to the Principal Ledger (but, for the avoidance of doubt, excluding any Principal Receipts received in the Calculation Period commencing on (but excluding) the relevant Calculation Date);

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	(2)    any other amount standing to the credit of the Principal Ledger including (i) the proceeds of any advances under the Intercompany Loan Agreement (where such proceeds have not been applied to acquire additional Loans and their Related Security, refinance an advance under the Intercompany Loan, invest in Substitution Assets or make a Capital Distribution), (ii) any Cash Capital Contributions and (iii) the proceeds from any sale of Loans and their Related Security or Substitution Assets pursuant to the terms of the Guarantor Agreement or the Mortgage Sale Agreement but excluding any amounts received under the Covered Bond Swap Agreement in respect of principal (but, for the avoidance of doubt, excluding any such other amounts received in the Calculation Period commencing on (but excluding) the relevant Calculation Date);
	(3)    following repayment of any Hard Bullet Covered Bonds by the Bank and the Guarantor on the Final Maturity Date thereof, any amounts standing to the credit of the Pre-Maturity Liquidity Ledger in respect of such Series of Hard Bullet Covered Bonds (except where the Guarantor has elected to or is required to retain such amounts on the Pre-Maturity Liquidity Ledger)
“Available Revenue Receipts”	(1)    As of a relevant Calculation Date, an amount equal to the aggregate of:
	(a)    the amount of Revenue Receipts received during the immediately preceding Calculation Period and credited to the Revenue Ledger; (b)    other net income of the Guarantor including all amounts of interest received on the Guarantor Accounts and the Substitution Assets in the immediately preceding Calculation Period, but excluding amounts received by the Guarantor under the Interest Rate Swap Agreement and in respect of interest received by the Guarantor under the Covered Bond Swap Agreement; (c)    prior to the Service of a Notice of Pay on the Guarantor, amounts standing to the credit of the Reserve Fund in excess of the Reserve Fund Required Amount; (d)    the amount of any termination payment or premium received from a Swap Provider which is not applied to pay a replacement Swap Provider; (e)    any other Revenue Receipts not referred to in paragraphs (a) to (d) (inclusive) above received during the immediately preceding Calculation Period and standing to the Credit of the Revenue Ledger; and (f)     following the service of a Notice to Pay on the Guarantor, amounts standing to the credit of the Reserve Fund;

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	(2)    Less Third Party Amounts, which will be paid on receipt in cleared funds to the Seller
“Bank Account Agreement”	The bank account agreement entered into on the Program Date between the Guarantor, the Account Bank, the GDA Provider, the Cash Manager and the Bond Trustee (as amended and/or supplemented and/or restated from time to time)
“BMO Group”	The Bank and its subsidiaries collectively
“borrower”	In relation to a Loan, each individual specified as such in the relevant Mortgage Conditions together with each person (if any) from time to time assuming an obligation to repay such Loan or any part of it
“Calculation Amount”	In relation to any Series of covered bonds, the meaning given in the applicable prospectus supplement
“Calculation Period”	The period from (and including) the first day of a calendar month to (and including) the last day of that calendar month, except that the first Calculation Period will commence on (and include) the first Issue Date under the Program and end on (and include) the last day of the next following calendar month
“Canadian Business Day”	A day (other than a Saturday or Sunday) on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in Toronto
“Canadian Dollar Equivalent”	In respect of any amount in a currency other than Canadian Dollars, the amount of Canadian Dollars that could be purchased with such amount at the then prevailing spot rate of exchange
“Capital Account Ledger”	The ledger maintained by the Managing GP (or the Cash Manager on its behalf) in respect of each Partner to record the balance of each Partner’s Capital Contributions from time to time
“Capital Contribution”	In relation to each Partner, the aggregate of the capital contributed by or agreed to be contributed by that Partner to the Guarantor from time to time by way of Cash Capital Contributions and Capital Contributions in Kind as determined on each Calculation Date in accordance with the formula set out in the Guarantor Agreement

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“Capital Contribution in Kind”	A contribution by a Partner to the Guarantor other than a Cash Capital Contribution, including contributions of Substitution Assets (up to the prescribed limit), and/or Loans and their Related Security on a fully-serviced basis to the Guarantor (which will constitute a Capital Contribution equal to (a) the aggregate of the Fair Market Value of those Loans as at the relevant Purchase Date, minus (b) any cash payment paid by the Guarantor for such Loans and their Related Security on that Purchase Date)
“Capital Distribution”	Any return on a Partner’s Capital Contribution in accordance with the terms of the Guarantor Agreement
“Capitalized Arrears”	In relation to a Loan on any date (the “determination date”), the amount (if any) at such date of any arrears of interest in respect of which, on or prior to the determination date, each of the following conditions has been satisfied:
	(1)    the Seller (or the Servicer on the Seller’s behalf) acting as a reasonable and prudent institutional mortgage lender in the Seller’s market has, by arrangement with the relevant borrower, agreed to capitalize such arrears of interest; and (2)    such arrears of interest have been capitalized and added, in the relevant accounts of the Seller (or, if the determination date occurs after the First Purchase Date, the Guarantor), to the principal amount outstanding in respect of such Loan
“Capitalized Expenses”	In relation to a Loan, the amount of any expense, charge, fee, premium or payment (excluding, however, any arrears of interest) capitalized and added to the principal amount outstanding of that Loan in accordance with the relevant Mortgage Conditions
“Cash Management Agreement”	The cash management agreement entered into on the Program Date between the Guarantor, the Seller, the Servicer, the Cash Manager, the GDA Provider and the Bond Trustee (as amended and/or supplemented and/or restated from time to time)
“Cash Management Deposit Ratings”	The threshold ratings of (i) P-1 (in respect of Moody’s), (ii) F1 or A (in respect of Fitch) and (iii) AA (low) or R-1 (middle) (in respect of DBRS), as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or, in the case of Fitch, the issuer default rating) of the Cash Manager by the Rating Agencies
“Cash Manager”	BMO, in its capacity as cash manager or any successor cash manager appointed from time to time
“Cash Manager Required Ratings”	The threshold ratings of (i) P-1 (in respect of Moody’s), (ii) BBB+ and F2 (in respect of Fitch), and (iii) BBB (low) (in respect of DBRS), as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or in the case of Fitch, the issuer default rating) of the Cash Manager by the Rating Agencies

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“Cash Manager Termination Event”	If any of the following events occur:
	(a)    the Cash Manager defaults in the payment on the due date of any payment due and payable by it under the Cash Management Agreement or in the performance of its obligations thereunder and such default continues unremedied for a period of five Canadian Business Days after the earlier of the Cash Manager becoming aware of such default and receipt by the Cash Manager of written notice from the Bond Trustee requiring the same to be remedied; or
	(b)    the Cash Manager defaults in the performance or observance of any of its other covenants and obligations under the Cash Management Agreement, which in the reasonable opinion of the Bond Trustee is materially prejudicial to the interests of the Secured Creditors and such default continues unremedied for a period of thirty (30) days after the earlier of the Cash Manager becoming aware of such default and receipt by the Cash Manager of written notice from the Bond Trustee requiring the same to be remedied; or
	(c)    an Insolvency Event occurs in respect of the Cash Manager; or
	(d)    the Ratings of the Cash Manager fall below the Cash Manager Required Ratings
“Corporate Services Provider”	Computershare Trust Company of Canada, in its capacity as Corporate Services Provider under the Corporate Services Agreement together with any successor or additional Corporate Services Provider appointed from time to time thereunder
“Cover Pool Monitor”	KPMG LLP, in its capacity as Cover Pool Monitor under the Cover Pool Monitor Agreement together with any successor or additional Cover Pool Monitor appointed from time to time thereunder
“Cover Pool Monitor Agreement”	The cover pool monitor agreement entered into on the Program Date between the Cover Pool Monitor, the Guarantor, the Cash Manager, and the Bond Trustee (as amended and/or supplemented and/or restated from time to time)

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“Covered Bond Swap Effective Date”	The earliest to occur of (i) an Issuer Event of Default, (ii) a Guarantor Event of Default, and (iii) the date on which one or more Rating Agencies downgrades or withdraws the long-term, unsecured, unsubordinated and unguaranteed debt obligations (or, in the case of Fitch, the long-term issuer default rating) of the Covered Bond Swap Provider, or any credit support provider from time to time in respect of the Covered Bond Swap Provider, below BBB (high) (in respect of DBRS), BBB+ (in respect of Fitch) and Baa1 (in respect of Moody’s)
“Covered Bond Swap Provider”	The Bank and, from time to time, any additional provider(s) of a swap under the Covered Bond Swap Agreement, together with any successor covered bond swap provider(s)
“Credit and Collection Policy”	The Seller’s customary credit and collection policies and practices relating to the granting of credit on the security of Loans and the collection and enforcement of Loans, as in effect on the Program Date, as modified in compliance with the Mortgage Sale Agreement from time to time
“Custodian”	Computershare Trust Company of Canada, in its capacity as Custodian under the Mortgage Sale Agreement.
“Customer Files”	With respect to any Loan, (a) the original fully executed copy of the document evidencing the Loan and the Mortgage, (b) the duplicate registered Mortgage evidencing and securing such Loan bearing a certificate of registration from the applicable land registry office, land titles office or similar place of public record in which the related Mortgage is registered together with the promissory note, if any, evidencing such Loan fully executed by the borrower, (c) fully executed copies of the other loan and/or security agreements, if any, securing the Mortgage, fully executed by the borrower, (d) a record or facsimile of the original credit application fully executed by the borrower and all other credit information obtained by the Seller or the relevant Originator in connection with the Loan and the related borrower, I the solicitor’s or notary’s report of title or title insurance policy obtained by the Seller or the relevant Originator in connection with the initial advance of the Loan together with the survey or certificate of location relied upon by the solicitor or notary or title insurance company in issuing his or its report or title insurance policy, (f) the most recent valuation report of the related mortgaged property obtained by the Seller or the relevant Originator in accordance with the Credit and Collection Policy, (g) the insurance policy or certificate of insurance evidencing the borrower’s insurance against fire and other standard risks showing the Seller or the relevant Originator as first mortgagee and loss payee and containing a standard mortgage endorsement, and (h) any and all other documents that the Servicer or the Seller or the relevant Originator will keep on file relating to such Loan.

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“Dealer”	Each dealer appointed from time to time in accordance with the Program Agreement, which appointment may be for a specific issue or on an ongoing basis. References in this prospectus to the relevant Dealer(s) will, in the case of an issue of covered bonds being (or intended to be) subscribed for or purchased by more than one Dealer, be to all Dealers agreeing to subscribe for or purchase such covered bonds
“Determination Date”	The meaning given in the applicable prospectus supplement
“Due for Payment”	The requirement by the Guarantor to pay any Guaranteed Amount:
	(1)    following service of a Notice to Pay but prior to service of a Guarantor Acceleration Notice:
	(a)    (except where paragraph (b) below applies) on the date on which the Scheduled Payment Date in respect of such Guaranteed Amount is reached, or, if the applicable prospectus supplement specified that an Extended Due for Payment Date is applicable to the relevant Series of covered bonds, on the Interest Payment Date that would have applied if the Final Maturity Date of such Series of covered bonds had been the Extended Due for Payment Date or such other Interest Payment Date(s) specified in the applicable prospectus supplement (the “Original Due for Payment Date”); and
	(b)    in relation to any Guaranteed Amount in respect of the Final Redemption Amount payable on the Final Maturity Date of a Series of covered bonds for which an Extended Due for Payment Date is specified in the applicable prospectus supplement, on the Extended Due for Payment Date, but only to the extent that the Guarantor, having received the Notice to Pay no later than the date falling one Business Day prior to the Extension Determination Date, does not pay Guaranteed Amounts corresponding to the full amount of the Final Redemption Amount in respect of such Series of covered bonds by the Extension Determination Date, because the Guarantor has insufficient funds available under the Guarantee Priorities of Payments to pay such Guaranteed Amounts in full on the earlier of (1) the date which falls two Business Days after service of the Notice to Pay on the Guarantor or, if later, the Final Maturity Date (in each case after the expiry of the grace period set out in Condition 9.2(b) (Guarantor Events of Default) of the Terms and Conditions of the Covered Bonds) and (2) the Extension Determination Date.

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	For the avoidance of doubt, Due for Payment does not refer to any earlier date upon which payment of any Guaranteed Amounts may become due under the guaranteed obligations, by reason of prepayment, acceleration of maturity, mandatory or optional redemption or otherwise; or
	(2)    following service of a Guarantor Acceleration Notice, on the date on which the Guarantor Acceleration Notice is served on the Bank and the Guarantor
“Earliest Maturing Covered Bonds”	At any time, the Series of the covered bonds (other than any Series which is fully collateralized by amounts standing to the credit of the GDA Account) that has or have the earliest Final Maturity Date as specified in the applicable prospectus supplement (ignoring any acceleration of amounts due under the covered bonds prior to service of a Guarantor Acceleration Notice)
“Excluded Swap Termination Amount”	In relation to a Swap Agreement, an amount equal to the amount of any termination payment due and payable under that Swap Agreement (a) to the relevant Swap Provider as a result of a Swap Provider Default with respect to such Swap Provider or (b) to the relevant Swap Provider following a Swap Provider Downgrade Event with respect to such Swap Provider
“Extended Due for Payment Date”	In relation to any Series of covered bonds, the date, if any, specified as such in the applicable prospectus supplement to which the payment of all or (as applicable) part of the Final Redemption Amount payable on the Final Maturity Date will be deferred in the event that the Final Redemption Amount is not paid in full by the Extension Determination Date
“Extension Determination Date”	In relation to any Series of covered bonds, the date falling two Business Days after the expiry of seven days from (and including) the Final Maturity Date of such Series of covered bonds
“Extraordinary Resolution”	A resolution of the covered bondholders passed as such under the terms of the Trust Deed
“Fair Market Value”	In respect of a Loan and its Related Security, the fair market value at the relevant time, being the price expressed in terms of money or funds’ worth, a willing, prudent and informed buyer would pay in an open and unrestricted market to a willing, prudent and informed seller, each acting at arms’ length, where neither party is under any compulsion to enter into the transaction, as part of the acquisition of all of the Loans and their Related Security being purchased or sold at the relevant time

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“Final Maturity Date”	The Interest Payment Date on which a Series of covered bonds will be redeemed at the Final Redemption Amount in accordance with the Terms and Conditions
“Final Redemption Amount”	In respect of a Series of covered bonds, the amount as specified in the applicable prospectus supplement
“First Purchase Date”	The date on which the Initial Portfolio was assigned to the Guarantor pursuant to the terms of the Mortgage Sale Agreement, being                     , 2013
“Fixed Coupon Amount”	The meaning given in the applicable prospectus supplement
“Fixed Rate”	The rate of interest paid under the Fixed Rate Covered Bonds
“Fixed Rate Covered Bonds”	Covered bonds that pay a fixed rate of interest on such date or dates as may be agreed between the Bank and the relevant Dealer(s) and on redemption calculated on the 30/360 day count basis or as may be agreed between the Bank and the relevant Dealer(s)
“Fixed Rate Loan”	A Loan the interest rate on which is fixed at a specified rate at the time of its origination, and the initial term of which was up to ten years
“Floating Rate”	The rate of interest paid under the Floating Rate Covered Bonds
“Floating Rate Covered Bonds”	Covered bonds which bear interest at a rate determined:
	(a)    on the same basis as the floating rate under a notional interest rate swap transaction; or
	(b)    on the basis of a reference rate appearing on the agreed screen page of a commercial quotation service; or
	(c)    on such other basis as may be agreed between the Bank and the relevant Dealer(s),
	as set out in the applicable prospectus supplement
“GDA Account”	The account in the name of the Guarantor held with BMO and maintained subject to the terms of the Guaranteed Deposit Account Contract, the Bank Account Agreement and the Security Agreement or such additional or replacement account as may for the time being be in place with the prior consent of the Security Trustee and designated as such

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“GDA Provider”	BMO, in its capacity as GDA provider or any successor GDA provider appointed from time to time
“GDA Rate”	The variable rate of interest accruing on the balance standing to the credit of the GDA Account being a variable rate at a minimum of 0.10 per cent below the average of the rates per annum for Canadian Dollar bankers’ acceptances having a term of 30 days that appears on the Reuters screen as of 10:00 a.m. (Toronto time) on the date of determination, as reported by the GDA Provider (and if such screen is not available, any successor or similar service as may be selected by the GDA Provider) (calculated on the basis of the actual number of days elapsed and a 365 day year) or such greater amount as the Guarantor (or the Cash Manager on its behalf) and the GDA Provider may agree from time to time
“Guaranteed Amounts”	Prior to service of a Guarantor Acceleration Notice, with respect to any Original Due for Payment Date or, if applicable, any Extended Due for Payment Date, the sum of Scheduled Interest and Scheduled Principal, in each case, payable on that Original Due for Payment Date or, if applicable, any Extended Due for Payment Date, or after service of a Guarantor Acceleration Notice, an amount equal to the relevant Early Redemption Amount as specified in the Terms and Conditions plus all accrued and unpaid interest and all other amounts due and payable in respect of the covered bonds (other than additional amounts payable under Condition 7 (Taxation) of the Terms and Conditions of the Covered Bonds), including all Excluded Scheduled Interest Amounts, all Excluded Scheduled Principal Amounts (whenever the same arose) and all amounts payable by the Guarantor under the Trust Deed
“Guarantor Acceleration Notice”	A notice in writing given by the Bond Trustee to the Bank and the Guarantor, that each covered bond of each Series is, and each covered bond of each Series will, as against the Bank (if not already due and repayable against it following an Issuer Acceleration Notice) and as against the Guarantor, thereupon immediately become, due and repayable at its Early Redemption Amount together with accrued interest and all amounts payable by the Guarantor under the Covered Bond Guarantee will thereupon immediately become due and payable at the Guaranteed Amount corresponding to the Early Redemption Amount for each covered bond of each Series together with accrued interest in each case as provided in and in accordance with the Trust Deed and thereafter the Security will become enforceable, if any of the Guarantor Events of Default will occur and be continuing
“Guarantor Accounts”	The GDA Account and the Transaction Account and any additional or replacement accounts opened in the name of the Guarantor from time to time with the prior consent of the Bond Trustee, including the Standby GDA Account and the Standby Transaction Account

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“Guarantor Agreement”	The limited partnership agreement in respect of the Guarantor entered into on the Program Date by and among the Managing GP, the Liquidation GP, the Bond Trustee and the Bank as Limited Partner and any other parties who accede thereto in accordance with its terms
“Guarantor Payment Date”	The 12th Canadian Business Day of each month following a Calculation Date
“Guarantor Payment Period”	The period from (and including) a Guarantor Payment Date to (but excluding) the next following Guarantor Payment Date
“Hard Bullet Covered Bond”	Any covered bond issued by the Bank in respect of which the principal is due to be redeemed in full in one amount on the Final Maturity Date of that covered bond and which is identified as such in the applicable prospectus supplement
“Indemnity Amounts”	In respect of any person that is a party to a Transaction Document, any amounts payable to such person pursuant to the indemnification provisions of such Transaction Document.
“Independently Controlled and Governed”	In respect of the Guarantor, at the time of determination, it is demonstrated that, whether by attestation of an executive officer of the Bank or otherwise, each of the following is correct:
	(a)     the managing general partner of the Guarantor is not (and cannot be) an affiliate of the Bank and less than ten percent of its voting securities are (or can be) owned, directly or indirectly, by the Bank or any of its affiliates,
	(b)     if an administrative agent or other analogous entity has been engaged by the managing general partner of the Guarantor to fulfill its responsibility or role to carry on, oversee, manage or otherwise administer the business, activities and assets of the Guarantor, the agent or entity is not (and cannot be) an affiliate of the Bank and less than ten percent of its voting securities are (or can be) owned, directly or indirectly, by the Bank or any of its affiliates,
	(c)     all members (but one) of the board of directors or other governing body of the managing general partner of the Guarantor and each such administrative agent or other entity are not (and cannot be) directors, officers, employees or other representatives of the Bank or any of its affiliates, do not (and cannot) hold greater than ten percent of the voting or equity securities of the Bank or any of its affiliates and are (and must be) otherwise free from any material relationship with the Bank or any of its affiliates (hereinafter referred to as “Independent Members”), and

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	(d)     the board of directors or other governing body of the managing general partner of the Guarantor and each such administrative agent or other entity is (and must be) composed of at least three members, and the non-Independent Member is not (and will not be) entitled to vote on any resolution or question to be determined or resolved by the board (or other governing body) and will attend meetings of the board (or other governing body) at the discretion of the remaining members thereof, provided that such board of directors or other governing body may be composed of only two Independent Members with “observer status” granted to one director, officer, employee or other representative of the Bank or any of its affiliates
“Indexation Methodology”	The indexation methodology of the Bank used to account for subsequent price developments in the valuation of a Loan, which indexation methodology will be consistent with all regulatory requirements to which the Bank is subject (or supervisory guidelines provided to the Bank) in relation to the valuation of residential properties or the indexation of such values, together with any additional requirements as may be established by CMHC in relation thereto and set forth in the CMHC Guide
“Initial Portfolio”	The portfolio of Loans and their Related Security sold by the Seller to the Guarantor on the First Purchase Date pursuant to the Mortgage Sale Agreement
“Insolvency Event”	In respect of the Seller, the Servicer or the Cash Manager or any other person, and impending or actual insolvency of such person, as evidenced by, but not limited to:
	(a)     the commencement of a dissolution proceeding or a case in bankruptcy involving the relevant entity (and where such proceeding is the result of an involuntary filing, such proceeding is not dismissed within 60 days after the date of such filing); or
	(b)     the appointment of a trustee or other similar court officer over, or the taking of control or possession by such officer, of the business of the relevant entity, in whole or in part, before the commencement of a dissolution proceeding or a case in bankruptcy; or
	(c)     the relevant entity makes a general assignment for the benefit of any of its creditors; or

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	(d)     the general failure of, or the inability of, or the written admission of the inability of, the relevant entity to pay its debts as they become due
“Intercompany Loan Agreement”	The intercompany loan agreement entered into on the Program Date between the Bank, the Guarantor, the Cash Manager and the Bond Trustee documenting the Intercompany Loan (as amended and/or supplemented and/or restated from time to time)
“Interest Basis”	The meaning given in the applicable prospectus supplement
“Interest Commencement Date”	In the case of interest bearing covered bonds, the date specified in the applicable prospectus supplement from (and including) which the relevant covered bonds will accrue interest
“Interest Payment Date”	In respect of Fixed Rate Covered Bonds and Floating Rate Covered Bonds, the meaning given in the applicable prospectus supplement
“Interest Rate Swap Agreement”	The agreement between the Guarantor, the Interest Rate Swap Provider and the Bond Trustee dated the Program Date governing the Interest Rate Swap in the form of an ISDA Master Agreement, including a schedule, one or more confirmations and a credit support annex (each as may be amended and/or supplemented and/or restated from time to time)
“Interest Rate Swap Provider”	BMO in its capacity as interest rate swap provider under the Interest Rate Swap Agreement together with any successor interest rate swap provider
“Investor Report”	The monthly report made available to the covered bondholders, the Bond Trustee and the Rating Agencies detailing, inter alia, compliance with the Asset Coverage Test
“ISDA Master Agreement”	The 1992 ISDA Master Agreement (Multicurrency—Cross Border), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”)
“Issue Date”	Each date on which the Bank issues a Tranche of covered bonds under the Program, as specified in the applicable prospectus supplement
“Issue Price”	The price, generally expressed as a percentage of the nominal amount of the covered bonds, at which a Series or Tranche of covered bonds will be issued
“Latest Valuation”	In relation to any Property, the value given to that Property by the most recent Valuation Report addressed to the Seller or, if the LTV ratio of such Loan was less than 60%, the purchase price of that Property or current property tax assessment, as applicable

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“Ledger”	Each of the Revenue Ledger, the Principal Ledger, the Reserve Ledger, the Pre-Maturity Liquidity Ledger and the Payment Ledger
“Lending Criteria”	The lending criteria of the Seller, or, as applicable, the Originator, from time to time, or such other criteria as would be acceptable to reasonable and prudent institutional mortgage lenders in the Seller’s market
“Limited Partner”	The Bank, in its capacity as a limited partner of the Guarantor, individually and together with such other persons who may from time to time, become limited partner(s) of the Guarantor pursuant to the terms of the Guarantor Agreement
“Liquidation GP”	8429065 Canada Inc., in its capacity as liquation general partner of the Guarantor together with any of its successors and any successor liquidation general partner appointed pursuant to the terms of the Guarantor Agreement
“Loan”	Each mortgage loan referenced by its mortgage loan identifier number and comprising the aggregate of all principal sums, interest, costs, charges, expenses and other funds due or owing with respect to that mortgage loan or home equity line of credit under the relevant Mortgage Conditions by a borrower on the security of a Mortgage from time to time outstanding or, as the context may require, the borrower’s obligations in respect of the same
“Loan Representations and Warranties”	The representations and warranties relating to the Loans set out in the Mortgage Sale Agreement
“Loan Repurchase Notice”	A notice in substantially the form set out in the Mortgage Sale Agreement served by the Guarantor on the Seller in relation to the repurchase of Loans in the Portfolio by the Seller in accordance with the terms of the Mortgage Sale Agreement
“LTV ratio” or “LTV” or “Loan-To-Value ratio”	The ratio of the outstanding balance of a Loan to the value of the Property securing that Loan
“Managing GP”	BMO Covered Bond GP Inc., in its capacity as managing general partner of the Guarantor, any successor managing general partner of the Guarantor appointed in accordance with the terms of the Guarantor Agreement, including without limitation the Liquidation GP if and while appointed as Managing GP in accordance with Article 11 of the Guarantor Agreement (Removal and Resignation of the Managing General Partner and the Liquidation General Partner), and any successor or assign of any of them as the context requires

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“Market Value”	With respect to a Property and any date of determination, (a) if such date of determination is prior to July 31, 2014, the Original Market Value of such Property, or (b) if such date of determination is on or after July 31, 2014, the Original Market Value of such Property as adjusted in accordance with the Indexation Methodology
“Master Definitions and Construction Agreement”	The master definitions and construction agreement made between the parties to the Transaction Documents on or about the Program Date (as the same may be amended and/or supplemented and/or restated from time to time)
“Maximum Rate of Interest”	In respect of Floating Rate covered bonds or Variable Interest covered bonds, the percentage rate per annum (if any) specified in the applicable prospectus supplement
“Maximum Redemption Amount”	The amount specified as such in the applicable prospectus supplement
“Minimum Rate of Interest”	In respect of Floating Rate Covered Bonds, the percentage rate per annum (if any) specified in the applicable prospectus supplement
“Minimum Redemption Amount”	The amount specified as such in the applicable prospectus supplement
“Monthly Payment”	The amount which the relevant Mortgage Conditions require a borrower to pay on each Monthly Payment Day in respect of that borrower’s Loan
“Monthly Payment Day”	The date on which interest (and principal in relation to a repayment mortgage) is due to be paid by a borrower on a Loan or, if any such day is not a Canadian Business Day, the next following Canadian Business Day
“Mortgage”	The legal charge, mortgage, hypothec, standard security or charge securing a Loan
“Mortgage Account”	The mortgage account into which all Loans secured on the same Property will be incorporated
“Mortgage Sale Agreement”	The mortgage sale agreement entered into on the Program Date between the Seller, the Guarantor, the Custodian and the Bond Trustee (as amended and/or supplemented and/or restated from time to time) and, where the context so requires, including any New Mortgage Sale Agreement entered into from time to time between any New Seller, the Guarantor and the Bond Trustee
“Mortgage Conditions”	All the terms and conditions applicable to a Loan

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“New Loan Type”	A new type of mortgage loan originated by the Seller or a New Seller, which the Seller or the New Seller intends to sell to the Guarantor, the terms and conditions of which are materially different (in the opinion of the Seller or the New Seller, acting reasonably) from any of the Loans in the Portfolio. For the avoidance of doubt, a mortgage loan will not constitute a New Loan Type if it differs from any of the Loans in the Portfolio solely due to it having different interest rates and/or interest periods and/or time periods for which it is subject to a fixed rate, capped rate or any other interest rate or the benefit of any discounts, cash-backs and/or rate guarantees. A home equity line of credit, commercial mortgage or a Loan originated by an Originator that is not the Seller will be a New Loan Type
“New Mortgage Sale Agreement”	Any new mortgage sale agreement entered into between any New Seller, the Guarantor and the Bond Trustee (as amended and/or supplemented and/or restated from time to time), which will be substantially in the same form and contain substantially the same provisions (provided that the Bond Trustee may agree variations to the representations and warranties in relation to the relevant Loan and their Related Security) as the Mortgage Sale Agreement (as amended and/or supplemented and/or restated from time to time)
“New Seller”	Any member of the BMO Group (other than BMO and any general partner of the Guarantor) that becomes a limited partner of the Guarantor and accedes to the relevant Transaction Documents in accordance with the terms thereof and sells Loan and their Related Security to the Guarantor in the future pursuant to a New Mortgage Sale Agreement
“Non-Performing Loan”	Any Loan that is 90 days or more in arrears
“Optional Redemption Amount”	The meaning (if any) given in the applicable prospectus supplement
“Optional Redemption Date”	The meaning (if any) given in the applicable prospectus supplement
“Original Due for Payment Date”	The meaning given in paragraph (1)(a) of the definition of Due for Payment
“Original Market Value”	In respect of a Property, its value as most recently determined or assessed in accordance with the underwriting policies of the Seller or, if not capable of determination in accordance therewith, on the basis of the most recent sale price of the Property
“Originator”	A person that is a member of the BMO Group and has originated Loans included in the Portfolio

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“OSFI”	Office of the Superintendent of Financial Institutions
“Outstanding Principal Balance”	In relation to any Loan at any date (the “determination date”), the aggregate at such date (but avoiding double counting) of: (a)    the original principal amount advanced by the Seller including any retention(s) advanced to the relevant borrower after completion of the Mortgage; (b)    Capitalized Expenses; and (c)    Capitalized Arrears, in each case relating to such Loan less any prepayment, repayment or payment of any of the foregoing made on or prior to the determination date
“Paying Agent Required Ratings”	The threshold ratings of (i) P-1 with respect to the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Paying Agent by Moody’s, (ii) F1 with respect to the short-term issuer default rating of the Paying Agent by Fitch, and (iii) A with respect to long-term issuer default rating of the Paying Agent by Fitch
“Payment Ledger”	The ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement to record the credits and debits of Available Revenue Receipts and Available Principal Receipts for application in accordance with the relevant Priorities of Payment
“Pre-Maturity Liquidity Ledger”	The ledger on the GDA Account established to record the credits and debits of funds available to repay any Series of Hard Bullet Covered Bonds on the Final Maturity Date thereof if the Pre-Maturity Test has been breached
“Pre-Maturity Liquidity Required Amount”	Nil, unless the Pre-Maturity Test has been breached in respect of one or more Series of Hard Bullet Covered Bonds, and then an amount equal to the aggregate for each affected Series (without double counting) of (i) the Required Redemption Amount for such affected Series, (ii) the Required Redemption Amount for all other Series of Hard Bullet Covered Bonds which will mature within 12 months of the date of the calculation, and (iii) the amount required to satisfy paragraphs (a) through (f) of the Guarantee Priorities of Payments on the Final Maturity of the affected Series of Hard Bullet Covered Bonds and on the Final Maturity Date of all other Series of Hard Bullet Covered Bonds which will mature within 12 months of the date of the calculation

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“Pre-Maturity Required Ratings”	With respect to the Bank’s unsecured, unsubordinated and unguaranteed debt obligations (or in the case of Fitch, the issuer default rating) of the Bank by the Rating Agencies on any Canadian Business Day, a rating of (a) in the case of Fitch, F1+, (b) in the case of Moody’s, P-1, and (c) in the case of DBRS, (i) if such Canadian Business Day falls within six months of the Final Maturity Date of any Series of Hard Bullet Covered Bonds, A(high), or (ii) otherwise, A (low)
“Pre-Maturity Test”	If one or more Rating Agencies downgrades the Bank’s unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating, as applicable, below the Pre-Maturity Required Ratings and a Hard Bullet Covered Bond is due for repayment within a specified period of time thereafter
“Present Value”	For any Loan the value of the outstanding loan balance of such Loan, calculated by discounting the expected future cash flow (on a loan level basis) using current market interest rates for mortgage loans with credit risks similar to those of the Loan (using the same discounting methodology as that used as part of the fair value disclosure in the Bank’s audited financial statements), or using publicly posted mortgage rates
“Principal Amount Outstanding”	In respect of a covered bond on any day, the principal amount of that covered bond on the relevant Issue Date thereof less principal amounts received by the relevant covered bondholder in respect thereof on or prior to that day
“Principal Ledger”	The ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement) to record the credits and debits of Principal Receipts in accordance with the terms of the Guarantor Agreement
“Principal Receipts”	Any payment received in respect of principal in respect of any Loan (including payments pursuant to any insurance policies taken out in respect of a Loan), whether as all or part of a Monthly Payment in respect of such Loan, on redemption (including partial redemption) of such Loan, on enforcement of such Loan (including the proceeds of sale of the relevant Property) or on the disposal of such Loan or otherwise (without double counting but including principal received or treated as received after completion of the enforcement procedures)
“Priorities of Payments”	The orders of priority for the allocation and distribution of amounts standing to the credit of the Guarantor in different circumstances being the Pre-Acceleration Revenue Priorities of Payments, the Pre-Acceleration Principal Priorities of Payments and the Guarantee Priorities of Payments and the Post-Enforcement Priorities of Payments

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“Product Switch”	In respect of a Loan, a variation in the financial terms and conditions applicable to the relevant borrower’s Loan other than: (a) any variation agreed with a borrower to control or manage arrears on the Loan; (b) any variation imposed by statute; or (c) any change in the repayment method of the Loan
“Program Agreement”	The Underwriting Agreement, and such other agreement or agreements, as the case may be, to the extent then in force, under which the covered bonds may from time to time be agreed to be sold by the Bank to, and purchased by, the Dealers
“Program Date”	[                            ], 2013
“Prohibited Insurer”	CMHC, Canada Guaranty Mortgage Insurance Company, the Genworth Financial Mortgage Insurance Company of Canada, the PMI Mortgage Insurance Company Canada, any other private mortgage insurer recognized by CMHC for purposes of the Legislative Framework or otherwise identified in the Protection of Residential Mortgage or Hypothecary Insurance Act (Canada), or any successor to any of them
“Property”	Freehold or leasehold residential property (or owned residential immovable property situated in the Province of Québec) located in Canada which is subject to a Mortgage
“Purchase Date”	Each of the First Purchase Date and each other date on which Loans and their Related Security are assigned to the Guarantor in accordance with the terms of the Mortgage Sale Agreement
“Purchaser”	Any third party or the Seller to whom the Guarantor offers to sell Selected Loans
“Rate of Interest”	In respect of a Series of interest bearing covered bonds, the rate of interest payable from time to time in respect of such covered bonds determined in accordance with the Terms and Conditions and the applicable prospectus supplement
“Rating Agencies”	Fitch, Moody’s, and DBRS, and any other internationally recognized rating agency that may rate the covered bonds from time to time
“Rating Agency Condition”	With respect to any event or matter, (i) in the case of each Rating Agency other than Fitch, confirmation in writing by the Rating Agencies that the then current ratings of the covered bonds will not be downgraded or withdrawn as a result of the relevant event or matter, and (ii) in the case of Fitch, at least 5 Canadian Business Days’ prior written notice of such event or matter will have been provided to Fitch

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“Ratings”	With respect to any entity, (a) the long-term or short-term rating given by Moody’s to such entity’s, unsecured, unguaranteed and unsubordinated debt, (b) the long-term or short-term issuer default rating given to such entity by Fitch and (c) the long-term or short-term rating given by DBRS to such entity’s, unsecured, unguaranteed and unsubordinated debt
“Ratings Trigger”	The Account Bank Required Ratings, the Cash Management Deposit Ratings, the Cash Manager Required Ratings, the Paying Agent Required Ratings, the Pre-Maturity Required Ratings, the Reserve Fund Required Amount Ratings, the Servicer Replacement Ratings, the Servicer Deposit Threshold Ratings, the Standby Account Bank Required Ratings and the Swap Agreement Ratings
“Receiver”	Any person or persons appointed (and any additional person or persons appointed or substituted) as an administrative receiver, receiver, manager, or receiver and manager of the Portfolio by the Bond Trustee pursuant to the Security Agreement
“Records”	With respect to each Loan, all documents and information (other than the Customer File) including, without limitation, computer

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	programs, tapes, discs, punch cards, data processing software and related property and rights, maintained by the Seller or the Servicer with respect to such Loan, the Related Security and the related borrower
“Reference Rate”	In respect of Floating Rate Covered Bonds to which Screen Rate Determination applies, the meaning given in the applicable prospectus supplement
“Related Retained Loans”	In relation to any Eligible Loan, all Retained Loans that are secured by, or advanced upon the security of, the same mortgage or hypothecary instrument securing such Eligible Loan
“Related Security”	With respect to any Loan:
	(1)     all of the Seller’s right, title and interest in the related Customer File including the Mortgage and the security interest granted to the Seller (or, as applicable, the relevant Originator) by the related borrower in the related mortgaged property as security for or pursuant to such Loan and all proceeds thereof or realized thereunder;
	(2)     all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Loan, whether pursuant to the Related Security or otherwise, together with all personal property financing statements and similar instruments or other filings relating thereto and all proceeds thereof or realized thereunder;
	(3)     all guaranties, indemnities, insurance (other than blanket insurance coverage maintained by the Seller) and other agreements (including the Mortgage) or arrangements of whatever character from time to time supporting or securing payment of such Loan which are or should be included in the Customer Files whether pursuant to the Related Security or otherwise and all the proceeds of the foregoing; and
	(4)     all Records related to such Loan.

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“Repurchase Amount”	With respect to a Loan at any time, the sum of the Outstanding Principal Balance of such Loan and all Arrears of Interest and accrued interest thereon
“Reserve Fund”	The reserve fund that the Guarantor will be required to establish in the GDA Account which may be credited with part of an advance from the proceeds of an intercompany loan (in the Guarantor’s discretion) and from Available Revenue Receipts and Available Principal Receipts up to an amount equal to the Reserve Fund Required Amount
“Reserve Fund Required Amount”	Nil, unless one or more Rating Agencies downgrades the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating of the Bank below the Reserve Fund Required Amount Ratings and then an amount equal to the Canadian Dollar

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	Equivalent of one month’s interest due on each Series of covered bonds together with an amount equal to one-twelfth of the anticipated aggregate annual amount payable in respect of the items specified in paragraphs (a) to (c) and, if applicable, (d) of the Pre-Acceleration Revenue Priorities of Payments
“Reserve Fund Required Amount Ratings”	The threshold ratings of (i) P-1 (in respect of Moody’s), (ii) R-1 (middle) and A (low) (in respect of DBRS; for greater certainty, the ratings from DBRS are only required to be at or above one of such ratings), and (iii) F1 or A (in respect of Fitch; provided that both such ratings from Fitch are required), as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or in the case of Fitch, the issuer default rating) of the Bank by the Rating Agencies
“Reserve Ledger”	The ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement), to record the crediting of Available Revenue Receipts and Available Principal Receipts to the Reserve Fund and the debiting of such Reserve Fund in accordance with the terms of the Guarantor Agreement
“Retained Loans”	A loan, indebtedness or liability that is secured by or advanced upon the security of, a mortgage or hypothecary instrument securing an Eligible Loan(s) transferred or contributed to the Guarantor which is not also being transferred or contributed to the Guarantor
“Revenue Ledger”	The ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement (or, if applicable, the ledger of such name maintained by the Standby Account Bank pursuant to the Standby Bank Account Agreement), to record credits and debits of Revenue Receipts in accordance with the terms of the Guarantor Agreement
“Revenue Receipts”	Any payment received in respect of any Loan, including payments pursuant to any insurance policies taken out in respect of a Loan (otherwise than in respect of a Loan that has been repurchased by the Seller), whether as all or part of a Monthly Payment in respect of such Loan, on redemption (including partial redemption) of such Loan, on enforcement of such Loan (including the proceeds of sale of the relevant Property) or on the disposal of such Loan or otherwise, which in any such case is not a Principal Receipt in respect of such Loan
“Scheduled Interest”	In relation to a Series of covered bonds, an amount equal to the amount in respect of interest which is or would have been due and payable under such covered bonds on each Interest Payment Date as specified in Condition 4 (Interest) of the Terms and Conditions of the Covered Bonds (but excluding any additional amounts relating to premiums, default interest or interest upon

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	interest (“Excluded Scheduled Interest Amounts”) payable by the Bank following service of an Issuer Acceleration Notice, but including such amounts (whenever the same arose) following service of a Guarantor Acceleration Notice), as if such covered bonds had not become due and repayable prior to their Final Maturity Date and (if the applicable prospectus supplement specified that an Extended Due for Payment Date is applicable to the relevant covered bonds) as if the maturity date of the covered bonds had been the Extended Due for Payment Date (but taking into account any principal repaid in respect of such covered bonds or any Guaranteed Amounts paid in respect of such principal prior to the Extended Due for Payment Date) or, where applicable, after the Final Maturity Date, such other amount of interest as may be specified in the applicable prospectus supplement less any additional amounts the Bank would be obliged to pay as a result of any gross-up in respect of any withholding or deduction made under the circumstances set out in Condition 7 (Taxation) of the Terms and Conditions of the Covered Bonds
“Scheduled Payment Date”	In relation to payments under the Covered Bond Guarantee in respect of a Series of covered bonds, each Interest Payment Date or the Final Maturity Date as if such covered bonds had not become due and repayable prior to their Final Maturity Date
“Scheduled Principal”	In relation to a Series of covered bonds, an amount equal to the amount in respect of principal which is or would have been due and repayable under such covered bonds on each Interest Payment Date or the Final Maturity Date (as the case may be) as specified in the Terms and Conditions of the Covered Bonds, Condition 6.1 (Final redemption) and Condition 6.7 (Early Redemption Amounts) (but excluding any additional amounts relating to prepayments, early redemption, broken funding indemnities, penalties, premiums or default interest (“Excluded Scheduled Principal Amounts”) payable by the Bank following service of an Issuer Acceleration Notice, but including such amounts (whenever the same arose) following service of a Guarantor Acceleration Notice), as if such covered bonds had not become due and repayable prior to their Final Maturity Date and (if the prospectus supplement specified that an Extended Due for Payment Date is applicable to such relevant covered bonds) as if the maturity date of such covered bonds had been the Extended Due for Payment Date
“Screen Rate Determination”	If specified as applicable in the applicable prospectus supplement, the manner in which the Rate of Interest on Floating Rate Covered Bonds as determined in accordance with the applicable prospectus supplement
“Secured Creditors”	The Bond Trustee (in its own capacity and on behalf of the other Secured Creditors), the covered bondholders, the Bank, the Seller, the Servicer, the Account Bank, the GDA Provider, the Standby Account Bank, the Standby GDA Provider, the Cash Manager, the

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	Swap Providers, the Agents and any other person which becomes a Secured Creditor pursuant to the Security Agreement except, pursuant to the terms of the Guarantor Agreement, to the extent and for so long as such person is a Limited Partner
“Selected Loan Offer Notice”	A notice from the Guarantor served to the Seller offering to sell Selected Loans to the Seller in accordance with the terms of the Mortgage Sale Agreement and the Guarantor Agreement
“Selected Loans”	Loans and their Related Security to be sold by the Guarantor pursuant to the terms of the Guarantor Agreement or the Mortgage Sale Agreement.
“Seller”	BMO in its capacity as Seller under the Mortgage Sale Agreement, and “Sellers” means, together, the Seller and any New Sellers
“Series Reserved Matter”	In relation to covered bonds of a Series:
	(a)     reduction or cancellation of the amount payable or, where applicable, modification of the method of calculating the amount payable or modification of the date of payment or, where applicable, modification of the method of calculating the date of payment in respect of any principal or interest in respect of the covered bonds other than in accordance with the terms thereof;
	(b)     alteration of the currency in which payments under the covered bonds are to be made;
	(c)     alteration of the majority required to pass an Extraordinary Resolution;
	(d)     any amendment to the Covered Bond Guarantee or the Security Agreement (except in a manner determined by the Bond Trustee not to be materially prejudicial to the interests of the covered bondholders of any Series or an amendment which is in the sole opinion of the Bond Trustee of a formal, minor or technical nature or to correct a manifest error or an error which is, in the sole opinion of the Bond Trustee proven or is to comply with mandatory provisions of law);
	(e)     the sanctioning of any such scheme or proposal for the exchange or sale of the covered bonds or the conversion of the covered bonds into, or the cancellation of the covered bonds in consideration of, shares, stock, covered bonds, bonds, debentures, debenture stock and/or other obligations and/or securities of the Bank, or any other company formed or to be formed, or for or into or in

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	consideration of cash, or partly for or into or in consideration of such shares, stock, bonds, covered bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash and for the appointment of some person with power on behalf of the covered bondholders to execute an instrument of transfer of the Registered Covered Bonds held by them in favor of the persons with or to whom the covered bonds are to be exchanged or sold respectively; and
	(f)      alteration of the proviso to paragraph 5 or paragraph 6 of Schedule 4 to the Trust Deed
“Servicer Deposit Threshold Ratings”	The threshold ratings of (i) P-1 (in respect of Moody’s), (ii) F1 or A (in respect of Fitch) and (iii) BBB (low) or R-1 (middle) (in respect of DBRS), as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or, in the case of Fitch, the issuer default rating) of the Servicer by the Rating Agencies
“Servicer Replacement Ratings”	The threshold ratings of (i) Baa2 (in respect of Moody’s), (ii) F2 (in respect of Fitch), and (iii) either BBB (low) or R-1 (middle) (in respect DBRS) as applicable, of the unsecured, unsubordinated and unguaranteed debt obligations (or, in the case of Fitch, the issuer default rating) of the Servicer by the Rating Agencies
“Specified Denomination”	In respect of a Series of covered bonds, the denomination or denominations of such covered bonds specified in the applicable prospectus supplement
“Standby GDA Rate”	The variable rate of interest accruing on the balance standing to the credit of the Standby GDA Account being a variable rate at a floor of 0.10% below the average of the rates per annum for Canadian Dollar bankers’ acceptances having a term of 30 days that appears on the Reuters Screen as of 10:00 a.m. (Toronto time) on the date of determination, as reported by the Standby GDA Provider (and if such screen is not available, any successor or similar service as may be selected by the Standby GDA Provider) (calculated on the basis of the actual number of days elapsed and a 365 day year) or such greater amount as the Guarantor (or the Cash Manager on its behalf) and the Standby GDA Provider may agree from time to time

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“Substitution Assets”	The classes and types of assets from time to time eligible under the Legislative Framework and the CMHC Guide to collateralize covered bonds which include the following: (a) securities issued by the Government of Canada and (b) repos of Government of Canada securities having terms acceptable to CMHC; provided that the total exposure to Substitution Assets described in (a) and (b) above will not exceed 10 percent of the aggregate value of (x) the Loans in the Portfolio; (y) any Substitution Assets; and (z) cash balances held in the GDA Account (subject to the Prescribed Cash Limitation); in each case, provided that:
	(a)     such exposures will have certain minimum long-term and short-term ratings from the Rating Agencies, as specified by such Rating Agencies from time to time;
	(b)     the maximum aggregate total exposures in general to classes of assets with certain ratings by the Rating Agencies will, if specified by the Rating Agencies, be limited to the maximum percentages specified by such Rating Agencies; and
	(c)     in respect of investments of Available Revenue Receipts in such classes and types of assets, the Interest Rate Swap Provider has given its consent to investments in such classes and types of assets
“Swap Agreements”	The Covered Bond Swap Agreements together with the Interest Rate Swap Agreement
“Swap Collateral”	At any time, any asset (including, without limitation, cash and/or securities) which is paid or transferred by a Swap Provider to the Guarantor as collateral in respect of the performance by such Swap Provider of its obligations under the relevant Swap Agreement together with any income or distributions received in respect of such asset and any equivalent of such asset into which such asset is transformed
“Swap Collateral Available Amounts”	At any time, the amount of Swap Collateral which under the terms of the relevant Swap Agreement may be applied at that time in satisfaction of the relevant Swap Provider’s obligations to the Guarantor to the extent that such obligations relate to payments to be made in connection with the Pre-Acceleration Revenue Priorities of Payments, the Pre-Acceleration Principal Priorities of Payments or the Guarantee Priorities of Payments
“Swap Collateral Excluded Amounts”	At any time, the amount of Swap Collateral which under the terms of the relevant Swap Agreement may be applied in satisfaction of the relevant Swap Provider’s obligations to the Guarantor following termination of a Swap to the extent that such obligations

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	relate to payments to be made in connection with the Pre-Acceleration Priorities of Payments or the Guarantee Priorities of Payments
“Swap Provider Default”	The occurrence of an Event of Default (as defined in the relevant Swap Agreement) with respect to the relevant Swap Provider, where the relevant Swap Provider is the Defaulting Party (as defined in the relevant Swap Agreement)
“Swap Provider Downgrade Event”	The occurrence of an Additional Termination Event (as defined in the relevant Swap Agreement) following a failure by a Swap Provider to comply with the requirements of the ratings downgrade provisions set out in the relevant Swap Agreement
“Swap Providers”	The Covered Bond Swap Providers and the Interest Rate Swap Provider
“Taxes”	All present and future taxes, levies, imposts, duties (other than stamp duty), fees, deductions, withholdings or charges of any nature whatsoever and wheresoever imposed, including, without limitation, income tax, corporation tax, GST, VAT or other tax in respect of added value and any franchise, transfer, sales, gross receipts, use, business, occupation, excise, personal property, real property or other tax imposed by any national, local or supranational taxing or fiscal authority or agency together with any penalties, fines or interest thereon and “Tax” and “Taxation” will be construed accordingly
“Third Party Amounts”	Each of:
	(a)     payments of insurance premiums, if any, due to an insurer in respect of any arranged policy to the extent not paid or payable by the Seller;
	(b)     amounts under an unpaid direct debit which are repaid by a Seller to the bank making such payment if such bank is unable to recoup that amount itself from its customer’s account; or
	(c)     any amount received from a borrower for the express purpose of payment being made to a third party for the provision of a service (including giving insurance cover) to any of that borrower or the Seller or the Guarantor;
	which amounts will be paid on receipt by the Guarantor to the Seller from funds on deposit in the GDA Account, with such Seller paying such amounts to the relevant third party
“Total Credit Commitment”	The combined aggregate amount available to be drawn by the Guarantor under the terms of the Intercompany Loan Agreement,

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	subject to increase and decrease in accordance with the terms of the Intercompany Loan Agreement, which amount is initially the Canadian Dollar Equivalent of US$12 billion.
“Tranche”	An issue of covered bonds which are identical in all respects (including as to listing and admission to trading)
“Transaction Account”	The account in the name of the Guarantor held with the Account Bank and maintained subject to the terms of a bank account agreement and the Security Agreement or such additional or replacement account as may for the time being be in place with the prior consent of the Bond Trustee and designated as such
“Transaction Documents”	The Mortgage Sale Agreement; the Servicing Agreement; the Cover Pool Monitor Agreement; the Intercompany Loan Agreement; the Guarantor Agreement; the Program Agreement, the Cash Management Agreement; the Interest Rate Swap Agreement; each Covered Bond Swap Agreement; the Guaranteed Deposit Account Contract; the Standby Guaranteed Deposit Account Contract; the Bank Account Agreement; the Standby Bank Account Agreement; the Security Agreement (and each document entered into pursuant to the Security Agreement); the Trust Deed; the Agency Agreement; each of the prospectus supplements (as applicable in the case of each issue of listed covered bonds subscribed for pursuant to a subscription agreement); each Subscription Agreement (as applicable in the case of each issue of listed covered bonds subscribed for pursuant to a subscription agreement); the Master Definitions and Construction Agreement; and any security sharing agreement entered into by the Guarantor
“Valuation Report”	The appraisal of the Property for mortgage purposes, obtained by the relevant borrower, the Seller or, as applicable, any Originator, in respect of each Property in accordance with the Credit and Collection Policy or appraisal in respect of a valuation of a Property made using a methodology which would be acceptable to a reasonable and prudent institutional mortgage lenders in the Seller’s market and which has been approved by the relevant officers of the Seller or, as applicable, any Originator

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Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-189814

FORM OF PRELIMINARY PROSPECTUS SUPPLEMENT

The information in this preliminary prospectus supplement is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated [—], 2013

Preliminary Prospectus Supplement to the Prospectus dated [—], 2013

Bank of Montreal

U.S.$[—] [—]% Covered Bonds Due [—], 20[—]

unconditionally and irrevocably guaranteed as to payments by

BMO Covered Bond Guarantor Limited Partnership

We will pay interest on the [—]% covered bonds due [—], 20[—] semi-annually on [—] and [—] each year. We will make the first interest payment on the covered bonds on [—]. The covered bonds will mature on [—]. The covered bonds will constitute deposits for purposes of the Bank Act (Canada) and will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of Bank of Montreal (the “Bank”) and will rank pari passu with all deposit liabilities of the Bank without any preference among themselves and (save for any applicable statutory provisions) at least equally with all other present and future unsecured and unsubordinated obligations of the Bank, present and future, except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution). The covered bonds are unconditionally and irrevocably guaranteed as to payments by BMO Covered Bond Guarantor Limited Partnership as described in the prospectus. We will issue each covered bond in minimum denominations of U.S.$[—] and integral multiples of U.S.$[—].

Other than as set forth under “Terms and Conditions of the Covered Bonds—Redemption for taxation reasons” and “Terms and Conditions of the Covered Bonds—Redemption due to illegality or invalidity” in the prospectus, we may not redeem the covered bonds prior to their maturity. There is no sinking fund for the covered bonds.

Investing in the covered bonds involves a number of risks. See “Risk Factors” beginning on page [20] of the accompanying prospectus dated [—], 2013.

	Per Covered Bond	Total
Public offering price(1)
Underwriting commissions
Proceeds, before expenses, to Bank of Montreal

(1) The price to the public also will include interest accrued on the covered bonds after [—], 2013 if any.

We will deliver the covered bonds in book-entry form through the facilities of The Depository Trust Company (including through its indirect participants CDS Clearing and Depository Services, Inc., Euroclear and Clearstream, Luxembourg) on or about [—], 2013 against payment in immediately available funds.

This preliminary prospectus supplement may be used by certain of our affiliates in connection with offers and sales of the covered bonds in market-making transactions.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

The covered bonds described herein will not constitute deposits that are insured under the Canada Deposit Insurance Corporation Act (Canada) or by the United States Federal Deposit Insurance Corporation or under any other governmental insurance scheme of any country.

THE COVERED BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY CANADA MORTGAGE AND HOUSING CORPORATION (“CMHC”) NOR HAS CMHC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. THE COVERED BONDS ARE NEITHER INSURED NOR GUARANTEED BY CMHC OR THE GOVERNMENT OF CANADA OR ANY OTHER AGENCY THEREOF.

Program Arrangers

Barclays BMO Capital Markets

Joint Lead Managers

Co-Managers

Preliminary Prospectus Supplement dated [—], 2013

WHERE YOU CAN FIND MORE INFORMATION

Additional information with respect to the Bank, the Guarantor, the Portfolio and certain other matters, together with copies of each of the Transaction Documents and the Investor Reports filed by the Bank from time to time, is also available on the Bank’s website at http://www.bmo.com/home/about/banking/investor-relations/financial-information/covered-bonds and through the CMHC’s covered bond registry at http://www.cmhc-schl.gc.ca/coveredbonds. Information on or accessible through the CMHC’s and the Bank’s websites do not form part of this prospectus and should not be relied upon.

SUMMARY

This section is meant as a summary and should be read in conjunction with the accompanying prospectus to help you understand the covered bonds. This preliminary prospectus supplement, together with the accompanying prospectus, contains the terms of the covered bonds and supersedes all prior or contemporaneous oral statements as well as any other written materials relating to the covered bonds, including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, brochures or other educational materials. In the event of any inconsistency or conflict between the terms set forth in this preliminary prospectus supplement and the accompanying prospectus, the terms contained in this preliminary prospectus supplement will control.

An investment in the covered bonds entails significant risks relating to the covered bonds that are not associated with similar investments in a conventional debt security, including those described below. You should carefully consider, among other things, the matters set forth under “Risk Factors” beginning on page [—] of the accompanying prospectus. Before investing in the covered bonds, we urge you to consult your investment, legal, tax, accounting and other advisors.

In this preliminary prospectus supplement, unless the context otherwise indicates, the “Bank” means Bank of Montreal and “Guarantor” means BMO Covered Bond Guarantor Limited Partnership, and “we,” “us” or “our” means the Bank and Guarantor collectively. In this preliminary prospectus supplement, currency amounts are stated in Canadian dollars (“$”), unless specified otherwise.

Bank: Bank of Montreal

Guarantor: BMO Covered Bond Guarantor Limited Partnership

U.S. Registrar, Paying Agent, Transfer Agent and Exchange Agent: [—]

Specified Currency: [U.S. dollars (“U.S.$”)]

[(Condition 1.10)]

Aggregate Principal Amount: U.S.$ [—]

Series: [—]

Issue Price: [—] percent of the Aggregate Principal Amount

Specified Denominations: [U.S.$1,000]

[(Condition 1.08 or 1.09)]

Calculation Amount: [U.S.$1,000]

S-2

Issue Date: [—], 2013

Interest Commencement Date: [—], 2013

Final Maturity Date: [—], 20[—]

Extended Due for Payment Date of Guaranteed Amounts corresponding to the Final Redemption Amount under the Covered Bond Guarantee: [—]

Interest Rate Basis: [—]% [Fixed Rate] payable semi-annually in arrears from and including the Interest Commencement Date to but excluding the Final Maturity Date

[—] month [USD LIBOR] [+[—]] bps per annum [Floating Rate] payable monthly in arrears and subject to adjustment from and including the Final Maturity Date to but excluding the Extended Due for Payment Date

Redemption/Payment Basis: Redemption at par

Outstanding Series of Covered Bonds under the Program: None

The Portfolio: The assets in the “Portfolio” consist primarily of first lien Canadian residential mortgage loans and their related security interest in residential property, cash and in some cases certain Substitution Assets up to a certain threshold amount. As required by the CMHC Guide, the Portfolio does not include any Loans that are insured by a Prohibited Insurer. See “Summary of Principal Documents—Mortgage Sale Agreement” in the prospectus and Annex A and Annex B of this preliminary prospectus supplement. [As of the date of this preliminary prospectus supplement, the Guarantor does not own any Substitution Assets.]

Status of the Covered Bonds: The covered bonds will constitute deposit liabilities of the Bank for purposes of the Bank Act, however the covered bonds will not be insured under the Canada Deposit Insurance Corporation Act (Canada), and will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of the Bank and rank pari passu with all deposit liabilities of the Bank without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Bank, present and future, except as prescribed by law and in certain limited circumstances described in [Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution).]

Status of the Guarantee: Secured with recourse to certain assets of the Guarantor, including the Portfolio and any Excess Proceeds

S-3

Regulatory Maximum for Covered Bond Issuances: Upon the issuance of the covered bonds, the Bank will have issued and have outstanding covered bonds which represent [—] of the OSFI Total Assets of the Bank as of the date hereof. The aggregate outstanding principal balance of all covered bonds issued by the Bank at any time is subject to a maximum of 4% of the OSFI Total Assets of the Bank

Asset Percentage: As of the date of this preliminary prospectus supplement, the Asset Percentage is [—]%. The current maximum Asset Percentage is [—]%.

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

Fixed Rate Covered Bond Provisions (Condition 5.12) [Applicable]

Rate of Interest: [—]% per annum payable semi-annually in arrears

Interest Payment Date: [—] and [—] in each year up to and including the Final Maturity Date

Fixed Coupon Amount: U.S.$[—] per Calculation Amount

Broken Amount(s): [Not Applicable] / [$[—] per Calculation Amount, payable on the Interest Payment Date falling on [—], [2014]]

Day Count Basis: 30/360

Other terms relating to the method of calculating interest for fixed rate covered bonds: Not Applicable

Business Day Convention: [Modified Following Business Day Convention (unadjusted)]

Business Day(s): [New York and Toronto]

PROVISIONS RELATING TO EXTENDED DUE FOR PAYMENT DATE, IF APPLICABLE

Floating Rate Covered Bond Provisions

(Condition 5.12) If applicable, from and including the Final Maturity Date to but excluding the Extended Due for Payment Date

Interest Period(s): [The period from and including each Specified Interest Payment Date, to but excluding the following Specified Interest Payment Date with the first such period being the period from and including the Final Maturity Date to but excluding the first Specified Interest Payment Date]

Specified Interest Payment Dates: The [—]th of each month from but excluding the Final Maturity Date to and including the Extended Due for Payment Date

S-4

Calculation Agent: The Bank, acting through its offices located at [—]

Business Day Convention: [Modified Following Business Day Convention (adjusted)]

Business Day(s): [New York and Toronto]

Manner in which the Rate of Interest is to be determined: [Screen Rate Determination]

Reference Rate: [1 month USD LIBOR]

Interest Determination Date(s): [Second London Business Day prior to the start of each Interest Period]

Relevant Screen Page: [Reuters Screen Page LIBOR01]

Relevant Time: [11:00 A.M. (London time)]

Reference Banks: Has the meaning given in the ISDA Definitions

Day Count Basis: Actual/360

Margin(s): [+[—]] bps per annum

PROVISIONS RELATING TO REDEMPTION

Early Redemption Amount: [U.S.$1,000 per Calculation Amount]

GENERAL PROVISIONS APPLICABLE TO THE COVERED BONDS 

Covered Bond Swap Rate: [1-month CAD-BA-CDOR plus [—] per cent]

DISTRIBUTION 

Dealers: [—]

Additional selling restrictions: See under “Supplemental Plan of Distribution” in this preliminary prospectus supplement

CUSIP: [—]

ISIN: [—]

Common Code: [—]

Listing: The covered bonds will not be listed on any securities exchange

S-5

DESCRIPTION OF THE COVERED BONDS

In addition to the terms described in the “Summary” section above, the following general terms will apply to the covered bonds.

General

The covered bonds will constitute deposits for purposes of the Bank Act (Canada) and will constitute legal, valid and binding direct, unconditional, unsubordinated and unsecured obligations of the Bank and will rank pari passu with all deposit liabilities of the Bank without any preference among themselves and (save for any applicable statutory provisions) at least equally with all other present and future unsecured and unsubordinated obligations of the Bank, present and future, except as prescribed by law and in certain limited circumstances described in Conditions 9.1 (Issuer Events of Default) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution). The covered bonds will not be deposits insured under the Canada Deposit Insurance Corporation Act (Canada) or under any other governmental insurance scheme of any country.

The aggregate principal amount of the covered bonds is U.S.$[—]. The covered bonds are issued in denominations of U.S.$1,000, and integral multiples of U.S.$1,000 in excess thereof. The covered bonds may only be transferred in amounts of U.S.$1,000 and increments of U.S.$1,000 thereafter.

We will pay interest on the covered bonds [semi-annually on [—] and [—] of each year. We will make the first interest payment on the covered bonds on [—], [2014].]

Guarantee

Pursuant to the covered bond guarantee (the “Covered Bond Guarantee”), the Guarantor has irrevocably and unconditionally guaranteed the due and punctual payment of the Guaranteed Amounts on the covered bonds in accordance with the Trust Deed

Currency

The covered bonds are denominated, and amounts due on the covered bonds will be paid, in U.S. dollars (“U.S.$”).

Form of the Covered Bonds

The covered bonds will be issued only in the form of a global covered bond held by The Depository Trust Company. See “Ownership and Book-Entry” in the accompanying prospectus.

No Listing

The covered bonds will not be listed on any securities exchange.

Please note that the information about the issuance, Issue Date, Issue Price, commissions and net proceeds to the Bank of Montreal relates only to the initial issuance and sale of your covered bonds. If you have purchased your covered bonds in a market-making transaction after the initial issuance and sale, any such relevant information about the sale to you will be provided in a separate confirmation of sale.

S-6

Final Maturity Date

The Final Maturity Date is or will be [—], 20[—]. The Final Maturity Date may be postponed under the Extended Due for Payment Date as further described in Condition 6 (Redemption and Purchase) under the “Terms and Conditions of the Covered Bonds” in the accompanying prospectus.

Manner of Payment and Delivery

Any payment on the covered bonds at maturity or otherwise will be made to accounts designated by you and approved by us, or at the office of the Bond Trustee. We also may make any payment or delivery in accordance with the applicable procedures of the depositary.

Terms Incorporated in the Global Covered Bond

All of the terms appearing above under “Summary” and the terms appearing in the first four paragraphs under the caption “—Payment of Additional Amounts” in this preliminary prospectus supplement, together with the Terms and Conditions of the Covered Bonds attached as Schedule 1 of the Trust Deed will be endorsed on the global covered bond that represent the covered bonds and is held by The Depository Trust Company. See “Terms and Conditions” in the accompanying prospectus.

DESCRIPTION OF THE COVERED BOND GUARANTEE

As described in the accompanying prospectus at pages [76-77], the Covered Bond Guarantee is secured by the pledge of certain assets of the Guarantor, which include the Portfolio and any Excess Proceeds, to the Bond Trustee under the Security Agreement. Statistical information about the Portfolio as of [—], 2013 is set forth in Annex A. Historical performance about the Portfolio is set forth in Annex B.

SWAP PROVIDERS

Interest Rate Swap Provider

The Bank, subject to replacement in accordance with the terms of the Covered Bond Swap Agreement.

Covered Bond Swap Provider

The Bank, subject to replacement in accordance with the terms of the Covered Bond Swap Agreement.

S-7

SUPPLEMENTAL PLAN OF DISTRIBUTION

Bank of Montreal expects to agree to sell to the Dealers, and the Dealers severally and not jointly expect to agree to purchase from Bank of Montreal, the principal amount of the covered bonds specified, at the price specified, on the cover page of this preliminary prospectus supplement. The Dealers intend to resell each covered bond they purchase at the price to the public set forth on the cover page of this preliminary prospectus supplement. In the future, the Dealers or one of their affiliates, may repurchase and resell the covered bonds in market-making transactions, with resales being made at prices related to prevailing market prices at the time of resale or at negotiated prices. For more information about the plan of distribution, the underwriting agreement and possible market-making activities, see “Plan of Distribution” in the accompanying prospectus.

Dealer                                                                          Principal Amount

The Dealers have advised the Bank that the Dealers propose initially to offer the covered bonds to the public at the public offering price on the cover page of this preliminary prospectus supplement, and to certain dealers at that public offering price less a commission not in excess of [—]% of the principal amount of the covered bonds. The Dealers may allow, and those dealers may reallow to other dealers, a commission not in excess of [—]% of the principal amount.

After the initial public offering of the covered bonds is completed, the public offering price and commissions may be changed by the Dealers.

In connection with the sale of the covered bonds, the Dealers may engage in:

• over-allotments, in which Dealers selling the covered bonds sell more covered bonds than the Bank actually sold to the Dealers, creating a Dealer short position;

• stabilizing transactions, in which purchases and sales of the covered bonds may be made by the Dealers at prices that do not exceed a specified maximum in accordance with Rule 104 of Regulation M under the Securities Exchange Act of 1934; and

• Dealer covering transactions, in which Dealers purchase the covered bonds in the open market after the distribution has been completed in order to cover Dealer short positions.

These stabilizing transactions and Dealer covering transactions may cause the price of the covered bonds to be higher than it would otherwise be. These transactions, if commenced, may be discontinued at any time.

The Dealers and their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. In the ordinary course of their respective businesses, the Dealers and/or their affiliates have engaged, and may in the future engage, in commercial banking, investment banking, trust or investment management transactions with us and our affiliates for which they have received, and will in the future receive, customary compensation.

S-8

We will deliver the covered bonds against payment therefor in New York, New York on [—], which is the [fifth] scheduled business day after the trade date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade covered bonds on any date prior to three business days before delivery will be required, by virtue of the fact that the covered bonds will initially settle in [five] business days [(T + 5)], to specify alternative settlement arrangements to prevent a failed settlement.

Selling Restrictions

General

Other than in the United States, no action has been or will be taken in any country or jurisdiction by the Bank, the Guarantor, the Dealers or the Bond Trustee that would permit a public offering of the covered bonds, or possession or distribution of any offering material in relation thereto, in such country or jurisdiction where action for that purpose is required and such action has not been taken. The Underwriting Agreement provides that each Dealer will (to the best of its knowledge and belief) comply with all applicable securities laws and regulations in each jurisdiction in which it purchases, offers, sells or delivers the covered bonds or has in its possession or distributes offering material.

S-9

THE BANK’S CANADIAN RESIDENTIAL MORTGAGE PORTFOLIO

[As at the October 31, 2012 the Bank’s Canadian residential mortgage loans portfolio totaled $— billion and consisted of approximately — loans. The Bank’s uninsured residential mortgage loans portfolio (the “conventional mortgage portfolio”) totaled $— billion and consisted of approximately — loans as at October 31, 2012. For the years ended October 31, 2008 to 2012, the conventional mortgage portfolio’s percentage of non-performing loans (more than 90 days past due) was between —% and —% and its percentage of delinquent loans (more than 30 days past due) was between —% and —%. For the years ended October 31, 2008, 2009, 2010, 2011 and 2012, the conventional mortgage portfolio’s percentage of non-performing loans was —%, —%, —%, —% and —%, and its percentage of delinquent loans was —%, —%, —%, —% and —%, respectively. For a description of the Bank’s loan classifications see Note — to the Bank’s consolidated financial statements included in its 2012 Annual Report.]

S-10

THE PORTFOLIO

The statistical and other information contained herein has been compiled by reference to the Loans in the Portfolio securing the covered bonds as of [—], 2013 (the “cut-off date”). The noon exchange rate of Canadian dollars into U.S. dollars on the cut-off date was CDN$1 = US$[—]. Columns stating percentage amounts may not add to 100% due to rounding.

The Loans in the Portfolio are selected on the basis of the seller’s Eligibility Criteria set forth in the Mortgage Sale Agreement. The material aspects of such Eligibility Criteria are described under “Summary of Principal Documents—Mortgage Sale Agreement—Eligibility Criteria” in the accompanying prospectus. As of the cut-off date, all Loans in the Portfolio complied with the Eligibility Criteria. One significant indicator of borrower credit quality is arrears and losses. The information presented below under “Loss Information” reflects the arrears and losses experience of the Portfolio as at the dates indicated. Any material change to the Eligibility Criteria, which could lead to arrears and losses deviating from the historical experience presented in the table under “Loss Information,” will be reported by the Guarantor on periodic reports filed with the SEC on Form 10-D. It is not expected that the characteristics of the Portfolio as of the closing date will differ materially from the characteristics of the Portfolio as of the cut-off date.

The cut-off date Portfolio was drawn up as at the cut-off date and comprised [—] Loans having an aggregate current balance of $[—] as at that date. The Bank originated the Loans in the cut-off date Portfolio between [—], 19[—] and [—], 2013.

[—] Loans in the cut-off date Portfolio (or [—]% of the aggregate current balance of the Loans as of the cut-off date) were fixed rate Loans. The remaining [—] Loans in the cut-off date Portfolio (or [—]% of the aggregate current balance of the Loans as of the cut-off date) were standard variable rate Loans, as described below.

In the prior three years, there have been no repurchases or replacement of Loans in the Portfolio as a result of breaches of representations or warranties and no demands for repurchase or replacement of any Loan.

No Loan in the Portfolio failed to meet the Bank’s Lending Criteria.

The Bank most recently filed a Form ABS-15G on [—], 2013. The Bank’s Central Index Key is: 0000927971.

As of the cut-off date, the Bank’s standard five-year variable rate for existing and new borrowers was [—]% (rate for “open,” or prepayable loans) and [—]% (rate for “closed,” or non-prepayable loans) per annum.

Review of the Portfolio

The Bank has performed a review of the Loans in the Portfolio and a review of the disclosure regarding the Loans in this preliminary prospectus supplement and the accompanying prospectus required by Item 1111 of Regulation AB (such disclosure, the “Rule 193 Information”). This review was designed and effected to provide the Bank with reasonable assurance that the Rule 193 Information is accurate in all material respects.

S-11

One aspect of the review consisted of a comparison of the statistical information contained in Annex A and Annex B hereto to statistical information relating to all of the Loans contained in the Bank’s data files. The data files are electronic records maintained by the Bank. For this comparison, the data files from the Bank’s loan servicing system, including relevant data elements, were extracted from the Bank’s information repository system. No material exceptions were found between the statistical information contained in Annex A and Annex B and the data files extracted from the Bank’s system.

A second aspect of the review consisted of a sample review by a third party of [—] randomly selected Loan files, which compared certain Loan characteristics selected by the Bank, such as amount financed, current balance, location of the property and property valuation, to the applicable information in the data files. No material exceptions were found between the Loan files reviewed and the data extracted from the Bank’s system.

A third aspect of the review consisted of a sample review of [—] randomly selected Loan files, which reviewed the Rule 193 Information related to descriptions of the transaction documents in this preliminary prospectus supplement and the accompanying prospectus. For this part of the review, the Bank and its legal counsel reviewed the Rule 193 Information consisting of descriptions of portions of the transaction documents and compared that Rule 193 Information to the related transaction documents. The Bank and its legal counsel also reviewed the Rule 193 Information consisting of descriptions of legal and regulatory provisions that may materially affect the performance of the Loans or payments on the covered bonds.

In addition to the elements of the review of the Rule 193 Information that were specifically conducted for purposes of this transaction as described above, with respect to Rule 193 Information relating to credit approvals and exceptions to credit policies, the Bank has observed the regular, ongoing application of its internal control procedures. These include quality assurance audits and portfolio level analyses on origination to ensure that all Loans comply with the Bank’s underwriting policies. These audits and portfolio level analyses are reviewed by the policy review committee as well as group risk management and other partners on a quarterly basis.

All Rule 193 Information consisting of textual disclosures of factual information and not otherwise described above was reviewed and approved by the Bank.

After undertaking the elements of the review described above, the Bank has found and concluded that it has reasonable assurance that the Rule 193 Information in this preliminary prospectus supplement and the accompanying prospectus is accurate in all material respects.

The review of disclosure relating to the description of the transaction documents and legal and regulatory matters and the reviews of statistical information and certain Loans characteristics were performed with the assistance of third parties engaged by the Bank. The Bank determined the nature, extent and timing of the review and the level of assistance provided by the third parties and by the Bank. The Bank has ultimate authority and control over, and assumes all responsibility for, the review and the findings and conclusions of the review. The Bank attributes all findings and conclusions of the review to itself.

S-12

Annex A

The following tables set forth statistical information with respect to the Loans in the Portfolio as of the cut-off date for the periods indicated:

Overall Portfolio Statistics

	As at [—],  2013
Number of Loans in the Portfolio		[	—]
•   The percentage of Readiline Loans		[	—]%
•   The percentage of Loans other than Readiline Loans		[	—]%
Current aggregate outstanding balance of Loans		[	—]
•   The percentage of Readiline Loans		[	—]%
•   The percentage of Loans other than Readiline Loans		[	—]%
Average Loan size		[	—]
Number of primary borrowers		[	—]
Number of properties		[	—]
Weighted average of authorized LTV of Loans in the Portfolio		[	—]
Weighted average of current LTV of Loans in the Portfolio		[	—]
Weighted average of original LTV of Loans in the Portfolio		[	—]
Weighted average seasoning of Loans in the Portfolio		[	—]
Weighted average coupon of Loans in the Portfolio		[	—]
Weighted average original term of Loans in the Portfolio		[	—]
Weighted average remaining term of Loans in the Portfolio		[	—]

Portfolio Delinquency Distribution
Aging Summary	Number of Loans	Percentage	Principal Balance	Percentage
Current and <30 Days Past Due
30 to 59 Days Past Due
60 to 89 Days Past Due
90 or More Days Past Due
Total

Portfolio Provincial Distribution
Province	Number of Loans	Percentage	Principal Balance	Percentage
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland
Northwest Territories
Nova Scotia
Nunavut

S-13

Portfolio Provincial Distribution
Province	Number of Loans	Percentage	Principal Balance	Percentage
Ontario
Prince Edward Island
Quebec
Saskatchewan
Yukon
Total

Portfolio Credit Bureau Score Distribution
Credit Bureau Score	Number of Loans	Percentage	Principal Balance	Percentage
Score Unavailable
599 and Below
600 – 650
651 – 700
701 – 750
751 – 800
800 and Above
Total

Portfolio Rate Type Distribution
Rate Type	Number of Loans	Percentage	Principal Balance	Percentage
Fixed
Variable
Total

Portfolio Occupancy Type Distribution
Occupancy Code	Number of Loans	Percentage	Principal Balance	Percentage
Not Owner Occupied
Owner Occupied
Total

Portfolio Mortgage Rate Distribution
Mortgage Rate (%)	Number of Loans	Percentage	Principal Balance	Percentage
3.4999 and Below
3.5000 – 3.9999
4.0000 – 4.4999
4.5000 – 4.9999
5.0000 – 5.4999
5.5000 – 5.9999
6.0000 – 6.4999
6.5000 – 6.9999
7.0000 – 7.4999
7.5000 – 7.9999
8.0000 – 8.4999
8.5000 and Above
Total

Portfolio Current LTV Distribution
Current LTV (%)	Number of Loans	Percentage	Principal Balance	Percentage
20.00 and Below
20.01 – 30.00
30.01 – 40.00
40.01 – 50.00
50.01 – 55.00
55.01 – 60.00

S-14

60.01 – 65.00

65.01 – 70.00

70.01 – 75.00

75.01 – 80.00

80.01 and Above

Total

Portfolio Remaining Term Distribution
Remaining Term (months)	Number of Loans	Percentage	Principal Balance	Percentage
Less than 12.00
12.00 – 23.99
24.00 – 35.99
36.00 – 41.99
42.00 – 47.99
48.00 – 53.99
54.00 – 59.99
60.00 – 65.99
66.00 – 71.99
72.00 – Above
Total

Remaining Principal Balance Distribution
Range of Remaining Principal Balance ($)	Number of Loans	Percentage	Principal Balance	Percentage
99,999 and Below
100,000 – 149,999
150,000 – 199,999
200,000 – 249,999
250,000 – 299,999
300,000 – 349,999
350,000 – 399,999
400,000 – 449,999
450,000 – 499,999
500,000 – 549,999
550,000 – 599,999
600,000 – 649,999
650,000 – 699,999
700,000 – 749,999
750,000 – 799,999
800,000 – 849,999
850,000 – 899,999
900,000 – 949,999
950,000 – 999,999
1,000,000 or Greater
Total

Portfolio Property Type Distribution
Property Type	Number of Loans	Percentage	Principal Balance	Percentage
Condo
Single Family
Multi Family/Other
Total

S-15

Overall Portfolio Performance

For collection purposes, a Loan is considered delinquent when a scheduled payment is 30 days or more past due. In the tables below, a Loan for which a scheduled payment is less than 30 days past due is categorized as “Current.”

Portfolio Performance – Overall

Delinquency Status – Current Balance of Loans in Arrears ($)

As at Date

31-Dec-08

31-Dec-09

31-Dec-10

31-Dec-11

31-Dec-12

—-—-13

Current Balance of Loans Outstanding

No. Days Past Due

$

%

$

%

$

%

$

%

$

%

$

%

Current

<30 Days

1-2 Months

³30 and <60 Days

2-3 Months

³60 and <90 Days

3-4 Months

³90 and <120 Days

4-5 Months

³120 and <150 Days

5-6 Months

³150 and <180 Days

6-7 Months

³180 and <210 Days

7-8 Months

³210 and <240 Days

8-9 Months

³240 and <270 Days

9-10 Months

³270 and <300 Days

10-11 Months

³300 and <330 Days

11-12 Months

³330 and <360 Days

12-13 Months

³360 and <390 Days

13-14 Months

³390 and <420 Days

14-15 Months

³420 and <450 Days

15-16 Months

³450 and <480 Days

16-17 Months

³480 and <510 Days

17-18 Months

³510 and <540 Days

18 Months and more

³540 Days

Total

Delinquency Status – Number of Loans in Arrears

As at Date

31-Dec-08

31-Dec-09

31-Dec-10

31-Dec-11

31-Dec-12

—-—-13

Total Number of Loans Outstanding

No. Days Past Due

#

%

#

%

#

%

#

%

#

%

#

%

Current

<30 Days

1-2 Months

³30 and <60 Days

2-3 Months

³60 and <90 Days

3-4 Months

³90 and <120 Days

4-5 Months

³120 and <150 Days

5-6 Months

³150 and <180 Days

6-7 Months

³180 and <210 Days

7-8 Months

³210 and <240 Days

8-9 Months

³240 and <270 Days

9-10 Months

³270 and <300 Days

10-11 Months

³300 and <330 Days

11-12 Months

³330 and <360 Days

12-13 Months

³360 and <390 Days

13-14 Months

³390 and <420 Days

14-15 Months

³420 and <450 Days

15-16 Months

³450 and <480 Days

16-17 Months

³480 and <510 Days

17-18 Months

³510 and <540 Days

18 Months and more

³540 Days

Total

Loss Information
As at Date	31-Dec-08	31-Dec-09	31-Dec-10	31-Dec-11	31-Dec-12	—-— -13
	%	%	%	%	%	%
Number of loans that have experienced a loss for the period / year ended
Gross loss amount for the period / year ended ($)
Cumulative number of loans that have experienced a loss
Cumulative gross loss amount ($)

S-16

Annex B

HISTORICAL PORTFOLIO DATA

Historical pool information regarding the performance of the Loans in the Portfolio is contained in this Annex. Historical pool information contained in this Annex that relates to the performance of the Loans for periods commencing prior to [—] does not form a part of this preliminary prospectus supplement, the accompanying prospectus or the registration statement relating to the covered bonds. Historical pool information about the Loans in the Portfolio for periods prior to [—] is not provided as such information is not available for such years and cannot be obtained without unreasonable effort and expense.

The following vintage tables present historical pool information about the Loans in the [—] Portfolio in respect of arrears and cumulative losses as at the dates specified in respect of Loans originated in specific years. “Vintage 2008,” for example, indicates all Loans in the Portfolio originated in the calendar year 2008. All of the Loans originated by the Bank are secured by a mortgage with first ranking priority on residential property in Canada. All such Loans are originated in accordance with the Bank’s lending criteria at the time of offer of the Loan. There are no material differences between the lending and origination criteria used to originate the Loans and the Bank’s lending and origination criteria described in the accompanying prospectus. Notwithstanding any change to the lending criteria or other terms applicable to new Loans, new Loans and their related security may only be assigned to the Portfolio if those new Loans comply with the Seller’s representations and warranties set out in the Mortgage Sale Agreement, including a representation that those new Loans were originated in accordance with the Seller’s lending criteria applicable at the time of their origination. The Seller is obliged to repurchase Loans that are in breach of these representations and warranties. See “Summary of Principal Documents—Mortgage Sale Agreement—Repurchase of Loans” in the accompanying prospectus.

Historical pool information on prepayments on the Loans is not being provided because prepayment and repayment rates should not affect the maturities of the covered bonds. The single pool of Loans held by the Guarantor supports an ongoing issuance of covered bonds by the Bank. As Loans repay or prepay, reducing the size of the Portfolio, the Seller is required to add Loans to the Portfolio in order to maintain compliance with the Asset Coverage Test. See “Summary of Principal Documents—Guarantor Agreement—Asset Coverage Test” in the accompanying prospectus. Any new Loans may only be assigned to the Portfolio if those new Loans comply with the Seller’s lending criteria, the material aspects of which are described under “Loan Origination and Lending Criteria” in the accompanying prospectus.

For collection purposes, a Loan is considered delinquent when a scheduled payment is 30 days or more past due. In the tables below, a Loan for which a scheduled payment is less than 30 days past due is categorized as “Current.”

S-17

2008 Vintage

Portfolio Performance—2008 Vintage

Delinquency Status—Current Balance of Loans in Arrears ($)

As at Date

31-Dec-08

31-Dec-09

31-Dec-10

31-Dec-11

31-Dec-12

—-—-13

Current Balance of Loans Outstanding

No. Days Past Due

$

%

$

%

$

%

$

%

$

%

$

%

Current

<30 Days

1-2 Months

³30 and <60 Days

2-3 Months

³60 and <90 Days

3-4 Months

³90 and <120 Days

4-5 Months

³120 and <150 Days

5-6 Months

³150 and <180 Days

6-7 Months

³180 and <210 Days

7-8 Months

³210 and <240 Days

8-9 Months

³240 and <270 Days

9-10 Months

³270 and <300 Days

10-11 Months

³300 and <330 Days

11-12 Months

³330 and <360 Days

12-13 Months

³360 and <390 Days

13-14 Months

³390 and <420 Days

14-15 Months

³420 and <450 Days

15-16 Months

³450 and <480 Days

16-17 Months

³480 and <510 Days

17-18 Months

³510 and <540 Days

18 Months and more

³540 Days

Total

Delinquency Status—Total Number of Loans in Arrears

As at Date

31-Dec-08

31-Dec-09

31-Dec-10

31-Dec-11

31-Dec-12

—-—-13

Total Number of Loans Outstanding

No. Days Past Due

#

%

#

%

#

%

#

%

#

%

#

%

Current

<30 Days

1-2 Months

³30 and <60 Days

2-3 Months

³60 and <90 Days

3-4 Months

³90 and <120 Days

4-5 Months

³120 and <150 Days

5-6 Months

³150 and <180 Days

6-7 Months

³180 and <210 Days

7-8 Months

³210 and <240 Days

8-9 Months

³240 and <270 Days

9-10 Months

³270 and <300 Days

10-11 Months

³300 and <330 Days

11-12 Months

³330 and <360 Days

12-13 Months

³360 and <390 Days

13-14 Months

³390 and <420 Days

14-15 Months

³420 and <450 Days

15-16 Months

³450 and <480 Days

16-17 Months

³480 and <510 Days

17-18 Months

³510 and <540 Days

18 Months and more

³540 Days

Total

Loss Information

As at Date

31-Dec-08

31-Dec-09

31-Dec-10

31-Dec-11

31-Dec-12

—-—-13

%

%

%

%

%

%

Number of loans that have experienced a loss for the period / year ended

Gross loss amount for the period / year ended ($)

Cumulative number of loans that have experienced a loss

Cumulative gross loss amount ($)

S-18

2009 Vintage

Portfolio Performance—2009 Vintage
Delinquency Status—Current Balance of Loans in Arrears ($)
As at Date		31-Dec-09		31-Dec-10		31-Dec-11		31-Dec-12		—-—-13
Current Balance of Loans Outstanding
	No. Days Past Due	$	%	$	%	$	%	$	%	$	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Delinquency Status—Total Number of Loans in Arrears

As at Date

31-Dec-09

31-Dec-10

31-Dec-11

31-Dec-12

—-—-13

Total Number of Loans Outstanding

No. Days Past Due

#

%

#

%

#

%

#

%

#

%

Current

<30 Days

1-2 Months

³30 and <60 Days

2-3 Months

³60 and <90 Days

3-4 Months

³90 and <120 Days

4-5 Months

³120 and <150 Days

5-6 Months

³150 and <180 Days

6-7 Months

³180 and <210 Days

7-8 Months

³210 and <240 Days

8-9 Months

³240 and <270 Days

9-10 Months

³270 and <300 Days

10-11 Months

³300 and <330 Days

11-12 Months

³330 and <360 Days

12-13 Months

³360 and <390 Days

13-14 Months

³390 and <420 Days

14-15 Months

³420 and <450 Days

15-16 Months

³450 and <480 Days

16-17 Months

³480 and <510 Days

17-18 Months

³510 and <540 Days

18 Months and more

³540 Days

Total

Loss Information
As at Date	31-Dec-09	31-Dec-10	31-Dec-11	31-Dec-12	—-— -13
	%	%	%	%	%
Number of loans that have experienced a loss for the period / year ended
Gross loss amount for the period / year ended ($)
Cumulative number of loans that have experienced a loss
Cumulative gross loss amount ($)

2010 Vintage

Portfolio Performance—2010 Vintage
Delinquency Status—Current Balance of Loans in Arrears ($)
As at Date		31-Dec-10		31-Dec-11		31-Dec-12		—-—-13
Current Balance of Loans Outstanding
	No. Days Past Due	$	%	$	%	$	%	$	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

19

Delinquency Status —Total Number of Loans in Arrears
As at Date		31-Dec-10		31-Dec-11		31-Dec-12		—-—-13
Total Number of Loans Outstanding
	No. Days Past Due	#	%	#	%	#	%	#	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Loss Information
As at Date	31-Dec-10	31-Dec-11	31-Dec-12	—-— -13
	%	%	%	%
Number of loans that have experienced a loss for the period / year ended
Net loss amount for the period / year ended ($)
Cumulative number of loans that have experienced a loss
Cumulative net loss amount ($)

2011 Vintage

Portfolio Performance—2011 Vintage
Delinquency Status—Current Balance of Loans in Arrears ($)
As at Date		31-Dec-11		31-Dec-12		—-—-13
Current Balance of Loans Outstanding
	No. Days Past Due	$	%	$	%	$	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Delinquency Status—Total Number of Loans in Arrears
As at Date		31-Dec-11		31-Dec-12		—-—-13
Total Number of Loans Outstanding
	No. Days Past Due	#	%	#	%	#	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days

S-20

15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Loss Information
As at Date	31-Dec-11	31-Dec-12	—-— -13
	%	%	%
Number of loans that have experienced a loss for the period / year ended
Gross loss amount for the period / year ended ($)
Cumulative number of loans that have experienced a loss
Cumulative gross loss amount ($)

2012 Vintage

Portfolio Performance—2012 Vintage
Delinquency Status— Current Balance of Loans in Arrears ($)
As at Date		31-Dec-12		—-—-13
Current Balance of Loans Outstanding
	No. Days Past Due	$	%	$	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Delinquency Status—Total Number of Loans in Arrears
As at Date		31-Dec-12		—-—-13
Total Number of Loans Outstanding
	No. Days Past Due	#	%	#	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Loss Information
As at Date	31-Dec-12	—-— -13
	%	%
Number of loans that have experienced a loss for the period / year ended
Gross loss amount for the period / year ended ($)
Cumulative number of loans that have experienced a loss
Cumulative gross loss amount ($)

S-21

2013 Vintage

Portfolio Performance—2013 Vintage
Delinquency Status—Current Balance of Loans in Arrears ($)
As at Date		—-—-13
Current Balance of Loans Outstanding
	No. Days Past Due	$	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Delinquency Status—Total Number of Loans in Arrears
As at Date		—-—-13
Total Number of Loans Outstanding
	No. Days Past Due	#	%
Current	<30 Days
1-2 Months	³30 and <60 Days
2-3 Months	³60 and <90 Days
3-4 Months	³90 and <120 Days
4-5 Months	³120 and <150 Days
5-6 Months	³150 and <180 Days
6-7 Months	³180 and <210 Days
7-8 Months	³210 and <240 Days
8-9 Months	³240 and <270 Days
9-10 Months	³270 and <300 Days
10-11 Months	³300 and <330 Days
11-12 Months	³330 and <360 Days
12-13 Months	³360 and <390 Days
13-14 Months	³390 and <420 Days
14-15 Months	³420 and <450 Days
15-16 Months	³450 and <480 Days
16-17 Months	³480 and <510 Days
17-18 Months	³510 and <540 Days
18 Months and more	³540 Days
Total

Loss Information
As at Date	—-— -13
	%
Number of loans that have experienced a loss for the period / year ended
Gross loss amount for the period / year ended ($)
Cumulative number of loans that have experienced a loss
Cumulative gross loss amount ($)

S-22

U.S.$[—] [—]% Covered Bonds Due [—], 20[—]

unconditionally and irrevocably guaranteed as to payments by

Scotiabank Covered Bond Guarantor Limited Partnership

Bank of Montreal

Covered Bonds

PRELIMINARY PROSPECTUS SUPPLEMENT

Program Arrangers

Barclays BMO Capital Markets

Joint Lead Managers

Co-Managers

[—], 2013

PART II — INFORMATION NOT REQUIRED IN PROSPECTUS

Item 8. Indemnification of Directors and Officers

Under the Bank Act, a bank may not, by contract, resolution or by-law, limit the liability of its directors for breaches of the Act, including their fiduciary duties imposed under the Act. However, a bank may indemnify a director or officer, a former director or officer or a person who acts or acted, at the bank’s request, as a director or officer of or in a similar capacity for another entity, and his or her heirs and personal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her because of any civil, criminal, administrative, investigative or other proceeding in which he or she is involved because of that association and may advance funds to him or her for the costs, charges or expenses of such a proceeding, provided however, that a bank may not indemnify such a person unless:

1. that person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank or the other entity for which he or she acted at the bank’s request as a director or officer or in a similar capacity; and

2. in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, that person had reasonable grounds for believing that his or her conduct was lawful.

Under the Bank Act, these individuals are entitled to be indemnified by the bank in respect of all costs, charges and expenses reasonably incurred by them in connection with the defense of any civil, criminal, administrative, investigative or other proceeding in which he or she is involved because of an association referred to above with the bank or other entity if the person was not judged by the courts or other competent authority to have committed any fault or omitted to do anything that they ought to have done and fulfilled the conditions set out in (1) and (2) above. A bank may, with the approval of a court, also indemnify these individuals in respect of, or advance amounts to him or her for the costs, charges and expenses of, a proceeding referred to above, in respect of an action by or on behalf of the bank or other entity to procure a judgment in its favor, to which the person is made a party because of an association referred to above with the bank or other entity, if he or she fulfills the conditions set out in (1) and (2) above.

The Guarantor’s limited partnership agreement provides that the Guarantor will indemnify and hold harmless the Managing GP and the Liquidation GP and their respective shareholders, directors, officers, employees, and agents from any costs, damages, liabilities, resulting from or arising out of any act or omission or error of judgment of the Managing GP or the Liquidation GP or any of their respective shareholders, directors, officers, employees, and agents on behalf of the Guarantor or in furtherance of the business of the Guarantor unless in the case of any such person such costs, damages, liabilities, or expenses result from or arise out of any act or omission or error of judgment as a result of which such person is adjudged to have been guilty of negligence or willful misconduct or to have failed to act honestly and in good faith or to have breached fiduciary duty to the Guarantor or the Limited Partner. The above-referenced indemnity is in addition to and not a limitation of any other obligation of the Guarantor to the Managing GP or the Liquidation GP including the obligation of the Guarantor to reimburse or repay the Managing GP and the Liquidation GP on account of costs outlays disbursements and expenditures incurred by or on their behalf.

II-1

The Bank’s by-laws provide that the Bank will indemnify a director or officer, a former director or officer, or a person who acts or acted at the Bank’s request as a director or officer of or in a similar capacity for another entity, and such person’s heirs and personal representatives, to the maximum extent permitted by the Bank Act.

The Bank has purchased, at its expense, a Directors’ and Officers’ Liability Insurance Policy that provides protection for individual directors and officers of Bank of Montreal and its subsidiaries (including the Guarantor) in circumstances where Bank of Montreal cannot or will not indemnify its directors or officers for acts and omissions. The Insurance Policy provides for a limit of $300 million per policy year with no deductible. The policy is in effect until October 31, 2013.

In addition, the Bank has purchased a separate Directors’ and Officers’ Liability Insurance Policy which provides for payments on behalf of the Bank when the law permits or requires the Bank (including the Guarantor) to provide an indemnity to a director or an officer. This policy has a limit of $150 million per policy year and is subject to a $100 million self-insured retention. This policy is in effect until October 31, 2013.

In the underwriting agreement related to the issuance of the covered bonds, the Bank has agreed to indemnify the Dealers in respect of certain liabilities, including liabilities under the United States Securities Act of 1933 as amended (the “Securities Act”), or to contribute to payments that the Dealers may be required to make in respect thereof.

Insofar as indemnification for liabilities arising from the Securities Act may be permitted to directors, officers or persons controlling the Bank pursuant to the foregoing provisions, the Bank has been informed that in the opinion of the U.S. Securities and Exchange Commission (the “Commission”) such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

II-2

Item 9. Exhibits

Exhibit Number	Description of Exhibit
1.1	Form of Underwriting Agreement.
4.1	Trust Deed dated September 30, 2013, between the Bank, the Guarantor and Computershare Trust Company of Canada, as Bond Trustee.
4.2	Master Definitions and Construction Agreement dated September 30, 2013, by and among the Bank, the Guarantor, the Bond Trustee, 8429065 Canada Inc., BMO Covered Bond GP, Inc., Royal Bank of Canada, Bank of New York Mellon and KPMG LLP.
4.3	Mortgage Sale Agreement, dated September 30, 2013, by and among the Bank, the Guarantor and the Bond Trustee.
4.4	Cover Pool Monitor Agreement, dated September 30, 2013, by and among the Bank, the Guarantor, the Bond Trustee and KPMG LLP, as Cover Pool Monitor.
4.5	Servicing Agreement, dated September 30, 2013, by and among the Bank, the Guarantor and the Bond Trustee.
4.6	Agency Agreement dated September 30, 2013, by and among the Bank, the Guarantor, Bank of New York Mellon, as Principal Paying Agent, a Registrar, a Transfer Agent and the Exchange Agent and the Bond Trustee.
4.7	Intercompany Loan Agreement, dated September 30, 2013, between the Guarantor, the Bank and the Bond Trustee.
4.8	Limited Partnership Agreement, dated September 30, 2013, by and among BMO Covered Bond GP Inc., 8429065 Canada Inc., the Bank and the Bond Trustee.
4.10	Corporate Services Agreement, dated September 30, 2013, by and among the Bank, the Guarantor, the Bond Trustee and 8429065 Canada Inc.
4.11	Cash Management Agreement, dated September 30, 2013, by and among the Bank, the Guarantor and the Bond Trustee.
4.12	General Security Agreement, dated September 30, 2013, by and among the Guarantor, the Bond Trustee and any other person who from time to time may become a party thereto.
4.13	Bank Account Agreement, dated September 30, 2013, by and among the Guarantor, the Bank and the Bond Trustee.
4.14	Stand-by Bank Account Agreement dated September 30, 2013, by and among the Guarantor, the Bank, Royal Bank of Canada, and the Bond Trustee.

II-3

Exhibit Number	Description of Exhibit
4.15	Guaranteed Deposit Account Contract dated September 30, 2013, by and among the Guarantor, the Bank and the Bond Trustee.
4.16	Standby Guaranteed Deposit Account Contract dated September 30, 2013, by and among the Guarantor, the Bank, Royal Bank of Canada, and the Bond Trustee.
4.17	Interest Rate Swap Agreement, including ISDA Master, Schedule and Credit Support Annex dated September 30, 2013 together with a form of Interest Rate Swap Confirmation between the Bank and the Guarantor.
4.18	Covered Bond Swap Agreement including ISDA Master, Schedule and Credit Support Annex dated September 30, 2013 together with a form of Covered Bond Swap Confirmation between the Bank and the Guarantor.
5.1	Opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Registrant, as to the legality of the covered bonds.
8.1	Opinion of Allen & Overy LLP, U.S. counsel for the Registrant, as to certain matters of United States federal income taxation.
8.2	Opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Registrant, as to certain matters of Canadian taxation.
12.1	Statement regarding the computation of consolidated ratio of earnings to fixed charges**.
23.1	Consent of KPMG LLP.
23.2	Consent of Osler, Hoskin & Harcourt LLP.
23.3	Consent of Allen & Overy LLP.
24.1	Powers of Attorney (included in the signature page hereto).
25.1	Statement of Eligibility of Trustee on Form T-1 with respect to Exhibit 4.1 above.

** Previously filed.

Additional exhibits to this Registration Statement may be subsequently filed in reports on Form 40-F or on Form 6-K that specifically state that such materials are incorporated by reference as exhibits in Part II of this Registration Statement.

II-4

Item 10. Undertakings

(a) Each undersigned registrant hereby undertakes, solely with respect to itself:

(1)    To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the registration statement;

Provided, however, That:

(A) Paragraphs (1)(i) and (1)(ii) above do not apply if the registration statement is on Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; and

(B) Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2)    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.

II-5

(3)    To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)    If the registrant is a foreign private issuer, file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

(5)    That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i) If the registrant is relying on Rule 430B:

(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) will be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than

II-6

registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6)    That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

each undersigned registrant undertakes, solely with respect to itself, that in a primary offering of securities of the each undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, each undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of each undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of each undersigned registrant or used or referred to by the each undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about each undersigned registrant or its securities provided by or on behalf of each undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the Registrant to the purchaser.

(b)    Each undersigned registrant hereby undertakes that, solely with respect to itself, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)    Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions set forth in Item 8 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful

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defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Bank of Montreal certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on this Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Province of Ontario, Canada, on August [—], 2013.

BANK OF MONTREAL

/s/ Cathryn E. Cranston

By: Cathryn E. Cranston

Senior Vice President,

Finance & Treasurer

/s/ Thomas E. Flynn

By: Thomas E. Flynn

Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated.

Signature Name	Title
/S/ * William A. Downe	President and Chief Executive Officer, Director
/S/ * Thomas E. Flynn	Chief Financial Officer**
/S/ * J. Robert S. Prichard	Chairman of the Board
/S/ * Robert M. Astley	Director
/S/ * Jan Babiak	Director
/S/ * Sophie Brochu	Director
/S/ * George A. Cope	Director

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Signature Name	Title
/S/ * Christine A. Edwards	Director
/S/ * Ronald H. Farmer	Director
/S/ * Eric R. La Flèche	Director
/S/ * Bruce H. Mitchell	Director
/S/ * Philip S. Orsino	Director
/S/ * Martha C. Piper	Director
/S/ * J. Robert S. Prichard	Director
/S/ * Don M. Wilson III	Director
*By /s/ [—]
[—] – Attorney-in-fact
**     Principal Accounting Officer

Pursuant to the requirements of the Securities Act of 1933, BMO Covered Bond GP, Inc., in its capacity as managing general partner of BMO Covered Bond Guarantor Limited Partnership certifies that it has reasonable grounds to believe that BMO Covered Bond Guarantor Limited Partnership meets all of the requirements for filing on this Form F-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Province of Ontario, Canada, on August [—], 2013.

BMO COVERED BOND GP, INC., in its capacity as managing general partner of BMO Covered Bond Guarantor Limited Partnership

/s/ Chris Hughes

By: Chris Hughes

Vice President, Corporate Treasury

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AUTHORIZED REPRESENTATIVE

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized Representative has duly caused this Registration Statement to be signed on its behalf by the undersigned, solely in her capacity as the duly authorized representative of Bank of Montreal in the United States, in the City of Chicago, State of Illinois, on August [—], 2013.

BANK OF MONTREAL
By:	/s/ Colleen Hennessy
	Colleen Hennessy
	Authorized Representative in the United States

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of BMO Covered Bond GP, Inc., in its capacity as managing general partner of BMO Covered Bond Guarantor Limited Partnership in the United States, has signed this Registration Statement in the City of Chicago, State of Illinois, on August [—], 2013.

BMO Covered Bond GP, Inc., in its capacity as managing general partner of BMO Covered Bond Guarantor Limited Partnership
By:	/s/ Colleen Hennessy
	Colleen Hennessy
	Authorized Representative in the United States

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INDEX TO EXHIBITS

Exhibit Number	Description of Exhibit
1.1	Form of Underwriting Agreement.
4.1	Trust Deed dated September 30, 2013, between the Bank, the Guarantor and Computershare Trust Company of Canada, as Bond Trustee.
4.2	Master Definitions and Constructions Agreement dated September 30, 2013, 2013, by and among the Bank, the Guarantor, the Bond Trustee, 8429065 Canada Inc., BMO Covered Bond GP, Inc., Royal Bank of Canada, Bank of New York Mellon and KPMG LLP.
4.3	Mortgage Sale Agreement, dated September 30, 2013, by and among the Bank, the Guarantor and the Bond Trustee.
4.4	Cover Pool Monitor Agreement, dated September 30, 2013, by and among the Bank, the Guarantor, the Bond Trustee and KPMG LLP, as Cover Pool Monitor.
4.5	Servicing Agreement, dated September 30, 2013, by and among the Bank, the Guarantor and the Bond Trustee.
4.6	Agency Agreement dated September 30, 2013, by and among the Bank, the Guarantor, Bank of New York Mellon, as Principal Paying Agent, a Registrar, a Transfer Agent and the Exchange Agent, and the Bond Trustee.
4.7	Intercompany Loan Agreement, dated September 30, 2013, between the Guarantor and the Bank*.
4.8	Limited Partnership Agreement, dated September 30, 2013, by and among BMO Covered Bond GP Inc., 8429065 Canada Inc., the Bank and the Bond Trustee.
4.10	Corporate Services Agreement, dated September 30, 2013, by and among the Bank, the Guarantor, the Bond Trustee and 8429065 Canada Inc.
4.11	Cash Management Agreement, dated September 30, 2013, by and among the Bank, the Guarantor and the Bond Trustee.
4.12	General Security Agreement, dated September 30, 2013, by and among the Guarantor, the Bond Trustee and any other person who from time to time may become a party thereto.
4.13	Bank Account Agreement, dated September 30, 2013, by and among the Guarantor, the Bank and the Bond Trustee.
4.14	Standby Bank Account Agreement dated September 30, 2013 by and among the Guarantor, the Bank, Royal Bank of Canada, and the Bond Trustee.

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Exhibit Number	Description of Exhibit
4.15	Stand-by Deposit Account Contract dated September 30, 2013, by and among the Guarantor, the Bank and the Bond Trustee.
4.16	Stand-by Guaranteed Deposit Account Contract dated September 30, 2013, by and among the Guarantor, the Bank, Royal Bank of Canada, and the Bond Trustee.
4.17	Interest Rate Swap Agreement, including ISDA Master, Schedule and Credit Support Annex dated September 30, 2013 together with a form of Interest Rate Swap Confirmation between the Bank and the Guarantor.
4.18	Covered Bond Swap Agreement including ISDA Master, Schedule and Credit Support Annex dated together with a form of Covered Bond Swap Confirmation between the Bank and the Guarantor.
5.1	Opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Registrant, as to the legality of the covered bonds.
8.1	Opinion of Allen & Overy LLP, U.S. counsel for the Registrant, as to certain matters of United States federal income taxation.
8.2	Opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Registrant, as to certain matters of Canadian taxation.
12.1	Statement regarding the computation of consolidated ratio of earnings to fixed charges**.
23.1	Consent of KPMG LLP.
23.2	Consent of Osler, Hoskin & Harcourt LLP.
23.3	Consent of Allen & Overy LLP.
24.1	Powers of Attorney (included in the signature page hereto).
25.1	Statement of Eligibility of Trustee on Form T-1 with respect to Exhibit 4.1 above.

** Previously filed.

Additional exhibits to this Registration Statement may be subsequently filed in reports on Form 40-F or on Form 6-K that specifically state that such materials are incorporated by reference as exhibits in Part II of this Registration Statement.

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EX-1.1

Exhibit 1.1

Form of Underwriting Agreement

Bank of Montreal

unconditionally and irrevocably guaranteed by

BMO Covered Bond Guarantor Limited Partnership

Covered Bonds

up to an aggregate initial offering price of U.S.$10,000,000,000

or the equivalent thereof in other currencies under the global registered covered bond program

Underwriting Agreement

[  —], 201[    ]

To the Dealers named in Annex III hereto.

Ladies and Gentlemen:

Bank of Montreal, a Canadian chartered bank (the “Bank”), proposes, subject to the terms and conditions stated herein, to issue and sell, from time to time, covered bonds under the Bank’s registered global covered bond program, in an aggregate principal amount of up to U.S. $10,000,000,000 or the equivalent thereof in one or more foreign or composite currencies or currency units (“Covered Bonds”) unconditionally and irrevocably guaranteed (the “Covered Bond Guarantee”, and together with the Covered Bonds, the “Securities”) by BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”), pursuant to the terms of this agreement (the “Agreement”).

Subject to the terms and conditions stated herein, the Bank hereby appoints each of you (individually, a “Dealer” and, collectively, the “Dealers”) as a dealer of the Bank for the purpose of soliciting and receiving offers to purchase the Securities, and the Bank and each of the Dealers severally agree that whenever the Bank determines to sell Securities to any Dealer, the Bank and such Dealer will, unless otherwise agreed by them, enter into a separate agreement, substantially in the form of Annex I hereto, relating to such sale (each, a “Terms Agreement”), in accordance with Section 3(b) hereof. The Bank reserves the right to sell Securities directly on its own behalf and to enter into agreements with other broker-dealers as Dealers for a specific offering of Securities as contemplated by Section 11(b) hereof. This Agreement shall not be construed to create either an obligation on the part of the Bank to sell any Securities or an obligation of any Dealer to purchase Securities.

The terms, conditions and rights of the Securities shall be as specified in or established pursuant to the Trust Deed, dated as of September 30, 2013, as it may be amended and supplemented from time to time (the “Trust Deed”), between the Bank and Computershare Trust Company of Canada, as bond trustee (the “Trustee”). The Securities shall have the maturity ranges, annual interest rates (if any), redemption provisions (if any) and other terms set forth in supplements to the Prospectus referred to below. The Securities may be issued in amounts denominated in United States dollars or in amounts denominated in foreign currencies, including the Euro, or any composite currency. The Securities will be issued, and the terms thereof established, from time to time by the Bank in accordance with the Trust Deed and such terms will be specified in the relevant Terms Agreement.

The Bank has filed with the Securities and Exchange Commission (the “Commission”) a registration statement (No. 333-189814) on Form F-3 for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of, among other securities, the Securities. Such registration statement, and any post-effective amendment thereto as of the date of this Agreement, excluding the exhibits thereto, but including all documents incorporated by reference in the prospectus included therein and the information, if any, deemed to be part of the registration statement pursuant to Rule 430B under the Securities Act, has been declared effective by the Commission, are hereinafter called the “Registration Statement”. The prospectus filed as part of the registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement is hereinafter called the “Prospectus”; any reference herein to the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such prospectus; any supplement to the Prospectus that sets forth only the terms of a particular issue of the Securities and is filed in accordance with Section 5(a) hereof is hereinafter called a “Prospectus Supplement”; any reference herein to the “Prospectus as amended or supplemented”, other than in Section 3(d) hereof, shall be deemed to refer to and include the Prospectus as most recently amended or supplemented (including by the applicable Prospectus Supplement and any other prospectus supplement specifically referred to in such Prospectus Supplement) in relation to the Securities to be sold pursuant to this Agreement, in the form most recently filed or transmitted for filing with the Commission pursuant to Rule 424(b) under the Securities Act and in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing. The term “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433(h) under the Securities Act, of the Bank relating to the Securities.

Terms not defined in this Agreement have the same meaning given to them in the Prospectus and the Prospectus Supplement.

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1. The Bank represents and warrants to, and agrees with, each Dealer that:

(a) The Bank meets the requirements for use of Form F-3 under the Securities Act; the Registration Statement has been declared effective by the Commission and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission and there are no reports or other information that in accordance with the requirements of the Commission must be made publicly available in connection with the offering of the Securities that have not been made publicly available as required; there are no documents required to be filed with the Commission in connection with the Prospectus that have not been filed as required; there are no contracts, documents or other materials required to be described or referred to in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, referred to or filed or incorporated by reference as required and, in the case of those documents filed, delivered to the Dealers;

(b) No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission;

(c) (i) Each part of the Registration Statement, the Pricing Disclosure Package and the Prospectus conform and, as amended or supplemented as of the date of any Prospectus Supplement and the related settlement date, will conform, in all material respects with the requirements of the Securities Act, Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Trust Indenture Act of 1939 (the “Trust Indenture Act”) and the rules and regulations of the Commission thereunder; (ii) the Registration Statement, when it became effective, and as of the date of this Agreement, did not contain and, as amended or supplemented as of the date of any Prospectus Supplement and the related settlement date, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iii) the Prospectus does not contain and, as amended or supplemented as of the date of any Prospectus Supplement and the related settlement date, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that with respect to clauses (i) through (iii), (1) the foregoing shall not apply to statements in or omissions from any such document in reliance upon, and in conformity with, written information furnished to the Bank by such Dealer expressly for use in the preparation thereof, or (B) those parts of the Registration Statement that constitute the Statements of Eligibility (Forms T-1) under the Trust Indenture Act of the Trustees and (2) the representations and warranties set forth above, when made as of the date of this Agreement, shall be deemed not to cover information concerning an offering of particular Securities;

(d) (i) With respect to any issue of Securities, the “Applicable Time” will be such time on the date of the applicable Terms Agreement as is specified therein as the Applicable Time, and the “Pricing Disclosure Package” will be the Prospectus as amended or supplemented at the Applicable Time together with (A) the information referenced in Schedule II(b) to such Terms Agreement and (B) such other documents, if any, as may be listed in Schedule II(a) to such Terms Agreement, taken together; (ii) with respect to each such issue of Securities, the Pricing Disclosure Package, as of the Applicable Time and as of the settlement date with respect to such issue of Securities, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (iii) with respect to each such issue of Securities, each Issuer Free Writing Prospectus listed in Schedule II(a) to the applicable Terms Agreement, if any, will not conflict (except to the extent that such conflict is a modification of or supersedes previous information) with the information contained in the Registration Statement, the Prospectus or the Prospectus as amended or supplemented and, taken together with the Pricing Disclosure Package as of the Applicable Time, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; provided, however, that the representations and warranties in clauses (ii) and (iii) of this Section 1(c) shall not apply to statements or omissions made in any Pricing Disclosure Package or Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Bank by such Dealer expressly for use therein;

(e) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, or furnished to the Commission and expressly incorporated by reference, as the case may be, complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and

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any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed, or furnished and expressly incorporated by reference, with the Commission, as the case may be, will comply in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder;

(f) The Bank exists as a Schedule I bank under the Bank Act (Canada), and has the requisite corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus as amended or supplemented and is qualified to transact business, except to the extent that the failure to be so qualified would not have a Material Adverse Effect as hereinafter defined;

(g) The Bank is registered as a registered issuer in the registry established by the Canadian Mortgage and Housing Corporation (the “CMHC”) pursuant to Section 21.51 of Part I.1 of the National Housing Act (Canada) (the “Registry”) and the Program is registered in the Registry and the Bank will not request the deregistration of the Bank as a registered issuer in the Registry or the deregistration of the Program in the Registry for so long as the Covered Bonds issued under such Terms Agreement are outstanding;

(h) the Bank and the Guarantor are in compliance in all material respects with all of their respective obligations under Part I.1 of the National Housing Act (Canada) and the Canadian Registered Covered Bond Programs Guide published by the CMHC on June 27, 2013, as amended from time to time (the “Guide”) and the Bank’s right to issue Covered Bonds under the Covered Bond Program is not suspended by the CMHC;

(i) All Securities will be issued by the Bank as a registered issuer under Part I.1 of the National Housing Act (Canada) and the Guide and under a registered covered bond program under Part I.1 of the National Housing Act (Canada) and the Guide;

(j) The Bank is not an “ineligible issuer” in connection with the offering of Securities pursuant to Rule 164 under the Securities Act. Any Issuer Free Writing Prospectus that the Bank is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each Issuer Free Writing Prospectus that the Bank has filed or is required to file, pursuant to Rule 433(d) under the Securities Act complies or will comply, in all material respects, with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder;

(k) Since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented there has not been (i) any material change in the share capital (other than as occasioned by common shares of the Bank having been issued pursuant to the Bank’s employee stock purchase plans, equity incentive option plans or dividend reinvestment plans, as occasioned upon conversion of convertible securities, as occasioned by shares issued in exchange for subsidiary corporation shares or acquisitions, and other than repurchased under the Bank’s normal course issuer bid), or (ii) any material adverse change in or affecting the financial position, shareholders’ equity or results of operations of the Bank and its consolidated subsidiaries considered as an entirety, in each case, otherwise than as set forth or contemplated in the Prospectus and the Registration Statement, each as amended or supplemented (any such change described in clause (ii) is referred to as a “Material Adverse Change”);

(l) This Agreement, the Agency Agreement and the Mortgage Sale Agreement has been authorized, executed and delivered by the Bank;

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(m) The series constituting the Securities has been duly authorized and established in conformity with the Trust Deed and, when issued, the terms of a particular Security and of the issue and sale thereof have been duly authorized and established by all necessary corporate action in conformity with the Trust Deed, and such Security has been duly executed, authenticated and issued in accordance with the Trust Deed, and delivered against payment therefor as contemplated by this Agreement and any applicable Terms Agreement, such Security will have been duly executed, authenticated, issued and delivered and will constitute a valid and legally binding obligation of the Bank entitled to the benefits provided by the Trust Deed, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; the Trust Deed has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by, and constitutes a valid and legally binding obligation of, the Bank, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the Trust Deed conforms and the Securities will conform in all material respects to the descriptions thereof in the Prospectus as amended or supplemented;

(n) The execution and delivery by the Bank of this Agreement, the Trust Deed, the Securities and the issue and sale of the Securities and the compliance by the Bank with all of the provisions of the Securities, the Trust Deed, this Agreement and any Terms Agreement, and the consummation of the transactions herein and therein contemplated, will not result in a violation or breach of any of the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which the Bank is a party or by which the Bank is bound or to which any of the property or assets of the Bank is subject, or result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Bank or any of its properties, except, in each case, for such conflicts, breaches, defaults and violations that would not have a material adverse effect on the business, financial position, shareholders’ equity or results of operations of the Bank and its subsidiaries considered as an entirety (a “Material Adverse Effect”) or affect the validity of the Securities, nor will such action result in any material violation of the provisions of the Bank Act (Canada) or a violation of the by-laws of the Bank; and no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required by the Bank for the issue and sale of the Securities or the consummation by the Bank of the other transactions contemplated by this Agreement, any Terms Agreement or the Trust Deed, except to the extent that the failure to obtain or make such consents, approvals, authorizations, orders, registrations or qualifications would not have a Material Adverse Effect or affect the validity of the Securities, and such consents, approvals, authorizations, orders, registrations or qualifications as have been, or will have been prior to the date of this Agreement, obtained under the Securities Act or the Trust Indenture Act and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws (including insurance laws of any state relating to offers and sales of securities in such state) or under applicable Canadian securities or banking laws in connection with the purchases of the Securities by any Dealer, as the case may be, both in the manner contemplated hereby;

(o) There is no action, suit or proceeding pending or to the knowledge of the executive officers of the Bank threatened against the Bank or any of its subsidiaries, which has, or may reasonably be expected in the future to have, a Material Adverse Effect, except as set forth or contemplated in the Registration Statement and the Prospectus, each as amended or supplemented;

(p) The Bank is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be required to register as an “investment company” under the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder;

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(q) Neither the Bank nor any of its subsidiaries or affiliates, nor any director, officer, or employee, nor, to the Bank’s knowledge, any agent or representative of the Bank or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; and the Bank and its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein;

(r) As of the issue date of any series or tranche (after giving effect to the issue of such Securities and of any other Securities to be issued, and to the redemption of any Securities to be redeemed, on or prior to such issue date), the aggregate principal amount of outstanding Securities issued pursuant to the Registration Statement will not exceed the authorized amount permitted under the Registration Statement and the aggregate principal amount of all outstanding Securities issued will not exceed any limits on the authorized amount of outstanding Securities established by the Office of the Superintendent of Financial Institutions (Canada);

(s) There exists no event or circumstance which is or may with the passing of time, the giving of notice, the making of any determination, or any combination thereof constitute, an Issuer Event of Default in relation to any outstanding Security;

(t) The Bank has not received notice of any litigation or claim calling into question its title to any material portion of the aggregate of the Related Security sold to the Guarantor under the Mortgage Sale Agreement or its rights to assign or declare a trust in respect of any such Related Security to the Guarantor that, if decided for the claimant, would have a material adverse effect on the ability of the Guarantor to satisfy its obligations under the Covered Bond Guarantee;

(u) The operations of the Bank and its subsidiaries are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including, to the extent applicable, those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Bank and its subsidiaries conduct business, the rules and regulations thereunder and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Bank or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the executive officers of the Bank, threatened; and

(v) (i) The Bank represents that neither the Bank nor any of its subsidiaries (collectively, the “Entity”) or, to the knowledge of the Entity, any director, officer, employee, dealer, affiliate or representative of the Entity, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is:

(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the Canadian Government, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor

(B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria).

(ii) The Bank represents and covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person in any manner that, to the knowledge of the Entity, will result in a violation of applicable Sanctions in the jurisdiction in which such activity is carried out by such Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).

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2. Representations and Warranties of the Guarantor. The Guarantor represents and warrants to and agrees with each of the Dealers that:

(a) The Guarantor is a limited partnership established and existing under the Limited Partnerships Act (Ontario), with full power, capacity and authority to own its properties and to conduct business, and is lawfully qualified to do business in those jurisdictions in which business is conducted by it;

(b) The Guarantor has full power and capacity to execute and deliver this Agreement, the Covered Bond Guarantee and the Agency Agreement and to undertake and to perform the obligations expressed to be assumed by it herein and therein, and has taken all necessary corporate or other action to approve and to authorize the same;

(c) This Agreement, the Covered Bond Guarantee and the Agency Agreement have been duly authorized, executed and delivered by the Guarantor and constitute, legal, valid, binding and enforceable obligations of the Guarantor, as to enforcement, bankruptcy, insolvency, reorganization and the laws of general applicability relating to or affecting creditor’s rights and to general equity principles;

(d) All authorizations, consents, approvals, filings, notifications and registrations required by the Guarantor for or in connection with the execution and delivery of this Agreement and the performance by the Guarantor of the obligations expressed to be undertaken by it herein and the distribution of the Prospectus and the relevant Prospectus Supplement have been obtained and are in full force and effect or, as the case may be, have been effected;

(e) The execution and delivery of this Agreement, the Trust Deed, the Covered Bond Guarantee, the Agency Agreement and the consummation of the transactions herein and therein contemplated and compliance with the terms hereof and thereof do not and will not (A) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, the Limited Partnerships Act (Ontario) or any constitutional documents of the Guarantor, the laws of the Province of Ontario, Canada or (B) violate, conflict with or result in a breach of any terms, conditions or provisions, any indenture, trust deed, mortgage or other agreement or note to which the Guarantor is a party or by which it or any of its assets or properties is bound and which would be material in the context of the issue of the Securities, or (C) infringe any existing applicable law, rule, regulation, directive (including any relevant implementing measures), judgment, order or decree of Canada or any political subdivisions of the foregoing having jurisdiction over the Guarantor or its assets or properties that would have an adverse material effect on holders of the Securities;

(f) The documents incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as amended or supplemented, did not, as of their respective issue dates, contain an untrue statement of a material fact with respect to the Guarantor or the Covered Bond Guarantee or omit to state a material fact required to be stated therein with respect to the Guarantor or the Covered Bond Guarantee or necessary to make the statements therein with respect to the Guarantor or the Covered Bond Guarantee, in the light of the circumstances in which they were made, not misleading;

(g) The Guarantor has not engaged in any activities since its formation other than (A) those incidental to any registration as a limited partnership under the Limited Partnerships Act (Ontario); (B) the authorization and execution of the Transaction Documents to which it is a party; (C) the activities referred to or contemplated in the Transaction Documents or in the Pricing Disclosure Package and the Prospectus; or (D) the activities necessary to hold the Portfolio (as defined in the applicable Prospectus Supplement) and its other assets in accordance with the terms of the Transaction Documents;

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(h) Other than as set out in any of the Transaction Documents there exists no mortgage, lien, pledge or other charge or security interest on or over its assets and other than the Transaction Documents, it has not entered into any other material indenture or trust deed;

(i) There exists no event or circumstance which is or may with the passing of time, the giving of notice, the making of any determination, or any combination thereof constitute, an Guarantor Event of Default (as defined in the Terms and Conditions) in relation to any outstanding Security;

(j) Subject to the laws of bankruptcy and other laws affecting the rights of creditors generally, its obligations under the Covered Bond Guarantee and the Transaction Documents to which it is a party will be secured in the manner provided in the Security Agreement;

(k) The Guarantor is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Pricing Disclosure Package and the Prospectus, will not be, required to register as an “investment company” as such term is defined in the U.S. Investment Company Act of 1940, as amended; and

(l) There is no action, suit, proceeding, inquiry or investigation before or brought by any court or any federal, provincial, state, municipal or other governmental department, commission, board, agency or body, domestic or foreign, now pending, or, to the knowledge of the Guarantor, threatened against or affecting the Guarantor or any of its subsidiaries (i) other than proceedings described in the Pricing Disclosure Package and proceedings that would not have a Material Adverse Effect or a material adverse effect on the power or ability of the Guarantor to perform its obligations under this Agreement, the Trust Deed or the Securities or to consummate the transactions contemplated by the Pricing Disclosure Package or (ii) that is required to be described in the Registration Statement or the Prospectus and is not so described.

3. (a) On the basis of the representations and warranties, and subject to the terms and conditions, herein set forth, each of the Dealers hereby severally and not jointly agrees to use its reasonable efforts to solicit and receive offers to purchase the Securities upon the terms and conditions set forth herein, in the Prospectus as amended or supplemented from time to time and in any applicable Prospectus Supplement [or Term Sheet].

The Bank reserves the right, in its sole discretion, to instruct the Dealers to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase the Securities. Upon receipt of instructions from the Bank, the Dealers will forthwith suspend solicitation of offers to purchase Securities from the Bank until such time as the Bank has advised the Dealers that such solicitation may be resumed. During such time as the solicitation of offers to purchase the Securities shall be suspended, the Bank shall not be required to comply with the provisions of Sections 5(e), 5(f) and 5(g).

As Dealers, you are authorized to solicit offers to purchase the Securities only in accordance with applicable securities laws, and in authorized denominations as set forth in the Prospectus at a purchase price equal to 100% of their principal amount unless otherwise indicated on the applicable Term Sheet, if any, and Prospectus Supplement.

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(b) Unless the Bank and the Dealers otherwise agree, each sale of Securities to any Dealer shall be made in accordance with the terms of this Agreement and, unless the Bank and such Dealer shall otherwise agree, a Terms Agreement which will provide for the sale of such Securities to, and the purchase thereof by, such Dealer. A Terms Agreement may also specify certain provisions relating to the reoffering of such Securities by such Dealer. Unless the Bank and such Dealer shall otherwise agree, the commitment of any Dealer to purchase Securities pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties, and subject to the terms and conditions, herein set forth. Each Terms Agreement shall include a specification of the principal amount of Securities to be purchased by any Dealer pursuant thereto, the price to be paid to the Bank for such Securities, any commissions to be paid to the Dealers, the currency in which such Securities are to be denominated, any provisions relating to rights of, and default by, any additional underwriters acting together with such Dealer in the reoffering of the Securities, and the time (each, a “Time of Delivery”) and place of delivery of and payment for such Securities. Such Terms Agreement shall also specify any requirements for officers’ certificates, opinions of counsel and accountants’ letters pursuant to Section 6 hereof.

(c) Each Dealer severally agrees, with respect to any Security denominated in a currency other than U.S. dollars, as dealer, directly or indirectly, not to solicit offers to purchase, and as a principal under any Terms Agreement or otherwise, directly or indirectly, not to offer, sell or deliver, such Security in, or to residents of, the country issuing such currency (or if such Security is denominated in euros, not to residents of the 12 member states of the European Monetary Union; or if such Security is denominated in a composite currency, not to residents in any country issuing a currency comprising a portion of such composite currency), except, in each case, as permitted by applicable law.

(d) Each Dealer severally represents and agrees with the Bank that it will comply with or observe any restrictions or limitations set forth in the Prospectus as amended or supplemented on persons to whom, or the jurisdictions or manner in which, the Securities may be offered, sold, resold or delivered.

(e) Each Dealer severally represents and agrees with the Bank that it will promptly advise the Bank upon the completion of the distribution of any offering of Securities.

4. Any documents required to be delivered pursuant to Section 9 hereof shall be made available to the Dealers and their counsel at the office of the Bank’s counsel, Allen & Overy LLP, 1221 Avenue of the Americas, New York, New York 10020, and copies of such documents, other than documents delivered pursuant to Section 9(b), shall be made available to the Dealers and their counsel electronically.

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5. Each of the Bank and the Guarantor covenants and agrees with each Dealer:

(a) (i) To make no amendment or supplement (other than an amendment or supplement as a result of the Bank’s filing of a report under the Exchange Act) to the Registration Statement, the Pricing Disclosure Package or the Prospectus after the date of any Terms Agreement and prior to the related Time of Delivery unless approved by any Dealer party to such Terms Agreement promptly after reasonable notice thereof; (ii) to prepare, with respect to a particular offering of Securities to be sold by the Bank through or to such Dealer pursuant to this Agreement, a Prospectus Supplement and, if requested by such Dealer and agreed to by the Bank prior to the Applicable Time, to prepare an Issuer Free Writing Prospectus that is a final term sheet relating to such Securities in the form set forth in Annex II hereto (each, a “Term Sheet”), with respect to such Securities in a form previously approved by such Dealer and to file such final Prospectus Supplement or Term Sheet pursuant to Rule 424(b) or Rule 433(d) under the Securities Act within the time required by such rule; (iii) to make no amendment or supplement to the Registration Statement, the Pricing Disclosure Package or the Prospectus other than any Term Sheet or Prospectus Supplement (and other than an amendment or supplement as a result of filings by the Bank under the Exchange Act and other than the filing of prospectuses, preliminary prospectuses, preliminary prospectus supplements, free-writing prospectuses and other documents pursuant to Rule 424(b) or Rule 433 under the Securities Act relating to securities other than the Securities purchased through or by such Dealer), at any other time prior to having afforded each Dealer a reasonable opportunity to review it; (iv) to file such term sheet pursuant to Rule 433(d) under the Securities Act within the time required by such rule; and (v) to file promptly all other material required to be filed by the Bank with the Commission pursuant to Rule 433(d) under the Securities Act; to file promptly all reports and any definitive proxy or information statements required to be filed by the Bank with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities, and during such same period to advise such Dealer, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus or to the Pricing Disclosure Package has been filed with, or transmitted for filing to, the Commission (other than an amendment or supplement as a result of filings by the Bank under the Exchange Act and other than the filing of prospectuses, preliminary prospectuses, preliminary prospectus supplements, free-writing prospectuses and other documents pursuant to Rule 424(b) or Rule 433 under the Securities Act relating to securities other than the Securities purchased through or by such Dealer), of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement, Pricing Disclosure Package or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any such prospectus or suspending any such qualification, to use promptly its commercially reasonable efforts to obtain its withdrawal;

(b) To furnish such Dealer with copies of the Registration Statement and each amendment thereto, and with copies of the Prospectus as each is amended or supplemented, other than any Prospectus Supplement or Term Sheet or amendment or supplement relating solely to an offering of securities other than the Securities, in the form in which it is filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act, both in such quantities as such Dealer may reasonably request from time to time; and, if the delivery of a prospectus is required in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the

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light of the circumstances under which they were made, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act, the Exchange Act or the Trust Indenture Act, to notify such Dealer as promptly as practicable and request such Dealer to suspend solicitation of offers to purchase Securities and, if so notified, such Dealer shall forthwith cease such solicitations; and if the Bank shall decide to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to so advise such Dealer promptly by telephone (with confirmation in writing) and to prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance; provided, however, that if during such same period such Dealer continues to own Securities purchased from the Bank by such Dealer as principal which such Dealer proposes to sell, upon the reasonable request of such Dealer, the Bank shall promptly prepare and file with the Commission such an amendment or supplement, the expense of such preparation and filing to be borne by the Bank;

(c) That, from the date of any Terms Agreement with such Dealer and continuing to and including the related Time of Delivery, the Bank will not, without the prior consent (such consent not to be unreasonably withheld or delayed) of such Dealer, offer, sell, contract to sell or otherwise dispose of any debt securities of the Bank that (i) mature more than one year after such Time of Delivery, (ii) have the same maturity, and (iii) are otherwise substantially similar to the Securities. The restriction imposed by this Section 5(c) shall not apply to (i) any issue of debt securities denominated in a currency other than U.S. dollars, (ii) an issue of debt securities of which at least 90% (based on gross offering proceeds) is offered and sold outside the United States, or (iii) guarantees by the Bank of debt securities of its subsidiaries;

(d) That each acceptance by the Bank of an offer to purchase Securities hereunder, and each sale of Securities to such Dealer pursuant to a Terms Agreement, shall be deemed to be an affirmation to such Dealer that the representations and warranties of the Bank contained in or made pursuant to this Agreement are true and correct in all material respects as of the date of such acceptance or of such Terms Agreement as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented at such time);

(e) That each time the Registration Statement or the Prospectus shall be amended or supplemented as a result of the filing by the Bank of its annual report pursuant to Section 13(a) or 15(d) of the Exchange Act, and each time, if so indicated in the applicable Terms Agreement, the Bank sells Securities to such Dealer as principal, the Bank shall furnish or cause to be furnished (as promptly as reasonably practicable in the case of any such amendment or supplement) to such Dealer, upon its request, a certificate of an officer of the Bank, in his or her capacity as an officer of the Bank, dated the date of such supplement, amendment or Time of Delivery related to such sale, in form satisfactory to such Dealer in its reasonable judgment to the effect that the statements contained in the certificate referred to in Section 9(f) hereof which was last furnished to such Dealer are true and correct, in all material respects, at such date, as though made at and as of such date (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus each as amended and supplemented to such time) or, in lieu of such certificate, certificates of the same tenor as the certificates referred to in said Section 9(f) but modified to relate to the Registration Statement and the Prospectus each as amended and supplemented to such date;

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(f) That each time the Registration Statement or the Prospectus shall be amended or supplemented as a result of the filing by the Bank of its annual report pursuant to Section 13(a) or 15(d) of the Exchange Act, and each time, if so indicated in the applicable Terms Agreement, the Bank sells Securities to such Dealer as principal, the Bank shall furnish or cause to be furnished (as promptly as reasonably practicable in the case of any such amendment or supplement) to such Dealer, upon its request, a written opinion and letter of Sullivan & Cromwell LLP/Allen & Overy LLP, United States counsel for the Bank, and a written opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Bank, or, in either case, other counsel satisfactory to such Dealer in its reasonable judgment, dated the date of such amendment, supplement or Time of Delivery relating to such sale, each in form satisfactory to such Dealer in its reasonable judgment, to the effect that such Dealer may rely on the opinion and letter referred to in Section 9(c) or the opinion referred to in Section 9(d) hereof, as the case may be, which was last furnished to such Dealer to the same extent as though it were dated the date of such letter authorizing reliance (except that statements in such last opinion or letter shall be deemed to relate to the Registration Statement and the Prospectus each as amended and supplemented to such date) or, in lieu of either such opinion, an opinion and letter of the same tenor as the opinion and letter referred to in Section 9(c) or an opinion of the same tenor as the opinion referred to in Section 9(d) hereof, as the case may be, but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date;

(g) That each time the Registration Statement or the Prospectus shall be amended or supplemented as a result of the filing by the Bank of its annual report pursuant to Section 13(a) or 15(d) of the Exchange Act to set forth financial information included in or derived from the Bank’s consolidated financial statements, and each time, if so indicated in the applicable Terms Agreement, the Bank sells Securities to such Dealer as principal, the Bank shall cause its independent registered public accounting firm to furnish (as promptly as reasonably practicable in the case of any such amendment or supplement) to such Dealer, upon its request, a letter, dated a date which is as soon as reasonably practicable after the date of such amendment or supplement, or a letter, dated the Time of Delivery relating to such sale, in either case in form satisfactory to such Dealer in its reasonable judgment, of the same tenor as the letter referred to in Section 9(e) hereof but modified to relate to the Registration Statement and the Prospectus as amended or supplemented to the date of such amendment or supplement or Terms Agreement and Time of Delivery, as the case may be, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Bank, to the extent such financial statements and other information are available as of a date not more than five business days prior to the date of such letter; and

(h) To consider any request by the Dealers to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Dealers shall reasonably request.

6. (a) The Bank and each Dealer agree that the Bank will prepare and use one or more preliminary prospectus supplements or final prospectus supplements relating to the Securities containing customary information; provided that such information has been approved by the Dealers in writing before the first communication containing such information is used;

(b) Each Dealer severally represents that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell the Securities other than (A) any written communication permitted under subparagraph (a) above, (B) any Term Sheet or (C) any written communication prepared by such Dealer and approved by the Bank in advance in writing;

(c) Except in the case of Securities sold directly by the Bank, with respect to any particular issuance of Securities, the Bank represents to the Dealer purchasing

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such Securities that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell such Securities other than (A) any written communication permitted under subparagraph (a) above, (B) any Term Sheet or (C) any written communication approved by such Dealer in advance in writing;

(d) The Bank represents and agrees that it has complied and, in connection with any issuance of securities, will comply with the requirements of Rule 433 under the Securities Act applicable to any Issuer Free Writing Prospectus related to such issuance, including timely filing with the Commission where required, legending and record keeping, and neither the Bank nor any Dealer, without the written consent of the Bank or each relevant Dealer, as the case may be, will take any action that would result in the Bank or any Dealer, as the case may be, being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a Free Writing Prospectus that would not otherwise have been required to be filed thereunder. Except for the Issuer Free Writing Prospectuses, if any, identified in a schedule to the applicable Terms Agreement forming part of the Pricing Disclosure Package, and electronic road shows, if any, each furnished to the Dealers before first use, the Bank has not used or referred to, and will not, without the prior written consent of the Dealers (such consent not to be unreasonably withheld), use or refer to, any free writing prospectus;

(e) With respect to any issue of Securities, the Bank agrees that if at any time following the relevant Applicable Time until and including the related Time of Delivery any event occurred or occurs as a result of which an Issuer Free Writing Prospectus included in the relevant Pricing Disclosure Package would conflict (except to the extent that such conflict is a modification of or supersedes previous information) with the information in the Registration Statement, when it became effective, and as of the date of this Agreement, did not contain and, as amended or supplemented as of the date of any Prospectus Supplement and the related settlement date, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; the Prospectus, the Prospectus as amended or supplemented or the Prospectus Supplement or, taken together with the relevant Pricing Disclosure Package, would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (i) the Bank will give prompt notice thereof to the relevant Dealers and, (ii) if requested by such Dealers, and the Bank agrees, acting reasonably, will prepare and furnish without charge to each Dealer an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this Section 6(e) shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Bank by the Dealer or Dealers making such request expressly for use therein;

(f) Each Dealer severally covenants and agrees with the Bank that each acceptance by such Dealer of an offer to purchase Securities hereunder, and each sale of Securities from the Bank to such Dealer pursuant to a Terms Agreement, shall be deemed to be an affirmation to the Bank that the representations and warranties of such Dealer contained in or made pursuant to this Agreement are true and correct in all material respects as of the date of such acceptance or of such Terms Agreement as though made at and as of such time; and

(g) Each Dealer severally represents and agrees that:

(i) it will only sell Securities in accordance with the terms and conditions set forth in this Agreement, any applicable Terms Agreement and the Pricing Disclosure Package;

(ii) it will comply with all applicable laws and regulations in force in any jurisdiction in which it purchases, offers or sells Securities or possesses or distributes the Prospectus as amended or supplemented, any Prospectus Supplement, any Term Sheet or any Issuer Free Writing Prospectus and will obtain any consent, approval or permission required by it for the purchase, offer or sale by it of Securities under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers or sales and the Bank shall have no responsibility in relation to this;

(iii) it will not offer or sell any Securities purchased by it, directly or indirectly, in Canada or to any resident of Canada without the consent of the Bank, and further agrees that it will include a comparable provision in any sub-underwriting, banking group or selling group agreement or similar arrangement with respect to any Securities that may be entered into by such Dealer; and

(iv) it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any free writing prospectus, as defined in Rule 405 under the Act (which term includes use of any written information furnished to the Commission by the Bank and not incorporated by reference into the Registration Statement and any press release issued by the Bank) other than any Issuer Free Writing Prospectus.

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7. The Bank covenants and agrees with each Dealer that the Bank will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Bank’s counsel and accountants in connection with the registration of the Securities under the Securities Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, the Prospectus, any Term Sheet, any Issuer Free Writing Prospectus and any Prospectus Supplements and all other amendments and supplements thereto and the mailing and delivering of copies thereof to such Dealer; (ii) the reasonable fees and expenses of counsel for the Dealers in connection with the transactions contemplated hereunder; (iii) the cost of printing, word-processing or reproducing this Agreement, the Registration Statement, any Preliminary Prospectus, the Prospectus, the Pricing Disclosure Package, any Issuer Free Writing Prospectus, any Terms Sheet and any Prospectus Supplements, any Trust Deed, any Blue Sky and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iv) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(h) hereof, including fees and disbursements of the Bank’s counsel and reasonable fees and disbursements of Dealer’s counsel in connection with such qualification and in connection with the Blue Sky and legal investment surveys and all filing fees incurred in connection with the review and qualification of the offering of the Securities by the Financial Industry Regulatory Authority; (v) any fees charged by security rating services for rating the Securities; (vi) the cost of preparing the Securities; (vii) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Trust Deed and the Securities; (viii) any advertising expenses connected with the sale of Securities so long as such advertising expenses have been pre-approved by the Bank; (ix) the costs and expenses of the Bank relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Bank, travel and lodging expenses of the representatives and officers of the Bank and any such consultants, and the cost of any aircraft chartered in connection with the road show; (x) all reasonable costs and expenses related to the transfer and delivery of the Securities to the Dealers, including any transfer or other similar taxes payable thereon; and (xi) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. Each Dealer shall pay all other fees and expenses it incurs.

8. The obligation of any Dealer hereunder shall be subject, in such Dealer’s reasonable discretion, to the condition that all representations and warranties and other statements of the Bank herein are true and correct, in all material respects, at and as of the date of this Agreement and to the condition that the Bank shall have performed, in all material respects, all of its obligations hereunder theretofore in each case to be performed and to the following additional conditions:

(a) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission or, to the knowledge of the executive officers of the Bank, shall be contemplated by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of such Dealer;

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(b) Such Dealer shall have received, upon its request, from Shearman & Sterling LLP/Morrison & Foerster LLP, United States counsel to the Dealers, or other counsel satisfactory to such Dealer in its reasonable judgment, such opinion and letter, dated the date of this Agreement, with respect to the validity of the Trust Deed and the Securities, matters related to the Registration Statement and the Prospectus, as amended or supplemented, and such other matters as such Dealer may request in its reasonable judgment, and the Bank shall have furnished to such counsel such documents as such counsel requests in its reasonable judgment for the purpose of enabling such counsel to pass upon such matters;

(c) Such Dealer shall have received an opinion and letter of Sullivan & Cromwell LLP/Allen & Overy LLP, United States counsel for the Bank, or other counsel satisfactory to such Dealer in its reasonable judgment, dated the date of this Agreement;

(d) Such Dealer shall have received an opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Bank, or other counsel satisfactory to such Dealer in its reasonable judgment, dated the date of this Agreement;

(e) On the date of this Agreement, the independent registered public accounting firm who have audited the financial statements of the Bank and its subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus shall have furnished to such Dealer a letter, dated such applicable date, in form and substance satisfactory to such Dealer;

(f) The Bank shall have furnished or caused to be furnished to such Dealer a certificate of any Vice Chairman, any Executive or Senior Vice President, any Executive Managing Director or any Vice President or any principal financial or accounting officer of the Bank, dated the date of this Agreement, in which such officer, in his or her capacity as such, to the best of his or her knowledge after reasonable investigation, shall state that the representations and warranties of the Bank in this Agreement are true and correct, in all material respects, as of such applicable date, that the Bank has complied with all agreements and satisfied all conditions on its part to be performed or satisfied, in all material respects, at or prior to such applicable date, that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission, and that, since the respective dates as of which information is given in the Registration Statement and the Prospectus, as amended or supplemented, there has not been any Material Adverse Change, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus, as amended or supplemented; and

(g) Such Dealer shall have received evidence that the Bank is registered as a registered issuer in the Registry and the Program is registered in the Registry and the Bank’s right to issue Covered Bonds under the Program is not suspended by the CMHC.

9. (a) The Bank will indemnify and hold harmless each Dealer and each person, if any, who controls any of the Dealers within the meaning of the Securities Act, against any losses (other than loss of profits), claims, damages or liabilities, joint or several, to which such Dealer or such controlling person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements, in light of the circumstances under which they were made, therein not misleading, and will reimburse such Dealer and such controlling person for any legal or other expenses reasonably incurred by it in connection with

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investigating or defending any such action or claim, as incurred; provided, however, that the Bank will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Bank by such Dealer expressly for use therein.

(b) Each Dealer, severally and not jointly, will indemnify and hold harmless the Bank and each person, if any, who controls the Bank within the meaning of the Securities Act, against any losses, claims, damages or liabilities to which the Bank or such controlling person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Bank by such Dealer expressly for use therein; and will reimburse the Bank for any legal or other expenses reasonably incurred by the Bank or such controlling person in connection with investigating or defending any such action or claim, as incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided, however, that the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would, in the judgment of counsel, be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties. Such firm shall be designated in writing by the Dealers in the case of parties indemnified pursuant to Section 10(a) and by the Bank in the case of parties indemnified pursuant to Section 10(b). The indemnifying party shall not be liable for any settlement of any

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proceeding affected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which such consent shall not be unreasonably conditioned, delayed or withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is an actual or potential party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes (x) no admission of culpability of such indemnified party and (y) an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

(d) If the indemnification provided for in this Section 10 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses (other than loss of profits), claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Bank on the one hand and each Dealer on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Bank on the one hand and each Dealer on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Bank on the one hand and each Dealer on the other shall be deemed to be in the same proportion as the total net proceeds from the sale of Securities (before deducting expenses) received by the Bank bear to the total commissions or discounts received by such Dealer in respect thereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information supplied by the Bank on the one hand or by any Dealer on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Bank and each Dealer agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), a Dealer shall not be required to contribute any amount in excess of the amount by which total commissions or discounts received by such Dealer in respect thereof exceeds the amount of any damages which such Dealer has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) or found to be grossly negligent by a court of competent jurisdiction shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e) The obligations of the Bank under this Section 10 shall be in addition to any liability which the Bank may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Dealer within the meaning of the Securities Act; and the obligations of each Dealer under this Section 10 shall be in addition to any liability which such Dealer may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Bank and to each person, if any, who controls the Bank within the meaning of the Securities Act.

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10. The respective indemnities, agreements, representations, warranties, and other statements by any Dealer and the Bank or its officers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation or statement as to the results thereof made by or on behalf of any Dealer or the Bank or any of its officers or directors or any controlling person, and will survive each delivery of and payment for any of the Securities.

11. (a) The provisions of this Agreement relating to the purchase the Securities from the Bank may be suspended or terminated at any time by the Bank as to any Dealer or by any Dealer as to such Dealer upon the giving of written notice of such suspension or termination to such Dealer or the Bank, as the case may be. In the event of any such suspension or termination, with respect to any Dealer, this Agreement shall remain in full force and effect with respect to any Dealer as to which such suspension or termination has not occurred and no party shall have any liability to the other party hereto, except as provided in the third paragraph of Section 4(a), Section 8, Section 10, and Section 11 and except that, if at the time of such suspension or termination, an offer for the purchase of Securities shall have been accepted by the Bank but the delivery of the Securities relating thereto to the purchaser or his dealer shall not yet have occurred, the Bank shall have the obligations provided in subsections (e), (f) and (g) of Section 6.

(b) The Bank, in its sole discretion, may appoint one or more additional parties to act as Dealers hereunder from time to time. Any such appointment shall be made in a writing signed by the Bank and the party so appointed. Such appointment shall become effective in accordance with its terms after the execution and delivery of such writing by the Bank and such other party. When such appointment is effective, such other party shall be deemed to be one of the Dealers referred to in, and to have the rights and obligations of a Dealer under, this Agreement, subject to the terms and conditions of such appointment.

(c) The Bank and any Dealer may amend, eliminate or otherwise change any provision of this Agreement with respect to such Dealer without consent of, or notice to, any other Dealer. Any such amendment, elimination or change shall be made in a writing signed by the Bank and each Dealer that is a party to such amendment, elimination or change. In the event of such amendment, elimination or change, this Agreement shall remain in full force and effect with respect to any Dealer that is not a party to such amendment, elimination or change (without giving effect to such amendment, elimination or change with respect to such Dealer) unless suspended or terminated with respect to such Dealer pursuant to clause (a) of this Section 11.

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12. The following terms shall apply to any Terms Agreement if provided for therein:

(a) If any Dealer shall default in its obligation to purchase the Securities which it has agreed to purchase pursuant to such Terms Agreement, the representatives, if any, named in such Terms Agreement may in their discretion arrange for the representatives or another party or parties to purchase such Securities on the terms provided by such Terms Agreement. If within thirty-six hours after such default by any Dealer the representatives do not arrange for the purchase of such Securities, then the Bank shall be entitled to a further period of thirty-six hours within which to procure another party or parties satisfactory to the representatives to purchase such Securities on such terms.

(b) In the event that, within the respective prescribed periods, the representatives notify the Bank that they have so arranged for the purchase of such Securities, or the Bank notifies the representatives that it has so arranged for the purchase of such Securities, the representatives or the Bank shall have the right to postpone the Time of Delivery for a period of not more than seven calendar days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Bank agrees to file promptly any amendments or supplements to the Registration Statement, the Pricing Disclosure Package or the Prospectus which in the representatives’ opinion may thereby be made necessary. The term “Dealer” as used with respect to such Terms Agreement shall include any person substituted under this Section 13 (if applicable) with like effect as if such person had originally been a party to such Terms Agreement.

(c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Dealer or Dealers by the representatives and the Bank as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities covered by such Terms Agreement, then the Bank shall have the right to require each non-defaulting Dealer which is a party to that Terms Agreement to purchase the principal amount of Securities which such Dealer agreed to purchase pursuant to such Terms Agreement and, in addition, to require each non-defaulting Dealer which is a party to that Terms Agreement to purchase its pro rata share (based on the principal amount of Securities which such Dealer agreed to purchase pursuant to such Terms Agreement) of the Securities of such defaulting Dealer or Dealers for which such arrangements have not been made; provided, however, that nothing in this Section 13(c) shall relieve a defaulting Dealer from liability for its default.

(d) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Dealer or Dealers by the Dealers and the Bank as provided in subsection (a) above, the aggregate principal amount of Securities pursuant to such Terms Agreement which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities covered by such Terms Agreement, or if the Bank shall not exercise the right described in subsection (c) above to require non-defaulting Dealers to purchase Securities of a defaulting Dealer or Dealers, then such Terms Agreement shall thereupon terminate, without liability on the part of any non-defaulting Dealer or the Bank, except for the expenses to be borne by the Bank and the Dealers as provided in Section 8 hereof incorporated therein by reference and the indemnity and contribution agreement in Section 10 hereof incorporated therein by reference; provided, however, that nothing in this Section 13(d) shall relieve a defaulting Dealer from liability for its default.

13. Except as otherwise specifically provided herein, all statements, requests, notices and advices hereunder shall be in writing, or by telephone if promptly confirmed in writing, and if to a Dealer, shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail as set forth in Annex III hereto under such Dealer’s name, and if to the Bank shall be sufficient in all respects when delivered or sent by registered mail to Bank of Montreal, 100

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King Street West, 1 First Canadian Place, 18th Floor, Toronto, Ontario, Canada M5X 1A1, Facsimile Transmission: (416) 867-7193, Attention: Senior Vice-President, Financial Strategy, with a copy to Osler, Hoskin & Harcourt LLP, 100 King Street West, Suite 6600, Toronto, Ontario, Canada M5X 1B8, Facsimile Transmission: (416) 862-6666, Attention: Richard Fullerton.

14. This Agreement and any Terms Agreement shall be binding upon, and inure solely to the benefit of, each Dealer (or the applicable Dealer, in the case of a Terms Agreement) and the Bank, and to the extent provided in Section 10 and Section 11 hereof, the officers and directors of the Bank and any person who controls any Dealer or the Bank and an affiliate of a Dealer, and their respective personal representatives, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any Terms Agreement. No purchaser of any of the Securities through or from any Dealer hereunder shall be deemed a successor or assign by reason of such purchase.

15. The Bank acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement and any Terms Agreement is an arm’s-length commercial transaction between the Bank, on the one hand, and the Dealers, on the other, (ii) in connection therewith and with the process leading to such transaction each Dealer is acting solely as a principal and not the agent or fiduciary of the Bank, (iii) no Dealer has assumed an advisory or fiduciary responsibility in favor of the Bank with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Dealer has advised or is currently advising the Bank on other matters) or any other obligation to the Bank except the obligations expressly set forth in this Agreement, (iv) the Dealer may have interests that differ from the interests of the Bank and (v) the Bank has consulted its own legal and financial advisors to the extent it deemed appropriate. The Bank agrees that it will not claim that the Dealer, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Bank, in connection with such transaction or the process leading thereto.

16. This Agreement and any Terms Agreement supersede all prior agreements and understandings (whether written or oral) between the Bank and the Dealers, or any of them, with respect to the subject matter hereof.

17. This Agreement shall be governed by, and construed and enforced in accordance with the laws of the State of New York, without regard to principles of conflicts of laws other than the New York General Obligations Law Sections 5-1401 and 5-1402.

18. The Bank irrevocably (i) agrees that any legal suit, action or proceeding against the Bank brought by any Dealer or by any person who controls any Dealer arising out of or based upon this Agreement or any Terms Agreement may be instituted in any state or federal court in The City of New York (a “New York Court”), (ii) waives, to the fullest extent it may effectively do so, any objection that it may now or hereafter have to the laying of venue of any such proceeding, and (iii) submits to the jurisdiction of such courts in any such suit, action or proceeding. The Bank irrevocably waives any immunity to jurisdiction to which it may otherwise be entitled or become entitled (including immunity to pre-judgment attachment, post-judgment attachment and execution) in any legal suit, action or proceeding against it arising out of or based on this Agreement or any Terms Agreement or the transactions contemplated hereby and thereby that is instituted in any New York Court. The Bank has appointed BMO Capital Markets Corp., 3 Times Square, 28th Floor, New York, New York 10036 (Attention: Secretary), as its authorized agent (the “Authorized Agent”) upon which process may be served in any such action arising out of or based on this Agreement or any Terms Agreement that may be instituted in any New York Court by any Dealer or by any person who controls any Dealer, expressly consents to the jurisdiction of any such court in respect of any such action. The Bank represents and warrants that the Authorized Agent has agreed to act as such agent for service of process and agrees to take any and all action, including the filing of any and all documents and instruments, which may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and

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written notice of such service to the Bank shall be deemed, in every respect, effective service of process upon the Bank. Notwithstanding the foregoing, neither the Bank’s appointment of the Authorized Agent as its agent for service of process nor its consent to the jurisdiction of any New York Court and waiver of any defenses or objections thereto provided in this Section 19 shall apply to any legal action, suit or proceeding arising out of or based upon United States federal securities laws.

19. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be the rate at which, in accordance with normal banking procedures, the relevant Dealers could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Bank with respect to any sum due from it to any Dealer or any person controlling any Dealer shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Dealer or controlling person of any sum in such other currency, and only to the extent that such Dealer or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Dealer or controlling person hereunder, the Bank agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Dealer or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Dealer or controlling person hereunder, such Dealer or controlling person agrees to pay to the Bank an amount equal to the excess of the dollars so purchased over the sum originally due to such Dealer or controlling person hereunder.

20. Time shall be of the essence in this Agreement and any Terms Agreement. As used herein, “business day” shall mean any day other than a day when the Commission’s office in Washington, D.C. is not open for business or banking institutions are authorized or obligated by law or executive order to close in The City of New York or Toronto, Ontario.

21. This Agreement and any Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all of such respective counterparts shall together constitute one and the same instrument.

22. Notwithstanding anything herein to the contrary, the Bank is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of any potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Bank relating to that treatment and structure, without any Dealer imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to the U.S. federal and state income tax treatment of the potential transaction.

23. Waiver of Jury Trial

EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH PARTY HERETO CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.

24. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Dealers are required to obtain, verify and record information that identifies their respective clients, including the Bank, which information may include the name and address of their respective clients, as well as other information that will allow the Dealers to properly identify their respective clients.

If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, whereupon this letter and the acceptance by each of you thereof shall constitute a binding agreement between the Bank and each of you in accordance with its terms.

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Very truly yours,
BANK OF MONTREAL
By:
	Name:
	Title:

Very truly yours,
BMO Covered Bond Guarantor Limited Partnership
By:
	Name:
	Title:

Accepted in New York, New York
BMO CAPITAL MARKETS CORP.
By:
	Name:
	Title:

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ANNEX I

Bank of Montreal

unconditionally and irrevocably guaranteed by

BMO Covered Bond Guarantor Limited Partnership

Covered Bonds

up to an aggregate initial offering price of U.S.$10,000,000,000

or the equivalent thereof in other currencies under the global registered covered bond program

Terms Agreement

[Date]

[Name(s) and Address(es) of Dealer(s)]

Ladies and Gentlemen:

Bank of Montreal (the “Bank”) proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated [ ], 2013, among the Bank, the Guarantor and [Name(s) of Dealer(s)] (individually, an “Dealer” and, together the “Dealers”) (the “Underwriting Agreement”) and the additional dealers listed in Schedule I hereto represented by the Dealers (the “Representatives,” and collectively with the Dealers, the “Dealers”), to issue and sell to the Dealers the securities specified in Schedule II hereto (the “Purchased Securities”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Unless otherwise defined herein, all terms used herein have the meanings given to them in the Underwriting Agreement.

Nothing contained herein or in the Underwriting Agreement shall make any party hereto an agent of the Bank or make such party subject to the provisions therein relating to the solicitation of offers to purchase Securities from the Bank, solely by virtue of its execution of this Terms Agreement. Each of the representations and warranties set forth in the Underwriting Agreement shall be deemed to have been made at and as of the date of this Terms Agreement, except that each representation and warranty in Section 1 of the Underwriting Agreement which makes reference to the Registration Statement, the Pricing Disclosure Package or the Prospectus shall be deemed to be a representation and warranty as of the date of the Underwriting Agreement in relation to the Registration Statement, the Pricing Disclosure Package or the Prospectus (each as therein defined), and also a representation and warranty as of the date of this Terms Agreement and as of the Time of Delivery for the Purchased Securities, in each case, in relation to the Registration Statement, the Pricing Disclosure Package or the Prospectus as amended and supplemented in relation to the Purchased Securities.

An amendment to the Registration Statement, or a supplement to the Prospectus, or a Term Sheet, as the case may be, relating to the Purchased Securities, in the form heretofore delivered to you, is now proposed to be filed with the Commission.

Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Bank agrees to issue and sell to the Dealers and the Dealers agree to purchase from the Bank the Purchased Securities, at the time and place, in the principal amount and at the purchase price set forth in Schedule II hereto. The obligation of any Dealer to purchase Securities as principal pursuant to this Terms Agreement shall be subject, in such Dealer’s reasonable discretion, to the condition that each representation and warranty in Section 1 of the Underwriting Agreement which makes reference to the Registration Statement, the Pricing Disclosure Package or the Prospectus are true and correct, in all material respects, as of the date of this Terms Agreement in relation to the Registration

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Statement, the Pricing Disclosure Package or the Prospectus as amended and supplemented in relation to the Purchased Securities and the settlement date hereunder, and to the condition that the Bank shall have performed, in all material respects, all of its obligations under the Underwriting Agreement theretofore in each case to be performed and to the following additional conditions:

At the Time of Delivery for the Purchased Securities, there shall not have been any Material Adverse Change, otherwise than as set forth or contemplated in the Pricing Disclosure Package, since the respective dates as of which information is given in the Registration Statement and the Prospectus, as amended or supplemented in relation to the Purchased Securities, the effect of which, in the reasonable judgment of the Dealers, is so material and adverse as to make it impracticable or inadvisable to proceed with the purchase and public offering of the Purchased Securities by the Dealers, on the terms and in the manner contemplated in the Pricing Disclosure Package, as amended or supplemented.

The Dealers may terminate this Terms Agreement by notice given to the Bank, if after the execution and delivery of this Terms Agreement and prior to the Time of Delivery for the Purchased Securities: (i) there shall have occurred any suspension or material limitation in trading in securities generally on the New York Stock Exchange or the Toronto Stock Exchange if the effect of any such event, in the reasonable judgment of the Dealers, makes it impracticable or inadvisable to proceed with the purchase and public offering by the Dealers of the Purchased Securities; (ii) a general moratorium on commercial banking activities in New York is declared by either Federal or New York State authorities or in Toronto is declared either by federal or provincial authorities; (iii) there shall have occurred any outbreak or escalation of hostilities or any calamity or crisis involving the United States or Canada or there shall have been any declaration by the United States or Canada of a national emergency or war, other than any such outbreak, escalation or declaration arising out of or relating to the United States’ war on terrorism that does not represent a significant departure from the conditions that exist on the date of this Terms Agreement; (iv) trading is suspended in the Bank’s securities on the New York Stock Exchange or the Toronto Stock Exchange; (v) there shall have occurred any downgrading, or the Bank shall have received any written notice of any intended downgrading, in the rating accorded the Bank’s debt by Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, Standard & Poor’s, a division of The McGraw Hill Companies, Inc., Fitch Ratings, a division of The Fitch Group, or DBRS Limited and DBRS, Inc., or any such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, the ratings accorded the Bank’s debt; or (vi) there shall have occurred any material disruption in securities settlement, payment or clearance services in the United States or Canada, if, in the case of clauses (iii) and (vi), the effect of such an event in the reasonable judgment of the Dealers, is to make it impracticable or inadvisable to proceed with the purchase and public offering of the Purchased Securities by the Dealers, on the terms and in the manner contemplated in the Pricing Disclosure Package, as amended or supplemented.

[List any additional conditions/deliverables].

This Terms Agreement is a Terms Agreement referred to in the Underwriting Agreement and shall be governed by and construed in accordance with the law of the State of New York.

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If the foregoing is in accordance with your understanding, please sign and return to us [            ] counterparts hereof, and, upon acceptance hereof by you, this Terms Agreement and such acceptance hereof, including the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between you and the Bank.

Bank of Montreal
By:
	Name:
	Title:

BMO Covered Bond Guarantor Limited Partnership
By:
	Name:
	Title:

Accepted:

[Name(s) of Dealer(s)]

By:

Name:

Title:

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Schedule I to Annex I

Title of Purchased Securities:	[    ]
Form of Security	[global] [definitive]
Aggregate Principal Amount:	$[    ] or units of other Specified Currency
Price to Public:	[     ]% of the principal amount of the purchased Covered Bonds, plus accrued interest[, if any,] from [ ] to [and accrued amortization[, if any,] from [     ] to [     ]]
Applicable Time:	[time of day, month, day and year]
Purchase Price by [Name(s) of Dealer(s)]:	[    ]% of the principal amount of the Purchased Securities[, plus accrued interest from              to             ] [and accrued amortization, if any, from              to             ] (representing a purchase price equal to the Price to Public, less a commission payable to the Dealers of [    ]% of the principal amount of the Purchased Securities)
Method of and Specified Funds for Payment of Purchase Price:	[By certified or official bank cheque or cheques, payable to the order of the Bank, in [New York] [Clearing House] [immediately available] funds]
	[By wire transfer to a bank account specified by the Bank in [next day] [immediately available] funds]
Trust Deed:	Trust Deed, dated as of September 30,, 2013, as amended or supplemented, between the Bank and Computershare Trust Company of Canada, as Trustee
Maturity:
Interest Rate:	[ ]% per annum, accruing from [ ]
Interest Payment Dates:	[ ] and [ ] of each year, beginning on [ ] and ending at maturity
Extended Due for Payment Date:	[ ]/[not applicable]
Day Count Convention:	30/360; Following, Unadjusted

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“Business Day” definition:	Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions are authorized or required by law or executive order to close in The City of New York, New York or Toronto, Ontario
Closing Date:	[    ]
Closing Location:	New York, New York
Address for Notices to Underwriters:	BMO Capital Markets Corp. 115 S LaSalle Street, 37th Floor W Chicago, Illinois 60603 Attn: [ ] Barclays Capital Inc. 745 7th Avenue New York, New York 10019 Facsimile: 646-834-8133 Attention: Syndicate Registration - with a copy to - Morrison & Foerster LLP 1290 Avenue of the Americas New York, New York 10104-0050 Facsimile: 212-468-7900 Attention: Jerry Marlatt

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Schedule III to Annex I

(a) Issuer Free Writing Prospectuses:

[Term Sheet in the form set forth in Annex II of the Underwriting Agreement, but only if the Bank is requested by the Dealer(s) to prepare and file such term sheet pursuant to Section 5(a) of the Underwriting Agreement.]

(b) Additional Information in Pricing Disclosure Package:

[List any free writing prospectus, other than the Term Sheet, that the Bank and the Dealer(s) have expressly agreed in writing to include as part of the Pricing Disclosure Package]

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ANNEX II

Form of Term Sheet

Bank of Montreal

unconditionally and irrevocably guaranteed by

BMO Covered Bond Guarantor Limited Partnership

Covered Bonds

up to an aggregate initial offering price of U.S.$10,000,000,000

or the equivalent thereof in other currencies under the global registered covered bond program

FINAL TERM SHEET

DATED	[ ]
Issuer:	Bank of Montreal
Guarantor	BMO Covered Bond Guarantor Limited Partnership
Expected Ratings1:	[Aaa (Stable) / AAA (Stable) / AAA (Stable) / AAA (Stable) (Moody’s / S&P / Fitch / DBRS)]
Series Number:	[ ]
Principal Amount:	[ ]
Format:	[ ]
Trade Date:	[ ]
Settlement Date(T+[—])2:	[ ]
Interest Commencement Date;	[ ]
Final Maturity Date:	[ ]
Extended Due for Payment Date:	[ ]/ Not Applicable
Interest Rate:	[ ]
Re-offer Spread vs. MS:	[ ]
Redemption:	[ ]
Interest Rate Basis:	[ ]
Interest Payment Date[s]:	[ ]
Day Count Fraction:	[ ]
Payment Convention:	[ ]
Business Day(s):	[New York, Toronto]
Minimum Denominations:	[Minimum denominations of USD 1,000 and integral multiples of USD
Listing:	[ ]
Optional Redemption:	[None]
Form of Covered Bond	[DTC]
CUSIP/ISIN:	[ ]/[ ]
[Lead Underwriters]:	[ ]
[Co-Managers]	[ ]

1 A credit rating is not a recommendation to buy, sell or hold securities, and it may be subject to revision or withdrawal at any time by the assigning rating organization.

2 Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in three business days, unless the parties to such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Covered Bonds on the pricing date or the next succeeding business day will be required, by virtue of the fact that the Covered Bonds initially will settle in [five business days (T+5)], to specify alternative settlement arrangements to prevent a failed settlement. The Issuer and Guarantor have filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer and Guarantor have filed with the SEC for more complete information about the Issuer, the Guarantor and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, the Issuer, the Guarantor, or any underwriter or dealer participating in the offering will arrange to send you the prospectus if you request it by calling [BMO Capital Markets Corp.] toll-free at [ ] or by emailing [ ].

Any disclaimer or other notice that may appear below is not applicable to this communication and should be disregarded. Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system.

THESE COVERED BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY CMHC NOR HAS CMHC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DISCLOSURE DOCUMENT. THESE COVERED BONDS ARE NOT INSURED OR GUARANTEED BY CMHC OR THE GOVERNMENT OF CANADA OR ANY OTHER AGENCY THEREOF.

AII-1

ANNEX III

Form of Opinion of Allen & Overy LLP

AIII-1

Form of Letter of Sullivan & Cromwell LLP

AIII-2

ANNEX IV

Form of Opinion of [Osler, Hoskin & Harcourt LLP]

AIV-1

ANNEX V

Form of Letter of Independent Registered Public Accounting Firm

AV-1

ANNEX VI

Agents

Name:	Contact Information:
BMO Capital Markets Corp.	[115 S LaSalle Street, 37th Floor W Chicago, Illinois 60603 Attn: Bob DiGangi]

A-1

EX-4.1

Exhibit 4.1

TRUST DEED

RELATING TO A

U.S.$10,000,000,000

GLOBAL REGISTERED COVERED BOND PROGRAM

BANK OF MONTREAL,

as Issuer

- and -

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP,

as Guarantor

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA,

as Bond Trustee

DATED AS OF SEPTEMBER 30, 2013

CONTENTS

ARTICLE 1 DEFINITIONS AND INTERPRETATIONS		1
1.1	Definitions	1
1.2	Interpretation	2
1.3	Currency	3
1.4	Listing	3
1.5	Schedules	3
ARTICLE 2 AMOUNT AND ISSUE OF THE COVERED BONDS		3
2.1	Amount of the Covered Bonds, Final Terms Documents and Legal Opinions	3
2.2	Covenant to repay principal and to pay interest	4
2.3	Bond Trustee’s requirements regarding Paying Agents etc.	5
2.4	Floating Rate Covered Bonds	7
2.5	Currency of payments	7
2.6	Further Covered Bonds	7
2.7	Separate Series	8
ARTICLE 3 FORMS OF THE COVERED BONDS		8
3.1	Bearer Global Covered Bonds	8
3.2	Registered Global Covered Bonds	9
3.3	Bearer Definitive Covered Bonds and Registered Definitive Covered Bonds	10
3.4	Facsimile or pdf signatures	11
3.5	Persons to be treated as Covered Bondholders	11
3.6	Certificates of Euroclear, DTC and Clearstream, Luxembourg	12
ARTICLE 4 FEES, DUTIES AND TAXES		12
4.1	Fees, duties and taxes	12
ARTICLE 5 COVENANT OF COMPLIANCE		13
5.1	Covenant of Compliance	13
ARTICLE 6 CANCELLATION OF COVERED BONDS AND RECORDS		13
6.1	Cancellation of Covered Bonds	13
6.2	Records	14
ARTICLE 7 COVERED BOND GUARANTEE		15
7.1	Covered Bond Guarantee	15
7.2	Guarantee Description	15
7.3	Payments	16
7.4	Bankruptcy, sequestration, etc.	16
7.5	Unconditional and Absolute	16
7.6	No lessening, impairment, etc.	17
7.7	Enforcement	17
7.8	Waiver of Rights	18
7.9	Excess Proceeds	18
7.10	Unrecoverable Amounts	18

i

7.11	Excess Proceeds Amount	19
ARTICLE 8 PAYMENTS UNDER THE COVERED BOND GUARANTEE		19
8.1	Payments	19
8.2	Direction to Pay	20
8.3	Notification	20
8.4	No Withholding, Deductions etc.	20
8.5	Discharge and Subrogation	20
ARTICLE 9 NON-PAYMENT		21
9.1	Non-Payment	21
ARTICLE 10 PROCEEDINGS, ACTION AND INDEMNIFICATION		21
10.1	Proceedings, Action and Indemnification	21
ARTICLE 11 APPLICATION OF FUNDS		22
11.1	General	22
11.2	Application of Excess Proceeds	23
ARTICLE 12 NOTICE OF PAYMENTS		24
12.1	Notice of Payments	24
12.2	Covered Bondholder Communications and Reports	24
ARTICLE 13 [RESERVED]		25
ARTICLE 14 PARTIAL PAYMENTS		25
14.1	Partial Payments	25
ARTICLE 15 COVENANTS BY THE ISSUER AND THE GUARANTOR		25
15.1	Covenants	25
ARTICLE 16 REMUNERATION AND INDEMNIFICATION OF BOND TRUSTEE		30
16.1	Remuneration	30
16.2	Additional Remuneration	30
16.3	Taxes	30
16.4	Disputes	31
16.5	Other Liabilities	31
16.6	Indemnification	31
16.7	Interest	32
16.8	Survival	32
16.9	Allocation	32
ARTICLE 17 POWERS OF THE BOND TRUSTEE		32
17.1	Powers of the Bond Trustee	32
ARTICLE 18 BOND TRUSTEE’S LIABILITY		40
18.1	Bond Trustee’s Liability	40

ii

ARTICLE 19 BOND TRUSTEE CONTRACTING WITH THE ISSUER AND THE GUARANTOR		40
19.1	Contracting	40
ARTICLE 20 BOND TRUSTEE		41
20.1	Change of Bond Trustee	41
ARTICLE 21 WAIVER, AUTHORIZATION, DETERMINATION, MODIFICATION AND SUBSTITUTION		41
21.1	Waiver, Authorization and Determination	41
21.2	Modification	42
21.3	Substitution	43
21.4	Breach	44
21.5	Rating Agency Condition	45
ARTICLE 22 HOLDER OF BEARER DEFINITIVE COVERED BOND ASSUMED TO BE COUPONHOLDER		45
22.1	Assumption	45
ARTICLE 23 NO NOTICE TO COUPONHOLDERS		46
23.1	No Notice	46
ARTICLE 24 EXCHANGE RATE INDEMNITY		46
24.1	Exchange Rate Indemnity	46
24.2	Independent Obligations	47
24.3	Excess Funds	47
ARTICLE 25 NEW BOND TRUSTEE		47
25.1	New Bond Trustee	47
ARTICLE 26 SEPARATE AND CO-TRUSTEES		48
26.1	Separate and Co-Trustees	48
26.2	Appointment	48
ARTICLE 27 BOND TRUSTEE’S RETIREMENT AND REMOVAL		48
27.1	Retirement and Removal	48
ARTICLE 28 BOND TRUSTEE’S POWERS TO BE ADDITIONAL		50
28.1	Powers to be Additional	50
ARTICLE 29 REPRESENTATIONS, WARRANTIES AND COVENANTS		50
29.1	Representations, Warranties and Covenants of the Bond Trustee	50
ARTICLE 30 NOTICES		50
30.1	Notices	50

iii

ARTICLE 31 GOVERNING LAW; ASSIGNMENT		51
31.1	Governing Law	51
31.2	Submission to Jurisdiction	51
31.3	Assignment	51
ARTICLE 32 NON-PETITION		52
32.1	Non-Petition	52
32.2	Limitation of Liability	52
ARTICLE 33 FURTHER ASSURANCE		52
33.1	Further Assurance	52
ARTICLE 34 COUNTERPARTS		52
34.1	Counterparts	52
ARTICLE 35 INCORPORATION OF THE TRUST INDENTURE ACT		52
35.1	Trust Indenture Act	52
SCHEDULE 1		1
SCHEDULE 2		1
SCHEDULE 3		1
SCHEDULE 4		1
SCHEDULE 5		1
SCHEDULE 6		1

iv

THIS TRUST DEED is made as of September 30, 2013

BETWEEN:

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

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under the Laws of the Province of Ontario, whose registered office is at 100 King Street West, Suite 6100, 1 First Canadian Place, Toronto, Ontario, M5X 1B8, by its managing general partner, BMO COVERED BOND GP, INC., in its capacity as the Guarantor; and

(3) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated under the laws of Canada, whose registered office is at 100 University Avenue, 11^th Floor, Toronto, Ontario M5J 2Y1, in its capacity as the Bond Trustee, which expression includes such company and all other Persons or companies for the time being acting as Bond Trustee or Bond Trustees under this agreement and, as the Bond Trustee, which expressions includes such company and all other Persons or companies for the time being acting as trustee or trustees for the Covered Bondholders under this Trust Deed.

WHEREAS

(A) By a resolution of the board of directors of the Issuer passed on May 29, 2013 the Issuer has resolved to establish a Program pursuant to which the Issuer may from time to time issue Covered Bonds as set out herein.

(B) Covered Bonds up to a maximum nominal amount (calculated in accordance with Article 9 of the Program Agreement (Conditions Precedent)) from time to time outstanding of U.S.$10,000,000,000 (or its equivalent in other currencies) (subject to increase as provided in the Program Agreement) (the “Program Limit”) may be issued pursuant to the Program.

(C) Under the terms of the Guarantor Agreement, the Guarantor has undertaken to guarantee payment of the Guaranteed Amounts in respect of the Covered Bonds on the terms set out herein.

(D) The Bond Trustee has agreed to act as bond trustee for the benefit of the Covered Bondholders, and the Couponholders upon and subject to the terms and conditions hereof.

NOW THIS TRUST DEED WITNESSES AND IT IS AGREED AND DECLARED as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATIONS

1.1 Definitions

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

1.2 Interpretation

(a) For the purposes of this Trust Deed, this Trust Deed has the same meaning as Trust Deed in the Master Definitions and Construction Agreement.

(b) All references in this Trust Deed to principal and/or principal amount and/or interest in respect of the Covered Bonds or to any funds payable by the Issuer or by the Guarantor hereunder will, unless the context otherwise requires, be construed in accordance with Condition 5.7 (Interpretation of principal and interest).

(c) All references herein to any statute or any provision of any statute will be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under any modification or re-enactment.

(d) All references herein to any action, remedy or method of proceeding for the enforcement of the rights of creditors will be deemed to include, in respect of any jurisdiction other than the Province of Ontario, Canada, references to such action, remedy or method of proceeding for the enforcement of the rights of creditors available and reasonably appropriate in such jurisdiction as will most nearly approximate to such action, remedy or method of proceeding described or referred to herein.

(e) All references herein to Euroclear and/or Clearstream, Luxembourg and/or DTC will, whenever the context so permits (but not in the case of any NGCB), be deemed to include references to any additional or alternative clearing system as is approved by the Issuer, the Principal Paying Agent and the Bond Trustee or as may otherwise be specified in the applicable Final Terms Document.

(f) All references herein to the records of Euroclear and Clearstream, Luxembourg will be to the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customers’ interest in the Covered Bonds.

(g) Wherever in these presents there is a requirement for the consent of, or a request from, the Covered Bondholders, then, for so long as any of the Registered Covered Bonds is represented by a Registered Global Covered Bond registered in the name of DTC or its nominee, DTC may mail an

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Omnibus Proxy to the Issuer in accordance with and in the form used by DTC as part of its usual procedures from time to time. Such Omnibus Proxy shall assign the right to give such consent or, as the case may be, make such request to DTC’s direct participants as of the record date specified therein and any such assignee participant may give the relevant consent or, as the case may be, make the relevant request in accordance with these presents.

(h) In this Trust Deed, references to Schedules, Articles, Sections, paragraphs and sub-paragraphs will be construed as references to the Schedules to this Trust Deed and to the Articles, Sections, paragraphs and sub-paragraphs of this Trust Deed respectively.

(i) In this Trust Deed the table of contents and Article headings are included for ease of reference and will not affect the construction hereof.

(j) In this Trust Deed unless there is anything in the subject or context inconsistent therewith the following will apply: (i) words denoting the singular will include the plural and vice-versa; and (ii) words denoting one gender only will include the other gender.

1.3 Currency

All references in this Trust Deed to the relevant currency will be construed as references to the currency in which payments in respect of the Covered Bonds and/or Coupons of the relevant Series are to be made as indicated in the applicable Final Terms Document.

1.4 Listing

All references herein to Covered Bonds having a “listing” or being “listed” on a Stock Exchange shall be construed to mean that the Covered Bonds have been listed on that Stock Exchange and/or to trading on the relevant market, as the case may be, and all references in the trust presents to “listing” and “listed” shall include references to “quotation” and “quoted” respectively.

1.5 Schedules

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

ARTICLE 2

AMOUNT AND ISSUE OF THE COVERED BONDS

2.1 Amount of the Covered Bonds, Final Terms Documents and Legal Opinions

The Covered Bonds will be issued in Series in an aggregate nominal amount from time to time outstanding not exceeding the Program Limit from time to time and for the purpose of determining such aggregate nominal amount Article 9 (Conditions Precedent) of the Program Agreement will apply.

By not later than 12:00 p.m. (Toronto time) on the second Business Day preceding each proposed Issue Date, the Issuer will deliver or cause to be delivered to the Bond Trustee

- 3 -

a copy of the applicable Final Terms Document and drafts of all (if any) legal opinions to be given in relation to the relevant issue and will notify the Bond Trustee in writing without delay of the relevant Issue Date and the nominal amount of the Covered Bonds to be issued. Upon the issue of the relevant Covered Bonds, such Covered Bonds will become constituted hereby without further formality.

Before the first issue of Covered Bonds occurring after each anniversary of this Trust Deed and on such other occasions as the Bond Trustee so requests (on the basis that the Bond Trustee considers it necessary in view of a change (or proposed change) in the Laws of the Province of Ontario or the federal Laws of Canada applicable therein materially affecting the Issuer or the Guarantor (as the case may be), this Trust Deed, the Program Agreement, the Agency Agreement or the Security Agreement or the Bond Trustee has other reasonable grounds which will not include the mere lapse of time), the Issuer or, as the case may be, the Guarantor will procure that further legal opinion(s) (relating, if applicable, to any such change or proposed change) in such form and with such content as the Bond Trustee may reasonably require from the legal advisers specified in the Program Agreement or such other legal advisers as the Bond Trustee will approve is/are delivered to the Bond Trustee. Whenever such a request is made with respect to any Covered Bonds to be issued, the receipt of such opinion(s) in a form satisfactory to the Bond Trustee will be a further condition precedent to the issue of those Covered Bonds.

In accordance with Section 314(b) of the Trust Indenture Act, the Issuer and Guarantor shall, (A) promptly upon the execution and delivery of this Trust Deed and thereafter (B) and for so long as U.S. Registered Covered Bonds are outstanding within three months after the anniversary of such initial opinion, furnish to the Bond Trustee an opinion of counsel stating in the opinion of such counsel, appropriate steps have been taken to protect the title of the Bond Trustee to the Security and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary.

2.2 Covenant to repay principal and to pay interest

The Issuer covenants with the Bond Trustee that it will, as and when the Covered Bonds of any Series or any of them or principal in respect thereof becomes due to be redeemed, or on such earlier date as the same or any part thereof may become due and repayable thereunder, in accordance with the Terms and Conditions, unconditionally pay or procure to be paid to or to the order of the Bond Trustee in the relevant currency in immediately available funds the Principal Amount Outstanding in respect of the Covered Bonds of such Series or the amount of such instalment becoming due for redemption on that date and (except in the case of Zero Coupon Covered Bonds) will in the meantime and until redemption in full of the Covered Bonds of such Series (both before and after any decree, judgment or other order of a court of competent jurisdiction) unconditionally pay or procure to be paid to or to the order of the Bond Trustee as aforesaid interest (which will accrue from day to day) on the Principal Amount Outstanding of the Covered Bonds outstanding of such Series at rates and/or in amounts calculated from time to time in accordance with, or specified in, and on the dates provided for in, the Terms and Conditions (subject to Section 2.4 (Floating Rate Covered Bonds)); PROVIDED THAT:

(a) except for Excess Proceeds, every payment (whether by the Issuer or the Guarantor) of principal or interest or other sum due in respect of the Covered Bonds made to or to the order of the Principal Paying Agent in the manner provided in the Agency Agreement will be in satisfaction pro tanto of the relative covenant by the Issuer contained in this Article or (as the case may be)

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by the Guarantor under the Covered Bond Guarantee in relation to the Covered Bonds of such Series except to the extent that there is a default in the subsequent payment thereof in accordance with the Terms and Conditions to the relevant Covered Bondholders or Couponholders (as the case may be) and (in the case of the Guarantor only) where such payment by the Guarantor has been declared void, voidable or otherwise recoverable in whole or in part and recovered from the Bond Trustee or the Covered Bondholders;

(b) every payment of Excess Proceeds in accordance with the Terms and Conditions and Section 11.2 (Application of Excess Proceeds) (to or to the order of the Bond Trustee will be in satisfaction (for the benefit of the Issuer only and not the Guarantor) pro tanto of the relative covenant by the Issuer contained in this Article in respect of the Excess Proceeds which are due and payable in relation to the Covered Bonds of such Series (but as provided in Section 11.2 (Application of Excess Proceeds), will not do so for the purposes of the subrogation rights of the Guarantor contemplated by Section 7.8 (Waiver of Rights) and will not reduce or discharge any obligations of the Guarantor);

(c) in the case of any payment of principal which is not made to the Bond Trustee or the Principal Paying Agent on or before the due date or which is made on or after accelerated maturity following an Issuer Event of Default or Guarantor Event of Default, interest will continue to accrue on the Principal Amount Outstanding of the relevant Covered Bonds in accordance with Condition 6.10 (Late Payment).

(d) in any case where payment of the whole or any part of the principal amount of any Covered Bond is improperly withheld or refused upon due presentation thereof (other than in circumstances contemplated by (c) above) interest will accrue on the Principal Amount Outstanding of such Covered Bond payment of which has been so withheld or refused in accordance with Condition 6.10 (Late Payment).

The Bond Trustee will hold the benefit of this covenant on trust for the Covered Bondholders and the Couponholders and itself in accordance herewith.

2.3 Bond Trustee’s requirements regarding Paying Agents etc.

(a) At any time after an Issuer Event of Default or Potential Issuer Event of Default has occurred and is continuing or the Bond Trustee has received any money from the Issuer which it proposes to pay under Article 11 (Application of Funds) to the relevant Covered Bondholders and/or Couponholders, the Bond Trustee may:

(i) by notice in writing to the Issuer, the Guarantor, the Principal Paying Agent, the other Paying Agents, the Registrar, the Calculation Agent and/or the Transfer Agents require the Principal Paying Agent, the other Paying Agents, the Registrar, the Calculation Agent, the Exchange Agent and/or the Transfer Agents pursuant to the Agency Agreement:

A. to act thereafter as Principal Paying Agent, Paying Agent, Registrar, Calculation Agent, the Exchange Agent and/or

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Transfer Agent respectively of the Bond Trustee in relation to payments of such funds to be made by or on behalf of the Bond Trustee under the terms hereof mutatis mutandis on the terms provided in the Agency Agreement (save that the Bond Trustee’s liability under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Principal Paying Agent, the other Paying Agents, the Registrar, the Calculation Agent, the Exchange Agent and the Transfer Agents will be limited to the amounts for the time being held by the Bond Trustee on the trusts hereof relating to the Covered Bonds of the relevant Series and the relative Coupons and available for such purpose) and thereafter to hold all Covered Bonds, Coupons and Talons and all sums, documents and records held by them in respect of Covered Bonds, Coupons and Talons on behalf of the Bond Trustee; or

B. to deliver up all Covered Bonds and Coupons and all sums, documents and records held by them in respect of the Covered Bonds and Coupons to the Bond Trustee or as the Bond Trustee will direct in such notice provided that such notice will be deemed not to apply to any documents or records which the Principal Paying Agent, the relevant Paying Agent, the Registrar, the Exchange Agent and/or the relevant Transfer Agent is obliged not to release by any Law; and/or

(ii) by notice in writing to the Issuer, require it to make all subsequent payments in respect of the Covered Bonds and Coupons to or to the order of the Bond Trustee and not to the Principal Paying Agent and with effect from the issue of any such notice to the Issuer and until such notice is withdrawn, proviso (a) to Section 2.2 (Covenant to repay principal and to pay interest) relating to the Covered Bonds will cease to have effect in respect of the Issuer.

(b) At any time after a Guarantor Event of Default or Potential Guarantor Event of Default has occurred and is continuing or the Bond Trustee has received any money from the Guarantor which it proposes to pay under Article 11 (Application of Funds) to the relevant Covered Bondholders and/or Couponholders, the Bond Trustee may:

(i) by notice in writing to the Issuer, the Guarantor, the Principal Paying Agent, the other Paying Agents, the Registrar, the Calculation Agent and/or the Transfer Agents require the Principal Paying Agent, the other Paying Agents, the Registrar, the Calculation Agent, the Exchange Agent and/or the Transfer Agents pursuant to the Agency Agreement to:

A. act thereafter as Principal Paying Agent, Paying Agent, Registrar, Calculation Agent and/or Transfer Agent respectively of the Bond Trustee in relation to payments of such funds to be made by or on behalf of the Bond Trustee under the terms hereof mutatis mutandis on the terms provided in the Agency Agreement (save that the Bond Trustee’s liability

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under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Principal Paying Agent, the other Paying Agents, the Registrar, the Calculation Agent, the Exchange Agent and the Transfer Agents will be limited to the amounts for the time being held by the Bond Trustee on the trusts hereof relating to the Covered Bonds of the relevant Series and available for such purpose) and thereafter to hold all Covered Bonds and Coupons and all sums, documents and records held by them in respect of Covered Bonds and Coupons on behalf of the Bond Trustee; or

B. to deliver up all Covered Bonds and Coupons and all sums, documents and records held by them in respect of the Covered Bonds and Coupons to the Bond Trustee or as the Bond Trustee will direct in such notice provided that such notice will be deemed not to apply to any documents or records which the Principal Paying Agent, the relevant Paying Agent, the Registrar, the Exchange Agent and/or the relevant Transfer Agent is obliged not to release by any Law; and/or

(ii) by notice in writing to the Guarantor require it to make all subsequent payments in respect of the Covered Bonds and Coupons to or to the order of the Bond Trustee and not to the Principal Paying Agent and with effect from the issue of any such notice to the Guarantor and until such notice is withdrawn proviso (a) to Section 2.2 (Covenant to repay principal and to pay interest) relating to the Covered Bonds will cease to have effect.

2.4 Floating Rate Covered Bonds

If the Floating Rate Covered Bonds of any Series become immediately due and repayable following an Issuer Event of Default or a Guarantor Event of Default the rate and/or amount of interest payable in respect of them will be calculated by the Principal Paying Agent and/or the Calculation Agent (as the case may be), in each case, at the same intervals as if such Covered Bonds had not become due and repayable, and the first of such interval will commence on the expiry of the Interest Period during which the Covered Bonds of the relevant Series become so due and repayable mutatis mutandis in accordance with the provisions of Condition 4 (Interest) except that the rates of interest need not be published.

2.5 Currency of payments

All payments of any amounts due in respect of, under and in connection herewith and the Covered Bonds of any Series to the relevant Covered Bondholders and Couponholders will be made in the relevant currency all in accordance with the Terms and Conditions and converted at the relevant Covered Bond Swap Rate (if necessary).

2.6 Further Covered Bonds

The Issuer will be at liberty from time to time (but subject always to the provisions hereof) without the consent of the Covered Bondholders or Couponholders or other Secured Creditors to create and issue further Covered Bonds (whether in bearer or registered form) having terms and conditions the same as the Covered Bonds of any Series or the same in all respects and guaranteed by the Guarantor save for the amount and date of the first payment of interest thereon, Issue Date and/or Issue Price and so that the same will be consolidated and form a single series with the outstanding Covered Bonds of such Series.

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2.7 Separate Series

Subject to the provisions of the next sentence, the Covered Bonds of each Series will form a separate Series of Covered Bonds and accordingly, unless for any purpose the Bond Trustee in its absolute discretion will otherwise determine, the provisions of this sentence and of Article 3 (Forms of the Covered Bonds) to Article 24 (Exchange Rate Indemnity) (both inclusive), Article 25 (New Bond Trustee) and Schedule 5 (Provisions for Meetings of Covered Bondholders) will apply mutatis mutandis separately and independently to the Covered Bonds of each Series. However, for the purposes of Condition 9 (Events of Default, Acceleration and Enforcement) (insofar as it relates to a Program Resolution), Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution), Sections 10.1 (Proceedings, Action and Indemnification), 17.1(q) (Powers of the Bond Trustee), Article 23 (No Notice to Couponholders) and Article 27 (Bond Trustee’s Retirement and Removal) and (insofar as it relates to Condition 9 (Events of Default, Acceleration and Enforcement) or to a Program Resolution or Sections 10.1 (Proceedings, Action and Indemnification), Article 25 (New Bond Trustee) or Article 27 (Bond Trustee’s Retirement and Removal)) and Schedule 6 (Form of Managing GP’s Certificate), the Covered Bonds will be deemed to constitute a single Series and the provisions of such Conditions and Sections will apply to all the Covered Bonds together as if they constituted a single Series. In such Sections and Schedule the expressions Covered Bonds, Covered Bondholders, Coupons, Couponholders, Talons and Talonholders will be construed accordingly.

ARTICLE 3

FORMS OF THE COVERED BONDS

3.1 Bearer Global Covered Bonds

(a) Each Tranche of Bearer Covered Bonds will initially be issued in the form of a Temporary Global Covered Bond. Each Temporary Global Covered Bond will be exchangeable (free of charge) on and after the Exchange Date, upon a request as described therein, for either Bearer Definitive Covered Bonds of the same Series with, where applicable (except in the case of Zero Coupon Covered Bonds) Coupons and where applicable, Talons attached, or interests in a Permanent Global Covered Bond, in each case in accordance with the provisions of such Temporary Global Covered Bond and as indicated in the applicable Final Terms Document. Each Permanent Global Covered Bond will be exchangeable for Definitive Covered Bonds together with, where applicable (except in the case of Zero Coupon Covered Bonds) Coupons and, where applicable, Talons attached, in accordance with the provisions of such Permanent Global Covered Bond. All Bearer Global Covered Bonds will be prepared, completed and delivered to a Common Depositary (in the case of a CGCB form) or Common Safekeeper (in the case of a NGCB) for Euroclear and Clearstream, Luxembourg in accordance with the provisions of the Program Agreement or to another appropriate depositary as may be approved by the Bond Trustee in accordance with any other agreement between the Issuer and the relevant Dealer(s) and, in each case, the Agency Agreement.

(b) Each Temporary Global Covered Bond will be printed or typed in the form or substantially in the form set out in Part 1 of Schedule 2 (Forms of Global and

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Definitive Covered Bonds, Coupons and Talons) and may be a facsimile or pdf. Each Temporary Global Covered Bond will have annexed thereto a copy of the applicable Final Terms Document and will be signed manually or in facsimile or pdf by a person duly authorized by the Issuer on behalf of the Issuer and will be authenticated by or on behalf of the Principal Paying Agent and will, in the case of a NGCB be effectuated by the Common Safekeeper acting on the instructions of the Principal Paying Agent. Each Temporary Global Covered Bond so executed and authenticated will be binding and valid obligations of the Issuer and the Covered Bond Guarantee in respect thereof will be binding and valid obligations of the Guarantor and title to such Temporary Global Covered Bond will pass by delivery.

(c) Each Permanent Global Covered Bond will be printed or typed in the form or substantially in the form set out in Part 2 of Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) and may be a facsimile or pdf. Each Permanent Global Covered Bond will have annexed thereto a copy of the applicable Final Terms Document and will be signed manually or in facsimile or pdf by a person duly authorized by the Issuer on behalf of the Issuer and will be authenticated by or on behalf of the Principal Paying Agent and will, in the case of a NGCB be effectuated by the Common Safekeeper acting on the instructions of the Principal Paying Agent. Each Permanent Global Covered Bond so executed and authenticated will be binding and valid obligations of the Issuer and the Covered Bond Guarantee in respect thereof will be binding and valid obligations of the Guarantor and title to such Permanent Global Covered Bond will pass by delivery.

3.2 Registered Global Covered Bonds

(a) Subject as provided below, Registered Covered Bonds of a Tranche that are initially offered and sold in the United States in reliance on Rule 144A under the Securities Act shall be represented by a Rule 144A Global Covered Bond and Registered Covered Bonds of a Series that are initially offered and sold in offshore transactions in reliance on Regulation S under the Securities Act shall be represented by a Regulation S Global Covered Bond. Registered Covered Bonds issued pursuant to registration statement under the Securities Act shall be represented by a U.S. Registered Global Covered Bond. Registered Global Covered Bonds will either (i) be deposited with a custodian for, and registered in the name of DTC or its nominee, or (ii) be deposited with a common depositary for, and registered in the name of a nominee of, Euroclear and Clearstream, Luxembourg, as specified in the applicable Final Terms Document. Until the expiration of the Distribution Compliance Period beneficial interests in any Regulation S Definitive Covered Bond may be held only by or through agent members of Euroclear and Clearstream, Luxembourg. Title to the Registered Covered Bonds will pass upon registration of transfers in accordance with the provisions of the Agency Agreement.

(b) Registered Global Covered Bonds will be exchangeable and transferable only in accordance with, and subject to, the provisions of the Registered Global Covered Bonds and the Agency Agreement and the rules and operating procedures for the time being of DTC, Euroclear and Clearstream, Luxembourg.

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(c) Each Registered Global Covered Bond will be printed or typed in the form or substantially in the form set out in Part 7 of Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons) and may be a facsimile or pdf. Each Registered Global Covered Bond will have annexed thereto a copy of the applicable Final Terms Document and will be signed manually or in facsimile or pdf by a person duly authorized by the Issuer on behalf of the Issuer and will be authenticated by or on behalf of the Registrar. Each Registered Global Covered Bond as executed and authenticated will be a binding and valid obligation of the Issuer and the Covered Bond Guarantee in respect thereof will be a binding and valid obligation of the Guarantor.

3.3 Bearer Definitive Covered Bonds and Registered Definitive Covered Bonds

(a) The Bearer Definitive Covered Bonds, Coupons and Talons will be bearer in the respective forms or substantially in the respective forms set out in Parts 3, 4 and 5, respectively, of Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons). The Bearer Definitive Covered Bonds, Coupons and Talons will be serially numbered and, if listed or quoted, will be security printed in accordance with the requirements (if any) from time to time of the relevant Stock Exchange (if any). The relevant Terms and Conditions may be incorporated by reference into such Bearer Definitive Covered Bonds or, if not so permitted by the relevant Stock Exchange (if any), the Bearer Definitive Covered Bonds will be endorsed with or have attached thereto the relevant Terms and Conditions and, in either such case, the Bearer Definitive Covered Bonds will have endorsed thereon or attached thereto a copy of the applicable Final Terms Document (or the relevant provisions thereof). Title to the Bearer Definitive Covered Bonds, Coupons and Talons will pass by delivery.

(b) The Registered Definitive Covered Bonds will be in registered form and will be issued in the form or substantially in the form, and will bear the legend, set out in Part 7 of Schedule 2 (Forms of Global and Definitive Covered Bonds, Coupons and Talons), will be serially numbered, will (for so long as the transfer restrictions are in place) be endorsed with a legend in the same form mutatis mutandis as that set out on the Rule 144A Global Covered Bond (in the case of those issued in exchange for Rule 144A Global Covered Bonds) and the applicable form of transfer and, if listed or quoted, will be printed in accordance with the requirements (if any) from time to time of the relevant Stock Exchange (if any). The relevant Terms and Conditions may be incorporated by reference into such Registered Definitive Covered Bonds, or, if not so permitted by the relevant Stock Exchange (if any), the Registered Definitive Covered Bonds will be endorsed with or have attached thereto the relevant Terms and Conditions and, in either such case, the Registered Definitive Covered Bonds will have endorsed thereon or attached thereto a copy of the applicable Final Terms Document (or the relevant provisions thereof). Title to the Registered Definitive Covered Bonds will pass upon the registration of transfers in the Register kept by the Registrar in respect thereof in accordance with the provisions of the relevant Agency Agreement and this Trust Deed.

(c) The Definitive Covered Bonds will be signed manually or in facsimile or pdf by a person duly authorized by the Issuer on behalf of the Issuer and will be authenticated by or on behalf of the Principal Paying Agent (in the case of the

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Bearer Definitive Covered Bonds) or the Registrar (in the case of Registered Definitive Covered Bonds). The Definitive Covered Bonds so executed and authenticated, and Coupons and Talons, upon execution and authentication of the relevant Bearer Definitive Covered Bonds, will be binding and valid obligations of the Issuer and the Covered Bond Guarantee in respect thereof will be binding and valid obligations of the Guarantor. The Coupons and Talons will not be signed. No Definitive Covered Bond and none of the Coupons or Talons appertaining to a Bearer Definitive Covered Bond will be binding or valid until the relevant Definitive Covered Bond will have been executed and authenticated as aforesaid. No Bearer Covered Bond may be exchanged for a Registered Covered Bond and vice versa.

3.4 Facsimile or pdf signatures

The Issuer may use the facsimile or pdf signature of any person who at the date such signature is affixed to a Covered Bond is duly authorized by the Issuer notwithstanding that at the time of issue of any of the Covered Bonds he may have ceased for any reason to be the holder of such office or be so authorized.

3.5 Persons to be treated as Covered Bondholders

Except as ordered by a court of competent jurisdiction or as required by Law, the Issuer, the Guarantor, the Bond Trustee, the Principal Paying Agent, the other Paying Agents, the Registrar, the Exchange Agent and the Transfer Agents (notwithstanding any notice to the contrary and whether or not it is overdue and notwithstanding any notation of ownership or writing thereon or notice of any previous loss or theft thereof) may:

(a)    (i) for the purpose of making payment thereon or on account thereof deem and treat the bearer of any Bearer Global Covered Bond, Bearer Definitive Covered Bond, Coupon or Talon and the registered holder of any Registered Definitive Covered Bond; and

        (ii) for the purpose of voting, giving consents, and making requests pursuant to this Trust Deed and making payment thereon or on account thereof and, with respect of a Registered Global Covered Bond held through agent members of Euroclear, DTC or Clearstream, Luxembourg, voting, giving consents and making requests pursuant to this Trust Deed deem and treat the registered holder of any Registered Global Covered Bond,

as the absolute owner thereof and of all rights thereunder free from all encumbrances, and will not be required to obtain proof of such ownership or as to the identity of the bearer or, as the case may be, registered holder; and

(b) for all other purposes deem and treat:

        (i) the bearer of any Bearer Definitive Covered Bond, Coupon or Talon and the registered holder of any Registered Definitive Covered Bond; and

        (ii) each person for the time being shown in the records of Euroclear, DTC or Clearstream, Luxembourg or, as the case may be, or such other additional or alternative clearing system approved by the Issuer, the Bond Trustee and the Principal Paying Agent, as having a particular nominal amount of Covered Bonds credited to his securities account,

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as the absolute owner thereof free from all encumbrances and will not be required to obtain either (a) proof of such ownership, other than, in the case of any Person for the time being so shown in such records, a certificate or letter of confirmation signed on behalf of Euroclear, DTC or Clearstream, Luxembourg or any other form of record (including any certificate or other document which may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear’s EUCLID or Clearstream, Luxembourg’s Cedcom system) in accordance with its usual procedures and in which the holder of a particular nominal amount of the Covered Bonds is clearly identified together with the amount of such holding) made by any of them, or (b) proof of the identity of the bearer of any Bearer Global Covered Bond, Bearer Definitive Covered Bond, Coupon or Talon or the registered holder of any Registered Definitive Covered Bond or Registered Global Covered Bond.

3.6 Certificates of Euroclear, DTC and Clearstream, Luxembourg

Without prejudice to the provisions of Section 17.1 (Powers of the Bond Trustee), the Issuer, the Guarantor and the Bond Trustee may call for and, except in the case of manifest or proven error, will be at liberty to accept and place full reliance on as sufficient evidence thereof a certificate or letter of confirmation issued on behalf of Euroclear or Clearstream, Luxembourg or DTC or any form of record (including any certificate or other document which may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear’s EUCLID or Clearstream, Luxembourg’s Cedcom system) in accordance with its usual procedures and in which the holder of a particular nominal amount of the Covered Bonds is clearly identified together with the amount of such holding) made by any of them or such other form of evidence and/or information and/or certification as it will, in its absolute discretion, think fit to the effect that at any particular time or throughout any particular period any particular person is, was, or will be, shown in its records as the holder of a particular nominal amount of Covered Bonds represented by a Global Covered Bond and, if it does so rely, such letter of confirmation, form of record, evidence, information or certification will be conclusive and binding on all concerned.

ARTICLE 4

FEES, DUTIES AND TAXES

4.1 Fees, duties and taxes

The Issuer will pay any stamp, issue, registration, documentary and other fees, duties or taxes of a similar nature (if any), including interest and penalties (but excluding any interest or penalties arising by reason of any act or omission of the Bond Trustee or any Covered Bondholder or Couponholder that is done or omitted to be done other than pursuant to the terms of this Trust Deed), payable (a) in the United Kingdom, Canada, Belgium or Luxembourg on or in connection with (i) the execution and delivery of this Trust Deed, and (ii) the constitution and original issue and initial delivery of the Covered Bonds and the Coupons and the creation of the Security, and (b) in any jurisdiction on or in connection with any action taken by or on behalf of the Bond Trustee or (where permitted hereunder so to do) any Covered Bondholder or Couponholder or any other Secured Creditor to enforce this Trust Deed.

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ARTICLE 5

COVENANT OF COMPLIANCE

5.1 Covenant of Compliance

Each of the Issuer and the Guarantor covenants with the Bond Trustee that it will comply with and perform and observe all the provisions hereof and of the Security Agreement which are expressed to be binding on it. The Terms and Conditions will be binding on the Issuer and the Guarantor and, to the extent applicable, the Covered Bondholders and the Couponholders. The Bond Trustee will be entitled to enforce the obligations of the Issuer and the Guarantor under the Covered Bonds, the Coupons and the Terms and Conditions in the manner therein provided as if the same were set out and contained in this Trust Deed, which will be read and construed as one document with the Covered Bonds and the Coupons to the extent applicable. The Bond Trustee will hold the benefit of this covenant upon trust for itself and the Covered Bondholders and the Couponholders according to its and their respective interests.

ARTICLE 6

CANCELLATION OF COVERED BONDS AND RECORDS

6.1 Cancellation of Covered Bonds

The Issuer will procure that: (a) all Covered Bonds issued by it and which (i) are redeemed or (ii) are purchased by or on behalf of the Issuer or any of its Subsidiaries and surrendered for cancellation, or (iii) which, being mutilated or defaced, have been surrendered and replaced pursuant to Condition 10 (Replacement of Covered Bonds, Coupons and Talons), or (iv) are exchanged as provided herein (together in the case of Bearer Definitive Covered Bonds, with all unmatured Coupons attached thereto or delivered therewith); (b) in the case of Bearer Definitive Covered Bonds, all relative Coupons which have been paid in accordance with the relevant Terms and Conditions or which, being mutilated or defaced, have been surrendered and replaced pursuant to Condition 10 (Replacement of Covered Bonds, Coupons and Talons); and (c) all Talons which have been exchanged for further Coupons, will forthwith be cancelled by or on behalf of the Issuer and a certificate signed by two Authorized Signatories of the Issuer stating:

(a) the aggregate principal amount of Covered Bonds which have been redeemed and the amounts paid in respect thereof and the aggregate amounts which have been paid in respect of Coupons;

(b) the serial numbers of such Covered Bonds in definitive form distinguishing between Bearer Covered Bonds and Registered Covered Bonds;

(c) the total numbers (where applicable, of each denomination) by maturity date of such Coupons;

(d) the aggregate amount of interest paid (and the due dates of such payments) on Registered Global Covered Bonds, Bearer Definitive Covered Bonds and/or Registered Definitive Covered Bonds;

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(e) the aggregate nominal amount of Covered Bonds (if any) which have been purchased by or on behalf of the Issuer or any of its Subsidiaries and cancelled and the serial numbers of such Covered Bonds in definitive form and, in the case of Bearer Definitive Covered Bonds, the total number (where applicable, of each denomination) by maturity date of the Coupons and Talons attached thereto or surrendered therewith;

(f) the aggregate nominal amounts of Covered Bonds and the aggregate amounts in respect of Coupons which have been so exchanged or surrendered and replaced and the serial numbers of such Covered Bonds in definitive form and the total number (where applicable, of each denomination) by maturity date of such Coupons and Talons;

(g) the total number (where applicable, of each denomination) by maturity date of the unmatured Coupons missing from Bearer Definitive Covered Bonds bearing interest at a fixed rate which have been redeemed or exchanged or surrendered and replaced and the serial numbers of the Bearer Definitive Covered Bonds to which such missing unmatured Coupons appertained; and

(h) the total number (where applicable, of each denomination) by maturity date of Talons which have been exchanged for further Coupons,

will be given to the Bond Trustee by or on behalf of the Issuer as soon as possible and in any event within four months after the date of such redemption, purchase, payment, exchange or replacement (as the case may be). The Bond Trustee may accept such certificate as conclusive evidence of redemption, purchase or replacement pro tanto of the Covered Bonds, Coupons (if any) or payment of principal or interest (as the case may be) thereon or exchange of the relative Talons respectively and of cancellation of the relative Covered Bonds and Coupons.

6.2 Records

Subject to the paragraph below, the Issuer will use its best efforts to procure that: (i) the Principal Paying Agent will keep a full and complete record of all Covered Bonds, Coupons and Talons issued by it and of their redemption or purchase by or on behalf of the Issuer, or any of its Subsidiaries, any cancellation or any payment or exchange (as the case may be) of such Covered Bonds, Coupons and Talons and all replacement covered bonds, coupons or talons issued in substitution for lost, stolen, mutilated, defaced or destroyed Covered Bonds, Coupons or Talons; (ii) the Principal Paying Agent will in respect of the Coupons of each maturity retain (in the case of Coupons other than Talons) until the expiry of six years from the Relevant Date in respect of such Coupons and, in the case of Talons, indefinitely, either all paid or exchanged Coupons of that maturity or a list of the serial numbers of Coupons of that maturity still remaining unpaid or unexchanged; and (iii) such records and copies thereof will be made available to the Bond Trustee at all reasonable times during normal business hours.

Notwithstanding the foregoing, the Issuer will not be required to procure the keeping of a record of serial numbers and maturity dates of Coupons except as regards unmatured Coupons not attached to or surrendered with Bearer Definitive Covered Bonds presented for redemption or purchased and presented for cancellation, matured Coupons that remain unpaid and Coupons in place of which replacement Coupons have been issued and replacement Coupons.

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ARTICLE 7

COVERED BOND GUARANTEE

7.1 Covered Bond Guarantee

(a) In consideration of the Intercompany Loan to be made by the Issuer to the Guarantor pursuant to the Intercompany Loan Agreement, the payment of any Excess Proceeds to the Guarantor pursuant to Section 11.2 (Application of Excess Proceeds), and the payment by the Issuer to the Guarantor of the Guarantee Fee, the Guarantor, unconditionally (save as set out herein) and irrevocably guarantees to the Bond Trustee, for the benefit of the Covered Bondholders, the payment of the Guaranteed Amounts as and when the same become Due for Payment.

(b) The Guarantor will, as guarantor:

(i) following the occurrence of an Issuer Event of Default and the service by the Bond Trustee of an Issuer Acceleration Notice on the Issuer and a Notice to Pay on the Guarantor, pay or procure to be paid unconditionally and irrevocably to or to the order of the Bond Trustee (for the benefit of the Covered Bondholders), an amount equal to that portion of the Guaranteed Amounts which will become Due for Payment but would otherwise be unpaid, as of any Original Due for Payment Date or, if applicable, the Extended Due for Payment Date, by the issuer PROVIDED THAT no Notice to Pay will be so served until an Issuer Acceleration Notice has been served by the Bond Trustee on the Issuer; and

(ii) following the occurrence of a Guarantor Event of Default and the service by the Bond Trustee of a Guarantor Acceleration Notice, the Covered Bonds will (if an Issuer Acceleration Notice has not already been served) become immediately due and payable as against the Issuer and the obligations of the Guarantor under the Covered Bond Guarantee will be accelerated.

7.2 Guarantee Description

In relation to the Covered Bonds of each Series, the Covered Bond Guarantee:

(a) is a continuing guarantee;

(b) extends (in the case of the Guarantor) to the ultimate balance of the Guaranteed Amounts due to be paid or which would have been due to be paid by the Issuer on the relevant Scheduled Payment Dates in accordance with the terms hereof, the Covered Bonds or the Coupons, regardless of any intermediate payment or discharge in whole or in part of any Guaranteed Amounts due to be paid on the relevant Scheduled Payment Date;

(c) will not be discharged except by complete performance of the obligations in this Trust Deed, in addition to, and not instead of, any security or other guarantee or indemnity at any time existing in favour of any Person (whether from the Guarantor or otherwise); and

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(d) will remain in force until all funds payable by the Guarantor pursuant to the terms of the Covered Bond Guarantee will have been paid.

7.3 Payments

The Guarantor will not in respect of any payment due to be made pursuant hereto be released from its obligations under or pursuant hereto in any circumstances (notwithstanding anything which but for this provision would release the Guarantor or would affect its liability under or pursuant hereto in respect of such payment) except upon the receipt by or for the account of the Bond Trustee of the full amount of such payment from the Issuer and the Guarantor in the currency, at the place and in the manner provided for herein PROVIDED THAT (except in the case of Excess Proceeds) every payment of principal, premium or interest in respect of the Covered Bonds and/or Coupons made to the Principal Paying Agent in the manner provided in the Agency Agreement will be in satisfaction pro tanto of the liability of the Guarantor hereunder and will be deemed for the purpose of this Section 7.3 to have been paid to the order of the Bond Trustee, except to the extent that the subsequent payment thereof to the Covered Bondholders or the Couponholders in accordance with the Terms and Conditions is not made.

7.4 Bankruptcy, sequestration, etc.

If any payment received by the Bond Trustee, the Principal Paying Agent or any Covered Bondholder or Couponholder pursuant to the provisions hereof on the subsequent bankruptcy, sequestration, liquidation, insolvency, corporate reorganisation or other similar event of the Issuer, the Guarantor or any of its general partners, be set aside or avoided in whole or in part under any Laws relating to bankruptcy, sequestration, liquidation, insolvency, corporate reorganisation or other similar event, such payment will not be considered as having discharged or diminished the liability of, the Issuer or, as the case may be, the Guarantor and the Covered Bond Guarantee will continue to apply in accordance with its terms as if the underlying payment in respect of which the liability of the Guarantor hereunder or thereunder arose had at all times remained owing by the Issuer or the Guarantor, as the case may be.

7.5 Unconditional and Absolute

Without prejudice to the generality of the foregoing provisions of this Article 7, the Guarantor agrees that its obligations hereunder will be as guarantor (except with respect to that portion of any Excess Proceeds payable to the Covered Bondholders, prior to the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice which have been deposited into the GDA Account (or, as applicable, the Stand-By GDA Account), in respect of which the Guarantor will be the principal obligor) and will be absolute and unconditional (subject to a Notice to Pay being given), irrespective of, and unaffected by, any invalidity, irregularity, illegality or unenforceability of, or defect in, any provisions of this Trust Deed or the Covered Bonds or Coupons or any other Transaction Documents, or the absence of any action to enforce the same or the waiver, modification or consent by the Bond Trustee or any of the Covered Bondholders or Couponholders in respect of any provisions of the same or the obtaining of any judgment or decree against the Issuer or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defence of a guarantor. Accordingly, the validity of the Covered Bond Guarantee will not be affected by any invalidity, irregularity or unenforceability of all or any of the obligations of the Issuer hereunder or any other

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Transaction Document and the Covered Bond Guarantee will not be discharged nor will the liability of the Guarantor hereunder be affected by any act, thing or omission or means whatsoever whereby its liability would not have been discharged if it had been guarantor or principal debtor.

7.6 No lessening, impairment, etc.

The liability of the Guarantor under the Covered Bond Guarantee will not be lessened, affected, impaired or discharged by:

(a) any time, waiver or indulgence granted to the Issuer by the Bond Trustee, any of the Covered Bondholders or Couponholders;

(b) any dealings or transactions between the Issuer and the Bond Trustee, any of the Covered Bondholders or Couponholders whether or not the Guarantor will be a party to or cognisant of the same;

(c) the dissolution or liquidation of the Issuer or any change in the banking status or functions of the Issuer or any consolidation, merger, amalgamation, conveyance or transfer by the Issuer or any taking of control of the Issuer or its assets by regulatory authorities or deposit insurers;

(d) any composition, compromise or arrangement between the Issuer and its creditors or any reorganisation or restructuring of its business and affairs;

(e) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, the Issuer or any other Person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(f) any incapacity or lack of powers, authority or legal personality of the Issuer or any other Person;

(g) any variation (however fundamental) or replacement of this Trust Deed, the Covered Bonds or the Coupons;

(h) any failure on the part of the Issuer to pay all or any part of the Guarantee Fee payable by it to the Guarantor in connection herewith; or

(i) any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of the Issuer hereunder or any other Transaction Document resulting from any insolvency, liquidation or dissolution proceedings or from any Law, regulation or order so that each such obligation will for the purposes of the Guarantor’s obligations under the Covered Bond Guarantee be construed as if there were no such circumstance.

7.7 Enforcement

Subject to its obligation to deliver a Notice to Pay on the Guarantor, the Bond Trustee may determine from time to time whether it will enforce the Covered Bond Guarantee which it is entitled to enforce, without making any demand or taking any proceedings against the Issuer. Subject to the provisions of this Article 7 with regard to the service of a Notice to Pay

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on the Guarantor, the Guarantor hereby waives any right to require proceedings first against the Issuer with respect to this Trust Deed, the Covered Bonds or Coupons, diligence, presentment, demand of payment, filing of claims with a court in the event of dissolution, liquidation, reorganisation or restructuring, merger or bankruptcy of the Issuer, protest or notice and all demands whatsoever.

7.8 Waiver of Rights

To the extent that the Guarantor makes, or there is made on its behalf, a payment under the Covered Bond Guarantee, the Issuer will on such payment being made become indebted to the Guarantor for an amount equal to such payment unless such amount will have been set off with amounts owing under the Intercompany Loan Agreement. Until all amounts which may be or become payable by the Issuer hereunder, the Covered Bonds or Coupons have been irrevocably paid in full, the Guarantor hereby waives irrevocably and unconditionally:

(a) all rights of subrogation, indemnity, contribution or otherwise (arising under common law, equity, statute or otherwise whatsoever) which it might otherwise have against the Issuer by virtue of any payment made by the Guarantor pursuant to the Covered Bond Guarantee; and

(b) all rights to claim, rank, prove or vote as creditor of the Issuer or its estate in competition with the Bond Trustee (on behalf of the Covered Bondholders) or to claim a right of set-off,

subject always to the rights of the Guarantor to set-off amounts owing by the Issuer to the Guarantor in accordance with the Priorities of Payments in respect of amounts paid by the Guarantor under the Covered Bond Guarantee, against (x) any amounts repayable by the Guarantor under the terms of the Intercompany Loan Agreement, and (y) amounts payable by the Guarantor to any Swap Provider (provided that such Swap Provider is the Issuer) under the terms of any Interest Rate Swap or Covered Bond Swap, each of which rights shall remain unaffected.

7.9 Excess Proceeds

Any amounts from time to time received by the Bond Trustee under the Covered Bond Guarantee will be applied by the Bond Trustee in accordance with the provisions of Section 11.1 (General) PROVIDED THAT any Excess Proceeds received by the Bond Trustee will be applied by the Bond Trustee in accordance with the provisions of Section 11.2 (Application of Excess Proceeds).

7.10 Unrecoverable Amounts

As separate, independent, alternative and primary obligation, the Guarantor unconditionally and irrevocably agrees that (following the service by the Bond Trustee of an Issuer Acceleration Notice on the Issuer and the service by the Bond Trustee of a Notice to Pay on the Guarantor) should any amount which, although expressed to be a Guaranteed Amount, for any reason (including without limitation any provisions of this Trust Deed or any other Transaction Document being or becoming void, voidable or unenforceable for any reason and whether or not now existing and whether or not now known or becoming known to the Issuer, the Guarantor, the Bond Trustee or any Covered Bondholder) not be recoverable from the Guarantor on the basis of a guarantee, such amount will nevertheless be recoverable from the Guarantor on the basis of a full indemnity and will be paid by it to the Bond Trustee on demand provided that the Guarantor’s obligation hereunder will in no circumstances exceed the relevant Guaranteed Amount.

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7.11 Excess Proceeds Amount

Upon deposit of any Excess Proceeds into the GDA Account (or, as applicable, the Stand-By GDA Account), pursuant to Section 11.2 (Application of Excess Proceeds) (any such amount, the “Excess Proceeds Amount”), the Guarantor will be deemed to have assumed all of the obligations of the Issuer (other than the obligation to make any payments in respect of additional amounts which may become payable by the Issuer pursuant to Condition 7 (Taxation)), and be solely liable as principal obligor and not as a guarantor, in respect of the obligation to pay to the Covered Bondholders interest and principal in respect of Covered Bonds to which the Excess Proceeds relate (to the extent distributable to Covered Bondholders under the applicable Priorities of Payments), and the Covered Bondholders will have no rights against the Issuer with respect to payment of the Excess Proceeds Amount.

ARTICLE 8

PAYMENTS UNDER THE COVERED BOND GUARANTEE

8.1 Payments

(a) The Issuer will notify the Bond Trustee in writing (copied to the Guarantor), no later than close of business on the fifth Business Day before each Interest Payment Date of the amount of Scheduled Interest and Scheduled Principal which is due and payable by the Issuer (other than pursuant to Condition 9 (Events of Default, Acceleration and Enforcement) on such Interest Payment Date and will confirm whether or not it will have sufficient funds to make such payments of such Scheduled Interest and Scheduled Principal on such Interest Payment Date. If the amount available for payment by the Issuer in respect of Scheduled Interest and/or Scheduled Principal on such Interest Payment Date will be insufficient to meet the amount of Scheduled Interest and/or Scheduled Principal due and payable on such Interest Payment Date (the “Shortfall”) on or prior to such Interest Payment Date or due date, the Issuer will inform the Bond Trustee in writing (copied to the Guarantor) of the amount of the Shortfall. Following the occurrence of an Issuer Event of Default and service by the Bond Trustee of an Issuer Acceleration Notice on the Issuer pursuant to Condition 9.1 (Issuer Events of Default), the Bond Trustee will promptly deliver a Notice to Pay to the Guarantor requiring the Guarantor to pay the Guaranteed Amounts as and when the same are Due for Payment in accordance with the terms of the Covered Bond Guarantee and this Trust Deed.

(b) Following the service by the Bond Trustee of an Issuer Acceleration Notice on the Issuer and the service by the Bond Trustee of a Notice to Pay on the Guarantor but prior to a Guarantor Event of Default and delivery by the Bond Trustee of a Guarantor Acceleration Notice, payment by the Guarantor of the Guaranteed Amounts pursuant to the Covered Bond Guarantee will be made in accordance with the Guarantee Priorities of Payments on the later of (a) the Scheduled Payment Date which is two Canadian Business Days following service of a Notice to Pay on the Guarantor, and (b) the day on which the Guaranteed Amounts are otherwise Due for Payment.

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(c) The Guarantor will, to the extent it has funds available to it, make payments in respect of the unpaid portion of the Final Redemption Amount on any Interest Payment Date up until the Extended Due for Payment Date.

8.2 Direction to Pay

The Bond Trustee will direct the Guarantor to pay (or to procure the payment of) all sums payable under the Covered Bond Guarantee to the Principal Paying Agent subject always to the provisions of Section 2.3 (Bond Trustee’s requirements regarding Paying Agents, etc.). For avoidance of doubt, any discharge of the Issuer as a result of the payment of Excess Proceeds to the Bond Trustee will be disregarded for the purposes of determining the amounts to be paid by the Guarantor under the Covered Bond Guarantee.

8.3 Notification

At least one Business Day before the date on which the Guarantor is obliged to make a payment under the Covered Bond Guarantee, it will notify or procure the notification of the Principal Paying Agent of the irrevocable instructions to the Account Bank (or, as applicable, the Stand-By Account Bank) through which payment to the Principal Paying Agent is to be made.

8.4 No Withholding, Deductions etc.

All payments of Guaranteed Amounts by or on behalf of the Guarantor will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or other governmental charges of whatever nature, unless the withholding or deduction of such taxes, duties, assessments or governmental charges are required by Law or administrative practice of any jurisdiction. If any such withholding or deduction is required, the Guarantor will pay the Guaranteed Amounts net of such withholding or deduction and will account to the appropriate tax authority for the amount required to be withheld or deducted. The Guarantor will not be obliged to pay any additional amount to the Bond Trustee or any holder of Covered Bonds and/or Coupons in respect of the amount of such withholding or deduction required by or on behalf of Canada or any province, territory or political division thereof or any authority or agency therein or thereof having the power to tax or, in the case of Covered Bonds issued by a branch of the Issuer located outside of Canada, by the country in which such branch is located or any political subdivision thereof or any authority or agency therein or thereof having the power to tax. In the event that any such withholding or deduction is required of the Issuer, the Issuer will, in accordance with Condition 7 (Taxation), pay such additional amounts as will result in the Covered Bondholders or Couponholders receiving such amounts as they would have received in respect of such Covered Bonds or Coupons had no such withholding or deduction been required.

8.5 Discharge and Subrogation

(a) The Issuer will not be discharged from its obligations under the Covered Bonds or Coupons and this Trust Deed by any payment made by the Guarantor under the Covered Bond Guarantee PROVIDED THAT this Section 8.5 will operate only for the purpose of the subrogation rights of the Guarantor contemplated by Section 7.8 (Waiver of Rights).

Except in relation to Excess Proceeds, any payment made by the Guarantor to the Covered Bondholders or the Couponholders in respect of the Covered

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Bonds or Coupons may be made in accordance with the Terms and Conditions and the Agency Agreement, and any payments so made will be a good discharge pro tanto of the relative covenant by the Guarantor (as the case may be) contained in Articles 7 (Covered Bond Guarantee) or 8 (Payments Under the Covered Bond Guarantee) (as the case may be) save to the extent that there is default in the subsequent payment thereof in accordance with this Trust Deed to the relevant Covered Bondholders or Couponholders (as the case may be).

ARTICLE 9

NON-PAYMENT

9.1 Non-Payment

Proof that as regards any specified Covered Bond or Coupon the Issuer or, as the case may be, the Guarantor has made default in paying any amount due in respect of such Covered Bond or Coupon will (unless the contrary be proved) be sufficient evidence that the same default has been made as regards all other Covered Bonds or Coupons (as the case may be) in respect of which the relevant amount is due and payable.

ARTICLE 10

PROCEEDINGS, ACTION AND INDEMNIFICATION

10.1 Proceedings, Action and Indemnification

(a) The Bond Trustee may at any time after an Issuer Acceleration Notice (in the case of the Issuer) or a Guarantor Acceleration Notice (in the case of the Guarantor), at its discretion and without further notice, take such proceedings against or in relation to the Issuer or the Guarantor as the case may be or any other Person as it may think fit to enforce the provisions of this Trust Deed, the Covered Bonds and the Coupons or any other Transaction Document. However, the Bond Trustee will not be bound to take any such enforcement proceedings in relation to this Trust Deed, the Covered Bonds, the Coupons or any other Transaction Document unless directed or requested to do so (i) by a resolution of the Covered Bondholders as set out in Condition 9 (Events of Default, Acceleration and Enforcement), or (ii) in writing by the holders of not less than twenty-five per cent. of the Principal Amount Outstanding of the Covered Bonds of all Series then outstanding (taken together and converted into Canadian Dollars at the relevant Covered Bond Swap Rate as aforesaid) and in either case then only if it will be indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby render itself liable or which it may incur by so doing.

(b) Subject to this Section 10.1, the Bond Trustee will not be bound to take any other action hereunder or under any other Transaction Document unless directed or requested to do so (i) by an Extraordinary Resolution of the Covered Bondholders of the relevant one or more Series (with the Covered Bonds of each Series (if more than one) taken together as a single Series), or (ii) in writing by the holders of not less than twenty-five per cent. of the Principal Amount Outstanding of the Covered Bonds of the relevant one or more Series (with the Covered Bonds of each such Series (if more than one)

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taken together as a single Series and converted into Canadian Dollars at the relevant Covered Bond Swap Rate) and in either case then only if it will be indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby render itself liable or which it may incur by so doing.

(c) Only the Bond Trustee may enforce the provisions hereof. No Covered Bondholder or Couponholder will be entitled to proceed directly against the Issuer or the Guarantor to enforce the performance of any of the provisions hereof or to directly enforce the provisions of the Security Agreement or any other Transaction Document unless the Bond Trustee having become bound as aforesaid to take proceedings fails to do so within 30 days and such failure is continuing (in which case each of such Covered Bondholder or Couponholder will be entitled to take any such steps and proceedings as it will deem necessary other than the presentation of a petition for the winding up of, or for an administration order in respect of, the Issuer, the Guarantor or any of its general partners).

(d) Notwithstanding the foregoing, for so long as there are U.S. Registered Covered Bonds outstanding, in accordance with Section 316(b) of the Trust Indenture Act, the right of any holder to receive payment of principal and interest on the Covered Bonds on or after the due date for such principal or interest, or to institute suit for the enforcement of payment of that principal or interest, may not be impaired or affected without the consent of the Covered Bondholders, provided that no such right of enforcement shall exist (i) in respect of a postponement of an interest payment which has been consented to by the Covered Bondholders in accordance with the Trust Deed or (ii) to the extent that the institution or prosecution of such suit or the entry of judgment therein would, under applicable Law, result in the surrender, impairment, waiver or loss of the security granted pursuant to this Trust Deed or the relevant Security Agreements upon any property subject to such security.

ARTICLE 11

APPLICATION OF FUNDS

11.1 General

All funds (other than Excess Proceeds which will be applied in the manner set out in Section 11.2 (Application of Excess Proceeds) below) received by the Bond Trustee hereunder from the Issuer or, as the case may be, the Guarantor or any liquidator, trustee in sequestration, receiver, administrative receiver, administrator or other similar official appointed in relation to the Issuer or the Guarantor (including any funds which represent principal or interest in respect of Covered Bonds or Coupons which have become void or in respect of which claims have become prescribed under Condition 8 (Prescription) and including the proceeds of any enforcement of the Security) will, unless and to the extent attributable, in the opinion of the Bond Trustee and only as expressly permitted by the CMHC Guide, to a particular Series of the Covered Bonds, be apportioned pari passu and rateably between each Series of the Covered Bonds, and all funds received by the Bond Trustee hereunder from the Issuer or, as the case may be, the Guarantor, to the extent attributable in the opinion of the Bond Trustee and only as expressly permitted by the CMHC Guide, to a particular Series of the Covered Bonds or which are apportioned to such Series as aforesaid, be held by the Bond Trustee upon trust to apply them:

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(a) FIRST (except in relation to any such funds received by the Bond Trustee following the occurrence of an Issuer Event of Default and the service by the Bond Trustee of an Issuer Acceleration Notice and a Notice to Pay) in payment or satisfaction of all amounts then due and unpaid under Article 16 (Remuneration and Indemnification of Bond Trustee) to the Bond Trustee and/or any Appointee;

(b) SECONDLY in or towards payment pari passu and rateably of all principal and interest then due and unpaid in respect of the Covered Bonds of that Series;

(c) THIRDLY in or towards payment pari passu and rateably of all principal and interest then due and unpaid in respect of the Covered Bonds of each other Series; and

(d) FOURTHLY in payment of the balance (if any) to the Issuer (to the extent received from the Issuer) or the Guarantor (if received from the Guarantor).

Without prejudice to this Section 11.1, if the Bond Trustee holds any funds (other than Excess Proceeds) which represent principal or interest in respect of Covered Bonds which have become void or in respect of which claims have been prescribed under Condition 8 (Prescription), the Bond Trustee will (subject to no sums being then overdue to the Bond Trustee or to the Covered Bondholders or Couponholders in respect of any other Covered Bonds or Coupons which have been presented for payment and to paying or providing for the payment or satisfaction of the said costs, charges, expenses and liabilities, including the remuneration of the Bond Trustee), hold such funds on the above trusts.

11.2 Application of Excess Proceeds

(a) Following the service by the Bond Trustee of an Issuer Acceleration Notice, any Excess Proceeds received by the Bond Trustee on behalf of the Covered Bondholders will be deposited by the Bond Trustee, as soon as practicable, into the GDA Account (or, as applicable, the Stand-By GDA Account), and following a Guarantor Event of Default and service of a Guarantor Acceleration Notice, deposited or paid in such other manner as the Bond Trustee may direct, and in either case, will be distributed in accordance with the applicable Priorities of Payments. The Excess Proceeds will thereafter form part of the Charged Property and, if deposited into the GDA Account (or, as applicable, the Stand-By GDA Account), will be used by the Guarantor in the same manner as all other funds from time to time standing to the credit of the GDA Account (or, as applicable, the Stand-By GDA Account) and distributed in accordance with the applicable Priorities of Payments. Any Excess Proceeds received by the Bond Trustee (to the extent distributable to Covered Bondholders under the applicable Priorities of Payments) will discharge a proportion of the obligations of the Issuer in respect of the Covered Bonds and Coupons (subject to restitution of the same if such Excess Proceeds will be required to be repaid by the Bond Trustee, the Guarantor or the Bond Trustee, as the case may be). However, the obligations of the Guarantor under the Covered Bond Guarantee are (subject only to service of a Notice to Pay or a Guarantor Acceleration Notice) unconditional and irrevocable and the receipt by the Bond Trustee of any Excess Proceeds will not reduce or discharge any such obligations.

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(b) By subscribing for or purchasing the Covered Bond, each Covered Bondholder will be deemed to have irrevocably directed the Bond Trustee to deposit the Excess Proceeds into the GDA Account (or, as applicable, the Stand-By GDA Account) in the manner as described above, or following a Guarantor Event of Default and service of a Guarantor Acceleration Notice, deposit or pay the Excess Proceeds in such other manner as the Bond Trustee may direct, provided that in each case distributions thereof will be made in accordance with the applicable Priorities of Payments.

(c) For the avoidance of doubt, any payments by the Guarantor to the Covered Bondholders out of the Excess Proceeds, will reduce the Guaranteed Amounts pro tanto.

ARTICLE 12

NOTICE OF PAYMENTS

12.1 Notice of Payments

The Bond Trustee will give notice to the relevant Covered Bondholders in accordance with Condition 13 (Notices) of the day fixed for any payment to them under Section 11.1 (General). Such payment may be made in accordance with Condition 5 (Payments) and any payment so made will be a good discharge to the Bond Trustee.

12.2 Covered Bondholder Communications and Reports

The Bond Trustee shall in accordance with Condition 13 (Notices):

(a) within 60 days after the end of each calendar year following the first date on which U.S. Registered Covered Bonds are issued and for so long as there are U.S. Registered Covered Bonds outstanding, deliver to each Covered Bondholder a brief report that complies with Section 313(a) of the Trust Indenture Act, and such report shall be dated as of a date convenient to the Bond Trustee and be delivered by mail where required pursuant to Section 313(c) of the Trust Indenture Act. For so long as there are U.S. Registered Covered Bonds outstanding, the Trustee shall comply with Sections 313(b), 313(c) and 313(d) of the Trust Indenture Act, including without limitation with respect to the filing of reports with the U.S. Securities and Exchange Commission; and

(b) give notice to the relevant Covered Bondholders in accordance with Condition 13 (Notices) of the day fixed for any payment to them under Clause 11.1. Such payment may be made in accordance with Condition 5 (Payments) and any payment so made shall be a good discharge to the Bond Trustee.

For so long as U.S. Registered Covered Bonds are outstanding, Covered Bondholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Covered Bondholders with respect to their rights under this Trust Deed or under the Covered Bonds. For

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so long as U.S. Registered Covered Bonds are outstanding, the Issuer, the Guarantor, the Bond Trustee, the Registrar and any other Person shall have the protection of Section 312(c) of the Trust Indenture Act.

ARTICLE 13

[RESERVED]

ARTICLE 14

PARTIAL PAYMENTS

14.1 Partial Payments

Upon any payment under Section 11.1 (General) (other than payment in full against surrender of a Covered Bond or Coupon) the Covered Bond or Coupon in respect of which such payment is made will be produced to the Bond Trustee, the Registrar or the Paying Agent by or through whom such payment is made and the Bond Trustee will or will cause the Registrar or, as the case may be, the Paying Agent to enface thereon a memorandum of the amount and the date of payment but the Bond Trustee may in any particular case or generally in relation to Registered Covered Bonds dispense with such production and enfacement upon such indemnity being given to the Bond Trustee and the Issuer as such parties will think sufficient.

ARTICLE 15

COVENANTS BY THE ISSUER AND THE GUARANTOR

15.1 Covenants

Each of the Issuer and the Guarantor hereby covenants with the Bond Trustee that, so long as any of the Covered Bonds remain outstanding, it will:

(a) at all times comply with its obligations hereunder and under each other Transaction Document to which it is a party and with the CMHC Guide;

(b) at all times maintain a Principal Paying Agent, Registrar, Transfer Agent, Exchange Agent and other Paying Agents with specified offices in accordance with the Terms and Conditions and at all times maintain any other agents required by the Terms and Conditions;

(c) give notice in writing to the Bond Trustee of the occurrence of any Issuer Event of Default or Potential Issuer Event of Default or Guarantor Event of Default or Potential Guarantor Event of Default (as applicable) without waiting for the Bond Trustee to take any further action;

(d) at all times keep proper books of account;

(e) give to the Bond Trustee at all times such information as it will reasonably require for the purpose of the discharge of the duties, powers, trusts, authorities and discretions vested in it hereunder or by operation of Law provided always that the foregoing will not oblige the Issuer or the Guarantor to disclose any confidential information or information regarding any matters that are exempted from disclosure in the published accounts of the Issuer, Guarantor or any Subsidiary or Affiliate of the Issuer by reason of any applicable Law;

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(f) without limiting Section 15.1(e), for so long as U.S. Registered Covered Bonds are outstanding, deliver or cause to be delivered, to the Bond Trustee, pursuant to Section 312 of the Trust Indenture Act, at least once every six months commencing on the date which is six months following the date on which U.S. Registered Covered Bonds are first issued and at such other times as the Bond Trustee may request in writing, a list in such form as the Bond Trustee may reasonably request in writing of all information in the possession or control of the Issuer and the Guarantor, or of any of the Paying Agents, as to the names and addresses of the Covered Bondholders and requiring the Bond Trustee to preserve, in as current a form as is reasonably practicable, all such information so furnished to it or received by it;

(g) send to the Bond Trustee: (i) as promptly as practicable after the time of issue or publication thereof and in any event within 180 days after the end of each of its financial years (or financial periods, as appropriate, in the event of a change of accounting reference date) (in addition to any copies to which it may be entitled as a holder of any securities of the Issuer) two copies in English of each report and accounts for the relevant financial year/financial period (as appropriate) containing a balance sheet, profit and loss account of the Issuer; (ii) in the case of the Issuer only, as promptly as practicable after the issue or publication thereof two copies in English of every balance sheet, profit and loss account, report, circular and notice of general meeting and every other document issued or sent to its shareholders (in their capacity as such); and (iii) upon execution hereof and thereafter forthwith upon any changes of the same a list of Authorized Signatories of the Issuer, or as the case may be, the Guarantor PROVIDED HOWEVER, that there will be no obligation upon the Bond Trustee to review any balance sheet, income and expenditure account, profit and loss account, report, circular and notice of general meeting or every other document delivered to the Bond Trustee pursuant to this section and it is understood that the Bond Trustee is holding such documents so that they may be made available for inspection by the Covered Bondholders upon their reasonable request;

(h) procure that each of the Principal Paying Agent, the Transfer Agents and the Registrar makes available for inspection by Covered Bondholders and Couponholders at its specified office copies of this Trust Deed (including any deed supplemental thereto), the Agency Agreement and the then latest audited balance sheet and profit and loss accounts (consolidated if applicable) of the Issuer;

(i) promptly provide the Bond Trustee with copies of all supplements and/or amendments and/or restatements of the Program Agreement;

(j) in the case of the Issuer, cause to be prepared and certified by its Auditors in respect of each financial period, accounts in such form as will comply with all relevant legal and accounting requirements of the country in which the Issuer is incorporated and, if applicable, the requirements for the time being of the relevant Stock Exchange;

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(k) send or procure to be sent to the Bond Trustee at the time of delivery to the Bond Trustee of the Issuer’s report and accounts pursuant to paragraph (e)(i) of this Section and within 30 days after any request by the Bond Trustee, a certificate signed by two Authorized Signatories of the Issuer or, as the case may be, the Guarantor certifying that, to the best of their knowledge and belief after making all reasonable enquiries, (i) during such financial year (or financial period, as appropriate, in the event of a change of accounting reference date) (or during such period as the Bond Trustee may reasonably specify in such request) and since the completion thereof and up to a specified date not earlier than 10 days prior to the date of such certificate, the Issuer or, as the case may be, the Guarantor has complied with its material obligations hereunder and under the Agency Agreement and the other Transaction Documents or (if such is not the case) giving details of the circumstances of such non compliance, and (ii) without prejudice to the generality of this paragraph (i) or of paragraph (b) of this Article, there did not exist on the part of the Issuer, or as the case may be, the Guarantor, as at the date mentioned in (i) above, any Issuer Event of Default or Potential Issuer Event of Default or Guarantor Event of Default or Potential Guarantor Event of Default (as applicable) or, if any Issuer Event of Default or Potential Issuer Event of Default or Guarantor Event of Default or Potential Guarantor Event of Default (as applicable) exists, giving details of the same;

(l) so far as permitted by Law at all times execute all such further documents and do all such further acts and things as may be necessary at any time or times in the reasonable opinion of the Bond Trustee to give effect to the terms and conditions of this Trust Deed;

(m) procure that the Principal Paying Agent notifies the Bond Trustee forthwith in the event that it does not, on or before the due date for payment in respect of the Covered Bonds or any of them or in respect of the Coupons (if any), receive unconditionally in the manner provided by the Agency Agreement the full amount of the funds payable in the requisite currency on such due date on all such Covered Bonds or, as the case may be, all such Coupons;

(n) without prejudice to Condition 19 (Listing), if the applicable Final Terms Document of a Series indicates that the Covered Bonds of that Series are to be listed on a Stock Exchange, use all reasonable endeavours to procure the admission of the relevant Covered Bonds to listing and trading on such Stock Exchange(s) and to maintain the same until none of the Covered Bonds of the relevant series is outstanding (provided that if, at any time, the Issuer or the Guarantor is of the opinion in its sole discretion that maintaining such quotation or listing is unduly burdensome, the Issuer or Guarantor may seek an alternative listing of the Covered Bonds on some other Stock Exchange (including, without limitation, a stock exchange outside the European Union) as may be agreed between the Issuer, the Guarantor and for greater certainty, if any future Law introduces additional requirements (including new corporate governance requirements), in order to maintain the continued listing of the relevant Covered Bonds on a regulated market in the European Union, the Issuer may terminate the listing of the relevant Covered Bonds on such regulated market and will use all commercially reasonable endeavours to procure and maintain a quotation or listing of such Covered Bonds issued by it on such other stock exchange or exchanges or securities market or markets as

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the Issuer may consider appropriate. However, if such alternative listing is not available or is, in the opinion of the Issuer, impracticable or unduly burdensome, an alternative listing for such Covered Bonds may not be obtained;

(o) observe and comply with its obligations, and use all reasonable endeavours to procure that the Principal Paying Agent, the Registrar, any Transfer Agent and the other Paying Agents observe and comply with all their respective obligations under the Agency Agreement and not modify or amend the same without the previous consent in writing of the Bond Trustee;

(p) send to the Bond Trustee a copy of the form of any notice to be given to the Covered Bondholders in accordance with Condition 13 (Notices) and, upon publication, two copies of such notice, such notice being in the form approved by the Bond Trustee (such approval not to be unreasonably withheld or delayed and, unless so expressed, not to constitute approval for the purposes of Section 21 of the FSMA of a communication within the meaning of Section 21);

(q) in the event of the unconditional payment to the Principal Paying Agent or the Bond Trustee of any sum due in respect of principal, redemption amount, premium (if any) and/or interest on the Covered Bonds of any Series being made after the due date for payment thereof, forthwith give or procure the Principal Paying Agent to give notice to the Covered Bondholders of such Series in accordance with Condition 13 (Notices) that such payment has been made;

(r) if while any of the Covered Bonds remains outstanding the Issuer will become subject generally to the taxing jurisdiction of any country or any authority or political sub-division therein or thereof having power to tax other than or in addition to Canada or any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, unless the Bond Trustee otherwise agrees, the Issuer will give to the Bond Trustee notice forthwith upon becoming aware thereof and, as soon as practicable thereafter, an undertaking or covenant in form and substance and manner satisfactory to the Bond Trustee in terms corresponding to the relevant Condition 7 (Taxation) with the substitution for (or, as the case may be, addition to) the references therein to Canada or any province, territory, or political division thereof or any authority or agency therein or thereof having power to tax of references to that other or additional country or any authority or political sub-division therein or thereof having power to tax to whose taxing jurisdiction the Issuer will have become subject as aforesaid and, where such undertaking or covenant is provided, references in Condition 7 (Taxation) to Canada or any political sub-division thereof or any authority therein or thereof having power to tax will be deemed to be amended accordingly;

(s) give or procure that there be given notice to the Covered Bondholders in accordance with the Terms and Conditions of any appointment (other than the initial appointment), resignation or removal of any Principal Paying Agent, Registrar, Calculation Agent, Transfer Agent, Exchange Agent or other Paying Agent as shown on the Covered Bonds or so published in accordance with the Terms and Conditions as soon as practicable after having obtained (except in

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the case of resignation) the written approval of the Bond Trustee thereto (such approval not to be unreasonably withheld or delayed) and in any event within 14 days after such event taking effect and within 30 days of notice received from a Principal Paying Agent, Registrar, Transfer Agent, Exchange Agent or other Paying Agent of a change in its specified office, give notice to the Bond Trustee and to the Covered Bondholders of such change PROVIDED ALWAYS THAT so long as any of the Covered Bonds remains outstanding in the case of the termination of the appointment of the Registrar or a Transfer Agent or so long as any of the Covered Bonds or Coupons remains liable to prescription in the case of the termination of the appointment of the Principal Paying Agent or the Calculation Agent no such termination will take effect until a new Principal Paying Agent, Calculation Agent, Registrar, Exchange Agent or Transfer Agent (as the case may be) has been appointed on terms previously approved in writing by the Bond Trustee (provided, however, that such termination will take effect without the condition for a replacement Agent being appointed if the Agent whose appointment is being terminated is the Issuer or an Affiliate of the Issuer and the appointment of such Agent is being terminated under (i) Section 26.6 of the Agency Agreement in the event such Agent defaults in the performance or observance of its covenants or breaches its representations and warranties made, respectively, under Section 2.10 of the Agency Agreement, (ii) Section 26.10(b) of the Agency Agreement, or (iii) Section 26.11 of the Agency Agreement);

(t) in order to enable the Bond Trustee to ascertain the Principal Amount Outstanding of Covered Bonds of each Series for the time being outstanding (other than for the purpose of ascertaining the amount of Covered Bonds of each Series for the time being outstanding for the purpose of the Program Limit), deliver to the Bond Trustee forthwith after being so requested in writing by the Bond Trustee a certificate in writing signed by two Authorized Signatories setting out the total numbers and Principal Amount Outstanding of the Covered Bonds of each Series which up to and including the date of such certificate have been purchased by or for the account of the Issuer or any of its Subsidiaries, the Principal Amount Outstanding of the Covered Bonds of each Series which are held beneficially at such date by the Issuer, or any of its Subsidiaries and the Principal Amount Outstanding of the Covered Bonds of each Series so purchased which have been cancelled;

(u) use all reasonable endeavours to procure that Euroclear, DTC and/or Clearstream, Luxembourg (as the case may be) issue(s) any record, certificate or other document requested by the Bond Trustee under Section 17.1 (Powers of the Bond Trustee) or otherwise as soon as practicable after such request;

(v) procure that notice of service of any Issuer Acceleration Notice, Guarantor Acceleration Notice, or notice to call a meeting of Covered Bondholders is given promptly to each Rating Agency;

(w) ensure that each Covered Bond to be issued or other transactions to be effected hereunder will comply with all applicable Laws and regulations of any governmental or other regulatory authority of the country of any relevant currency for the purposes of any relevant Covered Bond and that all necessary consents and approvals of, and registrations and filings with, any such authority in connection therewith are obtained and maintained in full force and effect;

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(x) furnish, upon the request of a holder of Covered Bonds or any beneficial interest therein, to such holder or to a prospective purchaser designated by such holder or beneficial owner, the information required to be delivered under Rule 144A(d)(4) under the Securities Act if, at the time of the request, the Issuer or the Guarantor is neither a reporting company under Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended, nor exempt from reporting pursuant to Rule 12g2-3(b) thereunder;

(y) to the extent applicable, comply with the filing requirements of Section 314 of the Trust Indenture Act for so long as U.S. Registered Covered Bonds are outstanding; and

(z) the maximum Asset Percentage shall be 95%.

ARTICLE 16

REMUNERATION AND INDEMNIFICATION OF BOND TRUSTEE

16.1 Remuneration

The Issuer (failing which, and following an Issuer Event of Default and service of an Issuer Acceleration Notice and a Notice to Pay or, if earlier, following a Guarantor Event of Default and the service of a Guarantor Acceleration Notice, the Guarantor) will pay to the Bond Trustee, by way of remuneration for its services as Bond Trustee hereunder, such amount as will be agreed from time to time by exchange of letters between the Issuer and the Bond Trustee. Such remuneration will accrue from day to day and be payable (in priority to payments to Covered Bondholders and Couponholders and any other Secured Creditors) up to and including the date when, all the Covered Bonds having become due for redemption, the redemption funds and interest thereon to the date of redemption have been paid to the Principal Paying Agent or the Bond Trustee PROVIDED THAT if upon due presentation of any Covered Bond or Coupon or any cheque payment of the funds due in respect thereof is improperly withheld or refused, remuneration will be deemed not to have ceased to accrue and will continue to accrue until payment to such Covered Bondholder or Couponholder is duly made.

16.2 Additional Remuneration

In the event of the occurrence of an Issuer Event of Default, Guarantor Event of Default, Potential Issuer Event of Default or Potential Guarantor Event of Default or the Bond Trustee considering it necessary or being requested by the Issuer or the Guarantor (as the case may be) to undertake duties which the Bond Trustee and the Issuer or the Guarantor agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Bond Trustee hereunder the Issuer or the Guarantor will pay to the Bond Trustee such additional remuneration as will be agreed between them and the provisions of this Article 16 will apply mutatis mutandis in respect of such additional remuneration.

16.3 Taxes

The Issuer (and following an Issuer Event of Default and service of an Issuer Acceleration Notice and a Notice to Pay or, if earlier, following a Guarantor Event of Default

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and the service of a Guarantor Acceleration Notice, the Guarantor) will in addition to amounts payable under this Article 16 pay to the Bond Trustee an amount equal to the amount of any GST or similar Tax that the Bond Trustee is liable to account for to any Tax authority in respect of any supply of services made by the Bond Trustee pursuant to this Trust Deed subject to receipt of a valid GST (or similar Tax) invoice.

16.4 Disputes

In the event of the Bond Trustee and the Issuer (and, following any Issuer Event of Default and service of an Issuer Acceleration Notice and a Notice to Pay or, if earlier, following a Guarantor Event of Default and the service of a Guarantor Acceleration Notice, the Guarantor) failing to agree:

(a) (in a case to which Section 16.1 (Remuneration) above applies) upon the amount of the remuneration; or

(b) (in a case to which Section 16.2 (Additional Remuneration) above applies) upon whether such duties will be of an exceptional nature or otherwise outside the scope of the normal duties of the Bond Trustee hereunder, or upon such additional remuneration,

such matters will be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Bond Trustee and approved by the Issuer or the Guarantor (the expenses involved in such nomination and the fees of such investment bank being payable by the Issuer or the Guarantor) and the determination of any such investment bank will be final and binding upon the Bond Trustee and the Issuer or the Guarantor.

16.5 Other Liabilities

The Issuer (and following any Issuer Event of Default and service of an Issuer Acceleration Notice and a Notice to Pay or, if earlier, following a Guarantor Event of Default and the service of a Guarantor Acceleration Notice, the Guarantor) will also pay or discharge all other Liabilities properly incurred by the Bond Trustee in relation to the negotiation, preparation and execution of the exercise of its powers and the performance of its duties hereunder and any other Transaction Document to which it is party, including but not limited to reasonable legal fees and travelling expenses and any stamp, issue, registration, documentary and other similar taxes or duties paid or payable by the Bond Trustee in connection with any action taken by or on behalf of the Bond Trustee.

16.6 Indemnification

The Issuer (and following any Issuer Event of Default and service of an Issuer Acceleration Notice and a Notice to Pay or, if earlier, following a Guarantor Event of Default and the service of a Guarantor Acceleration Notice, the Guarantor) will indemnify the Bond Trustee in full in respect of all proceedings, claims and demands and all costs, charges, expenses, and liabilities for which it (or any Person appointed by it to whom any trust, power, authority or discretion may be delegated by it in the execution or purported execution of the trusts, powers, authorities or discretions vested in it by this Trust Deed or any other Transaction Document to which the Bond Trustee is party to or its functions under any such appointment) may be or become liable or which may properly be incurred by it (or any such Person as aforesaid) in respect of any matter or thing done or omitted in anyway relating to this Trust Deed or any other Transaction Document to which the Bond Trustee is party save

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to the extent that the same arises as a result of dishonesty, bad faith, wilful misconduct, gross negligence or reckless disregard on the part of the Bond Trustee. The Bond Trustee will use best endeavours to keep the Issuer and the Guarantor informed of the progress of any claims against the Bond Trustee. This indemnification will survive the termination of this Trust Deed and the retirement and removal of the Bond Trustee.

16.7 Interest

All amounts payable pursuant to Sections 16.5 (Other Liabilities) and 16.6 (Indemnification) above will be payable by the Issuer (failing which and following any Issuer Event of Default and the service of a Notice to Pay on the Guarantor or, if earlier, following a Guarantor Event of Default and the service of a Guarantor Acceleration Notice, the Guarantor) on the date specified in a demand by the Bond Trustee and in the case of payments actually made by the Bond Trustee prior to such demand will (if not paid within 3 days of such demand and the Bond Trustee so requests) carry interest at the rate then charged by the Bond Trustee on overdue accounts from the date specified in such demand, and in all other cases will (if not paid on the date specified in such demand or, if later, within 3 days of such demand and, in either case, the Bond Trustee so requires) carry interest at such rate from the date specified in such demand. All remuneration payable to the Bond Trustee will carry interest at such rate from the due date therefor.

16.8 Survival

Unless otherwise specifically stated in any discharge of this Trust Deed the provisions of this Article 16 and Article 24 (Exchange Rate Indemnity) will continue in full force and effect in relation to the period during which the Bond Trustee was bond trustee hereunder notwithstanding such discharge and whether or not the Bond Trustee is then the bond trustee hereunder.

16.9 Allocation

The Bond Trustee will be entitled in its absolute discretion to determine in respect of which Series of Covered Bonds any Liabilities incurred hereunder have been incurred or to allocate any such Liabilities between the Covered Bonds of any Series.

ARTICLE 17

POWERS OF THE BOND TRUSTEE

17.1 Powers of the Bond Trustee

Except as otherwise provided or otherwise in conflict or inconsistent with the Transaction Documents, the Bond Trustee has the following powers:

(a) The Bond Trustee may in relation hereto and the other Transaction Documents rely and/or act on the advice or report or opinion of or any information obtained from any Auditor, lawyer, valuer, accountant, surveyor, banker, professional adviser, broker, financial adviser, auctioneer or other expert whether obtained by the Issuer, the Guarantor, the Principal Paying Agent, the Bond Trustee or otherwise and whether or not addressed to the Bond Trustee notwithstanding that such advice, report, opinion, information, or any engagement letter or any other document entered into by the Bond Trustee and the relevant Person in connection therewith, contains any monetary or other limit on the liability of the relevant Person and the Bond Trustee will not be responsible for any Liability occasioned by so acting or relying.

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(b) Any such advice, opinion or information may be sent or obtained by letter, facsimile or e-mail transmission or cable and the Bond Trustee will not be liable for acting on any advice, opinion or information purporting to be conveyed by any such letter, facsimile or e-mail transmission or cable although the same will contain some error or will not be authentic.

(c) The Bond Trustee may call for and will be at liberty to accept as sufficient evidence of any fact or matter or the expediency of any transaction or thing a certificate signed by two Authorized Signatories of the Issuer or, as the case may be, the Guarantor, two Authorized Signatories of the Managing GP (as the case may be) and the Bond Trustee will not be bound in any such case to call for further evidence or be responsible for any Liability that may be occasioned by it or any other Person acting on such certificate.

(d) The Bond Trustee will be at liberty to hold this Trust Deed and any other documents relating thereto or to deposit them in any part of the world with any banker or banking company or company whose business includes undertaking the safe custody of documents or lawyer or firm of lawyers considered by the Bond Trustee to be of good repute and the Bond Trustee will not be responsible for or required to insure against any Liability incurred in connection with any such holding or deposit and may pay all sums required to be paid on account of or in respect of any such deposit.

(e) The Bond Trustee will not be responsible for the receipt or application of the proceeds of the issue of any of the Covered Bonds by the Issuer, the exchange of any Global Covered Bond for another Global Covered Bond or Definitive Covered Bonds or the delivery of any Global Covered Bond or Definitive Covered Bonds to the Person(s) entitled to it or them.

(f) Except to the extent required pursuant to Section 315(b) of the Trust Indenture Act and for so long as U.S. Registered Covered Bonds are outstanding, the Bond Trustee will not be bound to give notice to any Person of the execution of any documents comprised or referred to herein or to take any steps to ascertain whether any Issuer Event of Default, Potential Issuer Event of Default, Guarantor Event of Default or Potential Guarantor Event of Default has occurred and, until it will have actual knowledge or express notice pursuant hereto to the contrary, the Bond Trustee will be entitled to assume that no Issuer Event of Default, Potential Issuer Event of Default, Guarantor Event of Default or Potential Guarantor Event of Default has occurred and that each of the Issuer and the Guarantor is observing and performing all of their respective obligations hereunder.

(g) Save as expressly otherwise provided herein, the Bond Trustee will have absolute and uncontrolled discretion as to the exercise or non-exercise of its trusts, powers, authorities and discretions hereunder (the exercise or non-exercise of which as between the Bond Trustee and the Covered Bondholders and the Couponholders will be conclusive and binding on the Covered Bondholders and the Couponholders) and will not be responsible for any Liability which may result from their exercise or non-exercise and in

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particular the Bond Trustee will not be bound to act at the request or direction of the Covered Bondholders or otherwise under any provision hereof or to take at such request or direction or otherwise any other action under any provision hereof or thereof, without prejudice to the generality of Section 10.1 (Proceedings, Action and Indemnification), unless it will first be indemnified and/or secured to its satisfaction against all Liabilities to which it may render itself liable or which it may incur by so doing.

(h) Notwithstanding anything else in this Agreement, the Bond Trustee shall retain the right not to act (and will not be held liable for refusing to act) unless it has received a clear and unambiguous request, direction, order, instruction, authorization and/or certification, as applicable, which complies with the terms of this Agreement. Furthermore, the Bond Trustee shall retain the right not to act if, in its own discretion, it petitions a court of competent jurisdiction to clarify and adjudicate any uncertain or ambiguous matter relating to this Agreement.

(i) The Bond Trustee will not be liable to any Person by reason of having acted upon any Extraordinary Resolution in writing or any Extraordinary Resolution or other resolution purporting to have been passed at any meeting of the Covered Bondholders of all or any Series in respect whereof minutes have been made and signed or any direction or request of the Covered Bondholders of all or any Series even though subsequent to its acting it may be found that there was some defect in the constitution of the meeting or the passing of the resolution, (in the case of an Extraordinary Resolution in writing) that not all such Covered Bondholders had signed the Extraordinary Resolution or (in the case of a direction or request) it was not signed by the requisite number of Covered Bondholders or that for any reason the resolution, direction or request was not valid or binding upon such Covered Bondholders and the relative Couponholders.

(j) The Bond Trustee will not be liable to any Person by reason of having accepted as valid or not having rejected any Covered Bond or Coupon purporting to be such and subsequently found to be forged or not authentic.

(k) The Bond Trustee may request instructions from the Covered Bondholders given by way of a direction in writing of such Covered Bondholders of not less than twenty-five per cent. of the Principal Amount Outstanding of the Covered Bonds of the relevant Series then outstanding (unless otherwise specifically provided herein) with respect to any actions or approvals which, by the terms of this Trust Deed or other Transaction Documents, the Bond Trustee is permitted or required to take or to grant (including any such actions or approvals that are to be taken in the Bond Trustee’s “discretion” or “opinion”, or to its “satisfaction”, or words to similar effect) unless such action or approval is expressly authorized or required herein or pursuant to other Transaction Documents, and the Bond Trustee may refrain from taking any such action or withhold any such approval and shall not be under any liability whatsoever as a result thereof until it shall have received such instructions by way of such a direction in writing (unless otherwise specifically provided herein) from Covered Bondholders in accordance with this Trust Deed or other Transaction Documents. No Covered Bondholder shall have any right of action whatsoever against the Bond Trustee as a result

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of the Bond Trustee acting or refraining from acting under this Trust Deed or pursuant to other Transaction Documents in accordance with such written instructions from the Covered Bondholders. The Bond Trustee shall in all cases be fully justified in failing or refusing to take or continue any action under this Trust Deed or other Transaction Document unless it shall have received further assurances to its satisfaction from the Covered Bondholders of their indemnification obligations under this Trust Deed against any and all liability and expense which may be incurred by it by reason of taking or continuing to take such action, and unless it shall be secured in respect thereof as it may deem appropriate. If and to the extent that this Trust Deed or any other Transaction Documents require the Bond Trustee to act reasonably, each of the Covered Bondholders agrees that it shall act reasonably and without undue delay in authorizing or directing the Bond Trustee in that regard.

(l) Any consent or approval given by the Bond Trustee for the purposes hereof may be given on such terms and subject to such conditions (if any) as the Bond Trustee thinks fit and notwithstanding anything to the contrary herein may be given retrospectively. The Bond Trustee may give any consent or approval, exercise any power, authority or discretion or take any similar action (whether or not such consent, approval, power, authority, discretion or action is specifically referred to herein) if it is satisfied that the interests of the Covered Bondholders will not be materially prejudiced thereby. For the avoidance of doubt, the Bond Trustee will not have any duty to the Covered Bondholders in relation to such matters other than that which is contained in the preceding sentence.

(m) Except as expressly provided in Section 12.2, the Bond Trustee will not (unless and to the extent ordered so to do by a court of competent jurisdiction or permitted by other applicable Law (which for so long as U.S. Registered Covered Bonds are outstanding includes the Trust Indenture Act)) be required to disclose to any Covered Bondholder, Couponholder or any other Secured Creditor any information (including, without limitation, information of a confidential, financial or price sensitive nature) made available to the Bond Trustee by the Issuer, the Guarantor or any other Person in connection herewith or the Security Agreements and no Covered Bondholder, Couponholder or other Secured Creditor will be entitled to take any action to obtain from the Bond Trustee any such information.

(n) Where it is necessary or desirable for any purpose in connection herewith to convert any sum from one currency to another it will (unless otherwise provided herein or required by Law) be converted at such rate or rates, in accordance with such method and as at such date for the determination of such rate of exchange, as may be agreed by the Bond Trustee in consultation with the Issuer and any rate, method and date so agreed will be binding on the Issuer, the Guarantor, the Covered Bondholders and the Couponholders.

(o) The Bond Trustee may certify whether or not any of the conditions, events and acts set out in subparagraphs (b) to (d) (inclusive) of Condition 9.1 (Issuer Events of Default) and subparagraphs (b) to (e) (inclusive) of Condition 9.2 (Guarantor Events of Default), in each case of the Terms and Conditions (each of which conditions, events and acts will, unless in any case the Bond Trustee in its absolute discretion will otherwise determine, for all the purposes hereof

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be deemed to include the circumstances resulting therein and the consequences resulting therefrom) is in its opinion materially prejudicial to the interests of the Covered Bondholders of any Series and any such certificate will be conclusive and binding upon the Issuer, the Guarantor, the Covered Bondholders and the Couponholders.

(p) The Bond Trustee as between itself and the Covered Bondholders and the Couponholders may determine all questions and doubts arising in relation to any of the provisions hereof. Every such determination, whether or not relating in whole or in part to the acts or proceedings of the Bond Trustee, will be conclusive and will bind the Bond Trustee and the Covered Bondholders and the Couponholders.

(q) In connection with the exercise by it of any of its trusts, powers, authorities or discretions hereunder (including, without limitation, any modification, waiver, authorization, determination or substitution), the Bond Trustee will have regard to the general interests of the Covered Bondholders of each Series as a class (but will not have regard to any interests arising from circumstances particular to individual Covered Bondholders or Couponholders whatever their number) and, in particular but without limitation, will not have regard to the consequences of such exercise for individual Covered Bondholders and Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Bond Trustee will not be entitled to require, nor will any Covered Bondholder or Couponholder be entitled to claim, from the Issuer, the Guarantor, the Bond Trustee or any other Person any indemnification or payment in respect of any Tax or stamp duty consequences of any such exercise upon individual Covered Bondholders and/or Couponholders, except to the extent already provided for in Condition 7 (Taxation) and/or in any undertaking or covenant given in addition thereto or in substitution therefor hereunder.

(r) Any trustee of this Trust Deed being a lawyer, accountant, broker or other Person engaged in any profession or business will be entitled to charge and be paid all usual and proper professional and other charges for business transacted and acts done by him or his firm in connection with the trusts hereof or any other of the Transaction Documents to which the Bond Trustee is a party and also his reasonable charges in addition to disbursements for all other work and business done and all time spent by him or his firm in connection with matters arising in connection herewith including matters which might or should have been attended to in person by a trustee not being a lawyer, accountant, broker or other professional person.

(s) The Bond Trustee may whenever it thinks fit delegate by power of attorney or otherwise to any Person or Persons or fluctuating body of Persons (whether being a joint trustee of this Trust Deed or not) all or any of its trusts, powers, authorities and discretions hereunder. Such delegation may be made upon such terms (including power to sub-delegate) and subject to such conditions and regulations as the Bond Trustee may in the interests of the Covered Bondholders think fit. Provided the Bond Trustee has exercised reasonable care in the selection of any such delegate, the Bond Trustee will not be under

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any obligation to supervise the proceedings or acts of any such delegate or sub-delegate or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate or sub-delegate. The Bond Trustee will give a reasonable prior notice to the Issuer and the Guarantor of any such delegation or any renewal, extension or termination and will procure that any delegate will also give reasonable prior notice to the Issuer and the Guarantor of any sub-delegate.

(t) The Bond Trustee may in the conduct of the trusts hereof instead of acting personally employ and pay an agent (whether being a lawyer or other professional person) to transact or conduct, or concur in transacting or conducting, any business and to do, or concur in doing, all acts required to be done in connection herewith (including the receipt and payment of money). Provided the Bond Trustee has exercised reasonable care in the selection of any such agent, the Bond Trustee will not be in any way responsible for any Liability incurred by reason of any misconduct or default on the part of any such agent or be bound to supervise the proceedings or acts of any such agent.

(u) The Bond Trustee will not be responsible for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of this Trust Deed and any other Transaction Document or any other document relating or expressed to be supplemental thereto and will not be liable for any failure to obtain any licence, consent or other authority for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, performance, enforceability or admissibility in evidence of this Trust Deed and any other Transaction Document or any other document relating or expressed to be supplemental thereto.

(v) The Bond Trustee will not be responsible to any Person for failing to request, require or receive any legal opinion relating to the Covered Bonds or for checking or commenting upon the content of any such legal opinion and will not be responsible for any Liability incurred thereby.

(w) The Bond Trustee may appoint and pay any Person to act as a custodian or nominee on any terms in relation to such assets of the trusts constituted hereby as the Bond Trustee may reasonably determine, including for the purpose of depositing with a custodian this Trust Deed or any document relating to the trusts constituted hereby. If the Bond Trustee exercised reasonable care in the selection of such custodian or nominee, the Bond Trustee will not be responsible for any Liability incurred by reason of the misconduct, omission or default on the part of any such Person appointed by it hereunder or be bound to supervise the proceedings or acts of such Person. The Bond Trustee is not obliged to appoint a custodian if the Bond Trustee invests in securities payable to bearer.

(x) Subject to the requirements, if any, of any relevant Stock Exchange, any corporation into which the Bond Trustee will be merged or with which it will be consolidated or any company resulting from any such merger or consolidation will be a party hereto and will be the Bond Trustee under this Trust Deed without executing or filing any paper or document or any further act being required on the part of the parties thereto.

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(y) The Bond Trustee will not be bound to take any action in connection herewith or any obligations arising pursuant thereto, including, without prejudice to the generality of the foregoing, forming any opinion or employing any financial adviser, where it is not reasonably satisfied that the Issuer or the Guarantor (as the case may be) will be able to indemnify it against all Liabilities which may be incurred in connection with such action and may demand prior to taking any such action that there be paid to it in advance such sums as it reasonably considers (without prejudice to any further demand) will be sufficient so to indemnify it and on such demand being made the Issuer (and following an Issuer Event of Default and the service of an Issuer Acceleration Notice and a Notice to Pay on the Guarantor or, if earlier, following a Guarantor Event of Default and the service of a Guarantor Acceleration Notice, the Guarantor) will be obliged to make payment of all such sums in full.

(z) No provision herein will require the Bond Trustee to do anything which may (i) be illegal or contrary to applicable Law, or (ii) cause it to expend or risk its own funds or otherwise incur any Liability in the performance of any of its duties or in the exercise of any of its rights, powers or discretions, if it will have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or Liability is not assured to it.

(aa) Unless notified to the contrary, the Bond Trustee will be entitled to assume without enquiry (other than requesting a certificate pursuant to Section 15.1 (Covenants)) that no Covered Bonds are held by, for the benefit of, or on behalf of, the Issuer or any of its Subsidiaries.

(bb) The Bond Trustee will have no responsibility whatsoever to the Issuer, the Guarantor, any Covered Bondholder or Couponholder or any other Person for the maintenance of or failure to maintain any rating of any of the Covered Bonds by any Rating Agency.

(cc) The Bond Trustee will not be liable or responsible for, or for investigating any matter which is the subject of, any recital, statement, representation, warranty or covenant of any Person contained herein, or any other agreement or document relating to the transactions contemplated herein or under such other agreement or document.

(dd) Subject to Article 18 (Bond Trustee’s Liability), the Bond Trustee will not be liable or responsible for any Liabilities or inconvenience which may result from anything done or omitted to be done by it in accordance with the provisions hereof.

(ee) If, in connection with the exercise of its powers, trusts, authorities or discretions, the Bond Trustee is of the opinion that the interests of the Covered Bondholders of any one or more Series would be materially prejudiced thereby, the Bond Trustee will not exercise such power, trust, authority or discretion without the approval of such Covered Bondholders by Extraordinary Resolution or by a direction in writing of such Covered Bondholders of not less than twenty-five per cent. of the Principal Amount Outstanding of the Covered Bonds of the relevant Series then outstanding.

(ff) The Bond Trustee will not be responsible for any loss, expense or liability, which may be suffered as a result of any Loans or Related Security, or any

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deeds or documents of title thereto, being uninsured or inadequately insured or being held by clearing organisations or their operators or by intermediaries such as banks, brokers or other similar Persons on behalf of the Bond Trustee. The Bond Trustee will not be responsible for: (i) supervising the performance by the Issuer, the Guarantor, or any other party to the Transaction Documents of their respective obligations under the Transaction Documents, and the Bond Trustee will be entitled to assume, until they each have received written notice to the contrary, that all such Persons are properly performing their duties; (ii) considering the basis on which approvals or consents are granted by the Issuer, the Guarantor or any other party to the Transaction Documents under the Transaction Documents; (iii) monitoring the Portfolio, including, without limitation, whether the Portfolio is in compliance with the Asset Coverage Test or the Amortization Test; or (iv) monitoring whether Loans and Related Security satisfy the Eligibility Criteria. The Bond Trustee will not be liable to any Covered Bondholder or other Secured Creditor for any failure to make or to cause to be made on their behalf the searches, investigations and enquiries which would normally be made by a prudent chargee in relation to the Security and have no responsibility in relation to the legality, validity, sufficiency and enforceability of the Security and the Transaction Documents.

(gg) Where hereunder, the Bond Trustee is required to consider whether any event or the exercise by it of any of its powers, authorities or discretions is or will be materially prejudicial to the interests of the Covered Bondholders of one or more Series, the Bond Trustee will be entitled to call for and rely and act upon the advice or opinion of any reputable financial or other adviser (whether or not such financial adviser will be a Secured Creditor or otherwise party to any Transaction Document) and if relied upon by the Bond Trustee will be binding on the Covered Bondholders and Couponholders of all Series and the Bond Trustee will not incur any Liability by reason of so acting or relying.

(hh) The Bond Trustee may call for and will rely on any records, certificate or other document of or to be issued by Euroclear or Clearstream, Luxembourg in relation to any determination of the principal amount of Covered Bonds represented by a NGCB. Any such records, certificate or other document will be conclusive and binding for all purposes. The Bond Trustee will not be liable to any Person by reason of having accepted as valid or not having rejected any such records, certificate or other document to such effect purporting to be issued by Euroclear or Clearstream, Luxembourg and subsequently found to be forged or not authentic.

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ARTICLE 18

BOND TRUSTEE’S LIABILITY

18.1 Bond Trustee’s Liability

Nothing herein will in any case in which the Bond Trustee has failed to show the degree of care and diligence required of it as trustee having regard to the provisions hereof conferring on it any trusts, powers, authorities or discretions (i) relieve or indemnify the Bond Trustee against any liabilities which by virtue of any rule of Law would otherwise attach to it in respect of any breach of trust of which it may be guilty in relation to its duties hereunder or (ii) so long as U.S. Registered Covered Bonds are outstanding, relieve the Bond Trustee from liability for its own negligence, wilful default or fraud except as permitted in Section 315(d) of the Trust Indenture Act.

ARTICLE 19

BOND TRUSTEE CONTRACTING WITH THE ISSUER AND THE GUARANTOR

19.1 Contracting

Neither the Bond Trustee nor any director or officer or holding company, Subsidiary or other Affiliates of a corporation acting as a trustee hereunder will by reason of its or his fiduciary position be in any way precluded from:

(a) entering into or being interested in any contract or financial or other transaction or arrangement with the Issuer or the Guarantor or any of the Issuer’s Subsidiaries and Affiliates (including without limitation any contract, transaction or arrangement of a banking or insurance nature or any contract, transaction or arrangement in relation to the making of loans or the provision of financial facilities or financial advice to, or the purchase, placing or underwriting of or the subscribing or procuring subscriptions for or otherwise acquiring, holding or dealing with, or acting as paying agent in respect of, the Covered Bonds or any other covered bonds, bonds, stocks, shares, debenture stock, debentures or other securities of, the Issuer, the Guarantor or any of the Issuer’s Subsidiaries or Affiliates); or

(b) accepting or holding the trusteeship of any other trust deed constituting or securing any other securities issued by or guaranteed by, or relating to the Issuer or the Guarantor or any of the Issuer’s Subsidiaries or Affiliates, or any other office of profit under the Issuer or the Guarantor or any of the Issuer’s Subsidiaries or Affiliates,

and will be entitled to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such contract, transaction or arrangement as is referred to in (a) above or, as the case may be, any such trusteeship or office of profit as is referred to in (b) above without regard to the interests of, or consequences for the Covered Bondholders or Couponholders and notwithstanding that the same may be contrary or prejudicial to the interests of the Covered Bondholders and will not be responsible for any Liability occasioned to the Covered Bondholders or Couponholders thereby and will be entitled to retain and will not be in any way liable to account for any profit made or share of brokerage or commission or remuneration or other amount or benefit received thereby or in connection therewith provided that for so long as U.S. Registered Covered Bonds are outstanding the Bond Trustee shall

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comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship listed in Section 311(b) of the Trust Indenture Act. The provisions of Section 311 of the Trust Indenture Act shall apply to each of the Issuer and the Guarantor for so long as U.S. Registered Covered Bonds are outstanding.

Where any holding company, Subsidiary or associated company of the Bond Trustee or any director or officer of the Bond Trustee acting other than in his capacity as such a director or officer has any information, the Bond Trustee will not thereby be deemed also to have knowledge of such information and, unless it will have actual knowledge of such information, will not be responsible for any loss suffered by Covered Bondholders resulting from the Bond Trustee’s failing to take such information into account in acting or refraining from acting under or in relation hereto.

ARTICLE 20

BOND TRUSTEE

20.1 Change of Bond Trustee

If there is any change in the identity of the Bond Trustee in accordance with the Security Agreement, the Guarantor, the Cash Manager and the GDA Provider (or, as applicable, the Stand-By GDA Provider) will execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require for the purpose of vesting in the successor Bond Trustee the rights and obligations of the outgoing Bond Trustee under this Trust Deed and releasing the outgoing Bond Trustee from its future obligations under this Trust Deed.

ARTICLE 21

WAIVER, AUTHORIZATION, DETERMINATION, MODIFICATION AND

SUBSTITUTION

21.1 Waiver, Authorization and Determination

(a) The Bond Trustee may without the consent of any of the Covered Bondholders of any Series, and/or the related Couponholders and without prejudice to its rights in respect of any subsequent breach, Issuer Event of Default, Potential Issuer Event of Default, Guarantor Event of Default or Potential Guarantor Event of Default from time to time and at any time but only if in so far as in its opinion the interests of the Covered Bondholders of any Series will not be materially prejudiced thereby, waive or authorize any breach or proposed breach by the Issuer or the Guarantor of any of the covenants or provisions contained herein or in any other Transaction Document or any of the provisions of the Covered Bonds of any Series or determine that any Issuer Event of Default, Potential Issuer Event of Default, Guarantor Event of Default or Potential Guarantor Event of Default will not be treated as such for the purposes hereof PROVIDED ALWAYS THAT the Bond Trustee will not exercise any powers conferred on it by this Article 21 in contravention of any express direction given by Extraordinary Resolution or by a request under Condition 9 (Events of Default, Acceleration and Enforcement) but so that no such direction or request will affect any waiver, authorization or determination previously given or made. Any such waiver, authorization or determination may be given or made on such terms and subject to such conditions (if any) as

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the Bond Trustee may determine, will be binding on the Covered Bondholders, the related Couponholders and, if, but only if, the Bond Trustee will so require, will be notified by the Issuer to the Covered Bondholders in accordance with Condition 13 (Notices) as soon as practicable thereafter.

(b) The Bond Trustee will be bound to waive or authorize any breach or proposed breach by the Issuer or the Guarantor of any of the covenants or provisions contained herein or in any other Transaction Document or any of the provisions of the Covered Bonds of any Series or determine that any Issuer Event of Default, Potential Issuer Event of Default, Guarantor Event of Default or Potential Guarantor Event of Default will not be treated as such for the purposes hereof if it is (i) so directed by an Extraordinary Resolution (in the case of any such determination, with the Covered Bonds of all Series taken together as a single Series as provided in Section 2.7 (Separate Series) and, if applicable, converted into Canadian Dollars at the relevant Covered Bond Swap Rate), or (ii) requested to do so in writing by the holders of not less than twenty-five per cent. of the Principal Amount Outstanding of the Covered Bonds then outstanding (in the case of any such determination, with the Covered Bonds of all Series taken together as a single Series and, if applicable, converted into Canadian Dollars as aforesaid), and at all times then only if it will first be indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby render itself liable or which it may incur by so doing.

21.2 Modification

(a) Subject to Section 21.2(b), the Bond Trustee may without the consent or sanction of any of the Covered Bondholders of any Series and/or the Couponholders at any time and from time to time concur with the Issuer and the Guarantor and any other party in making any modification to (and for this purpose the Bond Trustee may disregard whether any such modification relates to a Series Reserved Matter) (i) this Trust Deed, any other Transaction Document or any of the provisions of the Covered Bonds of any Series which in the opinion of the Bond Trustee may be expedient to make PROVIDED THAT the Bond Trustee is of the sole opinion that such modification will not be materially prejudicial to the interests of any of the Covered Bondholders of any Series, or (ii) this Trust Deed or any other Transaction Document or any of the provisions of the Covered Bonds of any Series which is in the sole opinion of the Bond Trustee of a formal, minor or technical nature or is to correct a manifest error or an error which in the opinion of the Bond Trustee is proven or to comply with mandatory provisions of Law. Any such modification may be made on such terms and subject to such conditions (if any) as the Bond Trustee may determine, will be binding upon the Covered Bondholders and/or the Couponholders and, if, but only if, the Bond Trustee will so require, will be notified by the Issuer to the Covered Bondholders in accordance with Condition 13 (Notices) as soon as practicable thereafter.

In establishing whether an error is established as such, the Bond Trustee may have regard to any evidence on which the Bond Trustee considers reasonable to rely, and may, but will not be obliged to, have regard to all or any of the following:

(i) a certificate from the Arrangers:

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A. stating the intention of the parties to the relevant Transaction Document;

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

C. stating the modification to the relevant Transaction Document is required to reflect such intention; and/or

(ii) the Rating Agency Condition has been satisfied in respect of the modification; and/or

(iii) an opinion of counsel.

(b) The Bond Trustee will be bound to concur with the Issuer and the Guarantor and any other party in making any of the above-mentioned modifications if it is (i) so directed by an Extraordinary Resolution, or (ii) requested to do so in writing by the holders of not less than twenty-five per cent. of the Principal Amount Outstanding of the Covered Bonds (with the Covered Bonds of all Series taken together as a single Series as provided in Section 2.7 (Separate Series) and, if applicable, converted into Canadian Dollars at the relevant Covered Bond Swap Rate) then outstanding and at all times then only if it will first be indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby render itself liable or which it may incur by so doing.

(c) The prior consent of the Bond Trustee and the other Secured Creditors will not be required and will not be obtained in relation to the accession of any New Seller to the Program PROVIDED THAT the relevant conditions precedent in the Transaction Documents are satisfied at the time of the intended accession.

(d) Notwithstanding Clause 21.1 or 21.2(a), the Bond Trustee may without the consent of any other party make modifications to this Trust Deed or the other Transaction Documents to remove any references to the Trust Indenture Act, provided that there are no U.S. Registered Covered Bonds outstanding. Any such modification may be made on such terms and subject to such conditions (if any) as the Bond Trustee may determine, shall be binding upon the Secured Creditors and, unless the Bond Trustee otherwise agrees, shall be notified by the Issuer to the Covered Bondholders in accordance with Condition 13 (Notices) and the other Secured Creditors as soon as practicable thereafter.

21.3 Substitution

If so requested by the Issuer, the Bond Trustee shall, if it is satisfied based on advice from its legal advisors that to do so would not be materially prejudicial to the Covered Bondholders, without the consent of the holders of the Covered Bonds of any Series or Coupons relating thereto, or any other Secured Creditor, agree with the Issuer and the Guarantor to the substitution in place of the Issuer (or of the previous substitute under this Section 21.3) as the principal debtor hereunder and all other Transaction Documents of any Subsidiary of the Issuer (such substituted issuer being hereinafter called the New Company), provided that:

(a) in each case a trust deed is executed and other forms of undertaking are given by the New Company in the form and manner satisfactory to the Bond

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Trustee, agreeing to be bound by the provisions hereof and the other Transaction Documents and all of the outstanding Covered Bonds of all Series, in place of the Issuer, and with any consequential amendments which the Bond Trustee may deem appropriate as fully as if the New Company had been named herein and the other Transaction Documents as the principal debtor in place of the Issuer (or of the previous substitute under this Section 21.3)

(b) the Issuer and the Guarantor will each deliver to the Bond Trustee a certificate signed by two Authorized Signatories of the Issuer and, in the case of the Guarantor, the Managing GP stating that immediately after giving effect to such transaction no Issuer Event of Default or Potential Issuer Event of Default (in respect of the Issuer) and no Guarantor Event of Default or Potential Guarantor Event of Default (in respect of the Guarantor), respectively, has occurred and be continuing;

(c) the Rating Agency Condition is satisfied with respect thereto;

(d) the Issuer shall execute and deliver to the Bond Trustee (in such form reasonably acceptable to the Bond Trustee) an undertaking to guarantee the obligations of the New Company in respect of the Covered Bonds and this Trust Deed;

(e) where the New Company is domiciled or resident in, or subject generally to the taxing jurisdiction of, a territory other than or in addition to Canada or any province or territory thereof or any authority therein or thereof having power to tax, undertakings or covenants will be given by the New Company in terms corresponding to the provisions of Condition 7 (Taxation) with the substitution for (or, as the case may be, the addition to) the references to Canada or any province or territory thereof or any authority therein or thereof having power to tax of references to that other or additional territory in which the New Company is incorporated, domiciled or resident or to whose taxing jurisdiction it is subject and, where such undertaking or covenant is provided, references in Condition 6.2 (Redemption for taxation reasons) to Canada or any province or territory thereof or any authority therein or thereof having power to tax will be deemed to be amended accordingly;

(f) the Covered Bond Guarantee remaining in place mutatis mutandis in relation to the obligations of the New Company; and

(g) the Issuer and the Guarantor will deliver to the Bond Trustee legal opinions obtained from lawyers approved by the Bond Trustee in (i) Canada, and (ii) the jurisdiction of incorporation of the New Company if not in Canada, in each case in form and substance satisfactory to the Bond Trustee.

Any such substitution shall be notified by the Issuer to the Covered Bondholders in accordance with Condition 13 (Notices) and the other Secured Creditors as soon as practicable thereafter).

21.4 Breach

Any breach of or failure to comply by the Issuer or the Guarantor with any such terms and conditions as are referred to in Sections 21.1 (Waiver, Authorization and Determination),

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21.2(a), 21.3 (Substitution), 21.4 or 21.5 (Rating Agency Condition) will constitute a default by the Issuer or the Guarantor in the performance or observance of a covenant or provision binding on it under or pursuant hereto.

21.5 Rating Agency Condition

(a) Each proposed amendment, variation or waiver of rights under this Trust Deed that is considered by the Guarantor to be a material amendment, variation or waiver, will be subject to satisfaction of the Rating Agency Condition. The Guarantor will deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Trust Deed. For certainty, any increase in the maximum Asset Percentage set forth in Section 15.1(z) shall be deemed to be a material amendment to this Trust Deed.

(b) If:

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

(ii) a written request for such confirmation or response is delivered to that Rating Agency by a Requesting Party and either (i) the Rating Agency indicates that it does not consider such confirmation necessary in the circumstances, or (ii) no such confirmation or other response is received by one or more of the Rating Agencies within 30 days of the date of receipt of such request by such Rating Agency (each, a Non-Responsive Rating Agency), the Requesting Party shall be entitled to disregard the requirement for a confirmation of the satisfaction of the Rating Agency Condition with respect to each Non-Responsive Rating Agency and proceed on the basis of the of satisfaction of the Rating Agency Condition by each other Rating Agency on the basis that such confirmation by the Non-Responsive Rating Agency is not required in the particular circumstances of the request.

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

ARTICLE 22

HOLDER OF BEARER DEFINITIVE COVERED BOND ASSUMED TO BE

COUPONHOLDER

22.1 Assumption

Wherever herein the Bond Trustee is required or entitled to exercise a power, trust, authority or discretion hereunder, except as ordered by a court of competent jurisdiction or as required by applicable Law, the Bond Trustee will, notwithstanding that it may have express notice to the contrary, assume that each holder of a Bearer Definitive Covered Bond is the holder of all Coupons appertaining to such Bearer Definitive Covered Bond.

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ARTICLE 23

NO NOTICE TO COUPONHOLDERS

23.1 No Notice

Neither the Bond Trustee nor the Issuer will be required to give any notice to the Couponholders for any purpose hereunder and the Couponholders will be deemed for all purposes to have notice of the contents of any notice given to the holders of Bearer Covered Bonds in accordance with Condition 13 (Notices).

ARTICLE 24

EXCHANGE RATE INDEMNITY

24.1 Exchange Rate Indemnity

Each of the Issuer and, following the occurrence of a Covered Bond Guarantee Activation Event the Guarantor will, jointly and severally indemnify the Bond Trustee, every Appointee, the Covered Bondholders and the Couponholders and keep them indemnified against:

(a) any Liability incurred by any of them arising from the non payment by the Issuer or the Guarantor of any amount due to the Bond Trustee or the Covered Bondholders and the relative Couponholders hereunder by reason of any variation in the rates of exchange between those used for the purposes of calculating the amount due under a judgment or order in respect thereof and those prevailing at the date of actual payment by the Issuer or the Guarantor; and

(b) any deficiency arising or resulting from any variation in rates of exchange between (i) the date as of which the local currency equivalent of the amounts due or contingently due hereunder (other than this Article) is calculated for the purposes of any bankruptcy, insolvency or liquidation of the Issuer or, as the case may be, the Guarantor; and (ii) the final date for ascertaining the amount of claims in such bankruptcy, insolvency or liquidation. The amount of such deficiency will be deemed not to be reduced by any variation in rates of exchange occurring between the said final date and the date of any distribution of assets in connection with any such bankruptcy, insolvency or liquidation.

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24.2 Independent Obligations

The above indemnities will constitute obligations of the Issuer and the Guarantor separate and independent from their other obligations under the other provisions hereof and will apply irrespective of any indulgence granted by the Bond Trustee or the Covered Bondholders or the Couponholders from time to time and will continue in full force and effect notwithstanding the judgment or filing of any proof or proofs in any bankruptcy, insolvency or liquidation of the Issuer or, as the case may be, the Guarantor for a liquidated sum or sums in respect of amounts due hereunder (other than this Article 24). Any such deficiency as aforesaid will be deemed to constitute a loss suffered by the Covered Bondholders and the Couponholders and no proof or evidence of any actual loss will be required by the Issuer or the Guarantor or its or their liquidator or liquidators.

24.3 Excess Funds

In the case of Section 24.1(Exchange Rate Indemnity) above, if (upon payment or discharge as is therein referred to) the Covered Bondholders or Couponholders would on conversion to the relevant currency receive an amount in excess of the sum due in that same currency, the Covered Bondholders or, as the case may be, the Couponholders, will hold such excess to the order of the Issuer or as the case may be, the Guarantor or liquidators.

ARTICLE 25

NEW BOND TRUSTEE

25.1 New Bond Trustee

The power to appoint a new bond trustee of this Trust Deed will be vested solely in the Issuer and the Guarantor jointly but no Person will be appointed who will not previously have been approved by an Extraordinary Resolution of the Covered Bondholders. One or more Persons may hold office as bond trustee or bond trustees hereof but such bond trustee or bond trustees will meet the requirements for a bond trustee in the CMHC Guide and will be or include a Trust Corporation, and provided that so long as there are U.S. Registered Covered Bonds outstanding, at least one person holding office as bond trustee shall be a trustee who shall be qualified to act under Sections 310(a)(1), 310(a)(2) and 310(a)(5) of the Trust Indenture Act. If for so long as there are U.S. Registered Covered Bonds outstanding, a Bond Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Bond Trustee and the Issuer shall comply with the provisions of Section 310(b) of the Trust Indenture Act; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act any deed or deeds under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met. If at any time a Bond Trustee shall cease to be eligible in accordance with the provisions of this Clause 25, such Bond Trustee shall retire promptly in the manner and with the effect specified in Clause 27. Whenever there will be more than two bond trustees of this Trust Deed the majority of such bond trustees will be competent to execute and exercise all the duties, powers, trusts, authorities and discretions vested in the Bond Trustee hereby PROVIDED THAT a Trust Corporation will be included in such majority. Any appointment of a new bond trustee hereof will as soon as practicable thereafter be notified by the Issuer to the Bond Trustee, the Agents and the Covered Bondholders.

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ARTICLE 26

SEPARATE AND CO-TRUSTEES

26.1 Separate and Co-Trustees

Notwithstanding the provisions of Article 25 (New Bond Trustee) above, the Bond Trustee may, upon giving reasonable prior notice to the Issuer and the Guarantor (after consultation with the Issuer and the Guarantor but without the consent of the Issuer, the Guarantor, the Covered Bondholders or Couponholders), appoint any Person established or resident in any jurisdiction (whether a Trust Corporation or not) to act either as a separate bond trustee or as a co-bond trustee jointly with the Bond Trustee:

(a) if the Bond Trustee considers such appointment to be in the interests of the Covered Bondholders;

(b) for the purposes of conforming to any legal requirements, restrictions or conditions in any jurisdiction in which any particular act or acts is or are to be performed; or

(c) for the purposes of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction of either a judgment already obtained or any of the provisions hereof against the Issuer or the Guarantor.

Any such separate bond trustee or co-bond trustee so appointed shall (i) be deemed to have made each of the representations, warranties and covenants contained in Section 29 on the date of such appointment, and (ii) satisfy all requirements applicable to a bond trustee under the CMHC Guide.

26.2 Appointment

Each of the Issuer and the Guarantor irrevocably appoints the Bond Trustee to be its attorney in its name and on its behalf to execute any such instrument of appointment. Such a Person will (subject always to the provisions hereof) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Bond Trustee hereby) and such duties and obligations as will be conferred or imposed by the instrument of appointment. The Bond Trustee will have power in like manner to remove any such Person. Such reasonable remuneration as the Bond Trustee may pay to any such Person, together with any attributable Liabilities incurred by it in performing its function as such separate bond trustee or co-bond trustee, will for the purposes hereof be treated as Liabilities incurred by the Bond Trustee.

ARTICLE 27

BOND TRUSTEE’S RETIREMENT AND REMOVAL

27.1 Retirement and Removal

(a) The Bond Trustee may retire at any time on giving not less than three months’ prior written notice to the Issuer and the Guarantor without giving any reason and without being responsible for any Liabilities incurred by reason of such retirement. The Covered Bondholders may by Extraordinary Resolution of all the Covered Bondholders remove any bond trustee or bond trustees for the time being hereof. Each of the Issuer and the Guarantor undertakes that in the event of the only bond trustee hereof which is a Trust Corporation giving notice under this Article 27 or being

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removed by Extraordinary Resolution it will use all reasonable endeavours to procure that a new bond trustee hereof being a Trust Corporation that meets the requirements for a bond trustee in the CMHC Guide is appointed as soon as reasonably practicable thereafter. The retirement or removal of any such bond trustee will not become effective until a successor bond trustee being a Trust Corporation that meets the requirements for a bond trustee in the CMHC Guide is appointed. If, in such circumstances, no appointment of such new bond trustee has become effective within 60 days of the date of such notice or Extraordinary Resolution, the Bond Trustee will be entitled to appoint a Trust Corporation that meets the requirements for a bond trustee in the CMHC Guide as bond trustee hereof, but no such appointment will take effect unless previously approved by an Extraordinary Resolution. For greater certainty, a Bond Trustee who has resigned or been removed while there are U.S. Registered Covered Bonds outstanding shall be subject to Section 311(a) of the Trust Indenture Act to the extent provided therein, excluding any creditor relationship listed in Section 311(b) of the Trust Indenture Act.

(b) Notwithstanding the provisions of Section 27.1(a) and without any requirement of approval by Covered Bondholders, should the Bond Trustee be in breach of any of the representations, warranties or covenants provided in Section 29.1, the Guarantor may terminate the Bond Trustee. The Guarantor will use all reasonable endeavours to procure that a new bond trustee hereof being a Trust Corporation that meets the requirements for a bond trustee in the CMHC Guide is appointed as soon as reasonably practicable thereafter. The removal of any such bond trustee shall not become effective until a successor bond trustee being a Trust Corporation that meets the requirements for a bond trustee in the CMHC Guide is appointed and notice thereof has been provided to the Rating Agencies and CMHC prior to such effective date.

(c) The Guarantor or the Issuer shall provide notice to CMHC of the retirement or removal of the Bond Trustee and of the Bond Trustee’s replacement contemporaneously with the earlier of (i) notice of such retirement or removal and replacement to a Rating Agency, (ii) notice of such retirement or removal and replacement being provided to or otherwise made available to Investors and (iii) five Business Days following such retirement or removal and replacement (unless the replacement has yet to be identified at that time, in which case notice of the replacement may be provided no later than 10 Business Days thereafter). Any such notice shall include (if known) the reasons for the retirement or removal of the Bond Trustee, all information relating to the replacement required by the CMHC Guide and a revised and amended copy of this Trust Deed with such replacement.

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ARTICLE 28

BOND TRUSTEE’S POWERS TO BE ADDITIONAL

28.1 Powers to be Additional

The powers conferred upon the Bond Trustee hereby will be in addition to any powers which may from time to time be vested in the Bond Trustee by the general Law or as a holder of any of the Covered Bonds or Coupons.

ARTICLE 29

REPRESENTATIONS, WARRANTIES AND COVENANTS

29.1 Representations, Warranties and Covenants of the Bond Trustee

The Bond Trustee hereby represents and warrants to, and covenants with, each of the Issuer, the Guarantor and the Bond Trustee at the date hereof, and so long as it remains the Bond Trustee, that:

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

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

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

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

(e) it will comply with the CMHC Guide and each of the Transaction Documents to which it is a party; and

(f) it will 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 hereunder and the other Transaction Documents to which it is a party.

ARTICLE 30

NOTICES

30.1 Notices

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

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

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

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

or to such other address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written notice in accordance with the provisions of this Article 30.

ARTICLE 31

GOVERNING LAW; ASSIGNMENT

31.1 Governing Law

This Trust Deed will be governed by, and construed in accordance with, the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.

31.2 Submission to Jurisdiction

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

31.3 Assignment

This Trust Deed (and the benefits and obligations contained in it) may not be assigned by any party without the prior written consent of each of the other parties hereto and the Rating Agency Condition having been satisfied in respect of such assignment.

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ARTICLE 32

NON-PETITION

32.1 Non-Petition

The Issuer agrees that it will not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor, or any general partners of the Guarantor, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer under the Program will be outstanding or there will not have elapsed one year plus one day since the last day on which any such Covered Bonds will have been outstanding. The foregoing provision will survive the termination of this Trust Deed by either party hereto.

32.2 Limitation of Liability

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

ARTICLE 33

FURTHER ASSURANCE

33.1 Further Assurance

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

ARTICLE 34

COUNTERPARTS

34.1 Counterparts

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

ARTICLE 35

INCORPORATION OF THE TRUST INDENTURE ACT

35.1 Trust Indenture Act

The parties agree that for so long as U.S. Registered Covered Bonds are outstanding, the provisions of the Trust Indenture Act (including Sections 310 through 318, inclusive, thereof) that impose duties on any Person (including the provisions automatically deemed included unless expressly excluded by this Trust Deed) are part of and govern the applicable provisions of this Trust Deed ([including any supplemental Trust Deed]), whether or not physically contained herein. If and to the extent that any provision of this Trust Deed limits, qualifies, or conflicts with the duties imposed by, or with another provision (an

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“incorporated provision”) included in this Trust Deed by operation of Sections 310 to 318, inclusive, of the Trust Indenture Act, such imposed duties or incorporated provision shall control and such Trust Deed provision shall be deemed modified thereby.

[The remainder of this page left intentionally blank]

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IN WITNESS WHEREOF this Trust Deed has been executed as a deed by the Issuer, the Guarantor and the Bond Trustee and delivered on the date first stated on page 1.

BANK OF MONTREAL, in its capacity as Issuer

By:	/s/ Cathy Cranston
	Name:	Cathy Cranston
	Title:	Senior Vice President, Finance & Treasurer

BMO COVERED BOND GUARANTOR

LIMITED PARTNERSHIP by its managing

general partner BMO COVERED BOND GP, INC.

By:	/s/ Chris Hughes
	Name:	Chris Hughes
	Title:	President and Secretary

By:
	Name:
	Title:

COMPUTERSHARE TRUST COMPANY OF

CANADA, as Bond Trustee

By:	/s/ Sean Pigott
	Name:	Sean Pigott
	Title:	Corporate Trust Officer

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

SCHEDULE 1

TERMS AND CONDITIONS OF THE COVERED BONDS

The following are the Terms and Conditions of the Covered Bonds which will be incorporated by reference into each Global Covered Bond (as defined below) and each Definitive Covered Bond (as defined below), in the latter case only if permitted by the relevant stock exchange or other relevant authority (if any) and agreed by the Issuer and the relevant Dealer(s) at the time of issue but, if not so permitted and agreed, such Definitive Covered Bond will have endorsed thereon or attached thereto such Terms and Conditions. The applicable Final Terms Document in relation to any Tranche of Covered Bonds may specify other terms and conditions which will, to the extent so specified or to the extent inconsistent with the following Terms and Conditions, replace or modify the following Terms and Conditions for the purpose of such Covered Bonds. The applicable Final Terms Document (or the relevant provisions thereof) will be endorsed on, or attached to, each Global Covered Bond and Definitive Covered Bond. Reference should be made to “Form of the Covered Bonds” for a description of the content of the Final Terms Document which will specify which of such terms are to apply in relation to the relevant Covered Bonds.

This Covered Bond is one of a Series (as defined below) of Covered Bonds issued by the Issuer constituted by a trust deed dated the Program Date made between the Issuer, BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”), Computershare Trust Company of Canada, as Bond Trustee (and such trust deed as further modified and/or supplemented and/or restated from time to time, the “Trust Deed”).

Save as provided for in Conditions 9 and 14, references herein to the Covered Bonds will be references to the Covered Bonds of this Series and will mean:

(a) any registered covered bond representing Covered Bonds (a “Global Covered Bond”);

(b) in relation to any Covered Bonds represented by a Global Covered Bond, units of the lowest Specified Denomination in the Specified Currency;

(c) any Bearer Definitive Covered Bonds issued in exchange for a Global Covered Bond in bearer form; and

(d) any Definitive Covered Bonds in registered form representing Covered Bonds issued under a registration statement under the Securities Act (the “U.S. Registered Covered Bonds”), sold to non-U.S. persons outside the United States in reliance on Regulation S (“Regulation S Definitive Covered Bonds”) and within the United States to “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act (“Rule 144A Definitive Covered Bond” and, together with U.S. Registered Covered Bonds, Regulation S Definitive Covered Bonds and Bearer Definitive Covered Bonds, “Definitive Covered Bonds”) (whether or not issued in exchange for a Global Covered Bond in registered form).

The Covered Bonds and the Coupons (as defined below) have the benefit of an agency agreement dated the Program Date, made between the Issuer, the Guarantor, the Bond Trustee, Bank of New York Mellon as principal paying agent (in such capacity, the “Principal Paying Agent”, which expression will include any successor Principal Paying Agent, and together with any other paying agents appointed pursuant to the terms of such agency agreement, the “Paying Agents”, which expression will include any additional or successor Paying Agents), registrar (in such capacity, the “Registrar”, which expression will include any successor Registrar), transfer agent (in such capacity, the “Transfer Agent”, which expression will include any successor Transfer

Agent), and exchange agent (in such capacity, the “Exchange Agent”, which expression will include any successor Exchange Agent, and together with the Paying Agents, Registrar, and Transfer Agent, the “Agents”) (such agency agreement as further amended and/or supplemented and/or restated from time to time, the “Agency Agreement”).

Interest-bearing Bearer Definitive Covered Bonds have (unless otherwise indicated in the applicable Final Terms Document) interest coupons (“Coupons”) and, if indicated in the applicable Final Terms Document, talons for further Coupons (“Talons”) attached on issue. Any reference herein to Coupons or coupons will, unless the context otherwise requires, be deemed to include a reference to Talons or talons. Registered Covered Bonds and Global Covered Bonds do not have Coupons or Talons attached on issue.

The Final Terms Document¹ for the Covered Bonds (which in the case of U.S. Registered Covered Bonds, as defined below, shall be deemed to be the applicable prospectus supplement under which such U.S. Registered Covered Bonds are sold, each of which is hereby referred to as, “Final Terms Document”) is endorsed on or attached to the Covered Bond and supplements these Terms and Conditions (the “Terms and Conditions”) and may specify other terms and conditions which will, to the extent so specified or to the extent inconsistent with the Terms and Conditions, replace or modify the Terms and Conditions for the purposes of the Covered Bonds. References to the applicable Final Terms Document are to the Final Terms Document (or the relevant provisions thereof) endorsed on or attached to the Covered Bond.

The Bond Trustee acts for the benefit of the holders for the time being of the Covered Bonds (the “Covered Bondholders”, which expression will, in relation to any Covered Bonds represented by a Global Covered Bond, be construed as provided below) and the holders of the Coupons (the “Couponholders”, which expression will, unless the context otherwise requires, include the holders of the Talons), and for the holders of each other Series of Covered Bonds in accordance with the provisions of the Trust Deed.

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

The Guarantor has, in the Trust Deed, irrevocably and unconditionally guaranteed payment of Guaranteed Amounts in respect of the Covered Bonds as and when the same will become Due for Payment, but only after service of a Notice to Pay on the Guarantor following service of an Issuer Acceleration Notice on the Issuer (after the occurrence of an Issuer Event of Default) or service of a Guarantor Acceleration Notice on the Guarantor (after the occurrence of a Guarantor Event of Default) and subject to the applicable Priorities of Payments. The recourse of the Covered Bondholders to the Guarantor under the Covered Bond Guarantee will be limited to the Charged Property and will be subject to the applicable Priorities of Payments.

The security for the obligations of the Guarantor under the Covered Bond Guarantee and the other Transaction Documents to which it is a party has been created in and pursuant to, and on the terms set out in, a security agreement dated the Program Date and made between the Guarantor, the Bond Trustee and certain other Secured Creditors (such security agreement as

¹  To add applicable Prospectus Supplement for U.S. Registered Covered Bonds.

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amended and/or supplemented and/or restated from time to time, the “Security Agreement”). The obligations of the Guarantor are secured against the Charged Property and recourse against the Guarantor is limited to the Charged Property and is subject to the applicable Priorities of Payments.

These Terms and Conditions include summaries of, and are subject to, the provisions of the Trust Deed, the Security Agreement and the Agency Agreement.

Copies of the Trust Deed, the Security Agreement, the Master Definitions and Construction Agreement (as defined below), the Agency Agreement and each of the other Transaction Documents (in redacted or other general form and subject to any exclusions pursuant to applicable Law, including, without limitation, privacy Law, and policies of the Issuer relating to confidentiality and privacy matters) are available for inspection during normal business hours at the office for the time being of the Bond Trustee being at 100 University Avenue, 11^th Floor, Toronto, Ontario M5J 2Y1, and at the specified office of each of the Paying Agents. Copies of the applicable Final Terms Document for all Covered Bonds of each Series (including in relation to unlisted Covered Bonds of any Series) are obtainable during normal business hours at the registered office of the Issuer and at the specified office of each of the Paying Agents. The Covered Bondholders and the Couponholders are deemed to have notice of, are bound by all the provisions of, and definitions contained in, the Trust Deed, the Security Agreement, the Master Definitions and Construction Agreement, the Agency Agreement, each of the other Transaction Documents and the applicable Final Terms Document which are applicable to them.

Except where the context otherwise requires, capitalised terms used and not otherwise defined in these Terms and Conditions (including the preceding paragraphs) will bear the meanings given to them in the applicable Final Terms Document and/or the master definitions and construction agreement made between the parties to the Transaction Documents on the Program Date (and as further amended and/or supplemented and/or restated from time to time, the “Master Definitions and Construction Agreement”), a copy of each of which may be obtained as described above.

1. Form, Denomination and Title

The Covered Bonds are in bearer form or in registered form as specified in the applicable Final Terms Document and, in the case of Definitive Covered Bonds, serially numbered, in the Specified Currencies and the Specified Denomination(s). Unless otherwise specified in the applicable Final Terms Document, Covered Bonds of one Specified Denomination may not be exchanged for Covered Bonds of another Specified Denomination. Bearer Covered Bonds may not be exchanged for Registered Covered Bonds and vice versa.

The Covered Bonds in a Series may be Fixed Rate Covered Bonds, Floating Rate Covered Bonds, Zero Coupon Covered Bonds, or a combination of any of the foregoing, depending upon the Interest Basis shown in the applicable Final Terms Document. Prior to issuing a Series of Covered Bonds (if such Covered Bonds are not Fixed Rate Covered Bonds or Floating Rate Covered Bonds), the Issuer has obtained confirmation from each of the Rating Agencies that the Covered Bonds of all Series then outstanding will not be downgraded or withdrawn as a result of the issuance of this Series of Covered Bonds.

Bearer Definitive Covered Bonds are issued with Coupons attached, unless they are Zero Coupon Covered Bonds in which case references to Coupons and Couponholders in these Terms and Conditions are not applicable.

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Subject as set out below, title to the Bearer Covered Bonds and Coupons will pass by delivery and title to the Registered Covered Bonds will pass upon registration of transfers in accordance with the provisions of the Agency Agreement. The Issuer, the Guarantor, the Paying Agents and the Bond Trustee will (except as otherwise required by Law) deem and treat the bearer of any Bearer Covered Bond or Coupon and the registered holder of any Registered Covered Bond as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Covered Bond, without prejudice to the provisions set out in the next succeeding paragraph.

For so long as any of the Covered Bonds are represented by a Global Covered Bond held on behalf of or, as the case may be, registered in the name of a common depositary for Euroclear, Clearstream Luxembourg or DTC, each Person (other than Euroclear, Clearstream, Luxembourg or DTC) who is for the time being shown in the records of Euroclear, Clearstream, Luxembourg or DTC as the holder of a particular nominal amount of such Covered Bonds (in which regard any certificate or other document issued by Euroclear, DTC or Clearstream, Luxembourg as to the nominal amount of such Covered Bonds standing to the account of any Person will be conclusive and binding for all purposes save in the case of manifest or proven error and any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including, without limitation, Euroclear’s EUCLID or Clearstream, Luxembourg’s Cedcom system) in accordance with its usual procedures and in which the holder of a particular nominal amount of the Covered Bonds is clearly identified with the amount of such holding) will be treated by the Issuer, the Guarantor, the Paying Agents and the Bond Trustee as the holder of such nominal amount of such Covered Bonds for all purposes other than with respect to the payment of principal or interest or other amounts on such nominal amount of such Covered Bonds and the expressions “Covered Bondholder” and “holder” and related expressions should be construed accordingly.

Covered Bonds which are represented by a Global Covered Bond will be transferable only in accordance with the rules and procedures for the time being of Euroclear, DTC and Clearstream, Luxembourg or any other relevant clearing system, as the case may be.

References to Euroclear, DTC and/or Clearstream, Luxembourg will, whenever the context so permits (but not in the case of any NGCB), be deemed to include a reference to any successor operator and/or successor clearing system and/or any additional or alternative clearing system specified in the applicable Final Terms Document or as may otherwise be approved by the Issuer, the Principal Paying Agent and the Bond Trustee.

2. Transfers of Registered Covered Bonds

2.1 Transfers of interests in Registered Global Covered Bonds

Transfers of beneficial interests in Registered Global Covered Bonds will be effected by Euroclear, Clearstream, Luxembourg or DTC, as the case may be, and, in turn, by other participants and, if appropriate, indirect participants in such Clearing Systems acting on behalf of beneficial transferors and transferees of such interests. The Laws in some States within the United States require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer Covered Bonds represented by a Registered Global Covered Bond to such persons may depend upon the ability to exchange such Covered Bonds for Covered Bonds in definitive form. Similarly, because DTC can only act on behalf of Direct Participants in the DTC system who in turn act on behalf of Indirect Participants, the ability of a person having an interest in Covered Bonds represented by a Registered Global Covered Bond accepted by DTC to pledge such Covered Bonds to persons or entities that do not participate in the DTC

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system or otherwise to take action in respect of such Covered Bonds may depend upon the ability to exchange such Covered Bonds for Covered Bonds in definitive form. A beneficial interest in a Registered Global Covered Bond will, subject to compliance with all applicable legal and regulatory restrictions, be exchangeable for Registered Definitive Covered Bonds or for a beneficial interest in another Registered Global Covered Bond only in the Specified Denomination(s) set out in the applicable Final Terms Document and only in accordance with the rules and operating procedures for the time being of Euroclear, Clearstream, Luxembourg or DTC, as the case may be, and in accordance with the terms and conditions specified in the Agency Agreement. Transfers of a Rule 144A Global Covered Bond registered in the name of a nominee for DTC shall be limited to transfers of such Rule 144A Global Covered Bond, in whole but not in part, to another nominee of DTC or to a successor of DTC or to such successor’s nominee.

2.2 Transfers of Registered Covered Bonds in definitive form

Subject as provided in Conditions 2.3, 2.4, and 2.5, upon the terms and subject to the conditions set forth in the Agency Agreement, a Registered Definitive Covered Bond may be transferred in whole or in part in the Specified Denomination(s) set out in the applicable Final Terms Document. In order to effect any such transfer (a) the holder or holders must (i) surrender the Registered Definitive Covered Bond for registration of the transfer of the Registered Definitive Covered Bond (or the relevant part of the Registered Definitive Covered Bond) at the specified office of the Registrar or any Transfer Agent, with the form of transfer thereon duly executed by the holder or holders thereof or his or their attorney or attorneys duly authorized in writing, and (ii) complete and deposit such other certifications as may be required by the Registrar or, as the case may be, the relevant Transfer Agent, and (b) the Registrar or, as the case may be, the relevant Transfer Agent must, after due and careful enquiry, be satisfied with the documents of title and the identity of the Person making the request.

Any such transfer will be subject to such reasonable regulations as the Issuer, the Bond Trustee and the Registrar may from time to time prescribe (the initial such regulations being set out in the Agency Agreement).

Subject as provided above, the Registrar or, as the case may be, the relevant Transfer Agent will, within three business days (being for this purpose a day on which banks are open for business in the city where the specified office of the Registrar or, as the case may be, the relevant Transfer Agent is located) of the request (or such longer period as may be required to comply with any applicable fiscal or other Laws or regulations), authenticate and deliver, or procure the authentication and delivery of, at its specified office to the transferee or (at the risk of the transferee) send by uninsured mail to such address as the transferee may request, a new Registered Definitive Covered Bond of a like aggregate nominal amount to the Registered Definitive Covered Bond (or the relevant part of the Registered Definitive Covered Bond) transferred.

In the case of the transfer of only part of a Registered Definitive Covered Bond, a new Registered Definitive Covered Bond in respect of the balance of the Registered Definitive Covered Bond not transferred will (in addition to the new Registered Definitive Covered Bond in respect of the nominal amount transferred) be so authenticated and delivered or (at the risk of the transferor) sent by uninsured mail to the address specified by the transferor.

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2.3 Registration of transfer upon partial redemption

In the event of a partial redemption of Covered Bonds under Condition 6, the Issuer will not be required to register the transfer of any Registered Covered Bond, or part of a Registered Covered Bond, called for partial redemption.

2.4 Costs of registration

Covered Bondholders will not be required to bear the costs and expenses of effecting any registration of transfer as provided above, except for any costs or expenses of delivery other than by regular uninsured mail and except that the Issuer, the Registrar or the Transfer Agent may require the payment of a sum sufficient to cover any stamp duty, Taxes or any other governmental charge that may be imposed in relation to the registration.

2.5 Transfers of interests in Regulation S Global Covered Bonds in the United States or to U.S. persons

Prior to expiry of the applicable Distribution Compliance Period (as defined below), transfers by the holder of, or of a beneficial interest in, a Regulation S Global Covered Bond to a transferee in the United States or who is a U.S. person will only be made (a) upon receipt by the Registrar of a written certification substantially in the form set out in the Agency Agreement, amended as appropriate with the consent of the Issuer (a “Transfer Certificate”), copies of which are available from the specified office of the Registrar or any Transfer Agent, from the transferor of the Covered Bond or beneficial interest therein to the effect that such transfer is being made to a person whom the transferor reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A; or (b) otherwise pursuant to the Securities Act or an exemption therefrom, subject to receipt by the Issuer of such satisfactory evidence as the Issuer may reasonably require, which may include an opinion of U.S. counsel, that such transfer is in compliance with any applicable securities Laws of any State of the United States, and, in each case, in accordance with any applicable securities Laws of any State of the United States or any other jurisdiction.

Such transferee may only take delivery through a Rule 144A Covered Bond. Prior to the end of the applicable Distribution Compliance Period beneficial interests in Regulation S Covered Bonds registered in the name of a nominee for DTC may only be held through the accounts of Euroclear and Clearstream, Luxembourg. After expiry of the applicable Distribution Compliance Period (i) beneficial interests in Regulation S Global Covered Bonds registered in the name of a nominee for DTC may be held through DTC directly, by a participant in DTC, or indirectly through a participant in DTC and (ii) such certification requirements will no longer apply to such transfers.

2.6 Transfers of interests in Rule 144A Covered Bonds

Transfers of Rule 144A Covered Bonds or beneficial interests therein may be made:

(a) to a transferee who takes delivery of such interest through a Regulation S Covered Bond, upon receipt by the Registrar of a duly completed Transfer Certificate from the transferor to the effect that such transfer is being made in accordance with Regulation S and that, in the case of a Regulation S Global Covered Bond registered in the name of a nominee for DTC, if such transfer is being made prior to expiry of the applicable Distribution Compliance Period, the interests in the Covered Bonds being transferred will be held immediately thereafter through Euroclear and/or Clearstream, Luxembourg; or

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(b) to a transferee who takes delivery of such interest through a Rule 144A Covered Bond, where the transferee is a person whom the transferor reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, without certification; or

(c) otherwise pursuant to the Securities Act or an exemption therefrom, subject to receipt by the Issuer of such satisfactory evidence as the Issuer may reasonably require, which may include an opinion of U.S. counsel, that such transfer is in compliance with any applicable securities Laws of any State of the United States,

and, in each case, in accordance with any applicable securities Laws of any State of the United States or any other jurisdiction.

Upon the transfer, exchange or replacement of Rule 144A Covered Bonds, or upon specific request for removal of any United States securities Law legend on Rule 144A Covered Bonds, the Registrar shall deliver only Rule 144A Covered Bonds or refuse to remove the legend, as the case may be, unless there is delivered to the Issuer such satisfactory evidence as may reasonably be required by the Issuer, which may include an opinion of U.S. counsel, that neither the legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act.

2.7 Definitions

In these Terms and Conditions, the following expressions will have the following meanings:

“Distribution Compliance Period” means the period that ends 40 days after the later of the commencement of the offering and the Issue Date;

“Regulation S” means Regulation S under the Securities Act;

“Regulation S Definitive Covered Bond” means a definitive covered bond in registered form representing Covered Bonds sold to non-U.S. persons outside the United States in reliance on Regulation S;

“Regulation S Global Covered Bond” means a registered covered bond in registered form representing Covered Bonds sold to non-U.S. persons outside the United States in reliance on Regulation S.

“Rule 144A Definitive Covered Bond means a Registered Covered Bond sold in the United States to QIBs in reliance on Rule 144A, which is in definitive form;

“Rule 144A” means Rule 144A under the Securities Act;

“Rule 144A Covered Bond” means a Covered Bond represented by a Rule 144A Global Covered Bond or a Definitive Rule 144A Covered Bond;

“Rule 144A Global Covered Bond” means a Registered Global Covered Bond representing Covered Bonds sold in the United States to QIBs in reliance on Rule 144A; and

“U.S. Registered Covered Bond” means a Covered Bond issued under a registration statement under the Securities Act.

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3. Status of the Covered Bonds and the Covered Bond Guarantee

3.1 Status of the Covered Bonds

The Covered Bonds will constitute deposit liabilities of the Issuer for purposes of the Bank Act and will rank pari passu with all deposit liabilities of the Issuer without any preference among themselves and (save for any obligations required to be preferred by Law) at least pari passu with all other present and future unsubordinated and unsecured obligations of the Issuer from time to time outstanding, except in certain limited circumstances described in Conditions 9.1 and 14.

The Covered Bonds will not be deposits insured under the Canada Deposit Insurance Corporation Act or under any other governmental insurance scheme of any country.

The Covered Bonds will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer, except in certain limited circumstances described in Conditions 9.1 and 14.

3.2 Status of the Covered Bond Guarantee

The payment of Guaranteed Amounts in respect of the Covered Bonds when the same will become Due for Payment has been unconditionally (save as set out below) and irrevocably guaranteed by the Guarantor in favour of the Bond Trustee for and on behalf of the Covered Bondholders pursuant to a guarantee (the “Covered Bond Guarantee”) in the Trust Deed. However, the Guarantor will have no obligation under the Covered Bond Guarantee to pay any Guaranteed Amounts when the same will become Due for Payment under the Covered Bonds or the Trust Deed until service of a Notice to Pay by the Bond Trustee on the Guarantor (which the Bond Trustee will be required to serve following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice by the Bond Trustee on the Issuer) or, if earlier, the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice by the Bond Trustee on the Guarantor. The obligations of the Guarantor under the Covered Bond Guarantee are subject to the applicable Priorities of Payments, and subject as aforesaid, are unsubordinated obligations of the Guarantor, which are secured and subject to limitations on recourse as provided in the Security Agreement.

As security for the Guarantor’s obligations under the Covered Bond Guarantee and the other Transaction Documents to which it is a party, the Guarantor has granted a security interest over all of its assets under the Security Agreement in favour of the Bond Trustee (for Covered Bondholders and on behalf of the other Secured Creditors).

4. Interest

4.1 Interest on Fixed Rate Covered Bonds

Each Fixed Rate Covered Bond bears interest on its Principal Amount Outstanding (as defined in Condition 4.5, but subject to Condition 4.3) from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable, subject as provided in these Terms and Conditions, in arrears on the Interest Payment Date(s) in each year up to (and including) the Final Maturity Date.

If the Covered Bonds are in definitive form, except as provided in the applicable Final Terms Document, the amount of interest payable on each Interest Payment Date in respect of the Interest Period (as defined in Condition 4.5) ending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms Document, amount to the Broken Amount so specified.

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Except in the case of Covered Bonds in definitive form where a Fixed Coupon Amount or Broken Amount is specified in the applicable Final Terms Document, interest will be calculated in respect of any period by applying the Rate of Interest to (i) in the case of Fixed Rate Covered Bonds which are represented by a Global Covered Bond, the aggregate outstanding nominal amount of the Fixed Rate Covered Bonds represented by such Global Covered Bond, or (ii) in the case of Fixed Rate Covered Bonds in definitive form, the Calculation Amount; and in each case, multiplying such sum by the applicable Day Count Fraction (as defined in Condition 4.5), and rounding the resultant figure to the nearest sub-unit (as defined in Condition 4.5) of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Fixed Rate Covered Bond in definitive form comprises more than one Calculation Amount, the amount of interest payable in respect of such Fixed Rate Covered Bond will be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding.

The applicable Final Terms Document may provide that if the payment of the Final Redemption Amount of a Series of Fixed Rate Covered Bonds on its Final Maturity Date is deferred until the applicable Extended Due for Payment Date in accordance with the Terms and Conditions, interest will accrue and be payable on the unpaid portion of the Final Redemption Amount up to the Extended Due for Payment Date at the Rate of Interest specified in the applicable Final Terms Document which may provide that such Series of Fixed Rate Covered Bonds will continue to bear interest at a Fixed Rate or at a Floating Rate despite the fact that interest accrued and was payable on such Covered Bonds prior to the Final Maturity Date at a Fixed Rate.

4.2 Interest on Floating Rate Covered Bonds

(a) Interest Payment Dates

Each Floating Rate Covered Bond bears interest on its Principal Amount Outstanding (subject to Condition 4.3) from (and including) the Interest Commencement Date and such interest will be payable in arrears on either:

(i) the Interest Payment Date(s) in each year specified in the applicable Final Terms Document; or

(ii) if no Interest Payment Date(s) is/are specified in the applicable Final Terms Document, each date which falls the number of months or other period specified as the Interest Period in the applicable Final Terms Document after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date,

each such date, an “Interest Payment Date”.

Such interest will be payable in respect of each Interest Period.

(b) Rate of Interest

The Rate of Interest payable from time to time in respect of Floating Rate Covered Bonds will be determined in the manner specified in the applicable Final Terms Document.

(i) ISDA Determination for Floating Rate Covered Bonds

Where ISDA Determination is specified in the applicable Final Terms Document as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms Document) the Floating Rate Covered Bond Margin (if any). For the purposes of this subparagraph (i), “ISDA Rate” for an Interest Period means a rate equal to the Floating Rate that would be

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determined by the Principal Paying Agent or other Person specified in the applicable Final Terms Document under an interest rate swap transaction if the Principal Paying Agent or that other Person were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the ISDA Definitions, and under which:

(A) the Floating Rate Option is as specified in the applicable Final Terms Document;

(B) the Designated Maturity is the period specified in the applicable Final Terms Document; and

(C) unless otherwise stated in the applicable Final Terms Document, the relevant Reset Date is the first day of that Interest Period.

For the purposes of this subparagraph (i), “Floating Rate”, “Calculation Agent”, “Floating Rate Option”, “Designated Maturity” and “Reset Date” have the meanings given to those terms in the ISDA Definitions.

(ii) Screen Rate Determination for Floating Rate Covered Bonds

Where Screen Rate Determination is specified in the applicable Final Terms Document as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either:

(A) the offered quotation (if there is only one quotation on the Relevant Screen Page); or

(B) the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the case may be, on the Relevant Screen Page as at 11:00 a.m. (London time, in the case of LIBOR, or Brussels time, in the case of EURIBOR) on the Interest Determination Date in question plus or minus (as indicated in the applicable Final Terms Document) the Floating Rate Covered Bond Margin (if any), all as determined by the Principal Paying Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) will be disregarded by the Principal Paying Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.

If the Relevant Screen Page is not available or if, in the case of this subparagraph (ii), no offered quotation appears or fewer than three offered quotations appear, in each case as at the Specified Time, the Principal Paying Agent will request each of the Reference Banks to provide the Principal Paying Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate at approximately the Specified Time on the Interest Determination Date in question. If two or more of the Reference Banks provide the Principal Paying Agent with offered quotations, the Rate of Interest for the Interest Period will be the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the offered quotations plus or minus (as appropriate) the Floating Rate Covered Bond Margin (if any), all as determined by the Principal Paying Agent.

If on any Interest Determination Date one only or none of the Reference Banks provides the Principal Paying Agent with an offered quotation as provided in subparagraph (ii), the Rate of Interest for the relevant Interest Period will be the rate per annum which the Principal Paying Agent determines as being the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the rates, as communicated to (and at the request of) the Principal Paying Agent by the Reference Banks or any two or more of them, at which such

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Reference Banks offered, at approximately the Specified Time on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate to leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) plus or minus (as appropriate) the Floating Rate Covered Bond Margin (if any) or, if fewer than two of the Reference Banks provide the Principal Paying Agent with offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, at approximately the Specified Time on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Issuer suitable for the purpose) informs the Principal Paying Agent it is quoting to leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) plus or minus (as appropriate) the Floating Rate Covered Bond Margin (if any), provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this section, the Rate of Interest will be determined as at the last preceding Interest Determination Date (though substituting, where a different Floating Rate Covered Bond Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Floating Rate Covered Bond Margin relating to the relevant Interest Period in place of the Floating Rate Covered Bond Margin relating to that last preceding Interest Period).

If the Reference Rate from time to time in respect of Floating Rate Covered Bonds is specified in the applicable Final Terms Document as being other than LIBOR or EURIBOR, the Rate of Interest in respect of such Covered Bonds will be determined as provided in the applicable Final Terms Document.

(c) Minimum Rate of Interest and/or Maximum Rate of Interest

If the applicable Final Terms Document for a Floating Rate Covered Bond specifies a Minimum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (b) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period will be such Minimum Rate of Interest.

If the applicable Final Terms Document for a Floating Rate Covered Bond specifies a Maximum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (b) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period will be such Maximum Rate of Interest.

(d) Determination of Rate of Interest and Calculation of Interest Amounts

The Principal Paying Agent will at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period.

The Principal Paying Agent will calculate the amount of interest (the “Interest Amount”) payable on the Floating Rate Covered Bonds for the relevant Interest Period by applying the Rate of Interest to:

(i) in the case of Floating Rate Covered Bonds which are represented by a Global Covered Bond, the aggregate outstanding nominal amount of the Covered Bonds represented by such Global Covered Bond; or

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(ii) in the case of Floating Rate Covered Bonds in definitive form, the Calculation Amount,

and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Floating Rate Covered Bond in definitive form comprises more than one Calculation Amount, the Interest Amount payable in respect of such Covered Bond will be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding.

(e) Notification of Rate of Interest and Interest Amounts

The Principal Paying Agent will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer, the Guarantor, the Bond Trustee and to any stock exchange or other relevant competent authority or quotation system on which the relevant Floating Rate Covered Bonds are for the time being listed, quoted and/or traded or by which they have been admitted to listing or trading and to be published in accordance with Condition 13 (except for U.S. Registered Covered Bonds) as soon as possible after their determination but in no event later than the fourth Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. Any such amendment or alternative arrangements will be promptly notified to the Bond Trustee and each stock exchange or other relevant authority on which the relevant Floating Rate Covered Bonds are for the time being listed, quoted and/or traded or by which they have been admitted to listing or trading and to Covered Bondholders in accordance with Condition 13.

(f) Determination or Calculation by Bond Trustee

If for any reason at any relevant time after the Issue Date, the Principal Paying Agent defaults in its obligation to determine the Rate of Interest or the Principal Paying Agent defaults in its obligation to calculate any Interest Amount in accordance with subparagraph (b)(i) or (ii) above or as otherwise specified in the applicable Final Terms Document, as the case may be, and in each case in accordance with paragraph (d) above, the Bond Trustee will determine the Rate of Interest at such rate as, in its absolute discretion (having such regard as it will think fit to the foregoing provisions of this Condition, but subject always to any Minimum Rate of Interest or Maximum Rate of Interest specified in the applicable Final Terms Document), it will deem fair and reasonable in all the circumstances or, as the case may be, the Bond Trustee will calculate the Interest Amount(s) in such manner as it will deem fair and reasonable in all the circumstances. In making any such determination or calculation, the Bond Trustee may appoint and rely on a determination or calculation by a calculation agent (which will be an investment bank or other suitable entity of international repute). Each such determination or calculation will be deemed to have been made by the Principal Paying Agent.

(g) Certificates to be Final

All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 4.2, whether by the Principal Paying Agent or the Bond Trustee will (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Guarantor, the Principal Paying Agent, the other Paying Agents, the Bond Trustee and all Covered Bondholders and Couponholders and (in the absence of wilful default, negligence, bad faith or fraud) no liability to the Issuer, the

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Guarantor, the Covered Bondholders or the Couponholders will attach to the Principal Paying Agent or the Bond Trustee in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.

4.3 Interest following a Notice to Pay

If a Notice to Pay is served on the Guarantor, the Guarantor will, in accordance with the terms of the Trust Deed, pay Guaranteed Amounts corresponding to the amounts of interest described under Condition 4.1 or 4.2 (as the case may be) under the Covered Bond Guarantee in respect of the Covered Bonds on the Original Due for Payment Dates and, if applicable, the Extended Due for Payment Date in accordance with the applicable Priorities of Payments.

4.4 Accrual of interest

Interest (if any) will cease to accrue on each Covered Bond (or in the case of the redemption of part only of a Covered Bond, that part only of such Covered Bond) on the due date for redemption thereof unless, upon due presentation thereof, payment of principal is improperly withheld or refused or unless default is otherwise made in respect of payment, in which event, interest will continue to accrue as provided in Condition 6.10.

4.5 Business Day, Business Day Convention, Day Count Fractions and other adjustments

(a) In these Terms and Conditions, “Business Day” means:

(i) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in London and any Additional Business Centre specified in the applicable Final Terms Document; and

(ii) either (A) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (if other than London and any Additional Business Centre) or as otherwise specified in the applicable Final Terms Document or (B) in relation to any sum payable in euro, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System (the “TARGET System”) is open.

(b) If a “Business Day Convention” is specified in the applicable Final Terms Document and (x) if there is no numerically corresponding day in the calendar month in which an Interest Payment Date should occur, or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:

(i) in any case where Interest Periods are specified in accordance with Condition 4.2(a)(ii), the “Floating Rate Convention”, such Interest Payment Date (1) in the case of (x) above, will be the last day that is a Business Day in the relevant month and the provisions of (II) below will apply mutatis mutandis, or (2) in the case of (y) above, will be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (I) such Interest Payment Date will be brought forward to the immediately preceding Business Day, and (II) each subsequent Interest Payment Date will be the last Business Day in the month which falls on the Interest Period after the preceding applicable Interest Payment Date occurred; or

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(ii) the “Following Business Day Convention”, such Interest Payment Date will be postponed to the next day which is a Business Day; or

(iii) the “Modified Following Business Day Convention”, such Interest Payment Date will be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date will be brought forward to the immediately preceding Business Day; or

(iv) the “Preceding Business Day Convention”, such Interest Payment Date will be brought forward to the immediately preceding Business Day.

(c) “Day Count Fraction” means, in respect of the calculation of an amount of interest for any Interest Period:

(i) if “Actual/Actual (ICMA)” is specified in the applicable Final Terms Document, a fraction equal to “number of days accrued/number of days in year”, as such terms are used in Rule 251 of the statutes, by-laws, rules and recommendations of the International Capital Market Association (the “ICMA Rule Book”), calculated in accordance with Rule 251 of the ICMA Rule Book as applied to non-U.S. Dollar denominated straight and convertible bonds issued after 31 December 1998, as though the interest coupon on a bond has been calculated for a coupon period corresponding to the Interest Period;

(ii) if “Actual/Actual or Actual/Actual (ISDA)” is specified in the applicable Final Terms Document, the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (i) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366, and (ii) the actual number of days in that portion of the Interest Period falling in a non-leap year divided by 365);

(iii) if “Actual/365 (Fixed)” is specified in the applicable Final Terms Document, the actual number of days in the Interest Period divided by 365;

(iv) if “Actual/365 (Sterling)” is specified in the applicable Final Terms Document, the actual number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366;

(v) if “Actual/360” is specified in the applicable Final Terms Document, the actual number of days in the Interest Period divided by 360;

(vi) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms Document, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction	=	[360 x (Y2 – Y1)] + [30 x (M2 – M1)] + D2 - D1
		360

where:

“Y₁” is the year, expressed as a number, in which the first day of the Interest Period falls;

“Y₂” is the year, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;

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“M₁” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;

“M₂” is the calendar month, expressed as number, in which the day immediately following the last day included in the Interest Period falls;

“D₁” is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D₁ will be 30; and

“D₂” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31 and D₁ is greater than 29, in which case D₂ will be 30; and

(vii) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms Document, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction	=	[360 x (Y2 – Y1)] + [30 x (M2 – M1)] + D2 – D1
		360

where:

“Y₁” is the year, expressed as a number, in which the first day of the Interest Period falls;

“Y₂” is the year, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;

“M₁” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;

“M₂” is the calendar month, expressed as number, in which the day immediately following the last day included in the Interest Period falls;

“D₁” is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D₁ will be 30; and

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“D₂” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31, in which case D₂, will be 30; or

(viii) such other Day Count Fraction as may be specified in the applicable Final Terms Document.

(d) “Determination Period” means each period from (and including) a Determination Date to (but excluding) the next Determination Date (including, where either the Interest Commencement Date or the final Interest Payment Date is not a Determination Date, the period commencing on the first Determination Date prior to, and ending on the first Determination Date falling after, such date).

(e) “Fixed Interest Period” means the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date.

(f) “Interest Period” means the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date.

(g) “Principal Amount Outstanding” means, in respect of a Covered Bond, on any day, the principal amount of that Covered Bond on the relevant Issue Date thereof less principal amounts received by the relevant Covered Bondholder in respect thereof on or prior to that day.

(h) If “adjusted” is specified in the applicable Final Terms Document against the Day Count Fraction, interest in respect of the relevant Interest Period will be payable in arrears on the relevant Interest Payment Date and calculated from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date, as such Interest Payment Date will, where applicable, be adjusted in accordance with the Business Day Convention.

(i) If “not adjusted” is specified in the applicable Final Terms Document against the Day Count Fraction, interest in respect of the relevant Interest Period will be payable in arrears on the relevant Interest Payment Date and calculated from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date, but such Interest Payment Dates will not be adjusted in accordance with any Business Day Convention.

(j) “sub-unit” means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, €0.01.

4.6 Interest on U.S. Registered Covered Bonds

Condition 4.6 shall only apply to U.S. Registered Covered Bonds.

Each Covered Bond will bear interest from its date of issue at the rate per annum, in the case of a Fixed Rate Covered Bond, or pursuant to the interest rate formula, in the case of a Floating Rate Covered Bond, in each case as specified in the Final Terms Document, until the principal thereof is paid. Interest payments on Covered Bonds will be made in respect of Fixed Rate Covered Bonds and Floating Rate Covered Bonds in an amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Final Maturity Date, as the case may be (each an “Interest Period”).

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Interest on Fixed Rate Covered Bonds and Floating Rate Covered Bonds will be payable in arrears on each Interest Payment Date and on the Final Maturity Date. The first payment of interest on any Covered Bonds originally issued between a Regular Record Date (as defined below) and the related Interest Payment Date will be made on the Interest Payment Date immediately following the next succeeding record date to the registered holder on the next succeeding record date. The “Regular Record Date” shall be the fifteenth calendar day, whether or not a Business Day, immediately preceding the related Interest Payment Date. For the purpose of determining the holder at the close of business on a Regular Record Date when business is not being conducted, the close of business will mean 5:00 P.M., New York City time, on that day.

4.7 Interest Rates Applicable to U.S. Registered Covered Bonds

Condition 4.7 shall only apply to U.S. Registered Covered Bonds.

The relevant Final Terms Document will specify the Interest Payment Dates for a Fixed Rate Covered Bond as well as the Final Maturity Date. Interest on Fixed Rate Covered Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months or such other day count basis set forth in the Final Terms Document.

Fixed Rate Covered Bonds

If any Interest Payment Date, redemption date, repayment date or Final Maturity Date of a Fixed Rate Covered Bond falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

U.S. Registered Covered Bonds that are Floating Rate Covered Bonds

The following shall only apply to Floating Rate Covered Bonds.

Interest Rate Basis. Floating Rate Covered Bonds will bear interest at rates based on one or more of the following interest rate bases:

• commercial paper rate;

• U.S. prime rate;

• LIBOR;

• EURIBOR;

• treasury rate;

• CMT rate;

• CD rate;

• CMS rate; and/or

• federal funds rate.

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The applicable Final Terms Document will specify the interest rate basis that applies to a specific Series or Tranche of Floating Rate Covered Bonds.

Calculation of Interest. Calculations relating to Floating Rate Covered Bonds will be made by the Calculation Agent. The Final Terms Document for a particular Floating Rate Covered Bond will name the Calculation Agent for that Covered Bond as of its original issue date. A successor institution may be appointed to serve as Calculation Agent for such Covered Bonds from time to time after the original issue date of such Covered Bonds without the consent of Covered Bondholders or notification of the change.

For each Floating Rate Covered Bond, the Calculation Agent will determine, on the corresponding interest calculation date or on the interest determination date, as described below, the interest rate that takes effect on each interest reset date. In addition, the Calculation Agent will calculate the amount of interest that has accrued during each interest period that is, the period from and including the original issue date, or the last date to which interest has been paid or made available for payment, to but excluding the payment date. For each Interest Period, the Calculation Agent will calculate the amount of accrued interest by multiplying the face or other specified amount of the Floating Rate Covered Bond by an accrued interest factor for the Interest Period. This factor will equal the sum of the interest factors calculated for each day during the Interest Period. The interest factor for each day will be expressed as a decimal and will be calculated by dividing the interest rate, also expressed as a decimal, applicable to that day by 360 or by the actual number of days in the year, as specified in the relevant Final Terms Document.

Upon the request of the Covered Bondholder of any Floating Rate Covered Bond, the Calculation Agent will provide for that Covered Bond the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date. The Calculation Agent’s determination of any interest rate, and its calculation of the amount of interest for any Interest Period, will be final and binding in the absence of manifest error.

All percentages resulting from any calculation relating to a Covered Bond will be rounded upward or downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point, e.g., 9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655). All amounts used in or resulting from any calculation relating to a Floating Rate Covered Bond will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward.

In determining the interest rate basis that applies to a Floating Rate Covered Bond during a particular Interest Period, the Calculation Agent may obtain rate quotes from various banks or dealers active in the relevant market, as discussed below. Those reference banks and dealers may include the Calculation Agent itself and its affiliates, as well as any agent participating in the distribution of the relevant floating rate covered bonds and its affiliates, and they may include affiliates of the Bank.

Initial Interest Rate. For any Floating Rate Covered Bond, the interest rate in effect from the original issue date to the first interest reset date will be the initial interest rate. The initial interest rate or the manner in which it is determined will be set forth in the relevant Final Terms Document.

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Spread or Spread Multiplier. In some cases, the interest rate basis for a Floating Rate Covered Bond may be adjusted:

• by adding or subtracting a specified number of basis points, called the spread, with one basis point being 0.01 percent; or

• by multiplying the interest rate basis by a specified percentage, called the spread multiplier.

For any Floating Rate Covered Bond, the applicable Final Terms Document will indicate whether a spread or spread multiplier will apply to the Covered Bond and, if so, the amount of the spread or spread multiplier.

Maximum and Minimum Rates. The actual interest rate, after being adjusted by the spread or spread multiplier, may also be subject to either or both of the following limits:

• a maximum rate—i.e., a specified upper limit that the actual interest rate in effect at any time may not exceed; and/or

• a minimum rate—i.e., a specified lower limit that the actual interest rate in effect at any time may not fall below.

For any Floating Rate Covered Bond, the applicable Final Terms Document will indicate whether a maximum rate and/or minimum rate will apply to the Covered Bond and, if so, what those rates are.

Whether or not a maximum rate applies, the interest rate on a floating rate covered bond will in no event be higher than the maximum rate permitted by New York Law, as it may be modified by U.S. Law of general application and the Law of Ontario and the Laws of Canada applicable therein.

Interest Reset Dates. The rate of interest on a Floating Rate Covered Bond will be reset, by the Calculation Agent described below, daily, weekly, monthly, quarterly, semi-annually or annually. The date on which the interest rate resets and the reset rate becomes effective is called the interest reset date. Except as otherwise specified in the applicable Final Terms Document, the interest reset date will be as follows:

• for Floating Rate Covered Bonds that reset daily, each Business Day;

• for Floating Rate Covered Bonds that reset weekly and are not treasury rate Covered Bonds, the Wednesday of each week;

• for treasury rate Covered Bonds that reset weekly, the Tuesday of each week;

• for Floating Rate Covered Bonds that reset monthly, the third Wednesday of each month;

• for Floating Rate Covered Bonds that reset quarterly, the third Wednesday of each of four months of each year as indicated in the relevant Final Terms Document;

• for Floating Rate Covered Bonds that reset semi-annually, the third Wednesday of each of two months of each year as indicated in the relevant Final Terms Document; and

• for Floating Rate Covered Bonds that reset annually, the third Wednesday of one month of each year as indicated in the relevant Final Terms Document.

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For a Floating Rate Covered Bond, the interest rate in effect on any particular day will be the interest rate determined with respect to the latest interest reset date that occurs on or before that day. There are several exceptions, however, to the reset provisions described above.

If any interest reset date for a Floating Rate Covered Bond would otherwise be a day that is not a Business Day, the interest reset date will be postponed to the next day that is a Business Day. For a LIBOR or EURIBOR Covered Bond, however, if that Business Day is in the next succeeding calendar month, the interest reset date will be the immediately preceding Business Day.

Interest Determination Dates. The interest rate that takes effect on an interest reset date will be determined by the Calculation Agent by reference to a particular date called an interest determination date. Except as otherwise indicated in the relevant Final Terms Document:

• for commercial paper rate, federal funds rate and U.S. prime rate Covered Bonds, the interest determination date relating to a particular interest reset date will be the Business Day preceding the interest reset date;

• for LIBOR Covered Bonds, the interest determination date relating to a particular interest reset date will be the second London Business Day preceding the interest reset date, unless the index currency is pounds sterling, in which case the interest determination date will be the interest reset date. An interest determination date for a LIBOR covered bond is referred to as a LIBOR interest determination date;

• for EURIBOR Covered Bonds, the interest determination date relating to a particular interest reset date will be the second Euro Business Day preceding the interest reset date. An interest determination date for a EURIBOR Covered Bond is referred to as a EURIBOR interest determination date;

• for treasury rate Covered Bonds, the interest determination date relating to a particular interest reset date, which is referred to as a treasury interest determination date, will be the day of the week in which the interest reset date falls on which treasury bills—i.e., direct obligations of the U.S. government—would normally be auctioned. Treasury bills are usually sold at auction on the Monday of each week, unless that day is not a Business Day, in which case the auction is usually held on the following Tuesday, except that the auction may be held on the preceding Friday. If as the result of a Monday not being a Business Day an auction is held on the preceding Friday, that Friday will be the treasury interest determination date relating to the interest reset date occurring in the next succeeding week; and

• for CD rate, CMT rate and CMS rate Covered Bonds, the interest determination date relating to a particular interest reset date will be the second Business Day preceding the interest reset date.

The interest determination date pertaining to a Floating Rate Covered Bond the interest rate of which is determined with reference to two or more interest rate bases will be the latest Business Day which is at least two Canadian Business Days before the related interest reset date for the applicable floating rate covered bond on which each interest rate basis is determinable.

Interest Calculation Dates. As described above, the interest rate that takes effect on a particular interest reset date will be determined by reference to the corresponding interest determination date. Except for LIBOR Covered Bonds and EURIBOR Covered Bonds, however,

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the determination of the rate will actually be made on a day no later than the corresponding interest calculation date. The interest calculation date will be the earlier of the following:

• the tenth calendar day after the interest determination date or, if that tenth calendar day is not a Business Day, the next succeeding Business Day; and

• the Business Day immediately preceding the Interest Payment Date or the maturity, whichever is the day on which the next payment of interest will be due.

The Calculation Agent need not wait until the relevant interest calculation date to determine the interest rate if the rate information it needs to make the determination is available from the relevant sources sooner.

Interest Payment Dates. The Interest Payment Dates for a Floating Rate Covered Bond will depend on when the interest rate is reset and, unless otherwise specified in the relevant Final Terms Document, will be as follows:

• for Floating Rate Covered Bonds that reset daily, weekly or monthly, the third Wednesday of each month;

• for Floating Rate Covered Bonds that reset quarterly, the third Wednesday of the four months of each year specified in the relevant Final Terms Document;

• for Floating Rate Covered Bonds that reset semi-annually, the third Wednesday of the two months of each year specified in the relevant Final Terms Document; or

• for Floating Rate Covered Bonds that reset annually, the third Wednesday of the month specified in the relevant Final Terms Document.

Notwithstanding the above, if a covered bond is originally issued after the Regular Record Date and before the date that would otherwise be the first Interest Payment Date, the first Interest Payment Date will be the date that would otherwise be the second Interest Payment Date.

In addition, the following special provision will apply to a Floating Rate Covered Bond with regard to any Interest Payment Date other than one that falls on the maturity. If the Interest Payment Date would otherwise fall on a day that is not a Business Day, then the Interest Payment Date will be the next day that is a Business Day. However, if the floating rate covered bond is a LIBOR Covered Bond or a EURIBOR Covered Bond and the next Business Day falls in the next calendar month, then the Interest Payment Date will be advanced to the next preceding day that is a Business Day. If the Final Maturity Date of a Floating Rate Covered Bond falls on a day that is not a Business Day, the required payment of principal, premium, if any, and interest will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

Commercial Paper Rate Covered Bonds

A commercial paper rate Covered Bond will bear interest at an interest rate equal to the commercial paper rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The commercial paper rate will be the money market yield of the rate, for the relevant interest determination date, for commercial paper having the index maturity indicated in the applicable Final Terms Document, as published in H.15(519) under the heading “Commercial Paper—Nonfinancial.” If the commercial paper rate cannot be determined as described above, the following procedures will apply.

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• If the rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the commercial paper rate will be the rate, for the relevant interest determination date, for commercial paper having the index maturity specified in the applicable Final Terms Document, as published in H.15 daily update or any other recognized electronic source used for displaying that rate, under the heading “Commercial Paper—Nonfinancial.”

• If the rate described above does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the commercial paper rate will be the money market yield of the arithmetic mean of the following offered rates for U.S. dollar commercial paper that has the relevant index maturity and is placed for an industrial issuer whose bond rating is “Aa”, or the equivalent, from a nationally recognized rating agency: the rates offered as of 11:00 A.M., New York City time, on the relevant interest determination date, by three leading U.S. dollar commercial paper dealers in New York City selected by the Calculation Agent.

• If fewer than three dealers selected by the Calculation Agent are quoting as described above, the commercial paper rate for the new interest period will be the commercial paper rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

U.S. Prime Rate Covered Bonds

A U.S. prime rate Covered Bond will bear interest at an interest rate equal to the U.S. prime rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The U.S. prime rate will be the rate, for the relevant interest determination date, published in H.15(519) opposite the heading “Bank Prime Loan.” If the U.S. prime rate cannot be determined as described above, the following procedures will apply.

• If the rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the U.S. prime rate will be the rate, for the relevant interest determination date, as published in H.15 daily update or another recognized electronic source used for the purpose of displaying that rate, under the heading “Bank Prime Loan.”

• If the rate described above does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the U.S. prime rate will be the arithmetic mean of the following rates as they appear on the Reuters screen US PRIME 1 page: the rate of interest publicly announced by each bank appearing on that page as that bank’s prime rate or base lending rate, as of 11:00 A.M., New York City time, on the relevant interest determination date.

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• If fewer than four of these rates appear on the Reuters screen US PRIME 1 page, the U.S. prime rate will be the arithmetic mean of the prime rates or base lending rates, as of the close of business on the relevant interest determination date, of three major banks in New York City selected by the Calculation Agent. For this purpose, the Calculation Agent will use rates quoted on the basis of the actual number of days in the year divided by a 360-day year.

• If fewer than three banks selected by the Calculation Agent are quoting as described above, the U.S. prime rate for the new interest period will be the U.S. prime rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

LIBOR Covered Bonds

A LIBOR Covered Bond will bear interest at an interest rate equal to LIBOR, which will be the London interbank offered rate for deposits in U.S. dollars or any other index currency, as specified in the applicable Final Terms Document. In addition, when LIBOR is the interest rate basis the applicable LIBOR rate will be adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document. LIBOR will be determined in the following manner:

• LIBOR will be the offered rate appearing on the Reuters Page LIBOR01 as of 11:00 A.M., London time, on the relevant LIBOR interest determination date, for deposits of the relevant index currency having the relevant index maturity beginning on the relevant interest reset date. The applicable Final Terms Document will indicate the index currency, the index maturity and the reference page that apply to the LIBOR covered bond. If no reference page is mentioned in the Final Terms Document, Reuters Page LIBOR01 will apply to the LIBOR covered bond.

• If Reuters Page LIBOR01 applies and the rate described above does not appear on that page, then LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on the relevant LIBOR interest determination date, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent: deposits of the index currency having the relevant index maturity, beginning on the relevant interest reset date, and in a representative amount. The Calculation Agent will request the principal London office of each of these banks to provide a quotation of its rate. If at least two quotations are provided, LIBOR for the relevant LIBOR interest determination date will be the arithmetic mean of the quotations.

• If fewer than two quotations are provided as described above, LIBOR for the relevant LIBOR interest determination date will be the arithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M., in the applicable principal financial center, on that LIBOR interest determination date, by three major banks in that financial center selected by the Calculation Agent: loans of the index currency having the relevant index maturity, beginning on the relevant interest reset date and in a representative amount.

• If fewer than three banks selected by the Calculation Agent are quoting as described above, LIBOR for the new interest period will be LIBOR in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

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EURIBOR Covered Bonds

A EURIBOR Covered Bond will bear interest at an interest rate equal to the interest rate for deposits in euro, designated as “EURIBOR” and sponsored jointly by the European Banking Federation and ACI—the Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing that rate. In addition, when EURIBOR is the interest rate basis the EURIBOR base rate will be adjusted by the spread or spread multiplier, if any, specified in the applicable Final Terms Document. EURIBOR will be determined in the following manner:

• EURIBOR will be the offered rate for deposits in euros having the index maturity specified in the applicable Final Terms Document, beginning on the second Euro Business Day after the relevant EURIBOR interest determination date, as that rate appears on Reuters page EURIBOR01 as of 11:00 A.M., Brussels time, on the relevant EURIBOR interest determination date.

• If the rate described above does not appear on Reuters page EURIBOR01, EURIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., Brussels time, on the relevant EURIBOR interest determination date, at which deposits of the following kind are offered to prime banks in the euro-zone interbank market by the principal euro-zone office of each of four major banks in that market selected by the Calculation Agent: euro deposits having the relevant index maturity, beginning on the relevant interest reset date, and in a representative amount. The Calculation Agent will request the principal euro-zone office of each of these banks to provide a quotation of its rate. If at least two quotations are provided, EURIBOR for the relevant EURIBOR interest determination date will be the arithmetic mean of the quotations.

• If fewer than two quotations are provided as described above, EURIBOR for the relevant EURIBOR interest determination date will be the arithmetic mean of the rates for loans of the following kind to leading euro-zone banks quoted, at approximately 11:00 A.M., Brussels time on that EURIBOR interest determination date, by three major banks in the euro-zone selected by the Calculation Agent: loans of euros having the relevant index maturity, beginning on the relevant interest reset date, and in a representative amount.

• If fewer than three banks selected by the Calculation Agent are quoting as described above, EURIBOR for the new interest period will be EURIBOR in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

Treasury Rate Covered Bonds

A treasury rate Covered Bond will bear interest at an interest rate equal to the treasury rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The treasury rate will be the rate for the auction, on the relevant treasury interest determination date, of treasury bills having the index maturity specified in the applicable Final Terms Document, as that rate appears on Reuters page USAUCTION 10/11. If the treasury rate cannot be determined in this manner, the following procedures will apply.

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• If the rate described above does not appear on either page by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, the treasury rate will be the bond equivalent yield of the rate, for the relevant interest determination date, for the type of treasury bill described above, as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “U.S. Government Securities/Treasury Bills/Auction High.”

• If the rate described in the prior paragraph does not appear in H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the treasury rate will be the bond equivalent yield of the auction rate, for the relevant treasury interest determination date and for treasury bills of the kind described above, as announced by the U.S. Department of the Treasury.

• If the auction rate described in the prior paragraph is not so announced by 3:00 P.M., New York City time, on the relevant interest calculation date, or if no such auction is held for the relevant week, then the treasury rate will be the bond equivalent yield of the rate, for the relevant treasury interest determination date and for treasury bills having a remaining maturity closest to the specified index maturity, as published in H.15(519) under the heading “U.S. Government Securities/Treasury Bills/Secondary Market.”

• If the rate described in the prior paragraph does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the treasury rate will be the rate, for the relevant treasury interest determination date and for treasury bills having a remaining maturity closest to the specified index maturity, as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “U.S. Government Securities/Treasury Bills/Secondary Market.”

• If the rate described in the prior paragraph does not appear in H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the treasury rate will be the bond equivalent yield of the arithmetic mean of the following secondary market bid rates for the issue of treasury bills with a remaining maturity closest to the specified index maturity: the rates bid as of approximately 3:30 P.M., New York City time, on the relevant treasury interest determination date, by three primary U.S. government securities dealers in New York City selected by the Calculation Agent.

• If fewer than three dealers selected by the Calculation Agent are quoting as described in the prior paragraph, the treasury rate in effect for the new interest period will be the treasury rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

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CD Rate Covered Bonds

A CD rate Covered Bond will bear interest at an interest rate equal to the CD rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The CD rate will be the rate, on the relevant interest determination date, for negotiable U.S. dollar certificates of deposit having the index maturity specified in the applicable Final Terms Document, as published in H.15(519) under the heading “CDs (Secondary Market).” If the CD rate cannot be determined in this manner, the following procedures will apply.

• If the rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the CD rate will be the rate, for the relevant interest determination date, described above as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “CDs (Secondary Market).”

• If the rate described above does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the CD rate will be the arithmetic mean of the following secondary market offered rates for negotiable U.S. dollar certificates of deposit of major U.S. money market banks with a remaining maturity closest to the specified index maturity, and in a representative amount: the rates offered as of 10:00 A.M., New York City time, on the relevant interest determination date, by three leading non-bank dealers in negotiable U.S. dollar certificates of deposit in New York City, as selected by the Calculation Agent.

• If fewer than three dealers selected by the Calculation Agent are quoting as described above, the CD rate in effect for the new interest period will be the CD rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

CMT Rate Covered Bonds

A CMT rate Covered Bond will bear interest at an interest rate equal to the CMT rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The CMT rate will be the following rate displayed on the designated CMT Reuters page under the heading “. . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 Mondays Approximately 3:45 P.M.”, under the column for the designated CMT index maturity:

• if the designated CMT Reuters page is Reuters page FRBCMT, the rate for the relevant interest determination date; or

• if the designated CMT Reuters page is Reuters page FEDCMT, the weekly or monthly average, as specified in the applicable Final Terms Document, for the week that ends immediately before the week in which the relevant interest determination date falls, or for the month that ends immediately before the month in which the relevant interest determination date falls, as applicable.

If the CMT rate cannot be determined in this manner, the following procedures will apply.

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• If the applicable rate described above is not displayed on the relevant designated CMT Reuters page at 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the CMT rate will be the applicable treasury constant maturity rate described above—i.e., for the designated CMT index maturity and for either the relevant interest determination date or the weekly or monthly average, as applicable—as published in H.15(519).

• If the applicable rate described above does not appear in H.15(519) by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the CMT rate will be the treasury constant maturity rate, or other U.S. treasury rate, for the designated CMT index maturity and with reference to the relevant interest determination date, that:

• is published by the Board of Governors of the Federal Reserve System, or the U.S. Department of the Treasury; or

• as is otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which such CMT rate interest determination date falls; and

• in either case, is determined by the Calculation Agent to be comparable to the applicable rate formerly displayed on the designated CMT Reuters page and published in H.15(519).

• If the rate described in the prior paragraph does not appear by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the CMT rate will be the yield to maturity of the arithmetic mean of the following secondary market bid rates for the most recently issued treasury covered bonds having an original maturity equal to the designated CMT index maturity and a remaining term to maturity of not less than the designated CMT index maturity minus one year, and in a representative amount: the bid rates, as of approximately 3:30 P.M., New York City time, on the relevant interest determination date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting these bid rates, the Calculation Agent will request quotations from five of these primary dealers and will disregard the highest quotation—or, if there is equality, one of the highest—and the lowest quotation—or, if there is equality, one of the lowest. Treasury covered bonds are direct, non-callable, fixed rate obligations of the U.S. government.

• If the Calculation Agent is unable to obtain three quotations of the kind described in the prior paragraph, the CMT rate will be the yield to maturity of the arithmetic mean of the following secondary market bid rates for treasury covered bonds with an original maturity longer than the designated CMT index maturity, with a remaining term to maturity closest to the designated CMT index maturity and in a representative amount: the bid rates, as of approximately 3:30 P.M., New York City time, on the relevant interest determination date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting these bid rates, the Calculation Agent will request quotations from five of these

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primary dealers and will disregard the highest quotation (or, if there is equality, one of the highest) and the lowest quotation (or, if there is equality, one of the lowest). If two treasury covered bonds with an original maturity longer than the designated CMT index maturity have remaining terms to maturity that are equally close to the designated CMT index maturity, the Calculation Agent will obtain quotations for the treasury covered bond with the shorter remaining term to maturity.

• If fewer than five but more than two of these primary dealers are quoting as described in the prior paragraph, then the CMT rate for the relevant interest determination date will be based on the arithmetic mean of the bid rates so obtained, and neither the highest nor the lowest of those quotations will be disregarded.

• If two or fewer primary dealers selected by the Calculation Agent are quoting as described above, the CMT rate in effect for the new interest period will be the CMT rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

CMS Rate Covered Bonds

A CMS rate Covered Bond will bear interest at an interest rate equal to the CMS rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The CMS rate will be the rate for U.S. dollar swaps with a maturity for a specified number of years, expressed as a percentage in the applicable Final Terms Document, which appears on the Reuters page ISDAFIX1 as of 11:00 a.m., New York City time, on the interest rate determination date.

• If the CMS rate cannot be determined as described above, the following procedures will be used:

• If the applicable rate described above is not displayed on the relevant designated CMS Reuters page by 11:00 a.m., New York City time, on the interest rate determination date, then the CMS rate will be a percentage determined on the basis of the mid-market, semi-annual swap rate quotations provided by five leading swap dealers in the New York City interbank market at approximately 11:00 a.m., New York City time, on the interest rate determination date. For this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. dollar interest rate swap transaction with a term equal to the maturity designated in the relevant Final Terms Document commencing on that interest rate determination date with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to “LIBOR Reuters” with a maturity of three months. The Calculation Agent will select the five swap dealers after consultation with us and will request the principal New York City office of each of those dealers to provide a quotation of its rate. If at least three quotations are provided, the CMS rate for that interest rate determination date will be the arithmetic mean of the quotations, eliminating the highest and lowest quotations or, in the event of equality, one of the highest and one of the lowest quotations.

• If fewer than three leading swap dealers selected by the Calculation Agent are quoting as described above, the CMS rate will remain the CMS rate in effect on that interest rate determination date or, if that interest rate determination date is the first reference rate determination date, the initial interest rate.

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Federal Funds Rate Covered Bonds

A federal funds rate Covered Bond will bear interest at an interest rate equal to the federal funds rate and adjusted by the spread or spread multiplier, if any, indicated in the applicable Final Terms Document.

The federal funds rate will be the rate for U.S. dollar federal funds as of the relevant interest determination date, as published in H.15(519) under the heading “Federal Funds (Effective)”, as that rate is displayed on Reuters page FEDFUNDS1. If the federal funds rate cannot be determined in this manner, the following procedures will apply.

• If the rate described above is not displayed on Reuters page FEDFUNDS1 by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from that source at that time, then the federal funds rate, as of the relevant interest determination date, will be the rate described above as published in H.15 daily update, or another recognized electronic source used for displaying that rate, under the heading “Federal Funds (Effective).”

• If the rate described above is not displayed on Reuters page FEDFUNDS1 and does not appear in H.15(519), H.15 daily update or another recognized electronic source by 3:00 P.M., New York City time, on the relevant interest calculation date, unless the calculation is made earlier and the rate is available from one of those sources at that time, the federal funds rate will be the arithmetic mean of the rates for the last transaction in overnight, U.S. dollar federal funds arranged, before 9:00 A.M., New York City time, on the Business Day following the relevant interest determination date, by three leading brokers of U.S. dollar federal funds transactions in New York City selected by the Calculation Agent.

• If fewer than three brokers selected by the Calculation Agent are quoting as described above, the federal funds rate in effect for the new interest period will be the federal funds rate in effect for the prior interest period. If the initial interest rate has been in effect for the prior interest period, however, it will remain in effect for the new interest period.

Special Rate Calculation Terms

For the purposes of this Condition 5.12:

The term “bond equivalent yield” means a yield expressed as a percentage and calculated in accordance with the following formula:

bond equivalent yield =	D x N	x 100
	360 – (D x M)

where,

“D” means the annual rate for treasury bills quoted on a bank discount basis and expressed as a decimal;

“N” means 365 or 366, as the case may be; and

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“M” means the actual number of days in the applicable interest reset period.

The term “Business Day” means, for any Covered Bond, a day that meets all the following applicable requirements:

(a) (a) for all Covered Bonds, is a Monday, Tuesday, Wednesday, Thursday or Friday that is neither a legal holiday nor a day on which banking institutions are authorized or required by Law to close in New York City or Toronto, and, in the case of a Floating Rate covered bond, London;

(b) (b) if the Covered Bond has a specified currency other than U.S. dollars or euros, is also a day on which banking institutions are not authorized or obligated by Law, regulation or executive order to close in the applicable principal financial centre; and

(c) (c) if the Covered Bond is a EURIBOR covered bond or has a specified currency of euros, or is a LIBOR Covered Bond for which the index currency is euros, is also a Euro Business Day.

The term “designated CMT index maturity” means the index maturity for a CMT rate covered bond and will be the original period to maturity of a U.S. treasury security—either 1, 2, 3, 5, 7, 10, 20 or 30 years—specified in the applicable Final Terms Document.

The term “designated CMT Reuters page” means the Reuters page that displays treasury constant maturities as reported in H.15(519). If no Reuters page is so specified, then the applicable page will be Reuters page FEDCMT. If Reuters page FEDCMT applies but the applicable Final Terms Document does not specify whether the weekly or monthly average applies, the weekly average will apply.

The term “Euro Business Day” means any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System, or any successor system, is open for business.

The term “euro-zone” means, at any time, the region comprised of the member states of the European Economic and Monetary Union that, as of that time, have adopted a single currency in accordance with the Treaty on European Union of February 1992.

“H.15(519)” means the weekly statistical release entitled “Statistical Release H.15(519)”, or any successor publication, published by the Board of Governors of the Federal Reserve System.

“H.15 daily update” means the daily update of H.15(519) available through the worldwide website of the Board of Governors of the Federal Reserve System, at http://www.federalreserve.gov/releases/h15/update, or any successor site or publication.

The term “index currency” means, with respect to a LIBOR Covered Bond, the currency specified as such in the applicable Final Terms Document. The index currency may be U.S. dollars or any other currency, and will be U.S. dollars unless another currency is specified in the Final Terms Document.

The term “index maturity” means, with respect to a floating rate covered bond, the period to maturity of the instrument or obligation on which the interest rate formula is based, as specified in the applicable Final Terms Document.

“Interest Period” has the meaning given to such term in this Condition 4.5.

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“London business day” means any day on which dealings in the relevant index currency are transacted in the London interbank market.

The term “money market yield” means a yield expressed as a percentage and calculated in accordance with the following formula:

money market yield =	D x 360	x 100
	360 – (D x M)

where,

“D” means the annual rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and

“M” means the actual number of days in the relevant interest reset period.

The term “principal financial center” means the capital city of the country to which an index currency relates (or the capital city of the country issuing the specified currency, as applicable), except that with respect to U.S. dollars, Australian dollars, Canadian dollars, South African rands and Swiss francs, the “principal financial center” means The City of New York, Sydney, Toronto, Johannesburg and Zurich, respectively, and with respect to euros the principal financial center means London.

The term “representative amount” means an amount that, in the Calculation Agent’s judgment, is representative of a single transaction in the relevant market at the relevant time.

“Reuters Page LIBOR01” means the display designated as “LIBOR01” on Reuters 3000 Xtra (or any successor service) (or such other page as may replace Page LIBOR01 on Reuters 3000 Xtra or any successor service).

“Reuters screen US PRIME 1 page” means the display on the “US PRIME 1” page on the Reuters Monitor Money Rates Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks.

“Reuters page” means the display on Reuters 3000 Xtra, or any successor service or any replacement page or pages on that service.

If, when using the terms designated CMT Reuters page, H.15(519), H.15 daily update, Reuters screen US PRIME 1 page, Reuters Page LIBOR01 or Reuters page, a particular heading or headings is referenced on any of those pages, those references include any successor or replacement heading or headings as determined by the Calculation Agent.

5. Payments

5.1 Method of payment

Subject as provided below:

(a) payments in a Specified Currency other than euro will be made by credit or transfer to an account in the relevant Specified Currency (which, in the case of a payment in Yen to a non-resident of Japan, will be a non-resident account) maintained by the payee with, or, at the option of the payee, by a cheque in such Specified Currency drawn on, a bank in the principal financial centre of the country of such Specified Currency; and

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(b) payments in euro will be made by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee or, at the option of the payee, by a euro cheque.

In the case of Bearer Covered Bonds, payments in U.S. Dollars will be made by transfer to a U.S. Dollar account maintained by the payee with a bank outside of the United States (which expression, as used in this Condition 5, means the United States of America, including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction), or by cheque drawn on a United States bank. In no event will payment in respect of Bearer Covered Bonds be made by a cheque mailed to an address in the United States. All payments of interest in respect of Bearer Covered Bonds will be made to accounts located outside the United States except as may be permitted by United States tax Law in effect at the time of such payment without detriment to the Issuer or the Guarantor.

Payments will be subject in all cases to any fiscal or other Laws and regulations applicable thereto in the place of payment but without prejudice to the provisions of Condition 7. References to Specified Currency will include any successor currency under applicable Law.

5.2 Presentation of Bearer Definitive Covered Bonds and Coupons

Payments of principal and interest (if any) will (subject as provided below) be made in accordance with Condition 5.1 only against presentation and surrender of Bearer Definitive Covered Bonds or Coupons (or, in the case of part payment of any sum due, endorsement of the Bearer Definitive Covered Bond (or Coupon)), as the case may be, only at a specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America, including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction).

Fixed Rate Covered Bonds in definitive bearer form (other than Long Maturity Covered Bonds) should be presented for payment together with all unmatured Coupons appertaining thereto (which expression will include Coupons failing to be issued on exchange of matured Talons), failing which an amount equal to the face value of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the amount of such missing unmatured Coupon as the sum so paid bears to the total amount due) will be deducted from the amount due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relative missing Coupon at any time before the expiry of 10 years after the Relevant Date (as defined in Condition 7) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 8) or, if later, five years from the date on which such Coupon would otherwise have become due but in no event thereafter.

Upon amounts in respect of any Fixed Rate Covered Bond in definitive bearer form becoming due and repayable by the Issuer (in the absence of a Notice to Pay or a Guarantor Acceleration Notice) or by the Guarantor under the Covered Bond Guarantee (if a Notice to Pay or a Guarantor Acceleration Notice has been served) prior to its Final Maturity Date (or, as the case may be, Extended Due for Payment Date), all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof.

Upon the due date for redemption of any Floating Rate Covered Bond or Long Maturity Covered Bond in definitive bearer form, all unmatured Coupons and Talons (if any) relating thereto

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(whether or not attached) will become void and no payment or, as the case may be, exchange for further Coupons will be made in respect thereof. A “Long Maturity Covered Bond” is a Fixed Rate Covered Bond (other than a Fixed Rate Covered Bond which on issue had a Talon attached) whose nominal amount on issue is less than the aggregate interest payable thereon provided that such Covered Bond will cease to be a Long Maturity Covered Bond on the Interest Payment Date on which the aggregate amount of interest remaining to be paid after that date is less than the Principal Amount Outstanding of such Covered Bond.

If the due date for redemption of any Bearer Definitive Covered Bond is not an Interest Payment Date, interest (if any) accrued in respect of such Covered Bond from (and including) the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date will be payable only against presentation and surrender of the relevant Bearer Definitive Covered Bond.

5.3 Payments in respect of Bearer Global Covered Bonds

Payments of principal and interest (if any) in respect of Covered Bonds represented by any Bearer Global Covered Bond will (subject as provided below) be made in the manner specified above in relation to Bearer Definitive Covered Bonds and otherwise in the manner specified in the relevant Bearer Global Covered Bond against presentation or surrender, as the case may be, of such Bearer Global Covered Bond if the Bearer Global Covered Bond is not issued in NGCB form at the specified office of any Paying Agent outside the United States. On the occasion of each payment (i) in the case of any Bearer Global Covered Bond which is not issued in NGCB form, a record of such payment made on such Bearer Global Covered Bond, distinguishing between any payment of principal and any payment of interest, will be made on such Bearer Global Covered Bond by the Paying Agent and such record will be prima facie evidence that the payment in question has been made, and (ii) in the case of any Bearer Global Covered Bond which is issued in NGCB form, the Paying Agent will instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records to reflect such payment.

No payments of principal, interest or other amounts due in respect of a Bearer Global Covered Bond will be made by mail to an address in the United States or by transfer to an account maintained in the United States.

5.4 Payments in respect of Registered Covered Bonds

Payments of principal in respect of each Registered Covered Bond (whether or not in global form) will be made against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the Registered Covered Bond at the specified office of the Registrar or any of the Paying Agents. Such payments will be made in accordance with Condition 5.1 by transfer to the Designated Account (as defined below) of the holder (or the first named of joint holders) of the Registered Covered Bond appearing in the register of holders of the Registered Covered Bonds maintained by the Registrar (the “Register”) at the close of business on the tenth business day (“business day” being for the purposes of this Condition 5.4 a day on which banks are open for business in the city where the specified office of the Registrar is located) before the relevant due date (the “Record Date”). Notwithstanding the previous sentence, if (i) a holder does not have a Designated Account, or (ii) the principal amount of the Covered Bonds held by a holder is less than U.S.$250,000 (or its approximate equivalent in any other Specified Currency), payment will instead be made by a cheque in the Specified Currency drawn on a Designated Bank (as defined below). For these purposes, “Designated Account” means the account (which, in the case of a payment in Yen to a non-resident of Japan, will be a non-resident account) maintained by a holder with a Designated Bank and identified as such in the Register and “Designated Bank” means (in the case of payment in a Specified Currency other than euro) a bank in the principal financial centre of the country of such Specified Currency and (in the case of a payment in euro) any bank which processes payments in euro.

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Payments of interest in respect of each Registered Covered Bond (whether or not in global form) will be made by a cheque in the Specified Currency drawn on a Designated Bank and mailed by uninsured mail on the business day immediately preceding the relevant due date to the holder (or the first named of joint holders) of the Registered Covered Bond appearing in the Register at the close of business on the Record Date at the holder’s address shown in the Register on the Record Date and at the holder’s risk. Upon application of the holder to the specified office of the Registrar not less than three business days before the due date for any payment of interest in respect of a Registered Covered Bond, the payment may be made by transfer on the due date in the manner provided in the preceding paragraph. Any such application for transfer will be deemed to relate to all future payments of interest (other than interest due on redemption) in respect of the Registered Covered Bonds which become payable to the holder who has made the initial application until such time as the Registrar is notified in writing to the contrary by such holder. Payment of the interest due in respect of each Registered Covered Bond on redemption will be made in the same manner as payment of the principal in respect of such Registered Covered Bond.

Holders of Registered Covered Bonds will not be entitled to any interest or other payment for any delay in receiving any amount due in respect of any Registered Covered Bond as a result of a cheque posted in accordance with this Condition arriving after the due date for payment or being lost in the post. No commissions or expenses will be charged to such holders by the Registrar or any of the Paying Agents in respect of any payments of principal or interest in respect of the Registered Covered Bonds.

None of the Issuer, the Guarantor, the Bond Trustee or the Agents will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Registered Covered Bonds or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

5.5 General provisions applicable to payments

The holder of a Global Covered Bond (or, as provided in the Trust Deed, the Bond Trustee) will be the only Person entitled to receive payments in respect of Covered Bonds represented by such Global Covered Bond and the obligations of the Issuer or, as the case may be, the Guarantor under the Covered Bond Guarantee will be discharged by payment to, or to the order of, the holder of such Global Covered Bond (or the Bond Trustee, as the case may be) in respect of each amount so paid. Each of the Persons shown in the records of DTC, Euroclear or Clearstream, Luxembourg as the beneficial holder of a particular nominal amount of Covered Bonds represented by such Global Covered Bond must look solely to DTC, Euroclear or Clearstream, Luxembourg, as the case may be, for his share of each payment so made by the Issuer or the Guarantor under the Covered Bond Guarantee to, or to the order of, the holder of such Global Covered Bond (or the Bond Trustee, as the case may be). No Person other than the holder of the relevant Global Covered Bond (or, as provided in the Trust Deed, the Bond Trustee) will have any claim against the Issuer or the Guarantor under the Covered Bond Guarantee in respect of any payments due on that Global Covered Bond.

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Notwithstanding the foregoing provisions of this Condition, payments of principal and/or interest in respect of Bearer Covered Bonds in U.S. Dollars will only be made at the specified office of a Paying Agent in the United States if:

(a) the Issuer has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment in U.S. Dollars at such specified offices outside the United States of the full amount of principal and/or interest on the Bearer Covered Bonds in the manner provided above when due;

(b) payment of the full amount of such principal and interest at such specified offices outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions on the full payment or receipt of principal and interest in U.S. Dollars; and

(c) such payment is then permitted under United States Law without involving, in the opinion of the Issuer and the Guarantor, adverse tax consequences to the Issuer or the Guarantor under the Covered Bond Guarantee.

5.6 Payment Day

If the date for payment of any amount in respect of any Covered Bond or Coupon is not a Payment Day (as defined below), the holder thereof will not be entitled to payment of the relevant amount due until the next following Payment Day and will not be entitled to any interest or other sum in respect of any such delay. In this Condition (unless otherwise specified in the applicable Final Terms Document), “Payment Day” means any day which (subject to Condition 8) is:

(a) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in:

(i) the relevant place of presentation; and

(ii) any Additional Business Centre specified in the applicable Final Terms Document; and

(b) either (i) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (if other than the place of presentation, London and any Additional Business Centre) or as otherwise specified in the applicable Final Terms Document, or (ii) in relation to any sum payable in euro, a day on which the TARGET System is open.

(c) in the case of any payment in respect of a Registered Global Covered Bond denominated in a Specified Currency other than U.S. dollars and registered in the name of DTC or its nominee and in respect of which an accountholder of DTC (with an interest in such Registered Global Covered Bond) has elected, by a date not later than 15 days prior to a Payment Date, to receive any part of such payment in U.S. dollars, a day on which commercial banks are not authorized or required by Law to be closed in New York City.

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5.7 Interpretation of principal and interest

Any reference in these Terms and Conditions to principal in respect of the Covered Bonds will be deemed to include, as applicable:

(a) any additional amounts which may be payable with respect to principal under Condition 7 or under any undertakings or covenants given in addition thereto, or in substitution therefor, pursuant to the Trust Deed;

(b) the Final Redemption Amount of the Covered Bonds;

(c) the Early Redemption Amount of the Covered Bonds, but excluding any amount of interest referred to therein;

(d) the Optional Redemption Amount(s) (if any) of the Covered Bonds;

(e) in relation to Zero Coupon Covered Bonds, the Amortised Face Amount (as defined in Condition 6.7);

(f) any premium and any other amounts (other than interest) which may be payable under or in respect of the Covered Bonds; and

(g) any Excess Proceeds attributable to principal which may be deposited by the Bond Trustee into the GDA Account in respect of the Covered Bonds, and following a Guarantor Event of Default and service of a Guarantor Acceleration Notice deposited or paid in such other manner as the Bond Trustee may direct.

Any reference in these Terms and Conditions to interest in respect of the Covered Bonds will be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 7 or under any undertakings given in addition thereto, or in substitution therefor, pursuant to the Trust Deed.

5.8 Redenomination

Where redenomination is specified in the applicable Final Terms Document as being applicable, the Issuer may, without the consent of the Covered Bondholders and the Couponholders, on giving prior written notice to the Bond Trustee, the Agents, the Registrar (in the case of Registered Covered Bonds), Euroclear and Clearstream, Luxembourg and at least 30 days’ prior notice to the Covered Bondholders in accordance with Condition 13, elect that, with effect from the Redenomination Date specified in the notice, the Covered Bonds will be redenominated in euro. In relation to any Covered Bonds where the applicable Final Terms Document provides for a minimum Specified Denomination in the Specified Currency which is equivalent to at least €50,000 and which are admitted to trading on a regulated market in the European Economic Area, it will be a term of any such article that the holder of any Covered Bonds held through Euroclear, Clearstream, Luxembourg and/or DTC must have credited to its securities account with the relevant clearing system a minimum balance of Covered Bonds of at least €50,000.

The election will have effect as follows:

(a) the Covered Bonds will be deemed to be redenominated in euro in the denomination of €0.01 with a nominal amount for each Covered Bond equal to the nominal amount of that Covered Bond in the Specified Currency, converted into euro at the Established Rate, provided that, if the Issuer determines, in consultation with the Agents and the Bond Trustee, that the then market practice in respect of the redenomination in euro of internationally offered securities is different from the provisions specified above, such provisions will be deemed to be amended so as to comply with such market practice and the Issuer will promptly notify the Covered Bondholders, the competent listing authority, stock exchange, and/or market (if any) on or by which the Covered Bonds may be listed and/or admitted to trading and the Paying Agents of such deemed amendments;

(b) save to the extent that an Exchange Notice has been given in accordance with paragraph (d) below, the amount of interest due in respect of the Covered Bonds will be calculated by reference to the aggregate nominal amount of Covered Bonds

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presented (or, as the case may be, in respect of which Coupons are presented) for payment by the relevant holder and the amount of such payment will be rounded down to the nearest €0.01;

(c) if Definitive Covered Bonds are required to be issued after the Redenomination Date, they will be issued at the expense of the Issuer in the denominations of €50,000 and/or such higher amounts as the Agents may determine and notify to the Covered Bondholders and any remaining amounts less than €50,000 will be redeemed by the Issuer and paid to the Covered Bondholders in euro in accordance with Condition 6;

(d) if issued prior to the Redenomination Date, all unmatured Coupons denominated in the Specified Currency (whether or not attached to the Covered Bonds) will become void with effect from the date on which the Issuer gives notice (the “Exchange Notice”) that replacement euro-denominated Covered Bonds and Coupons are available for exchange (provided that such securities are so available) and no payments will be made in respect of them. The payment obligations contained in any Covered Bonds and Coupons so issued will also become void on that date although those Covered Bonds and Coupons will continue to constitute valid exchange obligations of the Issuer. New euro-denominated Covered Bonds and Coupons will be issued in exchange for Covered Bonds and Coupons denominated in the Specified Currency in such manner as the Agents may specify and as will be notified to the Covered Bondholders in the Exchange Notice. No Exchange Notice may be given less than 15 days prior to any date for payment of principal or interest on the Covered Bonds;

(e) after the Redenomination Date, all payments in respect of the Covered Bonds and the Coupons, other than payments of interest in respect of periods commencing before the Redenomination Date, will be made solely in euro as though references in the Covered Bonds to the Specified Currency were to euro. Payments will be made in euro by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee or, at the option of the payee, by a euro cheque;

(f) if the Covered Bonds are Fixed Rate Covered Bonds and interest for any period ending on or after the Redenomination Date is required to be calculated for a period ending other than on an Interest Payment Date, it will be calculated by applying the Rate of Interest to each Specified Denomination, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention;

(g) if the Covered Bonds are Floating Rate Covered Bonds, the applicable Final Terms Document will specify any relevant changes to the provisions relating to interest; and

(h) such other changes will be made to this Condition (and the Transaction Documents) as the Issuer may decide, after consultation with the Agents and the Bond Trustee, and as may be specified in the notice given to the Covered Bondholders pursuant to paragraph (a) above, to conform it to conventions then applicable to instruments denominated in euro.

5.9 Definitions

In these Conditions, the following expressions have the following meanings:

“Established Rate” means the rate for the conversion of the relevant Specified Currency (including compliance with rules relating to roundings in accordance with applicable European Community regulations) into euro established by the Council of the European Union pursuant to Article 123 of the Treaty.

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“euro” means the lawful currency of the Member States that adopt the single currency in accordance with the Treaty.

“Redenomination Date” means (in the case of interest bearing Covered Bonds) any date for payment of interest under the Covered Bonds or (in the case of Zero Coupon Covered Bonds) any date, in each case specified by the Issuer in the notice given to the Covered Bondholders pursuant to paragraph (a) above and which falls on or after the date on which the country of the relevant Specified Currency first adopts the euro.

“Treaty” means the Treaty establishing the European Community, as amended.

6. Redemption and Purchase

6.1 Final redemption

Unless previously redeemed or purchased and cancelled as specified below, each Covered Bond will be redeemed by the Issuer at its Final Redemption Amount specified in, or determined in the manner specified in, the applicable Final Terms Document in the relevant Specified Currency on the Final Maturity Date.

Without prejudice to Condition 9, if an Extended Due for Payment Date is specified in the applicable Final Terms Document for a Series of Covered Bonds and the Issuer has failed to pay the Final Redemption Amount on the Final Maturity Date specified in the Final Terms Document (in each case after the expiry of the grace period set out in Condition 9.1(a)) and following service of a Notice to Pay on the Guarantor by no later than the date falling one Business Day prior to the Extension Determination Date, the Guarantor has insufficient funds available under the Guarantee Priorities of Payments to pay the Guaranteed Amounts corresponding to the Final Redemption Amount in full in respect of the relevant Series of Covered Bonds on the date falling on the earlier of (a) the date which falls two Canadian Business Days after service of a Notice to Pay on the Guarantor or, if later, the Final Maturity Date (in each case after the expiry of the grace period set out in Condition 9.2(a)), and (b) the Extension Determination Date, under the Covered Bond Guarantee, then (subject as provided below) payment of the unpaid portion of the Final Redemption Amount by the Guarantor under the Covered Bond Guarantee will be deferred until the Extended Due for Payment Date, provided that any amount representing the Final Redemption Amount due and remaining unpaid on the earlier of (a) and (b) above will be paid by the Guarantor to the extent it has sufficient funds available under the Guarantee Priorities of Payments on any Interest Payment Date thereafter up to (and including) the relevant Extended Due for Payment Date.

The Issuer will confirm to the Principal Paying Agent as soon as reasonably practicable and in any event at least four Canadian Business Days prior to the Final Maturity Date of a Series of Covered Bonds whether (a) payment will be made in full of the Final Redemption Amount in respect of a Series of Covered Bonds on that Final Maturity Date or (b) payment will not be made in full of the Final Redemption Amount in respect of a Series of Covered Bonds on that Final Maturity Date. Any failure by the Issuer to notify the Principal Paying Agent will not affect the validity or effectiveness of the extension.

The Guarantor will notify the relevant Covered Bondholders (in accordance with Condition 13), the Rating Agencies, the Bond Trustee, the Principal Paying Agent and (in the case of Registered Covered Bonds) the Registrar as soon as reasonably practicable and in any event at least one

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Business Day prior to the date specified in (a) or (b) of the second preceding paragraph (as appropriate) of any inability of the Guarantor to pay in full the Guaranteed Amounts corresponding to the Final Redemption Amount in respect of a Series of Covered Bonds pursuant to the Covered Bond Guarantee. Any failure by the Guarantor to notify such parties will not affect the validity or effectiveness of the extension nor will any rights accrue to any of them by virtue thereof.

In the circumstances outlined above, the Guarantor will on the earlier of (a) the date falling two Canadian Business Days after service of a Notice to Pay or, if later, the Final Maturity Date (in each case after the expiry of the grace period set out in Condition 9.2(a)), and (b) the Extension Determination Date, under the Covered Bond Guarantee, apply the funds (if any) available (after paying or providing for payment of higher ranking or pari passu amounts in accordance with the Guarantee Priorities of Payments) pro rata in part payment of an amount equal to the Final Redemption Amount of each Covered Bond of the relevant Series of Covered Bonds and will pay Guaranteed Amounts constituting the corresponding part of Scheduled Interest in respect of each such Covered Bond on such date. The obligation of the Guarantor under the Covered Bond Guarantee to pay any amounts in respect of the balance of the Final Redemption Amount not so paid will be deferred as described above. Such failure to pay by the Guarantor will not constitute a Guarantor Event of Default.

Any discharge of the obligations of the Issuer as a result of the payment of Excess Proceeds to the Bond Trustee will be disregarded for the purposes of determining the liabilities of the Guarantor under the Covered Bond Guarantee in connection with this Condition 6.1.

6.2 Redemption for taxation reasons

The Covered Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time (if the relevant Covered Bond is not a Floating Rate Covered Bond) or on any Interest Payment Date (if the relevant Covered Bond is a Floating Rate Covered Bond), on giving not less than 30 nor more than 60 days’ notice to the Bond Trustee and, in accordance with Condition 13, the Covered Bondholders (which notice will be irrevocable), if the Issuer satisfies the Bond Trustee immediately before the giving of such notice that on the occasion of the next date for payment of interest on the relevant Covered Bonds, that the Issuer is or would be required to pay additional amounts as provided or referred to in Condition 7. Covered Bonds redeemed pursuant to this Condition 6.2 will be redeemed at their Early Redemption Amount referred to in Condition 6.7 together (if appropriate) with interest accrued to (but excluding) the date of redemption.

6.3 Redemption at the option of the Issuer (“Issuer Call”)

If an Issuer Call is specified in the applicable Final Terms Document, the Issuer may, having given not less than 15 nor more than 30 days’ notice or such other period of notice as may be specified in the applicable Final Terms Document to the Bond Trustee, the Principal Paying Agent, the Registrar (in the case of the redemption of Registered Covered Bonds) and, in accordance with Condition 13, the Covered Bondholders (which notice will be irrevocable) redeem all or only some of the Covered Bonds then outstanding on any Optional Redemption Date(s) and at the Optional Redemption Amount(s) specified in, or determined in the manner specified in, the applicable Final Terms Document together, if applicable, with interest accrued to (but excluding) the relevant Optional Redemption Date(s). The Issuer will be bound to redeem the Covered Bonds on the date specified in such notice. In the event of a redemption of only some of the Covered Bonds, such redemption must be of a nominal amount not less than the Minimum Redemption Amount and not more than the Maximum Redemption Amount (if any) as specified in the applicable Final Terms Document. In the case of a partial redemption of Covered Bonds, the Covered Bonds to be redeemed (the “Redeemed Covered Bonds”) will be selected individually by lot, in the case of Redeemed Covered Bonds represented by Definitive Covered

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Bonds, and in accordance with the rules of DTC, Euroclear and/or Clearstream, Luxembourg, in the case of Redeemed Covered Bonds represented by a Global Covered Bond, in each case, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the “Selection Date”). In the case of Redeemed Covered Bonds represented by Definitive Covered Bonds, a list of the serial numbers of such Redeemed Covered Bonds will be published in accordance with Condition 13 not less than 15 days (or such shorter period as may be specified in the applicable Final Terms Document) prior to the date fixed for redemption. The aggregate nominal amount of Redeemed Covered Bonds represented by Definitive Covered Bonds or represented by Global Covered Bonds will, in each case, bear the same proportion to the aggregate nominal amount of all Redeemed Covered Bonds as the aggregate nominal amount of Definitive Covered Bonds or Global Covered Bonds outstanding bears, in each case, to the aggregate nominal amount of the Covered Bonds outstanding on the Selection Date, provided that such nominal amounts will, if necessary, be rounded downwards to the nearest integral multiple of the Specified Denomination. No exchange of the relevant Global Covered Bond will be permitted during the period from (and including) the Selection Date to (and including) the date fixed for redemption pursuant to this Condition 6.3 and notice to that effect will be given by the Issuer to the Covered Bondholders in accordance with Condition 13 at least five days (or such shorter period as is specified in the applicable Final Terms Document) prior to the Selection Date.

6.4 Redemption at the option of the Covered Bondholders (“Investor Put”)

If an Investor Put is specified in the Final Terms Document for a Covered Bond, then if and to the extent specified in the applicable Final Terms Document and provided that an Issuer Event of Default has not occurred, upon the Covered Bondholder giving to the Issuer, in accordance with Condition 13, not less than 30 nor more than 60 days’ notice (which notice will be irrevocable), the Issuer will, upon the expiry of such notice provided that the Cash Manager has notified the Bond Trustee in writing that there will be sufficient funds available to pay any termination payment due to the Covered Bond Swap Provider, redeem subject to, and in accordance with, the terms specified in the applicable Final Terms Document in whole (but not in part) such Covered Bond on the Optional Redemption Date and at the relevant Optional Redemption Amount as specified in, or determined in the manner specified in, the applicable Final Terms Document, together, if applicable, with interest accrued to (but excluding) the relevant Optional Redemption Date.

If the Covered Bond is in definitive form, to exercise the right to require redemption of such Covered Bond, the Covered Bondholder must deliver such Covered Bond, on any Business Day falling within the above-mentioned notice period at the specified office of any Paying Agent, accompanied by a duly signed and completed notice of exercise of the Investor Put in the form (for the time being currently) obtainable from any specified office of any Paying Agent (a “Put Notice”) and in which the holder must specify a bank account (or, if payment is by cheque, an address) to which payment is to be made under this Condition 6.4.

It may be that before an Investor Put can be exercised, certain conditions and/or circumstances will need to be satisfied. Where relevant, the provisions will be set out in the applicable Final Terms Document.

6.5 Redemption due to illegality or invalidity

(a) The Covered Bonds of all Series may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the

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Bond Trustee, the Principal Paying Agent, the Registrar and, in accordance with Condition 13, all Covered Bondholders (which notice will be irrevocable), if the Issuer satisfies the Bond Trustee immediately before the giving of such notice that it has, or will, before the next Interest Payment Date of any Covered Bond of any Series, become unlawful for the Issuer to make, fund or allow to remain outstanding any Guarantee Loan made by it to the Guarantor under the Intercompany Loan Agreement, as a result of any change in, or amendment to, the applicable Laws or regulations or any change in the application or official interpretation of such Laws or regulations, which change or amendment has become or will become effective before the next such Interest Payment Date.

(b) Covered Bonds redeemed pursuant to Condition 6.5(a) will be redeemed at their Early Redemption Amount referred to in Condition 6.7 together (if appropriate) with interest accrued to (but excluding) the date of redemption.

6.6 General

Prior to the publication of any notice of redemption pursuant to Conditions 6.2 or 6.5(a), the Issuer will deliver to the Bond Trustee a certificate signed by two Authorized Signatories stating that the Issuer is entitled or required to effect such redemption and setting forth a statement of facts showing that the conditions set out in Conditions 6.2 or, as the case may be, 6.5(a) for such right or obligation (as applicable) of the Issuer to arise have been satisfied and the Bond Trustee will be entitled to accept the certificate as sufficient evidence of the satisfaction of the conditions set out above, in which event it will be conclusive and binding on all Covered Bondholders and Couponholders.

6.7 Early Redemption Amounts

For the purpose of Conditions 6.2 and 6.5(a), each Covered Bond will be redeemed (unless otherwise stated in the applicable Final Terms Document) at its Early Redemption Amount calculated as follows:

(a) in the case of a Covered Bond other than a Zero Coupon Covered Bond, at the amount specified in, or determined in the manner specified in, the applicable Final Terms Document or, if no such amount or manner is so specified in the applicable Final Terms Document, at its Principal Amount Outstanding, together with interest accrued to (but excluding) the date fixed for redemption; and

(b) in the case of a Zero Coupon Covered Bond, at an amount (the “Amortised Face Amount”) equal to the sum of:

(i) the Reference Price; and

(ii) the product of the Accrual Yield (compounded annually) being applied to the Reference Price from (and including) the Issue Date of the first Tranche of such Covered Bond to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Covered Bond becomes due and repayable.

Where such calculation in paragraph (b) above is to be made for a period which is not a whole number of years, it will be made (A) in the case of a Zero Coupon Covered Bond payable in a Specified Currency other than euro, on the basis of a 360-day year consisting of 12 months of 30 days each, or (B) in the case of a Zero Coupon Covered Bond payable in euro, on the basis of the actual number of days elapsed divided by 365 (or, if any of the days elapsed falls in a leap year, the sum of (x) the number of those days falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year divided by 365) or (C) on such other calculation basis as may be specified in the applicable Final Terms Document.

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6.8 Purchases

The Issuer or any of its Subsidiaries, or the Guarantor, may at any time purchase or otherwise acquire Covered Bonds (provided that, in the case of Bearer Definitive Covered Bonds, all unmatured Coupons and Talons appertaining thereto are attached thereto or surrendered therewith) at any price in the open market either by tender or private agreement or otherwise. If purchases are made by tender, tenders must be available to all Covered Bondholders alike. Such Covered Bonds may be held, reissued, resold or, at the option of the Issuer or the relevant Subsidiary, surrendered to any Paying Agent and/or the Registrar for cancellation (except that any Covered Bonds purchased or otherwise acquired by the Guarantor must immediately be surrendered to any Paying Agent and/or the Registrar for cancellation).

6.9 Cancellation

All Covered Bonds which are redeemed will forthwith be cancelled (together with, in the case of Bearer Definitive Covered Bonds, all unmatured Coupons and Talons attached thereto or surrendered therewith at the time of redemption). All Covered Bonds so cancelled and any Covered Bonds purchased and surrendered for cancellation pursuant to Condition 6.8 and cancelled (together with, in the case of Bearer Definitive Covered Bonds, all unmatured Coupons and Talons cancelled therewith) will be forwarded to the Principal Paying Agent and cannot be reissued or resold.

6.10 Late Payment

If any amount payable in respect of any Covered Bond is improperly withheld or refused upon its becoming due and payable or is paid after its due date, the amount due and payable in respect of such Covered Bond (the “Late Payment”) will itself accrue interest (both before and after any judgment or other order of a court of competent jurisdiction) from (and including) the date on which such payment was improperly withheld or refused or, as the case may be, became due, to (but excluding) the Late Payment Date in accordance with the following provisions:

(a) in the case of a Covered Bond other than a Zero Coupon Covered Bond, at the rate determined in accordance with Condition 4.1 or 4.2, as the case may be; and

(b) in the case of a Zero Coupon Covered Bond, at a rate equal to the Accrual Yield, in each case on the basis of the Day Count Fraction specified in the applicable Final Terms Document or, if none is specified, on a 30/360 basis.

For the purpose of this Condition 6.10, the “Late Payment Date” will mean the earlier of:

(i) the date which the Bond Trustee determines to be the date on which, upon further presentation of the relevant Covered Bond, payment of the full amount (including interest as aforesaid) in the relevant currency in respect of such Covered Bond is to be made; and

(ii) the seventh day after notice is given to the relevant Covered Bondholder (whether individually or in accordance with Condition 13) that the full amount (including interest as aforesaid) in the relevant currency in respect of such Covered Bond is available for payment,

provided that in the case of both (i) and (ii), upon further presentation thereof being duly made, such payment is made.

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7. Taxation

All payments of principal and interest (if any) in respect of the Covered Bonds and Coupons by or on behalf of the Issuer or the Guarantor under the Covered Bond Guarantee, as the case may be, will be made without withholding or deduction for, or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature unless such withholding or deduction of such taxes, duties, assessments or governmental charges is required by Law or administrative practice of any jurisdiction.

In the event of a withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of (i) the Government of Canada or any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, or (ii) in the case of Covered Bonds issued by a branch of the Issuer located outside of Canada, the country in which such branch is located or any political subdivision thereof or any authority or agency therein or thereof having power to tax, in respect of any payment of principal and interest on the Covered Bonds and Coupons, the Issuer will pay such additional amounts as will be necessary in order that the net amounts received by the Covered Bondholders or Couponholders after such withholding or deduction will equal the respective amounts of principal and interest, if any, which would otherwise have been receivable in respect of the Covered Bonds or Coupons, as the case may be, in the absence of such withholding or deduction; except that no such additional amounts will be payable with respect to any Covered Bond or Coupon presented for payment:

(a) to, or to a third party on behalf of, a Covered Bondholder or Couponholder who is liable to such taxes, duties, assessments or government charges in respect of such Covered Bond or Coupon by reason of such Covered Bondholder or Couponholder having some connection with Canada or the jurisdiction imposing such tax otherwise than the mere holding of such Covered Bond or Coupon;

(b) presented for payment more than 30 days after the Relevant Date except to the extent that the holder thereof would have been entitled to such additional amount on presenting the same for payment on or before such thirtieth day;

(c) where such withholding or deduction is imposed on a payment and is required to be made pursuant to European Council Directive 2003/48/EC or any other Law implementing or complying with, or introduced in order to conform to, such Directive;

(d) where such withholding or deduction is imposed pursuant to sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, U.S. Treasury regulations or agreements thereunder, official interpretations thereof, or any law implementing an intergovernmental approach thereto (“FATCA”);

(e) presented for payment by or on behalf of a Covered Bondholder or Couponholder who would have been able to avoid such withholding or deduction by presenting the relevant Covered Bond or Coupon to another Paying Agent in a Member State;

(f) to, or to a third party on behalf of, a Covered Bondholder or Couponholder in respect of whom such tax, duty, assessment or governmental charge is required to be withheld or deducted by reason of such Covered Bondholder or Couponholder being a Person not dealing at arm’s length (within the meaning of the Income Tax Act) with the Issuer; or

(g) to, or to a third party on behalf of, a Covered Bondholder or Couponholder who is liable for such taxes, duties, assessments or other charges by reason of such Covered Bondholder or Couponholder’s failure to comply with any certification, identification, documentation or other reporting requirement concerning the nationality, residence, identity or connection with Canada of such Covered Bondholder or Couponholder or

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other person entitled to payments under the Covered Bond, if (i) compliance is required by Law as a precondition to, exemption from, or reduction in the rate of, the tax, assessment or other charge and (ii) the Issuer has given such Covered Bondholder or Couponholder or, if such Covered Bondholder or Couponholder is not the beneficial owner of the Covered Bond or Coupon in question, the beneficial owner of such Covered Bond or Coupon at least 30 days’ notice that such Covered Bondholder, Couponholder or beneficial owner will be required to provide such certification, identification, documentation or other requirement.

As used herein, the “Relevant Date” means the date on which payment in respect of the Covered Bond or Coupon first becomes due and payable but, if the full amount of the funds payable on such date has not been received by the Principal Paying Agent or the Bond Trustee on or prior to such date, the Relevant Date will be the date on which such funds will have been so received and notice to that effect has been given to Covered Bondholders in accordance with Condition 13.

If any payments made by the Guarantor under the Covered Bond Guarantee are or become subject to any withholding or deduction on account of any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Canada, or in the case of Covered Bonds issued by a branch of the Issuer located outside of Canada, the country in which such branch is located or any political sub-division thereof or by any authority therein or thereof having power to tax, the Guarantor will not be obliged to pay any additional amount as a consequence.

8. Prescription

The Covered Bonds (whether in bearer or registered form) and Coupons will become void unless presented for payment within 10 years (in the case of principal) and five years (in the case of interest) in each case from the Relevant Date (as defined in Condition 7) therefor, subject in each case to the provisions of Condition 5.

The Issuer will be discharged from its obligation to pay principal on a Registered Covered Bond to the extent that the relevant Registered Covered Bond certificate has not been surrendered to the Registrar by, or a cheque which has been duly dispatched in the Specified Currency remains uncashed at, the end of the period of 10 years from the Relevant Date for such payment.

The Issuer will be discharged from its obligation to pay interest on a Registered Covered Bond to the extent that a cheque which has been duly dispatched in the Specified Currency remains uncashed at the end of the period of five years from the Relevant Date in respect of such payment.

There will not be included in any Coupon sheet issued on exchange of a Talon, any Coupon the claim for payment in respect of which would be void pursuant to this Condition or Condition 5 or any Talon which would be void pursuant to Condition 5.

9. Events of Default, Acceleration and Enforcement

9.1 Issuer Events of Default

The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds (which for this purpose or the purpose of any Extraordinary Resolution referred to in this Condition 9.1 means the Covered Bonds of a Series together with the Covered Bonds of any other Series constituted by the Trust Deed) then outstanding as if they were a single Series (with the nominal amount of Covered Bonds not denominated in Canadian Dollars converted into Canadian Dollars at the relevant Covered Bond Swap Rate) or if so directed by an Extraordinary Resolution of all the

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Covered Bondholders will (subject in each case to being indemnified and/or secured to its satisfaction), give notice (an “Issuer Acceleration Notice”) in writing to the Issuer that as against the Issuer (but not, for the avoidance of doubt, against the Guarantor under the Covered Bond Guarantee) each Covered Bond of each Series is, and each such Covered Bond will thereupon immediately become, due and repayable at its Early Redemption Amount together with (to the extent not included in the Early Redemption Amount) accrued interest as provided in the Trust Deed if any of the following events (each, an “Issuer Event of Default”) will occur and be continuing:

(a) if default is made by the Issuer for a period of 10 Canadian Business Days or more in the payment of any principal or 30 days or more in the payment of any interest due in respect of the Covered Bonds or any of them; or

(b) if the Issuer fails to perform or observe any of its obligations not otherwise specified in subparagraph (a) above or subparagraph (f) below under the Covered Bonds or Coupons of any Series or the Trust Deed or any other Transaction Documents to which the Issuer is a party (other than the Program Agreement and any subscription agreement), but excluding any obligation of the Issuer to comply with the Asset Coverage Test or any Loan Representations and Warranties given by the Issuer thereunder or pursuant thereto, and (except where the Bond Trustee considers such failure to be incapable of remedy when no such continuation or notice as is hereinafter referred to will be required) such failure continues for the period of 30 days (or such longer period as the Bond Trustee may permit) after written notice thereof has been given by the Bond Trustee to the Issuer requiring the same to be remedied; or

(c) if an Insolvency Event has occurred with respect to the Issuer; or

(d) if an Asset Coverage Test Breach Notice has been served and not revoked (in accordance with the terms of the Transaction Documents) on or before the immediately succeeding Calculation Date following service of such Asset Coverage Test Breach Notice; or

(e) if the Pre-Maturity Test in respect of any series of Hard Bullet Covered Bonds is breached less than six months prior to the Final Maturity Date of such series of Hard Bullet Covered Bonds and the Guarantor has not taken the necessary actions to cure the breach before the earlier to occur of: (i) 10 Canadian Business Days from the date that the Seller is notified of the breach of the Pre-Maturity Test and (ii) the Final Maturity date of that Series of Hard Bullet Covered Bonds, or

(f) if a Ratings Trigger prescribed by the Conditions or the Transaction Documents (and not otherwise specifically provided for in this Condition 9.1) is breached and the prescribed remedial action is not taken within the specified time period, unless, in respect of any Ratings Trigger other than the Account Bank Required Ratings, the Stand-By Account Bank Required Ratings, the Servicer Deposit Threshold Ratings or the Cash Management Deposit Ratings, such breach occurs at a time that the Guarantor is Independently Controlled and Governed,

provided that the condition, event or act described in subparagraphs (b) to (f) above will only constitute an Issuer Event of Default if the Bond Trustee has certified in writing to the Issuer and the Guarantor that such condition, event or act is, in its opinion, materially prejudicial to the interests of the Covered Bondholders of any Series.

Upon the Covered Bonds becoming immediately due and payable against the Issuer pursuant to this Condition 9.1, the Bond Trustee will forthwith serve on the Guarantor a notice to pay (the “Notice to Pay”) pursuant to the Covered Bond Guarantee. If a Notice to Pay has been served, the Guarantor will be required to make payments of Guaranteed Amounts when the same will become Due for Payment in accordance with the terms of the Covered Bond Guarantee and the Trust Deed.

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Following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice, the Bond Trustee may or will take such proceedings against the Issuer in accordance with the first paragraph of Condition 9.3.

The Trust Deed provides that all funds received by the Bond Trustee from the Issuer or any liquidator or Person with similar powers appointed in relation to the Issuer following the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice (the “Excess Proceeds”), will be deposited by the Bond Trustee on behalf of the Covered Bondholders, as soon as practicable, into the GDA Account, and following a Guarantor Event of Default and service of a Guarantor Acceleration Notice, deposited or paid in such other manner as the Bond Trustee may direct, and in either case, will be distributed in accordance with the applicable Priorities of Payments. The Excess Proceeds will thereafter form part of the Charged Property and, if deposited into the GDA Account, will be used by the Guarantor in the same manner as all other funds from time to time standing to the credit of the GDA Account and distributed in accordance with the applicable Priorities of Payments.

By subscribing for or purchasing Covered Bonds, each Covered Bondholder will be deemed to have irrevocably directed the Bond Trustee to deposit the Excess Proceeds into the GDA Account in the manner described above, or following a Guarantor Event of Default and service of a Guarantor Acceleration Notice, deposit or pay the Excess Proceeds in such other manner as the Bond Trustee may direct, provided that in each case, distributions thereof will be made in accordance with the applicable Priorities of Payments.

Upon deposit of any Excess Proceeds into the GDA Account, the Guarantor will be deemed to have assumed all of the obligations of the Issuer (other than the obligation to make any payments in respect of additional amounts which may become payable by the Issuer pursuant to Condition 7), and be solely liable as principal obligor, and not as a guarantor, in respect of the obligation to pay to the Covered Bondholders and/or Couponholders interest and principal in respect of Covered Bonds to which the Excess Proceeds relate (to the extent distributable to Covered Bondholders under the applicable Priorities of Payments), and the Covered Bondholders and/or Couponholders will have no rights against the Issuer with respect to payment of such Excess Proceeds.

9.2 Guarantor Events of Default

The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds (which for this purpose and the purpose of any Extraordinary Resolution referred to in this Condition 9.2 means the Covered Bonds of a Series together with the Covered Bonds of any other Series constituted by the Trust Deed) then outstanding as if they were a single Series (with the nominal amount of Covered Bonds not denominated in Canadian Dollars converted into Canadian Dollars at the relevant Covered Bond Swap Rate) or if so directed by an Extraordinary Resolution of all the Covered Bondholders will (subject in each case to being indemnified and/or secured to its satisfaction), give notice (the “Guarantor Acceleration Notice”) in writing to the Issuer and the Guarantor, that (i) each Covered Bond of each Series is, and each Covered Bond of each Series will as against the Issuer (if not already due and repayable against the Issuer following service of an Issuer Acceleration Notice), thereupon immediately become, due and repayable at its Early Redemption Amount together with (to the extent not already included in the Early Redemption Amount) accrued interest, and (ii) all amounts payable by the Guarantor under the Covered Bond

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Guarantee will thereupon immediately become due and payable at the Guaranteed Amount corresponding to the Early Redemption Amount for each Covered Bond of each Series together with (to the extent not already included in the Early Redemption Amount) accrued interest, in each case as provided in the Trust Deed and thereafter the Security will become enforceable if any of the following events (each, a “Guarantor Event of Default”) will occur and be continuing:

(a) if default is made by the Guarantor for a period of seven days or more in the payment of any Guaranteed Amounts which are Due for Payment in respect of the Covered Bonds of any Series except in the case of the payments of a Guaranteed Amount which is Due for Payment under Condition 6.1 when the Guarantor will be required to make payments of Guaranteed Amounts which are Due for Payment on the dates specified therein; or

(b) if default is made by the Guarantor in the performance or observance of any obligation, condition or provision binding on it (other than any obligation for the payment of Guaranteed Amounts in respect of the Covered Bonds of any Series or as described in subparagraph (f) below) under the Trust Deed, the Security Agreement or any other Transaction Document (other than the obligation of the Guarantor to (i) repay the Demand Loan within 60 days of a demand therefor or an obligation to do so pursuant to the terms of the Intercompany Loan Agreement, and (ii) make a payment under a Swap Agreement if it has insufficient funds therefor) to which the Guarantor is a party and, except where such default is or the effects of such default are, in the opinion of the Bond Trustee, not capable of remedy when no such continuation and notice as is hereinafter mentioned will be required, such default continues for 30 days (or such longer period as the Bond Trustee may permit) after written notice thereof has been given by the Bond Trustee to the Guarantor requiring the same to be remedied; or

(c) if an Insolvency Event has occurred with respect to the Guarantor; or

(d) if there is a failure to satisfy the Amortization Test (as set out in the Guarantor Agreement) on any Calculation Date following an Issuer Event of Default that is continuing, or

(e) if the Covered Bond Guarantee is not, or is claimed by the Guarantor not to be, in full force and effect, or

(f) if a Ratings Trigger prescribed by the Conditions or the Transaction Documents (and not otherwise specifically provided for in this Condition 9.2) is breached and the prescribed remedial action is not taken within the specified time period, unless, in respect of any Ratings Trigger other than the Account Bank Required Ratings, the Stand-By Account Bank Required Ratings, the Servicer Deposit Threshold Ratings or the Cash Management Deposit Ratings, such breach occurs at a time that the Guarantor is Independently Controlled and Governed,

provided that the condition, event or act described in subparagraphs (b) to (f) above will only constitute a Guarantor Event of Default if the Bond Trustee has certified in writing to the Issuer and the Guarantor that such condition, event or act is, in its opinion, materially prejudicial to the interests of the Covered Bondholders of any Series.

Following the occurrence of a Guarantor Event of Default and service of a Guarantor Acceleration Notice on the Guarantor, the Bond Trustee may or will take such proceedings or steps in accordance with the first and third paragraphs, respectively, of Condition 9.3.

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Upon service of a Guarantor Acceleration Notice, the Covered Bondholders will have a claim against the Guarantor, under the Covered Bond Guarantee, for an amount equal to the Early Redemption Amount in respect of each Covered Bond together with (to the extent not included in the Early Redemption Amount) accrued but unpaid interest and any other amount due under such Covered Bonds (other than additional amounts payable under Condition 7) as provided in the Trust Deed.

9.3 Enforcement

The Bond Trustee may at any time, at its discretion and without further notice, take such proceedings against the Issuer or the Guarantor, as the case may be, and/or any other Person as it may think fit to enforce the provisions of the Trust Deed, the Covered Bonds, the Coupons or any other Transaction Document, but it will not be bound to take any such enforcement proceedings in relation to the Trust Deed, the Covered Bonds, the Coupons or any other Transaction Document unless (i) it has been so directed by an Extraordinary Resolution of all the Covered Bondholders of all Series (with the Covered Bonds of all Series taken together as a single Series as aforesaid) or so requested in writing by the holders of not less than 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series then outstanding (taken together and converted into Canadian Dollars at the relevant Covered Bond Swap Rate as aforesaid), and (ii) it has been indemnified and/or secured to its satisfaction against all liabilities to which it may thereafter render itself liable or which it may incur by so doing.

In exercising any of its powers, trusts, authorities and discretions, the Bond Trustee will, subject to applicable law, only have regard to the interests of the Covered Bondholders of all Series and will not have regard to the interests of any other Secured Creditors.

The Bond Trustee may at any time, at its discretion and without further notice but subject to applicable Law, take such proceedings against the Guarantor and/or any other Person as it may think fit to enforce the provisions of the Security Agreement or any other Transaction Document in accordance with its terms and may, at any time after the Security has become enforceable, take such proceedings or steps as it may think fit to enforce the Security, but it will not be bound to take any such proceedings or steps unless (i) it has been so directed by an Extraordinary Resolution of all the Covered Bondholders of all Series (with the Covered Bonds of all Series taken together as a single Series as aforesaid) or a request in writing by the holders of not less than 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series then outstanding (taken together and converted into Canadian Dollars at the relevant Covered Bond Swap Rate as aforesaid), and (ii) it has been indemnified and/or secured to its satisfaction against all liabilities to which it may thereafter render itself liable or which it may incur by so doing. In exercising any of its powers, trusts, authorities and discretions under this paragraph, the Bond Trustee will, subject to applicable law, only have regard to the interests of the Covered Bondholders of all Series and will not have regard to the interests of any other Secured Creditors.

No Covered Bondholder or Couponholder will be entitled to proceed directly against the Issuer or the Guarantor or to take any action with respect to the Trust Deed, any other Transaction Document, the Covered Bonds, the Coupons, or the Security unless the Bond Trustee having become bound so to proceed, fails to do so within 30 days and such failure is continuing. Notwithstanding any other provision of these Conditions, for so long as there are U.S. Registered Covered Bonds outstanding, in accordance with Section 316(b) of the Trust Indenture Act, the right of any holder to receive payment of principal and interest on the Covered Bonds on or after the due date for such principal or interest, or to institute suit for the enforcement of payment of that principal or interest, may not be impaired or affected without the consent of the holders of

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the Covered Bonds, provided that no such right of enforcement shall exist (i) in respect of a postponement of an interest payment which has been consented to by the holders of the Covered Bonds in accordance with the Trust Deed or (ii) to the extent that the institution or prosecution of such suit or the entry of judgment therein would, under applicable Law, result in the surrender, impairment, waiver or loss of the security granted pursuant to the Trust Deed or the relevant Security Agreements upon any property subject to such security.

10. Replacement of Covered Bonds, Coupons and Talons

If any Covered Bond, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Principal Paying Agent in London (in the case of Bearer Covered Bonds or Coupons) or the Registrar (in the case of Registered Covered Bonds), or any other place approved by the Bond Trustee of which notice has been given to the Covered Bondholders in accordance with Condition 13 upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Covered Bonds, Coupons or Talons must be surrendered before replacements will be issued.

11. Principal Paying Agent, Paying Agents, Registrar, Transfer Agent and Exchange Agent

The Issuer is entitled, with the prior written approval of the Bond Trustee, to vary or terminate the appointment of any Agent and/or appoint additional or other Agents and/or approve any change in the specified office through which any Agent acts, provided that:

(a) there will at all times be a Principal Paying Agent and a Registrar;

(b) the Issuer will, so long as any Covered Bond is outstanding, maintain a Paying Agent (which may be the Principal Paying Agent) having a specified office in a city in Europe approved by the Bond Trustee;

(c) so long as any Covered Bond is listed on any stock exchange or admitted to listing or trading by any other relevant authority, there will at all times be a Paying Agent (in the case of Bearer Covered Bonds) and a Transfer Agent (in the case of Registered Covered Bonds) with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or, as the case may be, other relevant authority;

(d) so long as any of the Registered Global Covered Bonds payable in a Specified Currency other than U.S. dollars are held through DTC or its nominee, there will at all times be an Exchange Agent; and

(d) the Issuer will ensure that it maintains a Paying Agent in a Member State that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any other Directive implementing the conclusions of the ECOFIN Council Meeting of 26 to 27 November 2000 or any Law implementing or complying with, or introduced in order to conform to any such Directive, provided that the Issuer shall not, under any circumstances, be obliged to maintain a Paying Agent with a specified office in such Member State unless at least one European Member State does not require a Paying Agent making payments through a specified office in that Member State to so withhold or deduct tax.

In addition, the Issuer will forthwith appoint a Paying Agent having a specified office in the United States in the circumstances described in Condition 5.5. Notice of any such variation, termination, appointment or change will be given by the Issuer to the Covered Bondholders as soon as reasonably practicable in accordance with Condition 13.

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In acting under the Agency Agreement, the Agents act solely as agents of the Issuer and the Guarantor and, in certain circumstances specified therein, of the Bond Trustee and do not assume any obligation to, or relationship of agency or trust with, any Covered Bondholders or Couponholders. The Agency Agreement contains provisions permitting any entity into which any Agent is merged or converted or with which it is consolidated or to which it transfers all or substantially all of its assets to become the successor agent.

12. Exchange of Talons

On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Principal Paying Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to (and including) the final date for the payment of interest due in respect of the Bearer Covered Bond to which it appertains) a further Talon, subject to the provisions of Condition 8.

13. Notices

Any notice regarding Bearer Covered Bonds will be deemed to have been duly given to the relevant Covered Bondholders if sent to DTC, Euroclear and/or Clearstream, Luxembourg for communication by them to the Covered Bondholders and will be deemed to be given on the date on which it was so sent and (so long as the relevant Covered Bonds are listed for trading) any notice will also be published in accordance with the relevant listing rules. All notices regarding the Registered Covered Bonds will be deemed to be validly given if sent by first class mail or (if posted to an address overseas) by airmail to the holders (or the first named of joint holders) at their respective addresses recorded in the Register and will be deemed to have been given on the fourth day after mailing.

In addition, for so long as any Covered Bonds are admitted to trading and listed as described above, the Issuer will give copies of any such notice in accordance with this Condition 13 to the any relevant authority.

The Bond Trustee will be at liberty to sanction some other method of giving notice to the Covered Bondholders if, in its opinion, such other method is reasonable having regard to market practice then prevailing and to the requirements of the stock exchange on which the relevant Covered Bonds are then admitted to trading and provided that notice of such other method is given to the Covered Bondholders in such manner as the Bond Trustee will require.

Notices to be given by any Covered Bondholder will be in writing and given by lodging the same, together (in the case of any Covered Bond in definitive form) with the relevant Covered Bond or Covered Bonds, with the Principal Paying Agent (in the case of Bearer Covered Bonds) or the Registrar (in the case of Registered Covered Bonds). While any of the Covered Bonds are represented by a Global Covered Bond, such notice may be given by any holder of a Covered Bond to the Principal Paying Agent or the Registrar through DTC, Euroclear and/or Clearstream, Luxembourg, as the case may be, in such manner as the Principal Paying Agent, the Registrar and DTC, Euroclear and/or Clearstream, Luxembourg, as the case may be, may approve for this purpose.

14. Meetings of Covered Bondholders, Modification, Waiver and Substitution

Covered Bondholders, Couponholders and other Secured Creditors should note that the Issuer, the Guarantor and the Principal Paying Agent may without their consent or the consent of the Bond Trustee agree to modify any provision of any Final Terms Document which is of a formal, minor or technical nature or is made to correct a proven or manifest error or to comply with any mandatory provisions of Law.

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The Trust Deed contains provisions for convening meetings of the Covered Bondholders of any Series to consider any matter affecting their interests, including the modification by Extraordinary Resolution of these Terms and Conditions or the provisions of the Trust Deed. Such a meeting may be convened by the Issuer, the Guarantor or the Bond Trustee and will be convened by the Issuer at the request in writing of Covered Bondholders holding not less than 10 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds of such Series for the time being outstanding. The quorum at any such meeting in respect of any Covered Bonds of any Series for passing an Extraordinary Resolution is one or more Persons holding or representing not less than a clear majority of the aggregate Principal Amount Outstanding of the Covered Bonds of such Series for the time being outstanding, or at any adjourned meeting one or more Persons being or representing Covered Bondholders of such Series whatever the nominal amount of the Covered Bonds of such Series so held or represented, except that at any meeting the business of which includes the modification of any Series Reserved Matter, the quorum will be one or more Persons holding or representing not less than two-thirds of the aggregate Principal Amount Outstanding of the Covered Bonds of such Series for the time being outstanding, or at any adjourned such meeting one or more Persons holding or representing not less than one-third of the aggregate Principal Amount Outstanding of the Covered Bonds of such Series for the time being outstanding. An Extraordinary Resolution passed at any meeting of the Covered Bondholders of a Series will, subject as provided below, be binding on all the Covered Bondholders of such Series, whether or not they are present at the meeting, and on all Couponholders in respect of such Series of Covered Bonds. Pursuant to the Trust Deed, the Bond Trustee may convene a single meeting of the Covered Bondholders of more than one Series if in the opinion of the Bond Trustee there is no conflict between the holders of such Covered Bonds, in which event the provisions of this paragraph will apply thereto mutatis mutandis.

Notwithstanding the provisions of the immediately preceding paragraph, any Extraordinary Resolution to direct the Bond Trustee to accelerate the Covered Bonds pursuant to Condition 9 or to direct the Bond Trustee to take any enforcement action pursuant to Condition 9 (each a “Program Resolution”) will only be capable of being passed at a single meeting of the holders of the Covered Bonds of all Series then outstanding. Any such meeting to consider a Program Resolution may be convened by the Issuer, the Guarantor or the Bond Trustee or by Covered Bondholders, in the case of a direction to accelerate the Covered Bonds pursuant to Conditions 9.1 and 9.2 or to take enforcement action pursuant to Condition 9.3, holding at least 25 per cent. of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series then outstanding. The quorum at any such meeting for passing a Program Resolution is one or more Persons holding or representing at least a clear majority of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series for the time being outstanding, or at any adjourned such meeting one or more Persons holding or representing Covered Bonds whatever the nominal amount of the Covered Bonds of all Series then outstanding. A Program Resolution passed at any meeting of the Covered Bondholders of all Series will be binding on all Covered Bondholders of all Series, whether or not they are present at the meeting, and on all related Couponholders in respect of such Covered Bonds.

In connection with any meeting of the Covered Bondholders of more than one Series where such Covered Bonds are not denominated in Canadian Dollars, the nominal amount of the Covered Bonds of any Series not denominated in Canadian Dollars will be converted into Canadian Dollars at the relevant Covered Bond Swap Rate.

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The Bond Trustee, the Guarantor and the Issuer may also agree, without the consent of the Covered Bondholders or Couponholders of any Series and without the consent of the other Secured Creditors (and for this purpose the Bond Trustee may disregard whether any such modification relates to a Series Reserved Matter), to:

(a) any modification of the terms and conditions applying to Covered Bonds of one or more Series (including these Terms and Conditions), the related Coupons or any Transaction Document provided that in the sole opinion of the Bond Trustee such modification is not materially prejudicial to the interests of any of the Covered Bondholders of any Series; or

(b) any modification of the terms and conditions applying to Covered Bonds of any one or more Series (including these Terms and Conditions), the related Coupons or any Transaction Document which is in the sole opinion of the Bond Trustee of a formal, minor or technical nature or is to correct a manifest error or an error which is, in the sole opinion of the Bond Trustee, proven, or is to comply with mandatory provisions of Law.

Notwithstanding the above, the Issuer, the Guarantor and the Principal Paying Agent may agree, without the consent of the Bond Trustee, the Covered Bondholders or Couponholders or any of the other Secured Creditors, to any modification of any of the provisions of any Final Terms Document which is of a formal, minor or technical nature or is made to correct a proven or manifest error or to comply with any mandatory provisions of Law.

The Bond Trustee may also agree, without the consent of the Covered Bondholders of any Series, and/or the related Couponholders, to the waiver or authorization of any breach or proposed breach of any of the provisions of the Covered Bonds of any Series, or determine, without any such consent as aforesaid, that any Issuer Event of Default or Guarantor Event of Default or Potential Issuer Event of Default or Potential Guarantor Event of Default will not be treated as such, provided that, in any such case, it is not, in the sole opinion of the Bond Trustee, materially prejudicial to the interests of any of the Covered Bondholders of any Series. The Bond Trustee may also agree, without the consent of the Covered Bondholders of any Series, the related Couponholders or any other Secured Creditor, to the waiver or authorization of any breach or proposed breach of any of the provisions of the Transaction Documents, provided that, in any such case, it is not, in the sole opinion of the Bond Trustee, materially prejudicial to the interests of any of the Covered Bondholders of any Series.

Any such modification, waiver, authorization or determination will be binding on all Covered Bondholders of all Series of Covered Bonds, the related Couponholders and the other Secured Creditors, any such modification will be notified by the Issuer to the Covered Bondholders of all Series of Covered Bonds for the time being outstanding and the other Secured Creditors in accordance with the relevant Terms and Conditions as soon as practicable thereafter. Notwithstanding any other provision of these Conditions, for so long as there are U.S. Registered Covered Bonds outstanding, any such modification, waiver, authorization or determination will be made in accordance with and subject to Section 316 of the Trust Indenture Act. The right of any holder of U.S. Registered Covered Bonds to receive payment of principal and interest shall not be impaired unless made in accordance with Section 316 of the Trust Indenture Act.

In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorization or determination), the Bond Trustee will have regard to the general interests of the Covered Bondholders of each Series as a class (but will not have regard to any interests arising from circumstances particular to individual Covered Bondholders or Couponholders (whatever their number)) and, in particular,

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but without limitation, will not have regard to the consequences of any such exercise for individual Covered Bondholders or the related Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Bond Trustee will not be entitled to require, nor will any Covered Bondholder or Couponholder be entitled to claim, from the Issuer, the Guarantor, the Bond Trustee or any other Person any indemnification or payment in respect of any Tax or stamp duty consequences of any such exercise upon individual Covered Bondholders and/or Couponholders, except to the extent already provided for in Condition 7 and/or in any undertaking or covenant given in addition to, or in substitution for, Condition 7 pursuant to the Trust Deed.

Provided that the Bond Trustee has received a certificate signed by two Authorized Signatories of the Issuer and a certificate from the Guarantor stating that immediately after giving effect to the matters set out below in this paragraph, no Issuer Event of Default or Potential Issuer Event of Default (in respect of the Issuer) or Guarantor Event of Default or Potential Guarantor Event of Default (in respect of the Guarantor), respectively, has occurred and is continuing and certain other conditions as are specified in Section 21.3 of the Trust Deed are satisfied, but without the consent of the Covered Bondholders of any Series and the Coupons related thereto, or of any other Secured Creditor, another Subsidiary of the Issuer or any direct or indirect holding company of the Issuer may assume the obligations of the Issuer as principal obligor under the Trust Deed and the other Transaction Documents in respect of all Series of Covered Bonds on the same basis. The Trust Deed provides that any such assumption will be notified to the holders of all Series of Covered Bonds (in accordance with the relevant Terms and Conditions of such Covered Bonds).

For the purposes hereof:

“Potential Issuer Event of Default” means any condition, event or act which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfilment of any similar condition, would constitute an Issuer Event of Default; and

“Potential Guarantor Event of Default” means any condition, event or act which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfilment of any similar condition, would constitute a Guarantor Event of Default.

15. Indemnification of the Bond Trustee. Contracting with the Issuer and/or the Guarantor

If, in connection with the exercise of its powers, trusts, authorities or discretions, the Bond Trustee is of the opinion that the interests of the Covered Bondholders of any one or more Series would be materially prejudiced thereby, the Bond Trustee will not exercise such power, trust, authority or discretion without the approval of such Covered Bondholders by Extraordinary Resolution or by a direction in writing of such Covered Bondholders of at least 25 per cent. of the aggregate Principal Amount Outstanding of Covered Bonds of the relevant Series then outstanding.

The Trust Deed and the Security Agreement contain provisions for the indemnification of the Bond Trustee and for its relief from responsibility, including provisions relieving it from taking any action unless indemnified and/or secured to its satisfaction.

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The Trust Deed and the Security Agreement also contain provisions pursuant to which the Bond Trustee is entitled, inter alia: (i) to enter into business transactions with the Issuer, the Guarantor and/or any of the Issuer’s Subsidiaries and to act as trustee for the holders of any other securities issued or guaranteed by, or relating to, the Issuer, the Guarantor and/or any of the Issuer’s Subsidiaries; (ii) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the Covered Bondholders or Couponholders or any other Secured Creditors; and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.

The Bond Trustee will not be responsible for any loss, expense or liability, which may be suffered as a result of any Loans or their Related Security, or any deeds or documents of title thereto, being uninsured or inadequately insured or being held by clearing organisations or their operators or by intermediaries such as banks, brokers or other similar Persons on behalf of the Bond Trustee. The Bond Trustee will not be responsible for: (i) supervising the performance by the Issuer, the Guarantor or any other party to the Transaction Documents of their respective obligations under the Transaction Documents, and the Bond Trustee will be entitled to assume, until it has received written notice to the contrary, that all such Persons are properly performing their duties; (ii) considering the basis on which approvals or consents are granted by the Issuer, the Guarantor or any other party to the Transaction Documents under the Transaction Documents; (iii) monitoring the Portfolio, including, without limitation, whether the Portfolio is in compliance with the Asset Coverage Test or the Amortization Test; or (iv) monitoring whether Loans and their Related Security satisfy the Eligibility Criteria. The Bond Trustee will not be liable to any Covered Bondholder or other Secured Creditor for any failure to make or to cause to be made on their behalf the searches, investigations and enquiries which would normally be made by a prudent chargee in relation to the Security and have no responsibility in relation to the legality, validity, sufficiency and enforceability of the Security and the Transaction Documents.

16. Further Issues

The Issuer will be at liberty from time to time (but subject to the Terms and Conditions) without the consent of the Covered Bondholders, Couponholders or any Secured Creditors to create and issue further Covered Bonds (whether in bearer or registered form) having terms and conditions the same as the Covered Bonds of any Series or the same in all respects and guaranteed by the Guarantor save for the amount and date of the first payment of interest thereon, Issue Date and/or Issue Price and so that the same will be consolidated and form a single Series with the outstanding Covered Bonds of such Series.

17. Rating Agency Condition

By subscribing for or purchasing the Covered Bond(s), each Covered Bondholder will be deemed to have acknowledged and agreed that a credit rating of a Series of Covered Bonds is an assessment of credit risk and does not address other matters that may be of relevance to Covered Bondholders, including, without limitation, in the case of satisfaction of the Rating Agency Condition, whether the related action or event is either (i) permitted by the terms of the relevant Transaction Document, or (ii) in the best interests of, or not prejudicial to, some or all of the Covered Bondholders.

In being entitled to have regard to the fact that the Rating Agency Condition has been satisfied with respect to a particular Rating Agency, each of the Bank, the Guarantor, the Bond Trustee and the Secured Creditors (including the Covered Bondholders) is deemed to have acknowledged and agreed that the satisfaction of the Rating Agency Condition does not impose or extend any

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actual or contingent liability on the Rating Agencies to the Bank, the Guarantor, the Bond Trustee, the Secured Creditors (including the Covered Bondholders) or any other Person or create any legal relations between the Rating Agencies and the Bank, the Guarantor, the Bond Trustee, the Secured Creditors (including the Covered Bondholders) or any other Person whether by way of contract or otherwise.

By subscribing for or purchasing the Covered Bond(s), each Covered Bondholder will be deemed to have acknowledged and agreed that:

(a) confirmation of the satisfaction of the Rating Agency Condition, to the extent required, may or may not be given at the sole discretion of each Rating Agency;

(b) depending on the timing of delivery of the request and any information needed to be provided as part of any such request, it may be the case that a Rating Agency cannot provide confirmation of the satisfaction of the Rating Agency Condition in the time available, or at all, and the Rating Agency will not be responsible for the consequences thereof;

(c) a confirmation of satisfaction of the Rating Agency Condition, if given, will be given on the basis of the facts and circumstances prevailing at the relevant time, and in the context of cumulative changes to the transaction of which the Covered Bonds form a part; and

(d) a confirmation of satisfaction of the Rating Agency Condition represents only a restatement of the opinions given, and will not be construed as advice for the benefit of any Covered Bondholder or any other party.

If satisfaction of the Rating Agency Condition is a condition to any action or step under any Transaction Document or is otherwise required, or a written request for such a confirmation of satisfaction of the Rating Agency Condition is delivered to that Rating Agency by any of the Bank, the Guarantor, and/or the Bond Trustee, as applicable (each, a “Requesting Party”), and either (i) one or more of the Rating Agencies indicates that it does not consider satisfaction of the Rating Agency Condition necessary in the circumstances or (ii) no such confirmation or other response is received by one or more of the Rating Agencies within 30 days (or in the case of Moody’s or Fitch, 10 Business Days) of the date of actual receipt of such request by such Rating Agency (each, a “Non-Responsive Rating Agency”), the Requesting Party will be entitled to disregard the requirement for satisfaction of the Rating Agency Condition with respect to the Non-Responsive Rating Agency and proceed on the basis of the confirmations or other responses received by each other Rating Agency on the basis that satisfaction of the Rating Agency Condition with respect to the Non-Responsive Rating Agency is not required in the particular circumstances of the request. The failure by a Rating Agency to respond to a written request for a confirmation of satisfaction of the Rating Agency Condition will not be interpreted to mean that such Rating Agency has given any deemed confirmation or affirmation of rating or other response in respect of such action or step.

18. Governing Law

The Trust Deed, the Agency Agreement, the Covered Bonds, the Coupons, the Interest Rate Swap Agreement, the Covered Bond Swap Agreement, the Security Agreement, the Mortgage Sale Agreement, the Servicing Agreement, the Guarantor Agreement, the Intercompany Loan Agreement, the Cash Management Agreement, the Cover Pool Monitor Agreement, the Bank

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Account Agreement, the Stand-By Bank Account Agreement, the Guaranteed Deposit Account Contract and the Stand-By Guaranteed Deposit Account Contract will be governed by and construed in accordance with, the Laws of the Province of Ontario and the federal Laws of Canada applicable therein, unless otherwise indicated. The Underwriting Agreement will be governed by and construed in accordance with the Laws of the State of New York.

19. Listing

Without prejudice to the Issuer’s rights under the Trust Deed, if, in the case of any Covered Bonds admitted to trading on the Market or the PSM and admitted to the Official List by the UK Listing Authority in its capacity as a competent authority under the FSMA (or such other regulated market in the European Economic Area), the Issuer is of the opinion (in its sole discretion) that maintaining such quotation or listing is unduly burdensome due to the need of the Issuer to meet the requirements introduced following the implementation of any future Law or EU Directive imposing requirements (including new corporate governance requirements) on the Issuer that it in good faith determines are impractical or unduly burdensome, the Issuer may cease to maintain such admission (the date of such cessation, the “Cessation Date”), provided that it will use all commercially reasonable endeavours to obtain and maintain an alternative admission to trading, listing and/or quotation of the Covered Bonds on or prior to or as soon as reasonably practicable after the Cessation Date by another listing authority, securities exchange and/or quotation system as the Issuer may select. However, if such alternative listing authority, securities exchange and/or quotation system is not available or, in the opinion of the Issuer is impractical or unduly burdensome, an alternative listing may not be obtained.

If required, the Issuer and the Guarantor will enter into a supplemental Trust Deed to effect such consequential amendments to the Trust Deed and these Terms and Conditions as the Bond Trustee may require or will be requisite to comply with the requirements of any such stock exchange or securities market, provided that, for so long as U.S. Registered Covered Bonds are outstanding, any such amendment or change shall not violate, impair or conflict with the provisions of the Trust Indenture Act (including Sections 310 through 318, inclusive, thereof).

Any such amendments will be binding on Covered Bondholders and will be notified to them by the Issuer in accordance with Condition 13.

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SCHEDULE 2

FORMS OF GLOBAL AND DEFINITIVE COVERED BONDS, COUPONS AND TALONS

PART 1

FORM OF TEMPORARY GLOBAL COVERED BOND

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE AGENCY AGREEMENT) AND PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.¹

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

TEMPORARY GLOBAL COVERED BOND DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

This Global Covered Bond in bearer form (a “Bearer Global Covered Bond”) is a Temporary Global Covered Bond without interest coupons in respect of a duly authorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the aggregate nominal amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms Document applicable to the Covered Bonds (the “Final Terms Document”), a copy of which is annexed hereto, and which are constituted by a Trust Deed (as defined below). References herein to the “Conditions” will be to the Terms and Conditions of the Covered Bonds as set out in Schedule 1 (Terms and Conditions of the Covered Bonds) to the Trust Deed (as defined below) as supplemented, replaced and modified by the Final Terms Document but, in the event of any conflict between the provisions of the said Conditions and the information in the Final Terms Document, the Final Terms Document will prevail.

¹  Delete where the original maturity of the Bonds is 1 year or less.

Words and expressions defined in the Conditions will bear the same meanings when used in this Bearer Global Covered Bond.

This Bearer Global Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated as of September 30, 2013 and made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee.

For value received, the Issuer, subject as hereinafter provided and subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Final Maturity Date and/or on such earlier date(s) as all or any of the Covered Bonds represented by this Bearer Global Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Covered Bonds on each such date and to pay interest (if any) on the Principal Amount Outstanding of the Covered Bonds from time to time represented by this Global Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Bearer Global Covered Bond at the specified office of the Principal Paying Agent at 101 Barclay Street 7E, New York, NY 10286, or such other specified office as may be specified for this purpose in accordance with the Conditions or at the specified office of any of the other Paying Agents located outside the United States (except as provided in the Conditions) from time to time appointed by the Issuer in respect of the Covered Bonds.

If the Final Terms Document indicates that this Covered Bond is intended to be a New Global Covered Bond, the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond will be the aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg” and together with Euroclear, the “relevant Clearing Systems”). The records of the relevant Clearing Systems (which expression in this Bearer Global Covered Bond means the records that each relevant Clearing System holds for its customers which reflect the amount of each such customer’s interest in the Covered Bonds) will be conclusive evidence of the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond and, for these purposes, a statement issued by a relevant Clearing System (which statement will be made available to the bearer upon request) stating the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond at any time will be conclusive evidence of the records of the relevant Clearing System at that time.

If the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond, the Principal Amount Outstanding of the Covered Bonds represented by this Bearer Global Covered Bond will be the amount stated in the applicable Final Terms Document or, if lower, the Principal Amount Outstanding most recently entered by or on behalf of the Issuer in the relevant column in Part II, III, or IV of Schedule One hereto or in Schedule Two hereto.

On any redemption of, or payment of an instalment or interest being made in respect of, or purchase and cancellation of, any of the Covered Bonds represented by this Bearer Global Covered Bond the Issuer will procure that:

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(a) if the Final Terms Document indicates that this Bearer Global Covered Bond is intended to be a New Global Covered Bond, details of such redemption, payment or purchase and cancellation (as the case may be) will be entered pro rata in the records of the relevant Clearing Systems, and, upon any such entry being made, the Principal Amount Outstanding of the Covered Bonds recorded in the records of the relevant Clearing Systems and represented by this Bearer Global Covered Bond will be reduced by the aggregate Principal Amount Outstanding of the Covered Bonds so redeemed or purchased and cancelled or by the aggregate amount of such instalment so paid; or

(b) if the Final Terms Document indicates that this Bearer Global Covered Bond is not intended to be a New Global Covered Bond, details of such redemption, payment or purchase and cancellation (as the case may be) will be entered by or on behalf of the Issuer in Schedule One hereto and the relevant space in Schedule One hereto recording any such redemption, payment or purchase and cancellation (as the case may be) will be signed by or on behalf of the Issuer. Upon any such redemption, payment of an instalment or purchase and cancellation, the Principal Amount Outstanding of this Bearer Global Covered Bond and the Covered Bonds represented by this Bearer Global Covered Bond will be reduced by the Principal Amount Outstanding of such Covered Bonds so redeemed or purchased and cancelled or the amount of such instalment so paid.

Payments due in respect of Covered Bonds for the time being represented by this Bearer Global Covered Bond will be made to the bearer of this Bearer Global Covered Bond and each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make entries referred to above will not affect such discharge.

Payments of principal and interest (if any) due prior to the Exchange Date (as defined below) will only be made to the bearer hereof to the extent that there is presented to the Principal Paying Agent by Clearstream, Luxembourg or Euroclear a certificate in or substantially in the form set out in Part 6 of Schedule 2 to the Trust Deed. The bearer of this Global Covered Bond will not (unless upon due presentation of this Bearer Global Covered Bond for exchange, delivery of the appropriate number of Bearer Definitive Covered Bonds (together, if applicable, with the Coupons and Talons appertaining thereto in or substantially in the forms set out in Parts 3, 4, and 5 and of Schedule 2 to the Trust Deed) or, as the case may be, issue and delivery (or, as the case may be, endorsement) of the Permanent Global Covered Bond is improperly withheld or refused and such withholding or refusal is continuing at the relevant payment date) be entitled to receive any payment hereon due on or after the Exchange Date.

On or after the date (the “Exchange Date”) which is 40 days after the Issue Date, this Bearer Global Covered Bond may be exchanged (free of charge) in whole or in part for, as specified in the Final Terms Document, either (a) security printed Bearer Definitive Covered Bonds and (if applicable) Coupons and/or Talons (on the basis that all the appropriate details have been included on the face of such Bearer Definitive Covered Bonds and (if applicable) Coupons and/or Talons and the relevant information supplementing, replacing or modifying the Conditions appearing in the Final Terms Document has been endorsed on or attached to such Bearer Definitive Covered Bonds), or (b) either (if the Final Terms Document indicates that this Global Covered Bond is intended to be a New Global Covered Bond) interests recorded in the records of the relevant Clearing Systems in a Permanent Bearer Global

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Covered Bond or (if the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond) a Permanent Bearer Global Covered Bond, which, in either case is in or substantially in the form set out in Part 2 of Schedule 2 to the Trust Deed (together with the Final Terms Document attached thereto) upon notice being given by Euroclear and/or Clearstream, Luxembourg acting on the instructions of any holder of an interest in this Global Covered Bond and subject, in the case of Bearer Definitive Covered Bonds, to such notice period as is specified in the Final Terms Document.

If Bearer Definitive Covered Bonds and (if applicable) Coupons and/or Talons have been issued in exchange for the Covered Bonds previously represented by the Permanent Global Covered Bond, then this Bearer Global Covered Bond may only thereafter be exchanged for Bearer Definitive Covered Bonds and (if applicable) Coupons and/or Talons pursuant to the terms hereof.

Presentation of this Bearer Global Covered Bond for exchange will be made by the bearer hereof on any Business Day in London at the office of the Principal Paying Agent specified above. The Issuer will procure that Bearer Definitive Covered Bonds or (as the case may be) the Permanent Global Covered Bond will be so issued and delivered and (in the case of the Permanent Bearer Global Covered Bond where the Final Terms indicates that this Global Covered Bond is intended to be a New Global Covered Bond) interests in the Permanent Bearer Global Covered Bond will be recorded in the records of the relevant Clearing Systems in exchange for only that portion of this Global Covered Bond in respect of which there will have been presented to the Principal Paying Agent by Euroclear or Clearstream, Luxembourg a certificate in or substantially in the form set out in Part 6 of Schedule 2 to the Trust Deed.

On an exchange of the whole of this Bearer Global Covered Bond, this Bearer Global Covered Bond will be surrendered to or to the order of the Principal Paying Agent. The Issuer will procure that:

(a) if the Final Terms Document indicates that this Bearer Global Covered Bond is intended to be a New Global Covered Bond, on an exchange of the whole or part only of this Bearer Global Covered Bond, details of such exchange will be entered pro rata in the records of the relevant Clearing Systems such that the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond will be reduced by the Principal Amount Outstanding of this Bearer Global Covered Bond so exchanged; or

(b) if the Final Terms Document indicates that this Bearer Global Covered Bond is not intended to be a New Global Covered Bond, on an exchange of part only of this Bearer Global Covered Bond details of such exchange will be entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space in Schedule Two hereto recording such exchange will be signed by or on behalf of the Issuer, whereupon the Principal Amount Outstanding of this Bearer Global Covered Bond and the Covered Bonds represented by this Bearer Global Covered Bond will be reduced by the Principal Amount Outstanding of this Bearer Global Covered Bond so exchanged. On any exchange of this Bearer Global Covered Bond for a Permanent Global Covered Bond, details of such exchange will be entered by or on behalf of the Issuer in Schedule Two to the Permanent Global Covered Bond and the relevant space in Schedule Two thereto recording such exchange will be signed by or on behalf of the Issuer.

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Until the exchange of the whole of this Bearer Global Covered Bond as aforesaid, the bearer hereof will (subject as provided in the next paragraph) in all respects (except as otherwise provided herein) be entitled to the same benefits as if he were the bearer of Bearer Definitive Covered Bonds and the relative Coupons and/or Talons (if any) in the form(s) set out in Parts 3, 4 and 5 (as applicable) of Schedule 2 to the Trust Deed, except that the bearer of this Bearer Global Covered Bond will not (unless upon due presentation of this Bearer Global Covered Bond exchange, issue and delivery (or, as the case may be, endorsement) of the Permanent Global Covered Bond or the appropriate number of Bearer Definitive Covered Bonds and the related Coupons and/or Talons (if any) is improperly withheld or refused and such withholding or refusal is continuing at the relevant payment date) be entitled (i) to receive any payment of interest on this Bearer Global Covered Bond, or (ii) on and after the Exchange Date, to receive any payment on this Bearer Global Covered Bond.

Each Person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount of the Covered Bonds represented by this Bearer Global Covered Bond (each an “Accountholder”) (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Covered Bonds standing to the account of any person will be conclusive and binding for all purposes save in the case of manifest error) will be treated by the Issuer, the Guarantor, the Bond Trustee the Principal Paying Agent and any other Paying Agent as the holder of such principal amount of such Covered Bonds for all purposes other than with respect to the payment of principal and interest on such principal amount of such Covered Bonds, the right to which will be vested, as against the Issuer and the Guarantor, solely in the bearer of this Bearer Global Covered Bond in accordance with and subject to the terms of this Bearer Global Covered Bond and the Trust Deed. Each Accountholder must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for its share of each payment made to the bearer of this Global Covered Bond.

For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any other purpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a year of 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such rate multiplied by the number of days in the year of which such calculation is made and divided by 360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by 366 and divided by 365.

This Bearer Global Covered Bond is governed by, and will be construed in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.

This Bearer Global Covered Bond will not be valid unless authenticated by Bank of New York Mellon, as Principal Paying Agent and, if the applicable Final Terms Document indicates that this Global Covered Bond is intended to be held in a manner which would allow Eurosystem eligibility, effectuated by the entity appointed as Common Safekeeper by the relevant Clearing Systems.

IN WITNESS whereof the Issuer has caused this Bearer Global Covered Bond to be signed manually or in facsimile or pdf by a person duly authorized on its behalf.

Issued as of the Issue Date specified in the Final Terms Document.

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BANK OF MONTREAL
By:
	[Authorized Signatory]
Authenticated by
BANK OF NEW YORK MELLON as Principal Paying Agent.
By:
	Authorized Officer
2Effectuated without recourse, warranty or liability by
as common safekeeper
By:

²  This should only be completed where the Final Terms Document indicates that this Global Covered Bond is intended to be a New Global Covered Bond.

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Schedule One⁴

PART I

INTEREST PAYMENTS

Date made Interest Payment Date Total amount of interest payable Amount of interest paid Confirmation of payment by or on behalf of the Issuer

⁴  Schedule One should only be completed where the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond.

PART II

REDEMPTIONS

Date made Total amount of principal payable Amount of principal paid Remaining Principal Amount Outstanding of this Bearer Global Covered Bond following such redemption* Confirmation of redemption
by or on behalf of the Issuer

* See most recent entry in Part II, III or IV or Schedule Two in order to determine this amount.

PART III

PURCHASES AND CANCELLATIONS

Date Made Part of the Principal Amount Outstanding of this Bearer Global Covered Bond purchased and cancelled Remaining Principal Amount Outstanding of this Bearer Global Covered Bond following such purchase and cancellation* Confirmation of purchase and cancellation by or on behalf of the Issuer

* See most recent entry in Part III or IV or Schedule Two in order to determine this amount.

Schedule Two⁵

EXCHANGES

FOR BEARER DEFINITIVE COVERED BONDS OR PERMANENT GLOBAL COVERED BOND

The following exchanges of a part of this Bearer Global Covered Bond for Bearer Definitive Covered Bonds or a part of a Permanent Global Covered Bond have been made:

Date Made Principal Amount Outstanding of this Bearer Global Covered Bond exchanged for Bearer Definitive Covered Bonds or a part of a Permanent Global Covered Bond Remaining Principal Amount Outstanding of this Bearer Global Covered Bond following such exchange^* Notation made by or on behalf of the Issuer

⁵  Schedule Two should only be completed where the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond.

^*  See most recent entry in Part II, III or IV of Schedule One or in this Schedule Two in order to determine this amount.

PART 2

FORM OF PERMANENT GLOBAL COVERED BOND

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE AGENCY AGREEMENT) AND PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.¹

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

PERMANENT GLOBAL COVERED BOND DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

This Global Covered Bond in bearer form (a “Bearer Global Covered Bond”) is a Permanent Global Covered Bond in respect of a duly authorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the aggregate nominal amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms Document applicable to the Covered Bonds (the “Final Terms Document”), a copy of which is annexed hereto, and which are constituted by a Trust Deed (as defined below). References herein to the “Conditions” will be to the Terms and Conditions of the Covered Bonds as set out in Schedule 1 (Terms and Conditions of the Covered Bonds) to the Trust Deed (as defined below) as supplemented, replaced and modified by the Final Terms Document but, in the event of any conflict between the provisions of the said Conditions and the information in the Final Terms Document, the Final Terms Document will prevail.

¹  Delete where the original maturity of the Bonds is 1 year or less.

Words and expressions defined in the Conditions will bear the same meanings when used in this Bearer Global Covered Bond.

This Bearer Global Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated as of September 30, 2013 and made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee.

If the Final Terms Document indicates that this Covered Bond is intended to be a New Global Covered Bond, the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond will be the aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg” and together with Euroclear, the “relevant Clearing Systems”). The records of the relevant Clearing Systems (which expression in this Bearer Global Covered Bond means the records that each relevant Clearing System holds for its customers which reflect the amount of each such customer’s interest in the Covered Bonds) will be conclusive evidence of the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond and, for these purposes, a statement issued by a relevant Clearing System (which statement will be made available to the bearer upon request) stating the Principal Amount Outstanding of Covered Bonds represented by this Bearer Global Covered Bond at any time will be conclusive evidence of the records of the relevant Clearing System at that time.

If the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond, the Principal Amount Outstanding of the Covered Bonds represented by this Bearer Global Covered Bond will be the amount stated in the applicable Final Terms Document or, if lower, the Principal Amount Outstanding most recently entered by or on behalf of the Issuer in the relevant column in Part II or III of Schedule One hereto or in Schedule Two hereto.

For value received, the Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Final Maturity Date and/or on such earlier date(s) as all or any of the Covered Bonds represented by this Bearer Global Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Covered Bonds on each such date and to pay interest (if any) on the Principal Amount Outstanding of the Covered Bonds from time to time represented by this Bearer Global Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Bearer Global Covered Bond at the specified office of the Principal Paying Agent at 101 Barclay Street 7E, New York, NY 10286, or such other specified office as may be specified for this purpose in accordance with the Conditions or at the specified office of any of the other Paying Agents located outside the United States, its territories and possessions (except as provided in the Conditions) from time to time appointed by the Issuer in respect of the Covered Bonds.

On any redemption of, or payment of an instalment or interest being made in respect of, or purchase and cancellation of, any of the Covered Bonds represented by this Bearer Global Covered Bond the Issuer will procure that:

(i) if the Final Terms Document indicates that this Global Covered Bond is intended to be a New Global Covered Bond, details of such redemption, payment or purchase and

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cancellation (as the case may be) will be entered pro rata in the records of the relevant Clearing Systems and, upon any such entry being made, the Principal Amount Outstanding of the Covered Bonds recorded in the records of the relevant Clearing Systems and represented by this Global Covered Bond will be reduced by the aggregate nominal amount of the Covered Bonds so redeemed or purchased and cancelled or by the aggregate amount of such instalment so paid; or

(ii) if the Final Terms Document indicates that this Bearer Global Covered Bond is not intended to be a New Global Covered Bond, details of such exchange will be entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space in Schedule Two hereto recording such exchange will be signed by or on behalf of the Issuer, whereupon the Principal Amount Outstanding of this Global Covered Bond and the Covered Bonds represented by this Bearer Global Covered Bond will be increased by the nominal amount of the Temporary Global Covered Bond so exchanged.

This Bearer Global Covered Bond may be exchanged (free of charge) in whole, but not in part, for Bearer Definitive Covered Bonds and (if applicable) Coupons and/or Talons in or substantially in the forms set out in Parts 3, 4 and 5 of Schedule 2 to the Trust Deed (on the basis that all the appropriate details have been included on the face of such Bearer Definitive Covered Bonds and (if applicable) Coupons and/or Talons and the relevant information supplementing, replacing or modifying the Conditions appearing in the Final Terms Document has been endorsed on or attached to such Bearer Definitive Covered Bonds) either, as specified in the applicable Final Terms Document:

(a) upon not less than 60 days’ written notice being given to the Principal Paying Agent by Euroclear and/or Clearstream Luxembourg (acting on the instructions of any holder of an interest in this Global Covered Bond); or

(b) upon the occurrence of an Exchange Event.

An “Exchange Event” means:

(i) the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available; or

(ii) the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Bearer Global Covered Bond (and any interests therein) exchanged for Bearer Definitive Covered Bonds.

If this Bearer Global Covered Bond is exchangeable following the occurrence of an Exchange Event:

(i) the Issuer will promptly give notice to Covered Bondholders in accordance with Condition 13 (Notices) upon the occurrence of such Exchange Event; and

(ii) Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in this Bearer Global Covered Bond) or the Bond Trustee

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may give notice to the Principal Paying Agent requesting exchange and, in the event of the occurrence of an Exchange Event as described in (b) above, the Issuer may also give notice to the Principal Paying Agent requesting exchange.

Any such exchange will occur on a date specified in the notice not more than 45 days after the date of receipt of the first relevant notice by the Principal Paying Agent.

The first notice requesting exchange in accordance with the above provisions will give rise to the issue of Bearer Definitive Covered Bonds for the Principal Amount Outstanding of Covered Bonds represented by this Global Covered Bond.

Any such exchange as aforesaid will be made upon presentation of this Bearer Global Covered Bond by the bearer hereof on any Business Day in London at the office of the Principal Paying Agent specified above.

The aggregate Principal Amount Outstanding of Bearer Definitive Covered Bonds issued upon an exchange of this Bearer Global Covered Bond will be equal to the aggregate Principal Amount Outstanding of this Bearer Global Covered Bond. Upon exchange of this Bearer Global Covered Bond for Bearer Definitive Covered Bonds, the Principal Paying Agent will cancel it or procure that it is cancelled.

Until the exchange of the whole of this Bearer Global Covered Bond as aforesaid, the bearer hereof will (subject as provided in the next paragraph) in all respects be entitled to the same benefits as if he were the bearer of Bearer Definitive Covered Bonds and the relative Coupons and/or Talons (if any) in the form(s) set out in Parts 3, 4 and 5 (as applicable) of Schedule 2 to the Trust Deed.

Each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount of the Covered Bonds represented by this Bearer Global Covered Bond (each an “Accountholder”) (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Covered Bonds standing to the account of any person will be conclusive and binding for all purposes save in the case of manifest error) will be treated by the Issuer, the Guarantor, the Bond Trustee the Principal Paying Agent and any other Paying Agent as the holder of such principal amount of such Covered Bonds for all purposes other than with respect to the payment of principal and interest on such principal amount of such Covered Bonds, the right to which will be vested, as against the Issuer and the Guarantor, solely in the bearer of this Bearer Global Covered Bond in accordance with and subject to the terms of this Bearer Global Covered Bond and the Trust Deed. Each Accountholder must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for its share of each payment made to the bearer of this Bearer Global Covered Bond.

For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any other purpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a year of 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such rate multiplied by the number of days in the year of which such calculation is made and divided by 360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by 366 and divided by 365.

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This Bearer Global Covered Bond is governed by, and will be construed in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.

This Bearer Global Covered Bond will not be valid unless authenticated by Bank of New York Mellon as Principal Paying Agent and, if the applicable Final Terms Document indicates that this Global Covered Bond is intended to be held in a manner which would allow Eurosystem eligibility, effectuated by the entity appointed as Common Safekeeper by the relevant Clearing Systems.

IN WITNESS whereof the Issuer has caused this Bearer Global Covered Bond to be signed manually or in facsimile or pdf by a person duly authorized on its behalf.

Issued as of the Issue Date specified in the Final Terms Document.

BANK OF MONTREAL

By:

[Authorized Signatory]

Authenticated by

BANK OF NEW YORK MELLON

as Principal Paying Agent.

By:

Authorized Officer

²Effectuated without recourse,

warranty or liability by

as common safekeeper

By:

²  This should only be completed where the Final Terms indicates that this Global Covered Bond is intended to be a New Global Covered Bond.

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Schedule One³

PART I

INTEREST PAYMENTS

Date made Interest Payment Date Total amount of interest payable Amount of interest paid Confirmation of payment by or on behalf of the Issuer

^3.  Schedule One should only be completed where the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond

PART II

REDEMPTIONS

Date made Total amount of principal payable Amount of principal paid Remaining Principal Amount Outstanding of this Bearer Global Covered Bond following such redemption* Confirmation of payment by or on behalf of the Issuer

* See most recent entry in Part III or III or Schedule Two in order to determine this amount.

PART III

PURCHASES AND CANCELLATIONS

Date Made Part of Principal Amount Outstanding of this Bearer Global Covered Bond purchased and cancelled Remaining Principal Amount Outstanding of this Bearer Global Covered Bond following such purchase and cancellation* Confirmation of purchase and cancellation by or on behalf of the Issuer

* See most recent entry in Part II or III or Schedule Two in order to determine this amount.

Schedule Two⁴

EXCHANGES

(only applicable where the Covered Bonds represented this Bearer Global Covered Bond were, on issue, represented by a Temporary Global Covered Bond)

Date made Principal Amount Outstanding of Temporary Global Covered Bond exchanged for this Bearer Global Covered Bond Increased Principal Amount Outstanding of this Bearer Global Covered Bond following such exchange* Notation made by or on behalf of the Issuer

4. Schedule Two should only be completed where the Final Terms Document indicates that this Global Covered Bond is not intended to be a New Global Covered Bond

* See most recent entry in Part II or III of Schedule One or in this Schedule Two in order to determine this amount.

PART 3

FORM OF BEARER DEFINITIVE COVERED BOND

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE AGENCY AGREEMENT) AND PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.¹

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

COVERED BONDS DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

This Covered Bond is one of a Series of Covered Bonds of [Specified Currency(ies) and Specified Denomination(s)] each of the Issuer (“Covered Bonds”) which are constituted by a Trust Deed (as defined below). References herein to the “Conditions” will be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 (Terms and Conditions of the Covered Bonds) to the Trust Deed (as defined below) which will be incorporated by reference herein and have effect as if set out herein] as supplemented, replaced and modified by the relevant information appearing in the Final Terms Document (the “Final Terms Document”) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Final Terms Document, such information will prevail.

Words and expressions defined in the Conditions will bear the same meanings when used in this Covered Bond.

¹  Delete where the original maturity of the Bonds is 1 year or less.

This Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated as of September 30, 2013 and made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee.

For value received, the Issuer, subject to and in accordance with the Conditions and the Trust Deed, hereby promises to pay to the bearer hereof on the Final Maturity Date and/or on such earlier date as this Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable on redemption of this Covered Bond and to pay interest (if any) on the Principal Amount Outstanding of this Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.

For the purposes of disclosure pursuant to the Interest Act (Canada) and not for any other purpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a year of 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such rate multiplied by the number of days in the year of which such calculation is made and divided by 360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by 366 and divided by 365.

Neither this Covered Bond nor the Coupons appertaining hereto will be valid or obligatory for any purpose unless and until this Covered Bond has been authenticated by Bank of New York Mellon as Principal Paying Agent.

IN WITNESS whereof this Covered Bond has been executed on behalf of the Issuer.

Issued as of [                     ], 20[—].

BANK OF MONTREAL

By:

[Authorized Signatory]

Authenticated by

BANK OF NEW YORK MELLON

as Principal Paying Agent.

By:

Authorized Officer

[0,000/00,000] [ISIN] [Series] [Serial No.]

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[CONDITIONS]

[Conditions to be as set out in Schedule 1 (Terms and Conditions of the Covered Bonds) to the Trust Deed or such other form as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s), but will not be endorsed if not required by the relevant Stock Exchange (if any)]

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FINAL TERMS DOCUMENT

[Here to be set out the text of the relevant information supplementing, replacing or modifying the Conditions which appears in the Final Terms Document relating to the Covered Bonds]

PART 4

FORM OF COUPON

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE AGENCY AGREEMENT) AND PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.¹

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

COVERED BONDS DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

Series No. [    ]*

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

[Coupon appertaining to a Covered Bond in the denomination of [Specified Currency and Specified Denomination]].²

[The interest on this Coupon is payable (free of/subject to) Canadian withholding tax.]

Part A

[For Fixed Rate Covered Bonds:

¹  Delete where the original maturity of the Bonds is 1 year or less.

²  Delete where the Covered Bonds are all of the same denomination

This Coupon is payable to bearer, separately negotiable and subject to the Terms and Conditions of the said Covered Bonds. Coupon for
[    ] due on [                    ], [             ]]

Part B

[For Floating Rate Covered Bonds:

Coupon for the amount due in accordance with the Terms and Conditions endorsed on, attached to or incorporated by reference into the said Covered Bonds on [the Interest Payment Date falling in [        ] [        ]/[        ]].

This Coupon is payable to bearer, separately negotiable and subject to such Terms and Conditions, under which it may become void before its due date.]

[No.] [0,000/00,000] [ISIN] [Series] [Serial No.]

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PART 5

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE AGENCY AGREEMENT) AND PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.¹

FORM OF TALON

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

[Interest on this Talon is payable [free of/subject to] Canadian withholding tax.]

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

COVERED BONDS DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

Series No. [    ]

[Talon appertaining to a Covered Bond in the denomination of [Specified Currency and Specified Denomination]]²

On and after [            ] further Coupons [and a further Talon]³ appertaining to the Covered Bond to which this Talon appertains will be issued at the specified office of any of the Paying Agents set out on the reverse hereof (and/or any other or further Paying Agents and/or specified offices as may from time to time be duly appointed and notified to the Covered Bondholders) upon production and surrender of this Talon.

¹  Delete where the original maturity of the Bonds is 1 year or less.

²  Delete where the Covered Bonds are all of the same denomination.

³  Not required on last Coupon sheet.

This Talon may, in certain circumstances, become void under the Terms and Conditions endorsed on the Covered Bond to which this Talon appertains.

[No.] [0,000/00,000] [ISIN] [Series] [Serial No.]

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[Reverse of Coupons and Talons]

PRINCIPAL PAYING AGENT

Bank of New York Mellon, 101 Barclay Street 7E, New York, NY 10286, and/or such other or further Principal Paying Agent or Paying Agent or Registrar or Exchange Agent or Transfer Agent and/or specified offices as may from time to time be duly appointed by the Issuer and the Guarantor and notice of which has been given to the Covered Bondholders.

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PART 6

FORM OF CERTIFICATE TO BE PRESENTED BY EUROCLEAR OR

CLEARSTREAM, LUXEMBOURG

BANK OF MONTREAL

(the “Issuer”)

[Title of Covered Bonds]

(the “Securities”)

This is to certify that, based solely on certifications we have received in writing, by electronic transmission from member organisations appearing in our records as persons being entitled to a portion of the nominal amount set forth below (our “Member Organisations”) substantially to the effect set forth in the temporary Global Covered Bond representing the Securities, as of the date hereof, [    ] principal amount of the above-captioned Securities (i) is owned by persons that are not citizens or residents of the United States, partnerships, corporations or other entities created or organised under the Laws of the United States or any estate the income of which is subject to United States Federal income taxation regardless of its source or any trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust (“United States persons”), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) (“financial institutions”) purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in Section (iii) above (whether or not also described in sub-paragraph (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.

If the Securities are of the category contemplated in Rule 903(b)(3) of Regulation S under the Securities Act of 1933, as amended, then this is also to certify with respect to such principal amount of Securities set forth above that, except as set forth below, we have received in writing, by electronic transmission, from our Member Organisations entitled to a portion of such principal amount, certifications with respect to such portion, substantially to the effect set forth in the temporary Global Covered Bond representing the Securities.

As used herein, “United States” means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to jurisdiction and its “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global security excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organisations to the effect that the statements made by such Member Organisations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as of the date hereof.

We will retain, as required, all certificates received from Member Organisations for the period specified in U.S. Treasury Regulation Section 1.163-5(c)(2)(i)(D)(3)(i).

We understand that this certification is required in connection with certain tax Laws and, if applicable, certain securities Laws of the United States. In connection therewith, if administrative or legal proceedings or official enquiries are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings or enquiries.

Dated:

Yours faithfully,

[Euroclear Bank S.A./N.V.]

or

[Clearstream Banking, société anonyme]

By:

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CERTIFICATE OF MEMBER ORGANISATIONS

BANK OF MONTREAL

(the “Issuer”)

[Title of Covered Bonds]

(the “Securities”)

This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by person(s) that are not citizens or residents of the United States, partnerships, corporations or other entities created or organised under the Laws of the United States or any estate the income of which is subject to United States Federal income taxation regardless of its source or any trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust (“United States person(s)”), (ii) are owned by United States person(s) that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) (“financial institutions”) purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United States or foreign financial institution described in Section (iii) above (whether or not also described in sub-paragraph (i) or (ii)) this is to further certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.

If the Securities are of the category contemplated in Rule 903(b)(3) of Regulation S under the Securities Act of 1933, as amended (the “Act”), then this is also to certify that, except as set forth below, the Securities are beneficially owned by (a) non-U.S. person(s) or (b) U.S. person(s) who purchased the Securities in transactions which did not require registration under the Act. As used in this paragraph, the term “U.S. person” has the meaning given to it by Regulation S under the Act.

As used herein, “United States” means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to jurisdiction and its “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

We undertake to advise you promptly by electronic transmission on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.

This certification excepts and does not relate to [    ] of such interest in the above Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of definitive Securities (or, if relevant, exercise of any right or collection of any interest) cannot be made until we do so certify.

We understand that this certification is required in connection with certain tax Laws and, if applicable, certain securities Laws of the United States. In connection therewith, if administrative or legal proceedings or official enquiries are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings or enquiries.

Dated: ¹

Name of person making certification

By: ....................................................

(As, or as agent for, the beneficial owner(s) of the Securities to which this certification relates).

¹  To be dated no earlier than the fifteenth day prior to the date to which this certification relates, namely (a) the payment date or (b) the Exchange Date.

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PART 7A

FORM OF REGULATION S GLOBAL COVERED BONDS

Issue Date:                    

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE AGENCY AGREEMENT) AND PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. UNTIL THE EXPIRY OF THE PERIOD OF 40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION OF THE TRANCHE OF COVERED BONDS OF WHICH THIS COVERED BOND FORMS PART, SALES MAY NOT BE MADE IN THE UNITED STATES OR TO U.S. PERSONS UNLESS MADE (I) PURSUANT TO RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT OR (II) TO QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN, AND IN TRANSACTIONS PURSUANT TO, RULE 144A UNDER THE SECURITIES ACT.

BY ITS PURCHASE AND HOLDING OF THIS COVERED BOND (OR ANY INTEREST THEREIN), THE PURCHASER OR HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT EITHER (A) IT IS NOT AND FOR SO LONG AS IT HOLDS THIS COVERED BOND (OR ANY INTEREST HEREIN) WILL NOT BE (I) AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” AS DEFINED IN AND SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR OTHER PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR (IV) A GOVERNMENTAL, CHURCH OR OTHER NON-U.S. EMPLOYEE BENEFIT PLAN WHICH IS SUBJECT TO ANY U.S. FEDERAL, STATE, OR NON-U.S. LOCAL LAW, THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR (B) ITS PURCHASE AND HOLDING OF THE COVERED BONDS WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR, IN THE CASE OF SUCH A GOVERNMENTAL, CHURCH OR OTHER NON-U.S. EMPLOYEE BENEFIT PLAN, ANY SUCH SUBSTANTIALLY SIMILAR U.S. FEDERAL, STATE, LOCAL OR NON-U.S. LAW FOR WHICH AN EXEMPTION IS NOT AVAILABLE.

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

REGULATION S GLOBAL COVERED BOND DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

REGULATION S GLOBAL COVERED BOND

The Issuer hereby certifies that [    ] is, at the date hereof, entered in the Register as the holder of the Principal Amount Outstanding set forth in Schedule One or Two (as applicable) hereto, such amount not to exceed Five Hundred Million Dollars of a duly authorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the Specified Currency and Specified Denomination(s) specified in the Final Terms Document applicable to the Covered Bonds (the “Final Terms Document”), a copy of which is annexed hereto. References herein to the Conditions will be to the Conditions of the Covered Bonds as set out in Schedule 1 (Terms and Conditions of the Covered Bonds) to the Trust Deed (as defined below) as supplemented, replaced and modified by the Final Terms Document but, in the event of any conflict between the provisions of the said Conditions and the information in the Final Terms Document, such information will prevail. Words and expressions defined in the Conditions will bear the same meanings when used in this Regulation S Global Covered Bond. This Regulation S Global Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed (as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated as of September 30, 2013 and made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee.

The Issuer, subject to and in accordance with the Conditions and the Trust Deed, agrees to pay to such registered holder on the Final Maturity Date and/or on such earlier date(s) as all or any of the Covered Bonds represented by this Regulation S Global Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Covered Bonds on each such date and to pay interest (if any) on the Principal Amount Outstanding of the Covered Bonds from time to time represented by this Regulation S Global Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Regulation S Global Covered Bond at the specified office of the Registrar at 101 Barclay Street 7E, New York, NY 10286, or such other specified office as may be specified for this purpose in accordance with the Conditions. On any redemption or payment of interest being made in respect of, or purchase and cancellation of, any of the Covered Bonds represented by this Regulation S Global Covered Bond details of such redemption, payment or purchase and cancellation (as the case may be) will be entered by or on behalf of the Issuer in Schedule One hereto and the relevant space in Schedule One hereto recording any such redemption, payment or purchase and cancellation (as the case may be) will be signed by or on behalf of the Issuer. Upon any such redemption or purchase and cancellation the Principal Amount Outstanding of this

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Regulation S Global Covered Bond and the Covered Bonds held by the registered holder hereof will be reduced by the Principal Amount Outstanding of such Covered Bonds so redeemed or purchased and cancelled. The nominal amount of this Regulation S Global Covered Bond and of the Covered Bonds held by the registered holder hereof following any such redemption or purchase and cancellation as aforesaid or any transfer or exchange as referred to below will be the Principal Amount Outstanding most recently entered in the relevant column in Part II or III of Schedule One hereto or in Schedule Two hereto.

This Regulation S Global Covered Bond may be exchanged (free of charge) in whole, but not in part, for Regulation S Definitive Covered Bonds without Coupons or Talons attached only upon the occurrence of an Exchange Event.

An “Exchange Event” means:

(a) in the case of Regulation S Global Covered Bonds registered in the name of The Depository Trust Company (“DTC”) or its nominee, either DTC has notified the Issuer that it is unwilling or unable to continue to act as depositary for the Regulation S Global Covered Bonds and no alternative clearing system is available or DTC has ceased to constitute a clearing agency registered under the U.S. Securities Exchange Act of 1934, as amended;

(b) in the case of Regulation S Global Covered Bonds registered in the name of the common depositary for Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), or its nominee, the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available; or

(c) the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Regulation S Global Covered Bonds (and any interests therein) exchanged for Regulation S Definitive Covered Bonds.

The Issuer will promptly give notice to Covered Bondholders in accordance with Condition 13 if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, DTC, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any registered holder of an interest in this Regulation S Global Covered Bond) or the Bond Trustee may give notice to the Registrar requesting exchange and, in the event of the occurrence of an Exchange Event as described in (c) above, the Issuer may also give notice to the Registrar requesting exchange. Any such exchange will occur not later than 10 days after the date of receipt of the first relevant notice by the Registrar.

Covered Bonds represented by this Regulation S Global Covered Bond are transferable only in accordance with, and subject to, the provisions hereof and of the Agency Agreement dated as of September 30, 2013 (as amended, supplemented or restated from time to time) and the rules and operating procedures of Euroclear, DTC and/or Clearstream, Luxembourg.

On any transfer pursuant to which either (i) Covered Bonds represented by this Regulation S Global Covered Bond are no longer to be so represented or (ii) Covered Bonds not so represented are to be so represented, details of such transfer will be entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space in Schedule Two hereto recording

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such transfer will be signed by or on behalf of the Issuer, whereupon the Principal Amount Outstanding of this Regulation S Global Covered Bond and the Covered Bonds held by the registered holder hereof will be increased or reduced (as the case may be) by the Principal Amount Outstanding so transferred.

Subject as provided in the following two paragraphs, until the exchange of the whole of this Regulation S Global Covered Bond as aforesaid, the registered holder hereof will in all respects be entitled to the same benefits as if he were the registered holder of Regulation S Definitive Covered Bonds in the form set out in Part 7 of Schedule 2 to the Trust Deed.

This Regulation S Global Covered Bond is governed by, and will be construed in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.

This Regulation S Global Covered Bond will not be valid unless authenticated by the Registrar specified in the Final Terms Document.

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IN WITNESS whereof the Issuer has caused this Regulation S Global Covered Bond to be signed manually or in facsimile or pdf by a person duly authorized on its behalf.

BANK OF MONTREAL

By:

[Authorized Signatory]

Authenticated by

                                                                              , as Registrar

By:

Authorized Officer

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Schedule One

Part I

INTEREST PAYMENTS

Date made Total amount payable Amount of interest paid Confirmation of payment by or on behalf of the Issuer

Part II

REDEMPTIONS

The initial Principal Amount Outstanding of this Registered Regulation S Global Covered Bond is U.S.$        .

Date made Total amount of principal payable Amount of principal paid Remaining Principal Amount Outstanding of this Regulation S Global Covered Bond following such redemption* Confirmation of redemption by or on behalf of the Issuer

* See most recent entry in Part II or III or Schedule Two in order to determine this amount.

Part III

PURCHASES AND CANCELLATIONS

The initial Principal Amount Outstanding of this Registered Regulation S Global Covered Bond is U.S.$        .

Date made Part of the Principal Amount Outstanding of this Regulation S Global Covered Bond purchased and cancelled Remaining Principal Amount Outstanding of this Regulation S Global Covered Bond following such purchase and cancellation* Confirmation of purchase and cancellation by or on behalf of the Issuer

* See most recent entry in Part II or III or Schedule Two in order to determine this amount.

Schedule Two

SCHEDULE OF TRANSFERS

The initial Principal Amount Outstanding of this Registered Regulation S Global Covered Bond is U.S.$        .

The following transfers affecting the Principal Amount Outstanding of this Regulation S Global Covered Bond have been made:

Date
made Principal Amount
Outstanding
of Covered Bonds
transferred Remaining/increased
Principal Amount
Outstanding of this
Regulation S Global
Covered Bond
following such
transfer* Notation made
by or on behalf
of the Issuer

* See most recent entry in Part II or III of Schedule One or in this Schedule Two in order to determine this amount.

—FORM OF TRANSFER OF REGULATION S COVERED BOND—

FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) to

(Please print or type name and address (including postal code) of transferee)

[Specified Currency][   ] Principal Amount Outstanding of this Covered Bond and all rights hereunder, hereby irrevocably constituting and appointing as attorney to transfer such Principal Amount Outstanding of this Covered Bond in the Register maintained by the Registrar on behalf of BANK OF MONTREAL with full power of substitution.

Signature(s)

Date:                                                         

N.B.: This form of transfer must be accompanied by such documents, evidence and information as may be required pursuant to the Conditions and must be executed under the hand of the transferor or, if the transferor is a corporation, either under its common seal or under the hand of two of its officers duly authorized in writing and, in such latter case, the document so authorizing such officers must be delivered with this form of transfer.

[Conditions]

[Conditions to be as set out in the First Schedule to the Trust Deed or such other form as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s), but will not be endorsed if not required by the relevant Stock Exchange (if any).]

Final Terms Document

[Here to be set out text of the relevant information supplementing, replacing or modifying the Conditions which appear in the Final Terms Document relating to the Covered Bonds]

PART 7B

FORM OF RULE 144A GLOBAL COVERED BONDS

Issue Date:                    

THIS SECURITY AND ANY GUARANTEE IN RESPECT THEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS; (B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT IN RESPECT OF THIS SECURITY (THE “AGENCY AGREEMENT”) AND, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE LAST ISSUE DATE FOR THE SERIES AND THE LAST DATE ON WHICH THE ISSUER OR AN AFFILIATE OF THE ISSUER WAS THE OWNER OF SUCH SECURITY, OTHER THAN (1) TO THE ISSUER OR ANY AFFILIATE THEREOF, (2) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE A QUALIFIED INSTITUTIONAL BUYERS IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND ANY OTHER JURISDICTION; AND (C) IT AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

THIS SECURITY AND RELATED DOCUMENTATION (INCLUDING, WITHOUT LIMITATION, THE AGENCY AGREEMENT REFERRED TO HEREIN) MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT THE CONSENT OF, BUT UPON NOTICE TO, THE HOLDER OF SUCH SECURITY SENT TO ITS REGISTERED ADDRESS, TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO RESALES OR OTHER TRANSFERS OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED, BY ITS ACCEPTANCE OR PURCHASE HEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT (EACH OF WHICH SHALL BE CONCLUSIVE AND BINDING ON THE HOLDER HEREOF AND ALL FUTURE

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HOLDERS OF THIS SECURITY AND ANY SECURITIES ISSUED IN EXCHANGE OR SUBSTITUTION THEREFOR, WHETHER OR NOT ANY NOTATION THEREOF IS MADE HEREON).

BY ITS PURCHASE AND HOLDING OF THIS COVERED BOND (OR ANY INTEREST THEREIN), THE PURCHASER OR HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT EITHER (A) IT IS NOT AND FOR SO LONG AS IT HOLDS THIS COVERED BOND (OR ANY INTEREST HEREIN) WILL NOT BE (I) AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” AS DEFINED IN AND SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR OTHER PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR (IV) A GOVERNMENTAL OR OTHER BENEFIT PLAN WHICH IS SUBJECT TO ANY NON-U.S. OR U.S. FEDERAL, STATE OR LOCAL LAW, THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR (B) ITS PURCHASE AND HOLDING OF THIS COVERED BOND WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR, IN THE CASE OF SUCH A GOVERNMENTAL OR OTHER EMPLOYEE BENEFIT PLAN, ANY SUCH SUBSTANTIALLY SIMILAR NON-U.S. OR U.S. FEDERAL, STATE OR LOCAL LAW FOR WHICH AN EXEMPTION IS NOT AVAILABLE”.

PROSPECTIVE PURCHASERS ARE HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A.

BANK OF MONTREAL

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

RULE 144A GLOBAL COVERED BONDS DUE [Year of Maturity]

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(a limited partnership established in the Province of Ontario)

(the “Guarantor”)

The Issuer hereby certifies that [    ] is, at the date hereof, entered in the Register as the holder of the Principal Amount Outstanding of [    ] of a duly authorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the Specified Currency and Specified Denomination(s) specified in the Final Terms Document applicable to the Covered Bonds (the “Final Terms Document”), a copy of which is annexed hereto. References herein to the Conditions will be

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to the Conditions of the Covered Bonds as set out in Schedule 1 (Terms and Conditions of the Covered Bonds) to the Trust Deed (as defined below) as supplemented, replaced and modified by the Final Terms Document but, in the event of any conflict between the provisions of the said Conditions and the information in the Final Terms Document, such information will prevail. Words and expressions defined in the Conditions will bear the same meanings when used in this Rule 144A Global Covered Bond. This Rule 144A Global Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed (as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated as of September 30, 2013 and made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee.

The Issuer, subject to and in accordance with the Conditions and the Trust Deed, agrees to pay to such registered holder on the Final Maturity Date and/or on such earlier date(s) as all or any of the Covered Bonds represented by this Rule 144A Global Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Covered Bonds on each such date and to pay interest (if any) on the Principal Amount Outstanding of the Covered Bonds from time to time represented by this Rule 144A Global Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Rule 144A Global Covered Bond at the specified office of the Registrar at 101 Barclay Street 7E, New York, NY 10286, or such other specified office as may be specified for this purpose in accordance with the Conditions. On any redemption or payment of interest being made in respect of, or purchase and cancellation of, any of the Covered Bonds represented by this Rule 144A Global Covered Bond details of such redemption, payment or purchase and cancellation (as the case may be) will be entered by or on behalf of the Issuer in Schedule One hereto and the relevant space in Schedule One hereto recording any such redemption, payment or purchase and cancellation (as the case may be) will be signed by or on behalf of the Issuer. Upon any such redemption or purchase and cancellation the Principal Amount Outstanding of this Rule 144A Global Covered Bond and the Covered Bonds held by the registered holder hereof will be reduced by the Principal Amount Outstanding of such Covered Bonds so redeemed or purchased and cancelled. The nominal amount of this Rule 144A Global Covered Bond and of the Covered Bonds held by the registered holder hereof following any such redemption or purchase and cancellation as aforesaid or any transfer or exchange as referred to below will be the Principal Amount Outstanding most recently entered in the relevant column in Part II or III of Schedule One hereto or in Schedule Two hereto.

This Rule 144A Global Covered Bond may be exchanged (free of charge) in whole, but not in part, for Registered Definitive Covered Bonds without Coupons or Talons attached only upon the occurrence of an Exchange Event.

An “Exchange Event” means:

(a) in the case of Rule 144A Global Covered Bonds registered in the name of The Depository Trust Company (“DTC”) or its nominee, either DTC has notified the Issuer that it is unwilling or unable to continue to act as depositary for the Rule 144A Global Covered Bonds and no alternative clearing system is available or DTC has ceased to constitute a clearing agency registered under the U.S. Securities Exchange Act of 1934, as amended;

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(b) in the case of Rule 144A Global Covered Bonds registered in the name of the common depositary for Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), or its nominee, the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available; or

(c) the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Rule 144A Global Covered Bonds (and any interests therein) exchanged for Rule 144A Definitive Covered Bonds.

The Issuer will promptly give notice to Covered Bondholders in accordance with Condition 13 if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, DTC, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any registered holder of an interest in this Rule 144A Global Covered Bond) or the Bond Trustee may give notice to the Registrar requesting exchange and, in the event of the occurrence of an Exchange Event as described in (c) above, the Issuer may also give notice to the Registrar requesting exchange. Any such exchange will occur not later than 10 days after the date of receipt of the first relevant notice by the Registrar.

Covered Bonds represented by this Rule 144A Global Covered Bond are transferable only in accordance with, and subject to, the provisions hereof and of the Agency Agreement dated as of September 30, 2013 (as amended, supplemented or restated from time to time) and the rules and operating procedures of DTC.

On any transfer pursuant to which either (i) Covered Bonds represented by this Rule 144A Global Covered Bond are no longer to be so represented or (ii) Covered Bonds not so represented are to be so represented, details of such transfer will be entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space in Schedule Two hereto recording such transfer will be signed by or on behalf of the Issuer, whereupon the Principal Amount Outstanding of this Rule 144A Global Covered Bond and the Covered Bonds held by the registered holder hereof will be increased or reduced (as the case may be) by the Principal Amount Outstanding so transferred.

Subject as provided in the following two paragraphs, until the exchange of the whole of this Rule 144A Global Covered Bond as aforesaid, the registered holder hereof will in all respects be entitled to the same benefits as if he were the registered holder of Registered Definitive Covered Bonds in the form set out in Part 7 of Schedule 2 to the Trust Deed.

This Rule 144A Global Covered Bond is governed by, and will be construed in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.

This Rule 144A Global Covered Bond will not be valid unless authenticated by the Registrar specified in the Final Terms Document.

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IN WITNESS whereof the Issuer has caused this Rule 144A Global Covered Bond to be signed manually or in facsimile or pdf by a person duly authorized on its behalf.

BANK OF MONTREAL

By:

[Authorized Signatory]

Authenticated by

                                                                                  , as Registrar

By:

Authorized Officer

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Schedule One

Part I

INTEREST PAYMENTS

Date made Total amount
payable Amount of interest
paid Confirmation of
payment by or on
behalf of the Issuer

Part II

REDEMPTIONS

The initial Principal Amount Outstanding of this Registered Rule 144A Global Covered Bond is U.S.$        .

Date made Total amount
of principal
payable Amount of
principal paid Remaining
Principal
Amount
Outstanding of
this Rule 144A
Global Covered
Bond following
such redemption* Confirmation
of redemption
by or on behalf
of the Issuer

* See most recent entry in Part II or III or Schedule Two in order to determine this amount.

Part III

PURCHASES AND CANCELLATIONS

The initial Principal Amount Outstanding of this Registered Rule 144A Global Covered Bond is U.S.$        .

Date made Part of the Principal
Amount Outstanding
of this Rule 144A
Global Covered
Bond purchased and
cancelled Remaining
Principal Amount
Outstanding of this
Rule 144A Global
Covered Bond
following such
purchase and
cancellation* Confirmation of
purchase and
cancellation by or
on behalf of the
Issuer

* See most recent entry in Part II or III or Schedule Two in order to determine this amount.

Schedule Two

SCHEDULE OF TRANSFERS

The initial Principal Amount Outstanding of this Registered Rule 144A Global Covered Bond is U.S.$        .

The following transfers affecting the Principal Amount Outstanding of this Rule 144A Global Covered Bond have been made:

Date
made Principal Amount
Outstanding
of Covered Bonds
transferred Remaining/increased
Principal Amount
Outstanding of this
Rule 144A Global
Covered Bond
following such
transfer^* Notation made
by or on behalf
of the Issuer

* See most recent entry in Part II or III of Schedule One or in this Schedule Two in order to determine this amount.

—FORM OF TRANSFER OF RULE 144A COVERED BOND—

FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) to

(Please print or type name and address (including postal code) of transferee)

[Specified Currency][    ] Principal Amount Outstanding of this Covered Bond and all rights hereunder, hereby irrevocably constituting and appointing as attorney to transfer such Principal Amount Outstanding of this Covered Bond in the Register maintained by the Registrar on behalf of BANK OF MONTREAL with full power of substitution.

Signature(s)                                                                                                  

Date:                                                                              

N.B.: This form of transfer must be accompanied by such documents, evidence and information as may be required pursuant to the Conditions and must be executed under the hand of the transferor or, if the transferor is a corporation, either under its common seal or under the hand of two of its officers duly authorized in writing and, in such latter case, the document so authorizing such officers must be delivered with this form of transfer.

[Conditions]

[Conditions to be as set out in the First Schedule to the Trust Deed or such other form as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s), but will not be endorsed if not required by the relevant Stock Exchange (if any).]

Final Terms Document

[Here to be set out text of the relevant information supplementing, replacing or modifying the Conditions which appear in the Final Terms Document relating to the Covered Bonds]

PART 7C

Issued pursuant to U.S. Registration Statement

FORM OF U.S. REGISTERED DEFINITIVE COVERED BOND

Bank of Montreal

(a chartered bank under the Bank Act (Canada))

(the “Issuer”)

[Specified Currency and Aggregate Nominal Amount of Tranche]

COVERED BONDS DUE [Year of Maturity]

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO Covered Bond Guarantor Limited Partnership

(established under the Limited Partnership Act (Ontario))

(the “Guarantor”)

This Covered Bond is one of a Series of Covered Bonds of [Specified Currency(ies) and Specified Denomination(s)] each of the Issuer (“Covered Bonds”). References herein to the Conditions shall be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 to the Trust Deed (as defined below) which shall be incorporated by reference herein and have effect as if set out herein] as supplemented, replaced and modified by the relevant information appearing in the Prospectus Supplement (the “Prospectus Supplement”) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Prospectus Supplement, such information will prevail.

Words and expressions defined in the Conditions shall bear the same meanings when used in this Covered Bond.

This Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated as of September 30, 2013 and made between the Issuer, the Guarantor and Computershare Trust Company of Canada, as Bond Trustee, for, inter alios, the Covered Bondholders.

For value received, the Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to             (being the person registered in the Register or, if more than one person is so registered, the first of such named persons) on [each Interest Payment Date and] the Final Maturity Date or on such earlier date as this Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable on redemption of this Covered Bond and to pay interest (if any) on the Principal Amount Outstanding of this Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.

For the purposes of disclosure pursuant to the Interest Act of Canada and not for any other purpose, where in any Covered Bond (i) a rate of interest is to be calculated on the basis of a year of 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such rate multiplied by the number of days in the year for which such calculation is made and divided by 360, or (ii) a rate of interest is to be calculated during a leap year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by 366 and divided by 365.

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This Covered Bond shall not be valid unless authenticated by [—], as Registrar.

IN WITNESS whereof this Covered Bond has been executed on behalf of the Issuer.

Issued as of [            ].

Bank of Montreal

By:		By:
	Duly Authorized		Duly Authorized

Authenticated by

[—]

as Registrar.

By:
	Authorized Officer

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FORM OF TRANSFER OF U.S. REGISTERED COVERED BOND

FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) to

(Please print or type name and address (including postal code) of transferee)

[Specified Currency] [             ] nominal amount of this Covered Bond and all rights hereunder, hereby irrevocably constituting and appointing            as attorney to transfer such nominal amount of this Covered Bond in the register maintained by [—] with full power of substitution.

Signature(s)

Date:                                                                                  

N.B. This form of transfer must be accompanied by such documents, evidence and information as may be required pursuant to the Conditions and must be executed under the hand of the transferor or, if the transferor is a corporation, either under its common seal or under the hand of two of its officers duly authorized in writing and, in such latter case, the document so authorizing such offices must be delivered with this form of transfer.

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[CONDITIONS]

[Conditions to be as set out in Schedule 1 to the Trust Deed or such other form as may be agreed between the Issuer, the Issuing and Paying Agent, the Bond Trustee and the Relevant Dealer(s), but shall not be endorsed if not required by the relevant Stock Exchange]

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PROSPECTUS SUPPLEMENT

[Here to be set out the text of the relevant information supplementing, replacing or modifying the Conditions which appears in the Prospectus Supplement relating to the Covered Bonds]

- 6 -

PART 7D

Issued pursuant to U.S. Registration Statement

FORM OF U.S. REGISTERED GLOBAL COVERED BOND

Series Number: CUSIP: Common Code: ISIN No.: Certificate No.: Serial Number:

[If this Covered Bond is registered in the name of Cede & Co. (or such other person as may be nominated by The Depository Trust Company (“DTC”) for the purpose) (collectively, “Cede & Co.”) as nominee for DTC, then, unless this Covered Bond is presented by an authorized representative of DTC to the Issuer (as defined below) or its agent for registration of transfer, exchange or payment, and any Covered Bond issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. or other nominee has an interest herein.

Unless and until it is exchanged in whole for securities in definitive registered form, this note may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor depository or a nominee of such successor depository.] ^††††

Bank of Montreal

(the “Issuer”)

(a Canadian chartered Bank)

U.S. REGISTERED GLOBAL COVERED BOND

and

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO Covered Bond Guarantor Limited Partnership

(established under the Limited Partnership Act (Ontario))

(the “Guarantor”)

The Issuer hereby certifies that              is, at the date hereof, entered in the Register as the holder of the aggregate Nominal Amount of              of a duly authorized issue of Covered Bonds of the Issuer (the “Covered Bonds”) of the Aggregate Nominal Amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Prospectus Supplement applicable to the Covered Bonds (the “Prospectus Supplement”), a copy of which is annexed hereto. References herein to the Conditions shall be to the Terms and Conditions of the Covered Bonds as set out in Schedule 1 to the Trust Deed (as defined below) as supplemented, replaced and modified by the Prospectus Supplement but, in the event of any conflict between the provisions of the said Conditions and the information in the Prospectus Supplement, the Prospectus Supplement will prevail.

^††††  Delete if not deposited with DTC.

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Words and expressions defined in the Conditions shall bear the same meanings when used in this Global Covered Bond.

This Global Covered Bond is issued subject to, and with the benefit of, the Conditions and a Trust Deed dated as of September 30, 2013 (such Trust Deed as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) and made between the Issuer, the Guarantor and Computershare Trust Company of Canada, as Bond Trustee, for, inter alios, the Covered Bondholders.

For value received, the Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to such registered holder on each Interest Payment Date (if the Covered Bonds are repayable in instalments) and on the Final Maturity Date and/or on such earlier date(s) as all or any of the Covered Bonds represented by this Global Covered Bond may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Covered Bonds on each such date and to pay interest (if any) on the Principal Amount Outstanding of the Covered Bonds from time to time represented by this Global Covered Bond calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Global Covered Bond at the office of the Registrar specified in the Prospectus Supplement.

On any redemption or payment of an instalment or interest being made in respect of, or purchase and cancellation of, any of the Covered Bonds represented by this Global Covered Bond details of such redemption, payment, purchase and cancellation (as the case may be) shall be entered by or on behalf of the Issuer in the Register. Upon any such redemption, payment of an instalment, purchase and cancellation the nominal amount of this Global Covered Bond and the Covered Bonds represented by this Global Covered Bond shall be reduced by the Principal Amount Outstanding of such Covered Bonds so redeemed or purchased and cancelled or the amount of such instalment. The Principal Amount Outstanding from time to time of this Global Covered Bond and of the Covered Bonds represented by this Global Covered Bond following any such redemption, payment of an instalment, purchase and cancellation as aforesaid or any exchange as referred to below shall be the Principal Amount Outstanding most recently entered in the Register.

This Global Covered Bond may be exchanged (free of charge) in whole, but not in part, for Registered Definitive Covered Bonds either, (i) as specified in the applicable Prospectus Supplement or (ii) upon the occurrence of an Exchange Event.

An “Exchange Event” means in the case of Covered Bonds registered in the name of a nominee for DTC, either (i) the Depository Trust Company (“DTC”) has notified the Issuer that it is unwilling or unable to continue to act as depositary for the Covered Bonds and no alternative clearing system is available or (ii) DTC has ceased to constitute a clearing agency registered under the Exchange Act; or (iii) the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Covered Bonds in definitive form and a certificate to such effect from two Authorized Signatories of the Issuer has been given to the Bond Trustee.

If this Global Covered Bond is exchangeable following the occurrence of an Exchange Event, the Issuer will promptly give notice to Covered Bondholders in accordance with Condition 13 (Notices) upon the occurrence of such Exchange Event; and, in the event of the occurrence of an Exchange Event as described in (iii) above, the Issuer may also give notice to the Registrar requesting exchange.

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Any such exchange shall occur on a date specified in the notice not more than 10 days after the date of receipt of the first relevant notice by the Registrar.

The first notice requesting exchange in accordance with the above provisions shall give rise to the issue of Registered Definitive Covered Bonds for the Principal Amount Outstanding of Covered Bonds represented by this Global Covered Bond.

Registered Definitive Covered Bonds will be issued in the minimum denominations specified in the Prospectus Supplement.

Any such exchange as aforesaid will be made upon presentation of this Global Covered Bond by the registered holder at the office of the Registrar or any Business Day in the place of presentation.

Covered Bonds represented by this Global Covered Bond are transferable only in accordance with, and subject to, the provisions hereof and the Agency Agreement dated September 30, 2013 (as amended and/or supplemented and/or restated from time to time) and the rules and operating procedures of DTC.

On any exchange or transfer as aforesaid pursuant to which either (i) Covered Bonds represented by this Global Covered Bond are no longer so represented or (ii) if Covered Bonds not so represented are to be so represented details of such exchange or transfer shall be entered by or on behalf of the Issuer in the Register, whereupon the nominal amount of this Global Covered Bond and the Covered Bonds held by the registered holder hereof shall be increased or reduced (as the case may be) by the nominal amount so exchanged or transferred.

Until the exchange of the whole of this Global Covered Bond as aforesaid, the registered holder hereof shall (subject as provided in the next paragraph) in all respects be entitled to the same benefits as if he were the registered holder of Registered Definitive Covered Bonds in the form set out in Part [—] of Part 7D of Schedule 2 to the Trust Deed.

Subject as provided in the Trust Deed, each person who is for the time being shown in the records of DTC as entitled to a particular nominal amount of the Covered Bonds represented by this Global Covered Bond (in which regard any certificate or other document issued by DTC as to the nominal amount of such Covered Bonds standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest or proven error) shall be deemed to be the holder of such nominal amount of such Covered Bonds for all purposes other than with respect of payments on, and voting, giving consents and making requests in respect of, such nominal amount of such Covered Bonds for which purpose the registered holder of this Global Covered Bond shall be deemed to be the holder of such nominal amount of the Covered Bonds in accordance with and subject to the terms of this Global Covered Bond and the Trust Deed.

This Global Covered Bond is governed by, and shall be construed in accordance with, the Laws of the Province of Ontario and the Laws of Canada applicable therein.

This Global Covered Bond shall not be valid unless authenticated by the Registrar specified in the Prospectus Supplement.

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IN WITNESS whereof the Issuer has caused this Global Covered Bond to be signed manually or in facsimile or pdf by persons duly authorized on its behalf.

Issued as of [            ].

Bank of Montreal

By:		By:
	Duly Authorized		Duly Authorized

Authenticated by

BANK OF NEW YORK MELLON

as Registrar without recourse, warranty or liability.

By:
	Authorized Officer

SCHEDULE 3

FORM OF ISSUER ACCELERATION NOTICE

[On the letterhead of the Bond Trustee]

To: BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”)

[insert date]

Dear Sirs,

Issuer Acceleration Notice

We refer to the U.S.$10,000,000,000 Global Registered Covered Bond Program of the Issuer and the Trust Deed dated as of September 30, 2013 made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee, as amended and/or supplemented and /or restated from time to time (the “Trust Deed”).

We hereby confirm that an Issuer Event of Default has occurred and this notice will constitute an Issuer Acceleration Notice which is served upon the Issuer pursuant to Condition 9.1 (Issuer Events of Default) of the Conditions.

Unless the context otherwise requires, capitalised terms used in this Issuer Acceleration Notice and not defined herein will have the meanings provided in the Master Definitions and Construction Agreement (as defined in the Trust Deed).

Yours faithfully,

……………………………….

for and on behalf of

Computershare Trust Company of Canada

SCHEDULE 4

FORM OF NOTICE TO PAY

[On the letterhead of the Bond Trustee]

To: BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”)

[insert date]

Dear Sirs,

Notice to Pay under Covered Bond Guarantee

We refer to the U.S.$10,000,000,000 Global Registered Covered Bond Program of the Issuer and the Trust Deed dated as of September 30, 2013 made between the Issuer, the Guarantor, and Computershare Trust Company of Canada in its capacity as Bond Trustee, as amended and/or supplemented and /or restated from time to time (the “Trust Deed”).

We hereby confirm that an Issuer Event of Default has occurred and an Issuer Acceleration Notice has been served on the Issuer. Accordingly, this notice will constitute a Notice to Pay which is served upon the Guarantor pursuant to Article 7 (Covered Bond Guarantee) of the Trust Deed.

Unless the context otherwise requires, capitalised terms used in this Notice to Pay and not defined herein will have the meanings provided in the Master Definitions and Construction Agreement (as defined in the Trust Deed).

Yours faithfully,

……………………………….

for and on behalf of

—

SCHEDULE 5

PROVISIONS FOR MEETINGS OF COVERED BONDHOLDERS

1.        (a) As used in this Schedule the following expressions will have the following meanings unless the context otherwise requires:

(i) “voting certificate” will mean an English language certificate issued by a Paying Agent and dated in which it is stated:

(A) that on the date thereof Bearer Covered Bonds (whether in definitive form or represented by a Bearer Global Covered Bond and not being Bearer Covered Bonds in respect of which a block voting instruction has been issued and is outstanding in respect of the meeting specified in such voting certificate or any adjourned such meeting) were deposited with such Paying Agent or (to the satisfaction of such Paying Agent) were held to its order or under its control or blocked in an account with a clearing system and that no such Bearer Covered Bonds will cease to be so deposited or held or blocked until the first to occur of:

I. the conclusion of the meeting specified in such certificate or, if later, of any adjourned such meeting; and

II. the surrender of the certificate to the Paying Agent who issued the same; and

(B) that the bearer thereof is entitled to attend and vote at such meeting and any adjourned such meeting in respect of the Bearer Covered Bonds represented by such certificate;

(ii) “block voting instruction” will mean an English language document issued by a Paying Agent and dated in which:

(A) it is certified that Bearer Covered Bonds (whether in definitive form or represented by a Bearer Global Covered Bond and not being Bearer Covered Bonds in respect of which a voting certificate has been issued and is outstanding in respect of the meeting specified in such block voting instruction and any adjourned such meeting) have been deposited with such Paying Agent or (to the satisfaction of such Paying Agent) were held to its order or under its control or blocked in an account with a clearing system and that no such Bearer Covered Bonds will cease to be so deposited or held or blocked until the first to occur of:

I. the conclusion of the meeting specified in such document or, if later, of any adjourned such meeting; and

II. the surrender to the Paying Agent not less than 48 hours before the time for which such meeting or any adjourned such meeting is convened of the receipt issued by such Paying Agent in respect of each such deposited Bearer Covered Bond which is to be released or (as the case may require) the Bearer Covered Bond or Bearer Covered Bonds ceasing with the agreement of the Paying Agent to be held to its order or under its control or so blocked and the giving of notice by the Paying Agent to the Issuer in accordance with paragraph 16 hereof of the necessary amendment to the block voting instruction;

(B) it is certified that each holder of such Bearer Covered Bonds has instructed such Paying Agent that the vote(s) attributable to the Bearer Covered Bond or Bearer Covered Bonds so deposited or held or blocked should be cast in a particular way in relation to the resolution or resolutions to be put to such meeting or any adjourned such meeting and that all such instructions are during the period commencing 48 hours prior to the time for which such meeting or any adjourned such meeting is convened and ending at the conclusion or adjournment thereof neither revocable nor capable of amendment;

(C) the aggregate principal amount of the Bearer Covered Bonds so deposited or held or blocked are listed distinguishing with regard to each such resolution between those in respect of which instructions have been given as aforesaid that the votes attributable thereto should be cast in favour of the resolution and those in respect of which instructions have been so given that the votes attributable thereto should be cast against the resolution; and

(D) one or more Persons named in such document (each hereinafter called a “proxy”) is or are authorized and instructed by such Paying Agent to cast the votes attributable to the Bearer Covered Bonds so listed in accordance with the instructions referred to in (c) above as set out in such document;

(iii) “24 hours” will mean a period of 24 hours including all or part of a day upon which banks are open for business in both the place where the relevant meeting is to be held and in each of the places where the Paying Agents have their specified offices (disregarding for this purpose the day upon which such meeting is to be held) and such period will be extended by one period or, to the extent necessary, more periods of 24 hours until there is included as aforesaid all or part of a day upon which banks are open for business in all of the places as aforesaid; and

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(iv) “48 hours” will mean a period of 48 hours including all or part of two days upon which banks are open for business both in the place where the relevant meeting is to be held and in each of the places where the Paying Agents have their specified offices (disregarding for this purpose the day upon which such meeting is to be held) and such period will be extended by one period or, to the extent necessary, more periods of 24 hours until there is included as aforesaid all or part of two days upon which banks are open for business in all of the places as aforesaid.

(b) A holder of a Bearer Covered Bond (whether in definitive form or represented by a Bearer Global Covered Bond) may obtain a voting certificate in respect of such Covered Bond from a Paying Agent or require a Paying Agent to issue a block voting instruction in respect of such Covered Bond by depositing such Bearer Covered Bond with such Paying Agent or (to the satisfaction of such Paying Agent) by such Bearer Covered Bond being held to its order or under its control or being blocked in an account with a clearing system, in each case not less than 48 hours before the time fixed for the relevant meeting and on the terms set out in sub-paragraph (a)(i)(A) or (a)(ii)(A)or above (as the case may be), and (in the case of a block voting instruction) instructing such Paying Agent to the effect set out in sub-paragraph (a)(ii)(B) above. The holder of any voting certificate or the proxies named in any block voting instruction will for all purposes in connection with the relevant meeting or adjourned meeting of Covered Bondholders be deemed to be the holder of the Bearer Covered Bonds to which such voting certificate or block voting instruction relates and the Paying Agent with which such Bearer Covered Bonds have been deposited or the person holding the same to the order or under the control of such Paying Agent or the clearing system in which such Bearer Covered Bonds have been blocked will be deemed for such purposes not to be the holder of those Bearer Covered Bonds.

(c)    (i) A holder of Registered Covered Bonds (whether in definitive form or represented by a Regulation S Global Covered Bond or a Rule 144A Global Covered Bond (other than a Registered Covered Bond referred to in (iv) below)) may, by an instrument in writing in the English language (a “form of proxy”) signed by the holder or, in the case of a corporation, executed under its common seal or signed on its behalf by an attorney or a duly authorized officer of the corporation and delivered to the specified office of the Registrar not less than 48 hours before the time fixed for the relevant meeting, appoint a proxy to act on his or its behalf in connection with any meeting of the Covered Bondholders and any adjourned such meeting.

(ii) Any holder of Registered Covered Bonds (whether in definitive form or represented by a Regulation S Global Covered Bond) which is a corporation may by resolution of its directors or other governing body Authorize any person to act as its representative (a “representative”) in connection with any meeting of the Covered Bondholders and any adjourned such meeting.

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(iii) Any proxy appointed pursuant to sub-paragraph (i) above or representative appointed pursuant to sub-paragraph (ii) above will so long as such appointment remains in force be deemed, for all purposes in connection with the relevant meeting or adjourned meeting of the Covered Bondholders, to be the holder of the Registered Covered Bonds to which such appointment relates and the holder of the Registered Covered Bonds will be deemed for such purposes not to be the holder.

(iv) For so long as any of the Registered Covered Bonds is represented by a Global Covered Bond registered in the name of DTC or its nominee, DTC may mail an Omnibus Proxy to the Issuer in accordance with and in the form used by DTC as part of its usual procedures from time to time in relation to meetings of Covered Bondholders. Such Omnibus Proxy will assign the voting rights in respect of the relevant meeting to DTC’s direct participants as of the record date specified therein. Any such assignee participant may, by an instrument in writing in the English language signed by such assignee participant or, in the case of a corporation, executed under its common seal or signed on its behalf by an attorney or a duly authorized officer of the corporation and delivered to the specified office of the Registrar or any Transfer Agent before the time fixed for the relevant meeting, appoint any person (a “sub-proxy”) to act on his or its behalf in connection with any meeting of Covered Bondholders and any adjourned such meeting. All references to “proxy” or “proxies” in this Schedule other than in this paragraph will be read so as to include references to “sub-proxy” or “sub-proxies”.

2. Notwithstanding the applicability of Section 316(a) of the Trust Indenture Act, the Issuer, the Guarantor or the Bond Trustee or (in relation to a meeting for the passing of a Program Resolution) the Covered Bondholders of any Series may at any time and the Issuer will upon a requisition in writing in the English language signed by the holders of not less than 10 per cent. of the Principal Amount Outstanding of the Covered Bonds for the time being outstanding convene a meeting of the Covered Bondholders. The Bond Trustee may convene a single meeting of the holders of Covered Bonds of more than one Series if in the opinion of the Bond Trustee there is no conflict between the holders of such Covered Bonds Series, in which event the provisions of this Schedule will apply thereto mutatis mutandis.

3. At least 21 days’ notice (exclusive of the day on which the notice is given and the day on which the meeting is to be held) specifying the place, day and hour of meeting will be given to the relevant Covered Bondholders prior to any meeting of such holders in the manner provided by Condition 13 (Notices). Such notice, which will be in the English language, will state generally the nature of the business to be transacted at the meeting thereby convened but it will not be necessary to specify in such notice the terms of any resolution to be proposed. Such notice will include statements, if applicable, to the effect that (i) Bearer Covered Bonds may, not less than 48 hours before the time fixed for the meeting, be deposited with Paying Agents or (to their satisfaction) held to their order or under their control or blocked in an account with a clearing system for the purpose of obtaining voting certificates or appointing proxies and (ii) the holders of Registered

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Covered Bonds may appoint proxies by executing and delivering a form of proxy in the English language to the specified office of the Registrar not less than 48 hours before the time fixed for the meeting or, in the case of corporations, may appoint representatives by resolution of their directors or other governing body. A copy of the notice will be sent by post to the Bond Trustee (unless the meeting is convened by the Bond Trustee), and to the Issuer (unless the meeting is convened by the Issuer) and to the Guarantor (unless the meeting is convened by the Guarantor.

4. A Person (who may but need not be a Covered Bondholder) nominated in writing by the Bond Trustee will be entitled to take the chair at the relevant meeting or adjourned meeting but if no such nomination is made or if at any meeting or adjourned meeting the person nominated will not be present within 15 minutes after the time appointed for holding the meeting or adjourned meeting the Covered Bondholders present will choose one of their number to be Chairman, failing which the Issuer may appoint a Chairman. The Chairman of an adjourned meeting need not be the same person as was Chairman of the meeting from which the adjournment took place.

5. At any such meeting one or more persons present holding Definitive Covered Bonds or voting certificates or being proxies or representatives and holding or representing in the aggregate not less than one-twentieth of the Principal Amount Outstanding of the Covered Bonds of the relevant Series for the time being outstanding will (except for the purpose of passing an Extraordinary Resolution or a Program Resolution) form a quorum for the transaction of business and no business (other than the choosing of a Chairman) will be transacted at any meeting unless the requisite quorum be present at the commencement of the relevant business. The quorum at any such meeting for passing an Extraordinary Resolution (subject as provided below) or a Program Resolution will be one or more persons present holding Bearer Definitive Covered Bonds or voting certificates or being proxies or representatives and holding or representing not less than a clear majority of the Principal Amount Outstanding of the Covered Bonds of the relevant Series for the time being outstanding PROVIDED THAT at any meeting the business of which includes any of the following matters (other than in relation to a Program Resolution) (each of which will, subject only to Section 21.2(a), only be capable of being effected after having been approved by Extraordinary Resolution of the holders of the Covered Bonds of the relevant Series) namely:

(a) reduction or cancellation of the amount payable or, where applicable, modification of the method of calculating the amount payable or modification of the date of payment or, where applicable, modification of the method of calculating the date of payment in respect of any principal or interest in respect of the Covered Bonds of such Series other than in accordance with the terms thereof;

(b) alteration of the currency in which payments under the Covered Bonds and Coupons of such Series are to be made;

(c) alteration of the majority required to pass an Extraordinary Resolution;

(d) any amendment to the Covered Bond Guarantee or the Security Agreement (except in a manner determined by the Bond Trustee not to be materially prejudicial to the interests of the Covered Bondholders of any such Series or an amendment which is in the sole opinion of the Bond Trustee of a formal,

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minor or technical nature or to correct a manifest error or an error which is, in the sole opinion of the Bond Trustee proven or is to comply with mandatory provisions of Law);

(e) the sanctioning of any such scheme or proposal for the exchange or sale of the Covered Bonds of such Series or the conversion of the Covered Bonds of such Series into, or the cancellation of the Covered Bonds in consideration of, shares, stock, covered bonds, bonds, debentures, debenture stock and/or other obligations and/or securities of the Issuer, or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, bonds, covered bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash and for the appointment of some Person with power on behalf of the holders of Covered Bonds of such Series to execute an instrument of transfer of the Registered Covered Bonds held by them in favour of the Persons with or to whom the Covered Bonds of such Series are to be exchanged or sold respectively; and

(f) alteration of the proviso to paragraph 5 or paragraph 6 hereof,

(each a “Series Reserved Matter”), the quorum will be one or more persons present holding Definitive Covered Bonds or voting certificates or being proxies or representatives and holding or representing in the aggregate not less than two-thirds of the Principal Amount Outstanding of the Covered Bonds of such Series for the time being outstanding.

6. If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after the time appointed for any such meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the meeting will if convened upon the requisition of Covered Bondholders be dissolved. In any other case it will stand adjourned to the same day in the next week (or if such day is a public holiday the next succeeding business day) at the same time and place (except in the case of a meeting at which an Extraordinary Resolution is to be proposed in which case it will stand adjourned for such period, being not less than 13 clear days nor more than 42 clear days, and to such place as may be appointed by the Chairman either at or subsequent to such meeting and approved by the Bond Trustee). If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after the time appointed for any adjourned meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the Chairman may either (with the approval of the Bond Trustee) dissolve such meeting or adjourn the same for such period, being not less than 13 clear days (but without any maximum number of clear days), and to such place as may be appointed by the Chairman either at or subsequent to such adjourned meeting and approved by the Bond Trustee, and the provisions of this sentence will apply to all further adjourned such meetings. At any adjourned meeting one or more persons present holding Bearer Definitive Covered Bonds or voting certificates or being proxies or representatives (whatever the nominal amount of the Bearer Covered Bonds of the relevant Series so held or represented by them) will (subject as provided below) form a quorum and will have power to pass any Extraordinary Resolution, Program Resolution or other resolution and to decide upon all matters which could properly have been dealt

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with at the meeting from which the adjournment took place had the requisite quorum been present PROVIDED THAT at any adjourned meeting the quorum for the transaction of business comprising any Series Reserved Matter will be one or more persons present holding Bearer Definitive Covered Bonds or voting certificates or being proxies and holding or representing in the aggregate not less than one-third of the Principal Amount Outstanding of the Bearer Covered Bonds of the relevant Series for the time being outstanding.

Notice of any adjourned meeting at which an Extraordinary Resolution is to be submitted will be given in the same manner as notice of an original meeting but as if 10 were substituted for 21 in paragraph 2 above and such notice will state the relevant quorum. Subject as aforesaid it will not be necessary to give any notice of an adjourned meeting.

7. Every question submitted to a meeting will be decided in the first instance by a show of hands and in case of equality of votes the Chairman will both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as a Covered Bondholder or as a holder of a voting certificate or as a proxy or as a representative.

8. At any meeting unless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman, the Issuer, the Guarantor, the Bond Trustee or any person present holding a Definitive Covered Bond or a voting certificate or being a proxy or representative (whatever the Principal Amount Outstanding of the Covered Bonds so held or represented by him) a declaration by the Chairman that a resolution has been carried or carried by a particular majority or lost or not carried by a particular majority will be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

9. Subject to paragraph 10 below, if at any such meeting a poll is so demanded it will be taken in such manner and subject as hereinafter provided either at once or after an adjournment as the Chairman directs and the result of such poll will be deemed to be the resolution of the meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll will not prevent the continuance of the meeting for the transaction of any business other than the motion on which the poll has been demanded.

10. The Chairman may with the consent of (and will if directed by) any such meeting adjourn the same from time to time and from place to place but no business will be transacted at any adjourned meeting except business which might lawfully (but for lack of required quorum) have been transacted at the meeting from which the adjournment took place.

11. Any poll demanded at any such meeting on the election of a Chairman or on any question of adjournment will be taken at the meeting without adjournment.

12. The Bond Trustee and its lawyers and any director, officer or employee of a corporation being a bond trustee of the Trust Deed and any director or officer of the Issuer or, as the case may be, the Guarantor and any of their lawyers and any other person authorized so to do by the Bond Trustee may attend and speak at any meeting. Save as aforesaid, but without prejudice to the proviso to the definition of “outstanding” as set out in the Master Definitions and Construction Agreement, no person will be entitled to attend and speak nor will any person be entitled to vote at any meeting of Covered Bondholders or

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join with others in requesting the convening of such a meeting or to exercise the rights conferred on Covered Bondholders by Condition 9 (Events of Default, Acceleration and Enforcement) unless he either produces the Bearer Definitive Covered Bond or Bearer Definitive Covered Bonds of which he is the holder or a voting certificate or is a proxy or a representative or is the holder of a Registered Definitive Covered Bond or Registered Definitive Covered Bonds. No person will be entitled to vote at any meeting in respect of Covered Bonds held by, for the benefit of, or on behalf of, the Issuer or the Guarantor. Nothing herein will prevent any of the proxies named in any block voting instruction or form of proxy or any representative from being a director, officer or representative of or otherwise connected with the Issuer or the Guarantor.

13. Subject as provided in paragraph 11 hereof at any meeting:

(a) on a show of hands every person who is present in person and produces a Bearer Definitive Covered Bond or voting certificate or is a holder of a Registered Definitive Covered Bond or is a proxy or representative will have one vote; and

(b) on a poll every person who is so present will have one vote in respect of each $1,000 Canadian Dollars or such other amount as the Bond Trustee may in its absolute discretion stipulate (or, in the case of meetings of holders of Covered Bonds denominated in another currency, such amount in such other currency as the Bond Trustee in its absolute discretion may stipulate) in the Principal Amount Outstanding of the Bearer Definitive Covered Bonds so produced or represented by the voting certificate so produced or in respect of which he is a proxy or representative or in respect of which (being a Registered Definitive Covered Bond) he is a registered holder.

Without prejudice to the obligations of the proxies named in any block voting instruction or form of proxy and representatives any person entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way.

14. The proxies named in any block voting instruction or form of proxy and representatives need not be Covered Bondholders.

15. Each block voting instruction together (if so requested by the Bond Trustee) with proof satisfactory to the Bond Trustee of its due execution on behalf of the relevant Paying Agent and each form of proxy will be deposited by the relevant Paying Agent or (as the case may be) by the Registrar or the relevant Transfer Agent at such place as the Bond Trustee will approve not less than 24 hours before the time appointed for holding the meeting or adjourned meeting at which the proxies named in the block voting instruction or form of proxy propose to vote and in default the block voting instruction or form of proxy will not be treated as valid unless the Chairman of the meeting decides otherwise before such meeting or adjourned meeting proceeds to business. A copy of each block voting instruction and form of proxy will (if the Bond Trustee so requires) be deposited with the Bond Trustee before the commencement of the meeting or adjourned meeting but the Bond Trustee will not thereby be obliged to investigate or be concerned with the validity of or the authority of the proxies named in any such block voting instruction or form of proxy.

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16. Any vote given in accordance with the terms of a block voting instruction or form of proxy will be valid notwithstanding the previous revocation or amendment of the block voting instruction or form of proxy or of any of the relevant Covered Bondholders’ instructions pursuant to which it was executed PROVIDED THAT no intimation in writing of such revocation or amendment will have been received from the relevant Paying Agent or in the case of a Registered Covered Bond from the holder thereof by the Issuer at its registered office (or such other place as may have been required or approved by the Bond Trustee for the purpose) by the time being 24 hours and 48 hours respectively before the time appointed for holding the meeting or adjourned meeting at which the block voting instruction or form of proxy is to be used.

17. A meeting of the Covered Bondholders will in addition to the powers hereinbefore given have the following powers exercisable only by Extraordinary Resolution (subject to the provisions relating to quorum and Series Reserved Matters contained in paragraphs 5 and 6 above) namely:

(a) Power to sanction any compromise or arrangement proposed to be made between the Issuer, the Guarantor, the Bond Trustee, any Appointee and the Covered Bondholders and Couponholders or any of them.

(b) Power to sanction any abrogation, modification, compromise or arrangement in respect of the rights of the Bond Trustee, any Appointee, the Covered Bondholders, the Couponholders, or the Issuer or the Guarantor or against any other or others of them or against any of their property whether such rights will arise under the Trust Deed or the other Transaction Documents or otherwise.

(c) Power to assent to any modification of the provisions of the Trust Deed or the other Transaction Documents which will be proposed by the Issuer, the Guarantor, the Bond Trustee or any Covered Bondholder.

(d) Power to give any authority or sanction which under the provisions of the Trust Deed is required to be given by Extraordinary Resolution.

(e) Power to appoint any Persons (whether Covered Bondholders or not) as a committee or committees to represent the interests of the Covered Bondholders and to confer upon such committee or committees any powers or discretions which the Covered Bondholders could themselves exercise by Extraordinary Resolution.

(f) Power to approve of a Person to be appointed a trustee and power to remove any trustee or trustees for the time being of the Trust Deed and/or the Security Agreement.

(g) Power to discharge or exonerate the Bond Trustee and/or any Appointee from all liability in respect of any act or omission for which the Bond Trustee and/or such Appointee may have become responsible under the Trust Deed and/or the Security Agreement.

- 9 -

(h) Power to Authorize the Bond Trustee and/or any Appointee to concur in and execute and do all such deeds, instruments, acts and things as may be necessary to carry out and give effect to any Extraordinary Resolution.

(i) Power to sanction any scheme or proposal for the exchange or sale of the Covered Bonds for or the conversion of the Covered Bonds into or the cancellation of the Covered Bonds in consideration of shares, stock, covered bonds, bonds, debentures, debenture stock and/or other obligations and/or securities of the Issuer or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, bonds, covered bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash and for the appointment of some person with power on behalf of the Covered Bondholders to execute an instrument of transfer of the Registered Covered Bonds held by them in favour of the persons with or to whom the Covered Bonds are to be exchanged or sold respectively.

18. Any resolution passed at a meeting of the Covered Bondholders duly convened and held in accordance with the Trust Deed will be binding upon all the Covered Bondholders whether present or not present at such meeting and whether or not voting and upon all Couponholders and each of them will be bound to give effect thereto accordingly and the passing of any such resolution will be conclusive evidence that the circumstances justify the passing thereof. Notice of the result of the voting on any resolution duly considered by the Covered Bondholders will be published in accordance with Condition 13 (Notices) by the Issuer within 14 days of such result being known PROVIDED THAT the non-publication of such notice will not invalidate such result.

19. The expression “Extraordinary Resolution” when used in the Trust Deed means (a) a resolution passed at a meeting of the Covered Bondholders duly convened and held in accordance with the Trust Deed by a majority consisting of not less than three-fourths of the Persons voting thereat upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll; or (b) a resolution in writing signed by or on behalf of Covered Bondholders holding not less than 75 per cent. in Principal Amount Outstanding of the Covered Bonds, which resolution in writing may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the Covered Bondholders.

20. Minutes of all resolutions and proceedings at every meeting of the Covered Bondholders will be made and entered in books to be from time to time provided for that purpose by the Issuer and any such minutes as aforesaid if purporting to be signed by the Chairman of the meeting at which such resolutions were passed or proceedings transacted will be conclusive evidence of the matters therein contained and until the contrary is proved every such meeting in respect of the proceedings of which minutes have been made will be deemed to have been duly held and convened and all resolutions passed or proceedings transacted thereat to have been duly passed or transacted.

21. (a) If and whenever the Issuer will have issued and have outstanding Covered Bonds of more than one Series the foregoing provisions of this Schedule will have effect subject to the following modifications:

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(i) a resolution which in the opinion of the Bond Trustee affects the Covered Bonds of only one Series will be deemed to have been duly passed if passed at a separate meeting of the Covered Bondholders of that Series;

(ii) a resolution which in the opinion of the Bond Trustee affects the Covered Bonds of more than one Series but does not give rise to a conflict of interest between the Covered Bondholders of any of the Series so affected will be deemed to have been duly passed if passed at a single meeting of the Covered Bondholders of all the Series so affected;

(iii) a resolution which in the opinion of the Bond Trustee affects the Covered Bonds of more than one Series and gives or may give rise to a conflict of interest between the Covered Bondholders of one Series or group of Series so affected and the Covered Bondholders of another Series or group of Series so affected will be deemed to have been duly passed only if passed at separate meetings of the Covered Bondholders of each Series or group of Series so affected;

(iv) a Program Resolution will be deemed to have been duly passed only if passed at a single meeting of the Covered Bondholders of all Series; and

(v) to all such meetings all the preceding provisions of this Schedule will mutatis mutandis apply as though references therein to Covered Bonds and Covered Bondholders were references to the Covered Bonds of the Series or group of Series in question or to the holders of such Covered Bonds, as the case may be.

(b) If the Issuer will have issued and have outstanding Covered Bonds which are not denominated in Canadian Dollars in the case of any meeting or request in writing or written resolution of holders of Covered Bonds of more than one currency (whether in respect of the meeting or any adjourned such meeting or any poll resulting therefrom or any such request or written resolution) the Principal Amount Outstanding of such Covered Bonds will be the equivalent in Canadian Dollars at the relevant Covered Bond Swap Rate. In such circumstances, on any poll each person present will have one vote for each $1,000 Canadian Dollars (or such other Canadian Dollars amount as the Bond Trustee may in its absolute discretion stipulate) of the Principal Amount Outstanding of the Covered Bonds (converted as above) which he holds or represents.

22. Subject to all other provisions of the Trust Deed the Bond Trustee may without the consent of the Issuer, the Guarantor, the Covered Bondholders or the Couponholders prescribe such further regulations regarding the requisitioning and/or the holding of meetings of Covered Bondholders and attendance and voting thereat as the Bond Trustee may in its sole discretion think fit.

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SCHEDULE 6

FORM OF GUARANTOR’S CERTIFICATE

To: —

For the attention of [    ]

[Date]

Dear Sirs,

[Description of Notes]

This certificate is given to you in your capacity as Bond Trustee under the Trust Deed (as defined below) in accordance with Section 15.1 (Covenants) of the Trust Deed dated as of September 30, 2013, as amended and/or supplemented and/or restated from time to time (the “Trust Deed”), and made between Bank of Montreal (the “Issuer”), BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”) and Computershare Trust Company of Canada (the “Trustee”). All words and expressions defined in the Trust Deed will (save as otherwise provided herein or unless the context otherwise requires) have the same meanings herein.

We hereby certify to you in your capacity as aforesaid that:

(a) [as at [    ]¹, no Issuer Event of Default or Potential Issuer Event of Default existed [other than [    ]] and no Issuer Event of Default or Potential Issuer Event of Default had existed at any time since [    ]² [the certification date of the previous certificate delivered under Section 15.1 (Covenants)³ [other than [    ]]⁴; and]

(b) as at [    ] no Guarantor Event of Default or Potential Guarantor Event of Default existed [other than [    ]] and No Guarantor Event of Default or Potential Guarantor Event of Default had existed at any time since [    ] ² [the certification date of the previous certificate delivered under Section 15.1 (Covenants)³ [other than [    ]] ⁴; and]

(c) [from and including [    ] [the certification date of the previous certificate delivered under Section 15.1 (Covenants) to and including [    ], [the Issuer] [the Guarantor] [the Guarantor]⁵ has complied with all its obligations under the Trust Deed [other than [    ]]⁶.]

……………………………….	……………………………….
Officer	Officer

¹  Specify a date not more than 7 days before the date of delivery of the certificate.

²  Insert date of Trust Deed in respect of the first certificate delivered under Section 15(l), otherwise delete.

³  Include unless the certificate is the first certificate delivered under Section 15.1 (Covenants), in which case delete.

⁴  If any event of default of potential event of default did exist, give details, otherwise delete.

⁵  Delete as appropriate.

⁶  If the Issuer [and/or Guarantor] has failed to comply with any such obligation(s), give details; otherwise delete.

EX-4.2

Exhibit 4.2

MASTER DEFINITIONS AND CONSTRUCTION AGREEMENT

SEPTEMBER 30, 2013

BANK OF MONTREAL

and

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

and

COMPUTERSHARE TRUST COMPANY OF CANADA

and

THE BANK OF NEW YORK MELLON

and

KPMG LLP

and

BMO COVERED BOND GP, INC.

and

8429065 CANADA INC.

and

ROYAL BANK OF CANADA

CONTENTS

Section		Page
1.	DEFINITIONS		1
2.	INTERPRETATION AND CONSTRUCTION		57
3.	RATING AGENCY CONDITION		59
4.	AMENDMENTS		60
5.	GOVERNING LAW		60
6.	LIABILITY OF LIMITED PARTNERS		61

THIS MASTER DEFINITIONS AND CONSTRUCTION AGREEMENT dated on September 30, 2013

(1) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada) (in its capacity as Issuer, Seller, Servicer, Cash Manager, Intercompany Loan Provider, Account Bank, Interest Rate Swap Provider and GDA Provider);

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. (in its capacity as the Guarantor));

(3) THE BANK OF NEW YORK MELLON, a New York banking corporation (in its capacity as Principal Paying Agent, an Exchange Agent, a Registrar and Transfer Agent);

(4) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada, (in its capacity as Bond Trustee and as Custodian);

(5) 8429065 CANADA INC., a corporation incorporated under the laws of Canada, in its capacity as Liquidation GP;

(6) BMO COVERED BOND GP, INC., a corporation incorporated under the laws of Canada, in its capacity as Managing GP;

(7) ROYAL BANK OF CANADA, a chartered bank under the Bank Act (Canada) (in its capacity as Stand-By Account Bank and Stand-By GDA Provider); and

(8) KPMG LLP (in its capacity as Cover Pool Monitor).

IT IS HEREBY AGREED as follows:

1. DEFINITIONS

24 hours (where referred to in Schedule 5 to the Trust Deed) has the meaning given to it in Schedule 5 to the Trust Deed;

48 hours (where referred to in Schedule 5 to the Trust Deed) has the meaning given to it in Schedule 5 to the Trust Deed;

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

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

€, Euro or euro means the lawful currency for the time being of the Member States of the European Union that have adopted or may adopt the single currency introduced at the start of the third stage of European Economic Monetary Union pursuant to the Treaty of Rome of 25th March, 1957, as amended by, inter alia, the Single European Act of 1986 and the Treaty of European Union of 7th February, 1992 and the Treaty of Amsterdam of 2nd October, 1997 establishing the European Community;

£, Sterling or sterling means the lawful currency for the time being of the United Kingdom of Great Britain and Northern Ireland;

1

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

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

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

Account Bank means BMO, acting through its office at 1 First Canadian Place, 100 King Street West, Toronto, Canada and any other financial institution which accedes to the Bank Account Agreement as an Account Bank;

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

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

Accrual Period means, in accordance with Condition 4.5(c)(i) (Business Day, Business Day Convention, Day Count Fractions and other adjustments ) of the Terms and Conditions, the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date;

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

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

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

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

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

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

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

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

2

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

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

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

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

Adverse Claim means a lien, security interest or other charge, encumbrance or claim, or any other type of preferential arrangement, it being understood that a lien, security interest or other charge, encumbrance or claim on any mortgaged property subject to any Loan, which, in the reasonable opinion of the Seller does not impair the marketability of such mortgaged property shall not constitute an Adverse Claim;

Affiliate or affiliate means any company which is for the time being an affiliate (within the meaning of the Securities Act (Ontario));

Agency Agreement means the agency agreement dated the Program Date and made between the Issuer, the Guarantor, the Bond Trustee, the Principal Paying Agent, the Exchange Agent, the Registrar and the Transfer Agent;

Agents means the Paying Agents, the Registrar, the Exchange Agent, the Transfer Agents and any Calculation Agent;

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

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

Amortization Test has the meaning given in Schedule 3 (Amortization Test) to the Guarantor Agreement;

Amortised Face Amount has the meaning given to it in Condition 6.7(b) (Redemption and Purchase – Early Redemption Amounts) of the Terms and Conditions;

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

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

3

Applicable Time means a time prior to the Time of Sale such that the Dealer(s) can convey the Final Terms Document of the Covered Bonds to the purchasers thereof at or prior to the Time of Sale;

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

Arrangers means Bank of Montreal, London Branch and Barclays Capital Inc.;

in Arrears or in arrears means, in respect of a Loan, that one or more Monthly Payments in respect of such Loan have become due and remain unpaid by a Borrower;

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

Asset Coverage Test has the meaning given to it Schedule 2 (Asset Coverage Test) to the Guarantor Agreement;

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

Asset Percentage has the meaning given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement;

Asset Percentage Adjusted Loan Balance has the meaning given in Schedule 2 (Asset Coverage Test) to the Guarantor Agreement;

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

Authorized Signatory means:

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

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

(c) in all other cases, an officer of the Issuer, or the Guarantor, or such other person appointed by the Issuer or the Guarantor to act as an authorized signatory, in each case as specified in the list of authorized signatories (as amended from time to time) sent to the Bond Trustee pursuant to Section 15.1(f) of the Trust Deed

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

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

4

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

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

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

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

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

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

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

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

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

less

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

Average Fixed Rate Loan Balances has the meaning given to it in the Interest Rate Swap Agreement;

Average Variable Rate Loan Balances has the meaning given to it in the Interest Rate Swap Agreement;

5

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

Bank Act means the Bank Act (Canada);

Banking Act means the Financial Services Act and Legislative Decree No. 385 of 1 September 1993 of the Republic of Italy;

Bearer Covered Bonds means Covered Bonds in bearer form;

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

Bearer Global Covered Bonds means Global Covered Bonds in bearer form, comprising Temporary Global Covered Bonds and Permanent Global Covered Bonds, substantially in the forms set out in Parts 1 and 2, respectively, of Schedule 2 to the Trust Deed;

Beneficial Owner means each actual purchaser of each Covered Bond;

block voting instruction has the meaning given to it in Schedule 5 to the Trust Deed;

BMO means Bank of Montreal, a chartered bank under the Bank Act (Canada), having its registered office at 129 rue Saint-Jacques, Montréal, Québec, Canada H2Y 1L6;

BMO Group means BMO and its Subsidiaries collectively;

BMO Prime Rate means the rate announced from time to time by BMO as its reference rate for the purpose of determining interest rates on Canadian dollar denominated commercial loans made by it in Canada and commonly referred to as its “prime” rate;

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

Borrower means, in relation to a Loan, each Person specified as such in the relevant Mortgage Conditions together with each Person (if any) from time to time assuming an obligation to repay such Loan or any part of it;

6

Business Day means a day which is both:

(a) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in London and any Additional Business Centre specified in the applicable Final Terms Document; and

(b) either (i) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (if other than London and any Additional Business Centre, or as otherwise specified in the applicable Final Terms Document or (ii) in relation to any sum payable in euro, a day on which the TARGET2 System is open;

Calculation Agency Agreement means, in relation to any Series of Covered Bonds, an agreement in or substantially in the form of Schedule 1 to the Agency Agreement;

Calculation Agent means, in relation to one or more Series of Variable Interest Covered Bonds, the person initially appointed as calculation agent in relation to such Covered Bonds by the Issuer and the Guarantor pursuant to the Agency Agreement or, if applicable, any successor calculation agent in relation to such Covered Bonds;

Calculation Amount, in relation to any Series of Covered Bonds has the meaning given to it in the applicable Final Terms Document;

Calculation Date means the last day of each month;

Calculation Period means the period from (and including) the first day of a month to (and including) the last day of that month, except that the first Calculation Period shall commence on (and include) the first Issue Date under the Program and end on (but exclude) the last day of that month, and the last Calculation Period shall commence on the first day of the month in which the last Series of Covered Bonds matures, and shall end on such maturity date;

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

Canadian Dollars, Canadian $ or cdn $ means the lawful currency for the time being of Canada;

Canadian Dollar Equivalent means in respect of any other amount in another currency, the amount of Canadian Dollars that could be purchased with such amount at the then prevailing spot rate of exchange;

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

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

7

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

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

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

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

(a) the Seller (or the Servicer on the Seller’s behalf) acting as a Reasonable Prudent Mortgage Lender has, by arrangement with the relevant Borrower, agreed to capitalise such Arrears of Interest; and

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

Capitalized Expenses means, in relation to a Loan, the amount of any expense, charge, fee, premium or payment (excluding, however, any Arrears of Interest) capitalized and added to the principal amount outstanding in respect of such Loan in accordance with the relevant Mortgage Conditions;

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

Cash Capital Contributions means a Capital Contribution made in cash;

Cash Flow Model Calculation Date means the Calculation Date falling in March, June, September and December of each year (commencing on the Calculation Date falling in the first such month following the First Issue Date);

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

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

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

8

Cash Manager means BMO in its capacity as cash manager or any successor cash manager appointed from time to time;

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

Cash Manager Termination Event has the meaning given to it in Section 14.1 of the Cash Management Agreement;

CDOR means the Canadian Dollar Offer Rate;

CGCB means a Temporary Global Covered Bond in the form set out in Part 1 of Schedule 2 to the Trust Deed or a Permanent Global Covered Bond in the form set out in Part 2 of Schedule 2 to the Trust Deed, in either case where the applicable Final Terms Document specifies that the Covered Bonds are in CGCB form;

Charged Property means the Collateral charged by the Guarantor pursuant to the Security Agreement;

Clearing Systems means DTC, Euroclear and/or Clearstream, Luxembourg;

Clearstream, Luxembourg means Clearstream Banking, société anonyme or its successors;

Closing Bank means the closing bank agreed between the Issuer, the Guarantor, the Registrar, the Principal Paying Agent and the relevant Dealer pursuant to the Agency Agreement or, as the case may be, the Lead Manager to which the relevant Dealer or, as the case may be, the Lead Manager shall pay the net purchase moneys for an issue of Registered Covered Bonds;

CMHC means Canada Mortgage and Housing Corporation and its successors;

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

Code means the U.S. Internal Revenue Code of 1986;

Collateral has the meaning given in Section 2.01 of the Security Agreement;

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

Commencement Date means the date of this Agreement;

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Common Depositary means the common depositary for Euroclear and Clearstream, Luxembourg;

Common Safekeeper means Euroclear Bank SA/NV or any entity so determined pursuant to Section 2.8 of the Agency Agreement;

Companies Act means the Companies Act 1985 or the Companies Act 2006, as applicable, and any regulations made pursuant to those Acts;

Completion means the completion of the sale and purchase of the Initial Portfolio or a New Portfolio pursuant to and in accordance with Section 2 or Section 4, respectively, of the Mortgage Sale Agreement;

Confirmation Letter means:

(a) in respect of the appointment of a third party as a Dealer for the duration of the Program, the Confirmation Letter substantially in the form set out in [Part 2 of Appendix 3] of the Program Agreement; and

(b) in respect of the appointment of a third party as a Dealer for one or more particular issue(s) of Covered Bonds under the Program, the Confirmation Letter substantially in the form set out in [Part 4 of Appendix 3] of the Program Agreement;

Controlled Assets The meaning given to it in Section 3.01 of the Security Agreement;

Controlled Securities Account The meaning given to it in Section 2.06 of the Security Agreement;

Corporate Representations and Warranties means the representations and warranties set forth in Section 1 of Schedule 1 to the Mortgage Sale Agreement;

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

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

Coupon means an interest coupon appertaining to a Bearer Definitive Covered Bond (other than a Zero Coupon Covered Bond), such coupon being:

(a) if appertaining to a Fixed Rate Covered Bond, substantially in the form set out in Part 4A of Schedule 2 to the Trust Deed or in such other form, having regard to the terms of issue of the Covered Bonds of the relevant Series, as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s); or

(b) if appertaining to a Floating Rate Covered Bond or an Index Linked Interest Covered Bond, substantially in the form set out in Part 4B of Schedule 2 to the Trust Deed or in such other form, having regard to the terms of issue of the Covered Bonds of the relevant Series, as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s); or

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(c) if appertaining to a Bearer Definitive Covered Bond which is neither a Fixed Rate Covered Bond nor a Floating Rate Covered Bond nor an Index Linked Interest Covered Bond, in such form as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s);

Couponholders means the holders of the Coupons (which expression shall, unless the context otherwise requires, include the holders of the Talons);

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

Cover Pool Monitor Agreement means the Cover Pool Monitor Agreement entered into on the Program Date between the Cover Pool Monitor, the Guarantor, the Cash Manager, the Issuer and the Bond Trustee;

Cover Pool Monitor Fee has the meaning given in Section 6.1 of the Cover Pool Monitor Agreement;

Cover Pool Monitor Payment Date has the meaning given in Section 6.1 (Cover Pool Monitor Payment Date) of the Cover Pool Monitor Agreement;

Covered Bond means each covered bond issued or to be issued pursuant to the Program Agreement and which is or is to be constituted under the Trust Deed, which covered bond may be represented by a Global Covered Bond or any Definitive Covered Bond and includes any replacements for a Covered Bond issued pursuant to Condition 6 (Redemption and Purchase) and Condition 10 (Replacement of Covered Bonds, Receipts, Coupons and Talons) of the Terms and Conditions;

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

Covered Bond Guarantee Activation Date means the earlier to occur of (i) an Issuer Event of Default, together with the service of an Issuer Acceleration Notice on the Issuer and the service of a Notice to Pay on the Guarantor; and (ii) a Guarantor Event of Default, together with the service of a Guarantor Acceleration Notice on the Issuer and on the Guarantor (and each a Covered Bond Guarantee Activation Event as the context requires);

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

Covered Bond Swap means a Forward Starting Covered Bond Swap or a Non-Forward Starting Covered Bond Swap;

Covered Bond Swap Agreement means each Forward Starting Covered Bond Swap Agreement and each Non-Forward Starting Covered Bond Swap Agreement;

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

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

Covered Bond Swap Provider means each provider of a Covered Bond Swap under a Covered Bond Swap Agreement;

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

Covered Bondholders means the holders of outstanding Covered Bonds at any time;

Credit and Collection Policy means the customary credit and collection policies and practices of the Seller, or as applicable, the relevant Originator, relating to the granting of credit on the security of Loans and the collection and enforcement of Loans, as in effect on the date on the Program Date, as modified in compliance with the Mortgage Sale Agreement from time to time;

Credit Linked Interest Covered Bonds means Covered Bonds in respect of which payments of interest will be calculated by reference to the creditworthiness of, performance of obligations by or some other factor relating to one or more Reference Entities, as set out in the applicable Final Terms Document;

Custodial Information means collectively, the Eligible Loan Details and the Substitution Asset Details with respect to the Loans and Related Security and Substitution Assets in the Portfolio;

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

Customer Files means, with respect to any Loan, (a) the original fully executed copy of the document(s) evidencing the Loan and the Mortgage, (b) the duplicate registered Mortgage evidencing and securing such Loan bearing a certificate of registration from the applicable land registry office, land titles office or similar place of public record in which the related Mortgage is registered together with the promissory note, if any, evidencing such Loan fully executed by the Borrower, (c) fully executed copies of the other loan and/or security agreements, if any, securing the Mortgage, fully executed by the Borrower, (d) a record or facsimile of the original credit application fully executed by the Borrower and all other credit information obtained by the Seller or the relevant Originator in connection with the Loan and the related Borrower, (e) the solicitor’s or notary’s report of title or title insurance policy obtained by the Seller or the relevant Originator in connection with the initial advance of the Loan together with the survey on certificate of location relied upon by the solicitor or notary or title insurance company in issuing his or its report or title insurance policy, (f) the most recent Valuation Report of the related mortgaged property obtained by the Seller or the relevant Originator in accordance with the Credit and Collection Policy, (g) the insurance policy or certificate of insurance evidencing the Borrower’s insurance against fire and other standard risks showing the Seller or the relevant Originator as first mortgagee and loss payee and containing a standard mortgage endorsement, and (h) any and all other documents that the Servicer or the Seller or the relevant Originator shall keep on file relating to such Loan;

Day Count Fraction, in the case of a Fixed Rate Covered Bond, has the meaning given in Condition 4.1 (Interest – Interest on Fixed Rate Covered Bonds) of the Terms and Conditions and in the case of a Floating Rate Covered Bond, has the meaning given in Condition 4.2 (Interest – Interest on Floating Rate Covered Bonds and Index Linked Interest Covered Bonds) of the Terms and Conditions;

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DBRS means DBRS Limited and its successors;

Dealer Accession Letter means:

(a) in respect of the appointment of a third party as a Dealer for the duration of the Program or until terminated by the Issuer, the Dealer Accession Letter substantially in the form set out in the Program Agreement; and

(b) in respect of the appointment of a third party as a Dealer for one or more particular issue(s) of Covered Bonds under the Program, the Dealer Accession Letter substantially in the form set out in the Program Agreement;

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

Dealership Agreement means the Dealership Agreement entered into on or after the Program Date between the Issuer, the Guarantor and the Dealers (as amended and/or supplemented and/or restated from time to time);

Defaulted Covered Bond has the meaning given in Section 6.8 of the Agency Agreement;

Declaration has the meaning given in the recitals to the Guarantor Agreement;

Defaulted Loan means any Loan in the Portfolio in respect of which there remains unpaid, in whole or in part, any regularly scheduled amount for any period of at least 90 consecutive days from the due date of such amount;

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

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

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

Definitive U.S. Registered Covered Bond means a Registered Covered Bond in definitive form issued under the U.S. Registration Statement;

Delinquent Loan means any Loan, other than a Defaulted Loan, (i) in respect of which there remains unpaid, in whole or in part, any regularly scheduled amount for any period of at least 30 consecutive days from the due date of such amount, or (ii) that has been, or in accordance with the Credit and Collection Policy, should be, classified as delinquent;

Demand Loan has the meaning given to it in Section 7.2(b) of the Intercompany Loan Agreement;

Demand Loan Contingent Amount means an amount equal to the lesser of: (a) the aggregate amount of the Intercompany Loan then outstanding, minus the aggregate amount of the Guarantee

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Loan then outstanding (as determined by an Asset Coverage Test run on the relevant repayment date); and (b) 1 per cent. of the amount of the Guarantee Loan then outstanding (as determined by an Asset Coverage Test run on the relevant repayment date), provided, for greater certainty, that in calculating the amount of the Guarantee Loan and the Demand Loan for purposes of determining the Demand Loan Contingent Amount, no credit shall be given to the Guarantor in the Asset Coverage Test for any Excess Proceeds received by the Guarantor from the Bond Trustee;

Demand Loan Repayment Event has the meaning given to it in Section 7.2 of the Intercompany Loan Agreement;

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

Departing Managing GP has the meaning given to it in Section 11.4 of the Guarantor Agreement;

Designated Account has the meaning given to it in Condition 5.4 (Payments – Payments in respect of Registered Covered Bonds) of the Terms and Conditions;

Designated Bank has the meaning given to it in Condition 5.4 (Payments – Payments in respect of Registered Covered Bonds) of the Terms and Conditions;

Designated Maturity has the meaning given to it in the ISDA Definitions;

Determination Date has the meaning given to it in the applicable Final Terms Document;

Determination Period has the meaning given to it in Condition 4.5(d) (Interest – Business Day, Business Day Convention, Day Count Fractions and other adjustments) of the Terms and Conditions;

Direct Participants means direct participants in DTC;

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

Distribution Compliance Period means the period that ends 40 days after the later of the commencement of the offering and the Issue Date;

Downgrade Trigger Event means, for a Covered Bond Swap Agreement or an Interest Rate Swap Agreement, an “Initial Rating Event” or a “Subsequent Rating Event”, in each case as defined therein;

Drawdown Date has the meaning given to it in Section 2.1 of the Intercompany Loan Agreement;

DTC means The Depository Trust Company or its successors;

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

DTCC means The Depository Trust & Clearing Corporation or its successors;

Dual Currency Interest Covered Bond means a Covered Bond in respect of which payments of interest will be made in such currencies, and based on such rates of exchange, as the Issuer and the relevant Dealer(s) may agree, such currencies and rates of exchange to be specified in the applicable Final Terms Document;

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Due for Payment means the requirement by the Guarantor to pay any Guaranteed Amounts following the delivery of a Notice to Pay on the Guarantor:

(i) prior to the occurrence of a Guarantor Event of Default, on the later of:

(a) the date on which the Scheduled Payment Date in respect of such Guaranteed Amounts is reached, or, if later, the day which is two Business Days following service of a Notice to Pay on the Guarantor in respect of such Guaranteed Amounts or if the applicable Final Terms Document specified that an Extended Due for Payment Date is applicable to the relevant Series of Covered Bonds, the Interest Payment Date that would have applied if the maturity date of the such Series of Covered Bonds had been the Extended Due for Payment Date (the Original Due for Payment Date); and

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

or, if, in either case, such day is not a Business Day, the next following Business Day. For the avoidance of doubt, Due for Payment does not refer to any earlier date upon which payment of any Guaranteed Amounts may become due under the guaranteed obligations, by reason of prepayment, acceleration of maturity, mandatory or optional redemption or otherwise; or

(ii) following the occurrence of a Guarantor Event of Default, the date on which an Guarantor Acceleration Notice is served on the Issuer and the Guarantor;

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

Early Redemption Amount has the meaning given to it in the applicable Final Terms Document;

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Eligibility Criteria means the following criteria:

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

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

(c) no Loan that is proposed to be sold to the Guarantor on the relevant Purchase Date has an Outstanding Principal Balance of more than $3,000,000.00;

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

(e) such Loan is not secured by a Mortgage that also secures one or more other loans that has the benefit of insurance from any Prohibited Insurer;

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

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

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

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

(j) at the time of transfer, the Guarantor will acquire the entire legal and beneficial ownership interest of the Seller in the applicable Loans and their Related Security, excluding registered title therein, free and clear of any encumbrances or ownership interests, other than (i) Permitted Security Interests, and (ii) Security Interests that are reflected in a Security Sharing Agreement and the subject of a release in favour of the Guarantor, in each case that complies with the CMHC Guide;

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

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

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

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

(o) as at the Purchase Date, immediately prior to the transfer by the Seller to the Guarantor of such Loan and the Related Security, such Loan, the Related Security and each Related Retained Loan, if any, are owned or beneficially owned by the Seller; and

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

Eligible Loan means a Loan with respect to which each of the Loan Representations and Warranties is correct;

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

(a) the Seller’s loan number;

(b) mortgagor(s) full name;

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

(d) principal balance amount;

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

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

(g) mortgage maturity date; and

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

EMU means the European Monetary Union;

Encumbrance has the same meaning as Adverse Claim;

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

Equity Linked Interest Covered Bonds means Covered Bonds in respect of which payments of interest will be calculated by reference to the price, value, performance or some other factor relating to one or more Reference Assets, as set out in the applicable Final Terms Document;

Established Rate means the rate for the conversion of the relevant Specified Currency (including compliance with rules relating to roundings in accordance with applicable European Community regulations) into euro established by the Council of the European Union pursuant to Article 123 of the Treaty;

EU means the European Union;

EURIBOR means the Euro-zone inter-bank offered rate;

Euro Equivalent means in respect of any other amount in another currency, the amount of Euros that could be purchased with such amount at the then prevailing spot rate of exchange;

Euroclear means Euroclear Bank S.A./N.V., or its successors;

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

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

Exchange Act means the U.S. Securities Exchange Act of 1934, as amended;

Exchange Agent means Bank of New York Mellon in its capacity as exchange agent (which expression shall include any successor exchange agent);

Exchange Date means the date on or after the date which is 40 days after a Temporary Global Covered Bond is issued;

Exchange Event means (i) in the case of Bearer Covered Bonds, (a) the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available or (b) the Issuer has or will become subject to adverse Tax consequences which would not be suffered were the Bearer Global Covered Bond (and any interests therein) exchanged for Bearer Definitive Covered Bonds and (ii) in the case of Registered Covered Bonds, (a) in the case of Registered Covered Bonds registered in the name of DTC or its nominee, either DTC has notified the Issuer that it is unwilling or unable to continue to act as depository for the Covered Bonds and no alternative clearing system is available or DTC has ceased to constitute a clearing agency registered under the Exchange Act, (b) in the case of Registered Covered Bonds registered in the name of the Common Depositary or its nominee, the Issuer has been notified that both Euroclear and

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Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available or (c) the Issuer has or will become subject to adverse Tax consequences which would not be suffered were the Registered Global Covered Bond (and any interests therein) exchanged for Registered Definitive Covered Bonds;

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

Extended Due for Payment Date means, in relation to any Series of Covered Bonds, the date, if any, specified as such in the applicable Final Terms Document to which the payment of all or (as applicable) part of the Final Redemption Amount payable on the Final Maturity Date will be deferred in the event that the Final Redemption Amount is not paid in full by the Extension Determination Date;

Extension Determination Date means, in respect of any Series of Covered Bonds, the date falling two Business Days after the expiry of seven days from (and including) the Final Maturity Date of such Series of Covered Bonds;

Extraordinary Resolution has the meaning given to it in paragraph 19 of Schedule 5 to the Trust Deed;

Facility means the loan facility made available by the Issuer to the Guarantor under the Intercompany Loan Agreement in an aggregate amount equal to the Total Credit Commitment;

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

FATCA has the meaning given in Condition 7 (Taxation);

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

FFI means a foreign financial institution as defined in the Code;

Financial Services Act means Legislative Decree No. 58 of 24th February, 1998 of the Republic of Italy;

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

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Final Redemption Amount means, in respect of a Series of Covered Bonds, the amount as specified in the applicable Final Terms Document;

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

Financial Instruments means cheques, bills of exchange or other similar instruments, whether negotiable or non-negotiable;

First Issue means the issuance by the Issuer of a Series of Covered Bonds for the first time pursuant to the Program;

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

First Purchase Date means the date on which the Initial Portfolio was sold to the Guarantor pursuant to the terms of the Mortgage Sale Agreement;

Fiscal Year means a fiscal year of the Partnership;

Fitch means Fitch Ratings Inc. or its successors;

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

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

Fixed Rate Loan means a Loan the interest rate on which is fixed at a specified rate at the time of its origination, and the initial term of up to ten years;

Fixed Guarantor Payment Period means the period from (and including) a Guarantor Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Guarantor Payment Date;

Floating Rate has the meaning given to it in the ISDA Definitions;

Floating Rate Convention has the meaning given to it in Condition 4.7(b)(i) (Interest – Business Day, Business Day Convention, Day Count Fractions and other adjustments) of the Terms and Conditions;

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

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

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

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

as set out in the applicable Final Terms Document;

Floating Rate Option has the meaning given to it in the ISDA Definitions;

Following Business Day Convention has the meaning given to it in Condition 4.7(b)(ii) (Interest – Business Day, Business Day Convention, Day Count Fractions and other adjustments) of the Terms and Conditions;

Forward Starting Covered Bond Swap Agreement means each agreement between the Guarantor and a Covered Bond Swap Provider in respect of a Series or Tranche, as applicable, of Covered Bonds which provides a hedge against certain interest rate, currency and/or other risks in respect of amounts received by the Guarantor under the Loans in the Portfolio and any relevant Interest Rate Swaps and amounts payable by the Guarantor under the Covered Bond Guarantee in respect of Covered Bonds (after service of a Notice to Pay) in the form of an ISDA Master Agreement, including a schedule, one or more confirmations and a credit support annex;

Framework means a comprehensive framework, the text of which was published by the Basel Committee on Banking Supervision in June 2004 under the title “International Convergence of Capital Measurement and Capital Standards: a Revised Framework – Comprehensive Version”;

FSA means the U.K. Financial Services Authority;

FSMA means the Financial Services and Markets Act 2000, as amended;

GDA Account means the account in the name of the Guarantor held with BMO and maintained subject to the terms of the Guaranteed Deposit Account Contract, the Bank Account Agreement, the Security Agreement and the Guarantor Agreement or such additional or replacement account (including the Stand-By GDA Account) as may be for the time being be in place pursuant to the Cash Management Agreement with the prior consent of the Bond Trustee and designated as such;

GDA Account Mandate means the bank account mandate between the Guarantor and the Account Bank relating to the operation of the GDA Account in or substantially in the form set out in Schedule 1 to the Bank Account Agreement;

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

GDA Provider means BMO in its capacity as GDA provider or any successor GDA provider appointed from time to time;

GDA Rate means the rate of interest accruing on the balance standing to the credit of the GDA Account equal to the annual rate of CDOR less 1.0% in respect of a Guarantor Payment Period;

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General Partners means the Managing GP and the Liquidation GP;

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

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

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

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

Guarantee Loan has the meaning given to it in Section 3.2 of the Intercompany Loan Agreement.

Guarantee Priorities of Payments has the meaning given to it in the Guarantor Agreement;

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

Guaranteed Deposit Account Contract or GDA means the guaranteed deposit account contract between the Guarantor, BMO (in its capacity as the GDA Provider), the Bond Trustee and the Cash Manager dated the Program Date;

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

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

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

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

Guarantor Agreement means the limited partnership agreement in respect of the Guarantor entered into on the Program Date by and among the Managing GP, the Liquidation GP, the Bond Trustee and the Bank as Limited Partner and any other parties who accede thereto in accordance with its terms (as amended and/or restated and/or supplemented from time to time);

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

Guarantor Event of Default has the meaning given to it in Condition 9.2 (Events of Default and Enforcement – Guarantor Events of Default) of the Terms and Conditions;

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

Guarantor Payment Date means the 12^th Canadian Business Day of each month following a Calculation Date;

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

Hard Bullet Covered Bond means any Covered Bond issued by the Issuer in respect of which the principal is due to be redeemed in full in one amount on the Final Maturity Date of that Covered Bond and which is identified as such in the applicable Final Terms Document;

ICSD means the International Central Securities Depository;

IFRS means International Financial Reporting Standards;

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

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

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

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

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

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

Index Linked Interest Covered Bonds means Covered Bonds in respect of which payments of interest will be calculated by reference to such index and/or formula or to changes in the prices of such securities or commodities or to such other factors as the Issuer and the relevant Dealer(s) may agree;

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

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

Industry Standard Sampling Size has the meaning given in Section 2.2(b) of the Cover Pool Monitor Agreement;

Initial Advance means, in respect of any Loan, the original principal amount advanced by the Seller including any retention(s) advanced to the relevant Borrower after completion of the Mortgage;

Initial Portfolio means the portfolio of Loans and their Related Security sold by the Seller to the Guarantor on the First Purchase Date pursuant to the Mortgage Sale Agreement;

Insolvency Event means, in respect of the Seller, the Servicer or the Cash Manager or any other Person, any impending or actual insolvency on the part of such Person, as evidenced by, but not limited to:

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

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

(c) the relevant entity makes a general assignment for the benefit of any of its creditors; or

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

Instalment Covered Bonds means Covered Bonds which will be redeemed in the Instalment Amounts and on the Instalment Dates specified in the applicable Final Terms Document;

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Intercompany Loan has the meaning given to it in Section 2.1 of the Intercompany Loan Agreement;

Intercompany Loan Agreement means the intercompany loan agreement entered into on the Program Date between the Intercompany Loan Provider, the Guarantor, the Cash Manager and the Bond Trustee documenting the Term Loan and the Demand Loan;

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

Intercompany Loan Provider means Bank of Montreal in its capacity as intercompany loan provider pursuant to the Intercompany Loan Agreement;

Interest Amount means the amount of interest payable on the Floating Rate Covered Bonds or Variable Interest Covered Bonds in respect of each Specified Denomination for the relevant Interest Period, as calculated in accordance with Condition 4.2(d);

Interest Commencement Date means, in the case of interest-bearing Covered Bonds, the date specified in the applicable Final Terms Document from (and including) which the relevant Covered Bonds start accruing interest;

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

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

Interest Period means, in accordance with Condition 4.7(e), the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date;

Interest Rate Swaps means the interest rate swap entered into in connection with each Series or Tranche of Covered Bonds under the terms of the Interest Rate Swap Agreement;

Interest Rate Swap Agreement means the agreement between the Guarantor, the Interest Rate Swap Provider and the Bond Trustee dated the Program Date governing the Interest Rate Swaps in the form of an ISDA Master Agreement, including a schedule, one or more confirmations and a credit support annex;

Interest Rate Swap Early Termination Event means a Termination Event or an Event of Default (each as defined in the Interest Rate Swap Agreement), excluding a Swap Provider Downgrade Event, pursuant to which the Non-defaulting Party or the party that is not the Affected Party (each as defined in the Interest Rate Swap Agreement), as applicable, may terminate the Interest Rate Swap Agreement;

Interest Rate Swap Provider means BMO in its capacity as interest rate swap provider under the Interest Rate Swap Agreement together with any successor interest rate swap provider;

Internal Revenue Code or Code means the U.S. Internal Revenue Code of 1986;

Investment Company Act means the U.S. Investment Company Act of 1940;

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

Investor Put has the meaning given to it in Condition 6.4 (Redemption at the option of the Covered Bondholders (“Investor Put”));

ISDA means the International Swaps and Derivatives Association, Inc.;

ISDA Definitions means the 2000 ISDA Definitions, as published by ISDA;

ISDA Master Agreement means the 1992 ISDA Master Agreement (Multicurrency – Cross Border), as published by ISDA;

ISDA Rate has the meaning given to it in Condition 4.2(b)(i) (Interest – Interest on Floating Rate Covered Bonds and Index Linked Interest Covered Bonds) of the Terms and Conditions;

Issue Date means each date on which the Issuer issues a Series or Tranche of Covered Bonds under the Program, as specified in the applicable Final Terms Document;

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

Issuer means Bank of Montreal, a chartered bank under the Bank Act, whose registered office is at 129 rue Saint-Jacques, Montréal, Québec, Canada H2Y 1L6;

Issuer Acceleration Notice has the meaning given to it in Condition 9.1 (Events of Default and Enforcement – Issuer Events of Default) of the Terms and Conditions;

Issuer Event of Default means any of the conditions, events or acts provided in Condition 9.1 (Events of Default and Enforcement – Issuer Events of Default) of the Terms and Conditions to be events upon the happening of which the Covered Bonds of each Series would, subject only to notice by the Bond Trustee as therein provided, become immediately due and payable as against the Issuer;

Latest Valuation means, in relation to any Property, the value given to that Property by the most recent Valuation Report addressed to the Seller or, as applicable, an Originator, or, if the LTV Ratio of such Loan was less than 60%, the purchase price of the property or current tax assessment, as applicable;

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

Lead Manager means, in relation to any Series or Tranche of Covered Bonds, the person named as the Lead Manager in the applicable Subscription Agreement or, when only one Dealer signs such Subscription Agreement, such Dealer;

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

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

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

Liability means any loss, damage, cost, charge, claim, demand, expense, judgment, decree, action, proceeding or other liability whatsoever (including, without limitation in respect of Taxes, duties, levies, imposts and other charges) and including any amounts in respect of, as applicable, GST, VAT or other Tax charged or chargeable in respect thereof and legal fees and expenses on a full indemnity basis;

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

LIBOR means London Interbank Offered Rate;

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

Liquidation GP means 8429065 Canada Inc., in its capacity as liquation general partner of the Guarantor together with any of its successors and any successor liquidation general partner appointed pursuant to the terms of the Guarantor Agreement;

Listing Agent means, in relation to any Covered Bonds which are, or are to be, listed, quoted and/or traded on or by a Stock Exchange other than the London Stock Exchange, the listing agent appointed by the Issuer from time to time for the purposes of liaising with that Stock Exchange;

Listing Particulars means, with regard to the issue of Covered Bonds to be listed, quoted and/or traded on or by a Stock Exchange, any listing particulars (including supplementary listing particulars) approved under the Prospectus Rules by the relevant authority:

(a) in accordance with the provisions of Section 75 of the FSMA (including any supplementary listing particulars published in accordance with the Program Agreement or otherwise) in the case of Covered Bonds which are, or are to be, listed on the London Stock Exchange; and/or

(b) in accordance with their equivalent in the case of Covered Bonds which are, or are to be, listed on a Stock Exchange other than the London Stock Exchange;

Loan means each mortgage loan referenced by its mortgage loan identifier number and comprising the aggregate of all principal sums, interest, costs, charges, expenses and other monies due or owing with respect to that mortgage loan under the relevant Mortgage Conditions by a Borrower on the security of a Mortgage from time to time outstanding or, as the context may require, the Borrower’s obligations in respect of the same;

Loan Interest Payment Date has the meaning given to it in the Intercompany Loan Agreement;

Loan Interest Period has the meaning given to it in the Intercompany Loan Agreement;

Loan Representations and Warranties means the representations and warranties set forth in Section 2 of Schedule 1 to the Mortgage Sale Agreement;

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Loan Repurchase Notice means a notice in substantially the form set out in Schedule 3 to the Mortgage Sale Agreement served by the Guarantor on the Seller in relation to the repurchase of Loans in the Portfolio by the Seller in accordance with the terms of the Mortgage Sale Agreement;

London Stock Exchange means the London Stock Exchange plc;

Long Maturity Covered Bond means a Fixed Rate Covered Bond (other than a Fixed Rate Covered Bond which on issue had a Talon attached) whose nominal amount on issue is less than the aggregate interest payable thereon provided that such Covered Bond shall cease to be a Long Maturity Covered Bond on the Interest Payment Date on which the aggregate amount of interest remaining to be paid after that date is less than the Principal Amount Outstanding of such Covered Bond;

Losses means all losses on the Loans;

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

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

LTV ratio or loan-to-value ratio or LTV means the ratio of the outstanding balance of a Loan to the value of the Property securing that Loan;

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

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

Mandate means the GDA Account Mandate and/or the Stand-By Transaction Account Mandate and/or the Stand-By GDA Account Mandate and/or the mandates in relation to each other Guarantor Account, as the case may be;

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

Market means the London Stock Exchange’s Regulated Market;

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

Master Definitions and Construction Agreement means this master definitions and construction agreement;

Material Adverse Effect means any effect (a) upon the business, operations, property or financial or other condition of the Seller or the Servicer (other than a successor Servicer), or (b) on the Portfolio, taken as a whole, which, in either case, could reasonably be expected to materially and adversely

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affect the interests of the Guarantor in the Portfolio, taken as a whole, the collectibility of the Loans, taken as a whole, the enforceability of the Portfolio, taken as a whole, or the Seller’s or the Servicer’s ability to perform its obligations under any Transaction Documents;

Member State means, at any time, a state that has joined the European Union from the time of its inception;

Modified Following Business Day Convention has the meaning given to it in Condition 4.7(b)(iii) (Interest—Business Day, Business Day Convention, Day Count Fractions and other adjustments) of the Terms and Conditions;

Month means a calendar month;

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

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

Moody’s means Moody’s Investors Service Limited or its successors;

Mortgage means the legal charge, standard security, mortgage, charge or hypothec securing a Loan;

Mortgage Pool means the Mortgages related to the Initial Portfolio or any New Portfolio sold by the Seller to the Guarantor on or subsequent to the First Purchase Date pursuant the Mortgage Sale Agreement;

Mortgage Sale Agreement means the mortgage sale agreement entered into on the Program Date and made between the Seller, the Servicer, the Cash Manager, the Guarantor, the Custodian and the Bond Trustee, and where the context so requires, including any New Mortgage Sale Agreement entered into from time to time between any New Seller, the Servicer, the Cash Manager, the Guarantor, the Custodian and the Bond Trustee;

Mortgage Conditions means all the terms and conditions applicable to a Loan;

Mortgagee means the person for the time being entitled to exercise the rights of the mortgagee under a Mortgage;

Negative Carry Factor has the meaning given to it in Schedule 2 or Schedule 3 of the Guarantor Agreement, as the context requires;

Negotiable Collateral means the Guarantor’s Collateral consisting of chattel paper, instruments, securities, investment property or negotiable documents of title;

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

New Company has the meaning given to it in Section 21.3 of the Trust Deed;

New Covered Bonds has the meaning given to it in Condition 6.12 (Redemption and Purchase—Legislative Exchange) of the Terms and Conditions;

New Dealer means any entity appointed as an additional Dealer in accordance with the Program Agreement;

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

New Loan Type means a new type of mortgage loan originated by the Seller or a New Seller, which the Seller or the New Seller intends to sell to the Guarantor, the terms and conditions of which are materially different (in the opinion of the Seller or the New Seller, acting reasonably) from any of the Loans or New Seller Loans in the Portfolio. For the avoidance of doubt, a mortgage loan will not constitute a New Loan Type if it differs from any of the Loans or New Seller Loans in the Portfolio solely due to it having different interest rates and/or interest periods and/or time periods for which it is subject to a fixed rate, capped rate or any other interest rate or the benefit of any discounts, cash-backs and/or rate guarantees. A home equity line of credit, commercial mortgage or a Loan originated by an Originator that is not the Seller will be a New Loan Type;

New Managing GP has the meaning given to it in Section 11.4 of the Guarantor Agreement;

New Mortgage Sale Agreement means any new mortgage sale agreement entered into between any New Seller, the Servicer, the Cash Manager, the Guarantor, the Custodian and the Bond Trustee, which shall be substantially in the same form and contain substantially the same provisions (provided that the Bond Trustee may agree variations to the representations and warranties in relation to the relevant New Seller Loans and their Related Security) as the Mortgage Sale Agreement;

New Portfolio means in each case the portfolio of New Loans and their Related Security (other than any New Loans and their Related Security which have been redeemed in full prior to the relevant Purchase Date or which do not otherwise comply with the terms of the Mortgage Sale Agreement as at the relevant Purchase Date), particulars of which are set out in the relevant New Portfolio Notice or in a document stored upon electronic media (including, but not limited to, a CD-ROM), and all right, title, interest and benefit of the Seller in and to:

(a) all payments of principal and interest (including, for the avoidance of doubt, all Accrued Interest, Arrears of Interest, Capitalized Interest, Capitalized Expenses and Capitalized Arrears) and other sums due or to become due in respect of such New Loans and their Related Security including, without limitation, the right to demand, sue for, recover and give receipts for all principal monies, interest and costs and the right to sue on all covenants and undertakings made or expressed to be made in favour of the Seller under the applicable Mortgage Conditions;

(b) subject where applicable to the subsisting rights of redemption of Borrowers, all collateral security for the repayment of the relevant New Loans;

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

(d) all the estate and interest in the relevant Properties vested in the Seller; and

(e) each Valuation Report and any right of action of the Seller against any solicitor, licensed conveyancer, qualified conveyancer, valuer or other person in connection with any report, valuation, opinion, certificate or other statement of fact or opinion given in connection with any relevant New Loan and its Related Security, or any part thereof or affecting the decision of the Seller to make or offer to make any relevant New Loan or part thereof;

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New Portfolio Notice means a notice in the form set out in Schedule 4 to the Mortgage Sale Agreement served in accordance with the terms of the Mortgage Sale Agreement;

New Secured Creditors means any person which becomes a Secured Creditor pursuant to and in accordance with the Security Agreement;

New Seller means any member of the BMO Group (other than BMO and any general partner of the Guarantor) that becomes a limited partner of the Guarantor and accedes to the relevant Transaction Documents in accordance with the terms thereof and sells New Seller Loans and their Related Security to the Guarantor in the future pursuant to a New Mortgage Sale Agreement;

New Seller Loans means Loans originated by a New Seller;

New Servicer means any entity appointed as a substitute servicer in accordance with the Servicing Agreement;

New Stand-By Bank Account Agreement has the meaning given to it in Section 4.1(g) of the Cash Management Agreement;

New Stand-By GDA Agreement has the meaning given to it in Section 4.1(g) of the Cash Management Agreement;

NGCB or New Global Covered Bond means a Temporary Global Covered Bond in the form set out in Part 1 of Schedule 2 to the Trust Deed or a Permanent Global Covered Bond in the form set out in Part 2 of Schedule 2 to the Trust Deed, in either case where the applicable Final Terms Document specifies that the Covered Bonds are in NGCB form;

NIPs means the Non-Investment Products Code;

Nominated Person has the meaning given in Section 3.7 of the Cover Pool Monitor Agreement;

Nominee has the meaning given to it in the Program Agreement;

Non-Compliance Notice has the meaning given in Section 3.4 of the Cover Pool Monitor Agreement;

Non-Forward Starting Covered Bond Swap Agreement means each agreement between the Guarantor and a Covered Bond Swap Provider governing any Covered Bond Swaps in respect of a Series or Tranche, as applicable, of Covered Bonds which provides a hedge against certain interest rate, currency and/or other risks in respect of amounts received by the Guarantor under the Loans in the Portfolio and any relevant Interest Rate Swaps and amounts payable by the Guarantor under the Intercompany Loan Agreement (prior to service of a Notice to Pay) and under the Covered Bond Guarantee in respect of Covered Bonds (after service of a Notice to Pay) in the form of an ISDA Master Agreement, including a schedule, one or more confirmations and a credit support annex;

Non-Performing Loan means a Loan that is 90 days or more in arrears;

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

Non-Resident means a non-resident of Canada as such term is defined in the Income Tax Act;

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notice means, in respect of notice to be given to Covered Bondholders, a notice validly given pursuant to Condition 14 (Notices) of the Terms and Conditions;

Notice to Pay has the meaning given to it in Condition 9.1 (Events of Default and Enforcement—Issuer Events of Default) of the Terms and Conditions and is substantially in the form set out in Schedule 4 to the Trust Deed;

Obligations has the meaning given to it in Section 2.02 of the Security Agreement;

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

Official List means the official list of the UK Listing Authority;

Omnibus Proxy means the omnibus proxy mailed by DTC to the Issuer as soon as possible after the record date in accordance with DTC’s usual procedures;

Open Variable Rate Loan means a Loan the interest rate on which is equal to the BMO Prime Rate and the initial term of which was three years;

Order means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI2001/544), as amended;

Original Due for Payment Date has the meaning given to it in paragraph (a) of the definition of Due for Payment;

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

Originator means a Person that is a member of the BMO Group and has originated Loans included in the Portfolio;

OSFI means the Office of the Superintendent of Financial Institutions;

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

(a) those Covered Bonds which have been redeemed pursuant to the trust presents;

(b) those Covered Bonds in respect of which the date (including, where applicable, any deferred date) for redemption in accordance with the Terms and Conditions has occurred and the redemption moneys (including all interest payable thereon) have been duly paid to the Bond Trustee or to the Principal Paying Agent in the manner provided in the Agency Agreement (and where appropriate notice to that effect has been given to the relative Covered Bondholders in accordance with Condition 13 (Notices) of the Terms and Conditions) and remain available for payment against presentation (unless the relevant Covered Bonds are in NGCB form) of the relevant Covered Bonds and/or Receipts and/or Coupons;

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

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

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

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

(g) any Bearer Global Covered Bond to the extent that it shall have been exchanged for Bearer Definitive Covered Bonds or another Bearer Global Covered Bond pursuant to its provisions, the provisions of the trust presents and the Agency Agreement; and

(h) those Legended Covered Bonds which have been exchanged for Unlegended Covered Bonds and those Unlegended Covered Bonds which have been exchanged for Legended Covered Bonds, in each case pursuant to their provisions, the provisions of the trust presents and the Agency Agreement,

PROVIDED THAT for each of the following purposes, namely:

(i) the right to attend and vote at any meeting of the holders of the Covered Bonds of any Series, to give instruction or direction to the Bond Trustee and for the purposes of a resolution in writing as envisaged by paragraph 20 of Schedule 4 to the Trust Deed;

(ii) the determination of how many and which Covered Bonds of any Series are for the time being outstanding for the purposes of Section 10.1 of the Trust Deed, Conditions 9 (Events of Default, Acceleration and Enforcement) and 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution) of the Terms and Conditions and paragraphs 2, 5, 6 and 9 of Schedule 5 to the Trust Deed;

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

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

those Covered Bonds of the relevant Series (if any) which are for the time being held by or on behalf of the Issuer or any of its Subsidiaries (including the Guarantor) as beneficial owner, shall (unless and until ceasing to be so held) be deemed not to remain outstanding;

Outstanding Principal Balance means, in relation to a Loan at any date (the determination date), the aggregate at such date (but avoiding double counting) of:

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(a) the Initial Advance;

(b) Capitalized Expenses;

(c) Capitalized Arrears; and

(d) Capitalized Interest,

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

Overpayment means a payment by a Borrower in an amount greater than the amount due on a Monthly Payment Day which (a) is permitted by the terms of such Loan or by agreement with the Borrower and (b) reduces the Outstanding Principal Balance of such Loan;

Partial Portfolio means part of any portfolio of Selected Loans;

Participants means Direct Participants and Indirect Participants;

Partly-Paid Covered Bonds means Covered Bonds which are only partly paid up on issue, in respect of which interest will accrue in accordance with Condition 4.4 on the paid-up amount of such Covered Bonds or on such other basis as may be agreed between the Issuer and the relevant Dealer(s) and indicated in the applicable Final Terms Document;

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

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

Partnership means BMO Covered Bond Guarantor Limited Partnership;

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

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

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

Payment Day has the meaning given to it in Condition 5.6 (Payments—Payment Day) of the Terms and Conditions;

Payment in Kind has the meaning given to it in Section 11.1(b)(ii) of the Intercompany Loan Agreement;

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Payment in Kind Date has the meaning given to it in Section 11.1(c) of the Intercompany Loan Agreement;

Payment in Kind Notice has the meaning given to it in Section 11.1(c) of the Intercompany Loan Agreement;

Payment Instruction means a payment instruction given by the Cash Manager to the Stand-By Account Bank in the form of Schedule 1 to the Stand-By Bank Account Agreement;

Payment Ledger means the ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement, to record the credits and debits of the Available Revenue Receipts and Available Principal Receipts for application in accordance with the relevant Priorities of Payments;

Perfected means in respect of any relevant Loan and its Related Security in the Portfolio, delivery of notice to the Borrower of the sale, assignment and transfer of such Loan and its Related Security to the Guarantor and a direction to make all future repayments of the Loan to the Stand-By Account Bank for the account of the Guarantor by the Seller or the applicable Originator, or, as necessary, by the Guarantor (or the Servicer on behalf of the Guarantor) on behalf of the Seller or the applicable Originator (under applicable powers of attorney granted to the Guarantor) to the Guarantor of such Loan and its Related Security and registration of the transfer of legal title to the Mortgages in the appropriate land registry office, land titles office or similar office of public registration for the location where the relevant real property is located and “Perfect” and “Perfection” shall have corresponding meanings;

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

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

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

Person means a reference to any person, individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organisation, governmental entity or other entity of similar nature (whether or not having separate legal personality);

Pledged Securities has the meaning given to it in Section 2.01(e) of the Security Agreement;

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Portfolio means the Loans and Related Security, Substitution Assets owned by the Guarantor and any cash balances credited to the Guarantor Accounts;

Post-Enforcement Priority of Payments has the meaning given to it in Section 4.07 of the Security Agreement;

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

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

Powers of Attorney has the meaning given to it in Section 3.1(a)(i) of the Mortgage Sale Agreement;

PPSA has the meaning given to it in Section 1.04 of the Security Agreement;

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

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

Preceding Business Day Convention has the meaning given to it in Condition 4.7(b)(iv) (Interest—Business Day, Business Day Convention, Day Count Fractions and other adjustments) of the Terms and Conditions;

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

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

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

Pre-Maturity Maximum Required Amount means on any date, the amount by which (a) the amount standing to the credit of the Pre-Maturity Liquidity Ledger including the principal amount of any Substitution Assets standing to the credit of the Pre-Maturity Liquidity Ledger at such date, is less than (b) the Required Redemption Amount for the relevant Series of Hard Bullet Covered Bonds at such date (together with the Required Redemption Amount of all other Series of Hard Bullet Covered Bonds which mature within 12 months of the date of such calculation);

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

Pre-Maturity Test has the meaning given to it in Schedule 4 (Pre-Maturity Test) to the Guarantor Agreement;

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

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

Prescribed Cash Limitation has the meaning given to it in Section 9.8 of the Guarantor Agreement;

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

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

Principal Amount Outstanding means, in accordance with Condition 4.7(f), in respect of a Covered Bond on any day, the principal amount of that Covered Bond on the relevant Issue Date thereof less principal amounts received by the relevant Covered Bondholder in respect thereof on or prior to that day;

Principal Ledger means the ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement to record the credits and debits of Principal Receipts in accordance with the terms of the Guarantor Agreement;

Principal Paying Agent means, in relation to all or any Series of the Covered Bonds, Bank of New York Mellon or, if applicable, any successor principal paying agent in relation to all or any Series of the Covered Bonds;

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

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

Product Switch means, in respect of a Loan, a variation in the financial terms and conditions applicable to such Loan other than: (i) any variation agreed with the related Borrower to control or manage arrears on such Loan; (ii) any variation of such Loan imposed by statute; (iii) any change in the repayment method of such Loan; or (iv) any change in the Borrower under such Loan or the addition of a new Borrower under such Loan;

Program means the US$10,000,000,000 global registered covered bond program established by the Issuer on the Program Date;

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

Program Date means September 30, 2013;

Program Limit has the meaning given to it in the Trust Deed;

Program Resolution has the meaning given to it in Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and Substitution)

Program Website has the meaning given to it in Section 9.4(a) of the Cash Management Agreement;

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

Property means freehold or leasehold residential property located in Canada (or owned residential immovable property situated in the Province of Québec) that is subject to a Mortgage;

Prospectus means the Prospectus prepared in connection with the Program and constituting (in the case of Covered Bonds to be listed on a Stock Exchange), to the extent specified in it, the Listing Particulars as revised, supplemented or amended from time to time by the Issuer and the Guarantor including any documents which are from time to time incorporated in the Prospectus by reference except that in relation to each Tranche of Covered Bonds only, the applicable Final Terms Document or Pricing Supplement, as the case may be, shall be deemed to be included in the Prospectus;

Prospectus Directive means Directive 2003/71/EC;

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Prospectus Rules means:

(a) in the case of Covered Bonds which are, or are to be, admitted to the Official List and admitted to trading on the London Stock Exchange’s Gilt-Edged and Fixed Interest Market, the prospectus rules made under Section 84 of the FSMA; and

(b) in the case of Covered Bonds which are, or are to be, listed on a Stock Exchange other than the London Stock Exchange, the prospectus rules and regulations for the time being in force for that Stock Exchange;

PSM mean the London Stock Exchange’s Professional Securities Market;

Purchase Date means each of the First Purchase Date and each other date on which a New Portfolio is assigned to the Guarantor in accordance with the terms of the Mortgage Sale Agreement;

Purchase Price means the purchase price to be paid by the Guarantor to the Seller in consideration of sale of the Initial Portfolio and/or the relevant New Portfolio to the Guarantor, which purchase price shall be equal to the Fair Market Value of the Loans and the Related Security included therein;

Purchaser means any third party or the Seller to whom the Guarantor offers to sell Loans and their Related Security’

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

Québec Purchased Assets has the meaning given in a Québec Seller Assignment;

Québec Security means, collectively, (a) the deed of hypothec to secure payment of titles of indebtedness entered into on the Program Date between the Guarantor and the Bond Trustee, as fondé de pouvoir, (b) the movable hypothec entered into on the Program Date between the Guarantor and the Bond Trustee, and (c) the collateral bond No. 01 in the amount of $10,000,000,000 issued as of the Program Date by the Guarantor in favour of the Bond Trustee and certified by the Bond Trustee, as fondé de pouvoir on the Program Date

Québec Seller Assignment means an assignment in or substantially in the form of Schedule 7 (Form of Québec Seller Assignment) to the Mortgage Sale Agreement;

Randomly Selected Loans means Loans and, if applicable, their Related Security, in the Portfolio, selected in accordance with the terms of the Guarantor Agreement on a basis that (i) would not, or would not reasonably be expected to, adversely affect the interests of the Covered Bondholders, and (ii) is not designed to favour the selection of any identifiable class or type or quality of Loans and their Related Security over all the Loans and their Related Security in the Portfolio, except with respect to identifying such Loans and their Related Security as having been acquired by the Guarantor from a particular Seller, if applicable;

Rate of Interest has the meaning given to it in the applicable Final Terms Document as further elaborated by Condition 4 (Interest) of the Terms and Conditions;

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

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

Ratings Trigger means the Account Bank Required Ratings, the Cash Management Deposit Ratings, the Cash Manager Required Ratings, the Paying Agent Required Ratings, the Pre-Maturity Required Ratings, the Reserve Fund Required Amount Ratings, the Servicer Replacement Threshold Ratings, the Servicer Deposit Threshold Ratings, the Stand-By Account Bank Required Ratings and the Swap Agreement Ratings;

Reasonable, Prudent Mortgage Lender means a lender acting in a reasonable prudent manner within the policy applied by the Seller and/or any Originator and/or the Servicer, as applicable, from time to time to the originating, underwriting and servicing of mortgage loans beneficially owned by the Seller outside the Mortgage Pool with no less care than that lender would service mortgages beneficially owned by it;

Recalculation Procedures has the meaning given in Section 2.8 the Cover Pool Monitor Agreement;

Receipt means payment receipts attached on issue to Bearer Definitive Covered Bonds redeemable in instalments for the payment of an instalment of principal, such receipts being in the form or substantially in the form set out in Part IV of Schedule 2 to the Trust Deed or in such other form as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s) and includes any replacements for Receipts issued pursuant to Condition 10 (Replacement of Covered Bonds);

Receiptholders means the holders of the Receipts;

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Receiver means any person or persons appointed (and any additional person or persons appointed or substituted) as an administrative receiver, receiver, manager, liquidator or receiver and manager of the Charged Property by the Bond Trustee pursuant to Article 4 of the Security Agreement;

Recipient has the meaning given in Section 2.1(b) of the Cover Pool Monitor Agreement;

Record Date has the meaning given to it in Condition 5.4 (Payments—Payments in respect of Registered Covered Bonds) of the Terms and Conditions;

Records means, with respect to each Loan, all documents and information (other than the Customer File) including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights, maintained by the Seller or the Servicer with respect to such Loan, the Related Security and the related Borrower;

Redeemed Covered Bonds has the meaning given to it in Condition 6.3 (Redemption and Purchase—Redemption at the option of the Issuer (Issuer Call)) of the Terms and Conditions;

Redemption Fee means the standard redemption fee charged to the Borrower by a Seller where the Borrower makes a repayment of the full outstanding principal of a Loan;

Reference Banks means, in the case of a determination of CDOR, the principal Toronto office of four major banks in the London inter-bank market selected by the Cash Manager;

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

Register means the register of holders of the Registered Covered Bonds maintained by the Registrar;

Registered Covered Bond means a Covered Bond in registered form;

Registered Definitive Covered Bond means a Registered Covered Bond in definitive form issued or, as the context may require, to be issued by the Issuer in accordance with the provisions of the Program Agreement or any other agreement between the Issuer and the relevant Dealer(s), the Agency Agreement and the Trust Deed either on issue or in exchange for a Registered Global Covered Bond or part thereof (all as indicated in the applicable Final Terms Document), such Registered Covered Bond in definitive form being substantially in the form set out in Part 7C of Schedule 2 to the Trust Deed with such modifications (if any) as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s) and having the Terms and Conditions endorsed thereon or, if permitted by the relevant Stock Exchange, incorporating the Terms and Conditions by reference (where applicable to the Trust Deed) as indicated in the applicable Final Terms Document and having the relevant information supplementing, replacing or modifying the Terms and Conditions appearing in the applicable Final Terms Document endorsed thereon or attached thereto and having a Form of Transfer endorsed thereon;

Registered Global Covered Bonds means Global Covered Bonds in registered form, comprising Rule 144A Global Covered Bonds and Regulation S Global Covered Bonds, substantially in the form set out in Part 8 of Schedule 2 to the Trust Deed;

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

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

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

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

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

(e) a Seller, the Originators and/or the Guarantor 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 which has jurisdiction over the Seller, the Originator or the Guarantor to effect such perfection; and

(f) the date on which one or more Rating Agencies downgrades the unsecured, unsubordinated and unguaranteed debt obligation ratings, or issuer default ratings, of the Seller below any of the following threshold ratings: (i) A3 (in respect of Moody’s), (ii) BBB- (in respect of Fitch), and (iii) BBB(low) and R-1(middle) (in respect of DBRS).

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

Registrar means Bank of New York Mellon in its capacity as registrar (and any successor registrar);

Regulation S means Regulation S under the Securities Act;

Regulation S Definitive Covered Bond means a definitive covered bond in registered form representing Covered Bonds sold to non-U.S. persons outside the United States in reliance on Regulation S;

Regulation S Covered Bond means a Covered Bond represented by a Regulation S Global Covered Bond and/or a Definitive Regulation S Covered Bond, as the context may require;

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

Regulation S Global Covered Bond means a Registered Global Covered Bond representing Covered Bonds sold to non-U.S. persons outside the United States in reliance on Regulation S and

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substantially in the form set out in Part 8 of Schedule 2 to the Trust Deed with such modifications (if any) as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s) or Lead Manager (in the case of syndicated issues);

Related Retained Loans means, in relation to any Loan owned by the Guarantor, all Retained Loans that are secured by, or advanced upon the security of, the same Mortgage and other Related Security as such Loan;

Related Security means, in relation to a Loan:

(a) all of the Seller’s right, title and interest in the related Customer File, including the Mortgage and the security interest or hypothec granted to the Seller (or, as applicable, the relevant Originator) by the related Borrower in the related mortgaged property as security for or pursuant to such Loan and all proceeds thereof;

(b) all other security interests, hypothecs or liens and property subject thereto from time to time purporting to secure payment of such Loan, whether pursuant to the Related Security or otherwise, together with all personal property financing statements or other filings relating thereto;

(c) all guaranties, indemnities, insurance (other than blanket insurance coverage maintained by the Seller) and other agreements (including the Mortgage) or arrangements of whatever character from time to time supporting or securing payment of such Loan which are or should be included in the Customer Files whether pursuant to the Related Security or otherwise and all proceeds thereof; and

(d) all Records related to such Loan;

Release of Security means a release of security in the form of Annex M to the Guide;

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Relevant Date has the meaning given to it in Condition 7 (Taxation) of the Terms and Conditions;

Relevant Implementation Date has the meaning given to it in Appendix 2 of the Program Agreement;

Relevant Member State has the meaning given to it in Appendix 2 of the Program Agreement;

Relevant Party means each Dealer, their respective affiliates and each person who controls such Dealer (within has the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each of their respective directors, officers, employees and agents;

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

repay, redeem and pay shall each include both of the others and cognate expressions shall be construed accordingly;

Replacement Issuer means any entity that assumes the obligations of the Issuer under the Covered Bonds;

Representations and Warranties means, collectively, the Loan Representations and Warranties and the Corporate Representations and Warranties;

Representation Date means any date on which the Issuer and the Guarantor gives representations and warranties to and for the benefit of each Dealer under the Program Agreement, which dates shall include the date of the Program Agreement, any Agreement Date for the issue of Covered Bonds in relation to a particular issue, the Time of Sale in relation to a particular issue and any time that the Prospectus shall be amended or supplemented;

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

Request means a written request from the Guarantor to the Issuer for an Advance to be made in the form of Schedule 1 to the Intercompany Loan Agreement;

Required True Loan Balance Amount has the meaning given to it in Schedule 9 to the Guarantor Agreement;

Required Redemption Amount has the meaning given to it in Schedule 9 to the Guarantor Agreement;

Requisite Ratings means (at any time) the rating then ascribed by each Rating Agency to the long-term, unsecured, unguaranteed and unsubordinated debt obligations of the Issuer;

Reservations has the meaning given to it in the Program Agreement;

Reserve Fund means the reserve fund that the Guarantor will be required to establish in the GDA Account which may be credited with the proceeds of Available Revenue Receipts and Available Principal Receipts up to an amount equal to the Reserve Fund Required Amount;

Reserve Fund Required Amount means nil, unless the ratings of the Issuer’s short-term, unsecured, unsubordinated and unguaranteed debt obligations (or issuer default rating, as applicable)

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by any one of the Rating Agencies fall below the Reserve Fund Required Amount Ratings and then an amount equal to the Canadian Dollar Equivalent of three month’s interest due on each Series of Covered Bonds together with an amount equal to three-twelfths of the anticipated aggregate annual amount payable in respect of the items specified in paragraphs (a) to (c) and, if applicable, (d) of the Pre-Acceleration Revenue Priorities of Payments;

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

Reserve Ledger means the ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement, to record the crediting of Revenue Receipts to the Reserve Fund and the debiting of such Reserve Fund in accordance with the terms of the Guarantor Agreement;

Reset Date has the meaning given to it in the ISDA Definitions;

Restricted Asset has the meaning given to it in Section 2.07 of the Security Agreement;

Retained Loan means a loan, indebtedness or liability that is secured by, or advanced upon the security of, a Mortgage and other Related Security securing a Loan transferred or contributed to the Guarantor which is not also being transferred or contributed to the Guarantor;

Retention Account has the meaning given to it in Section 4.10 of the Security Agreement;

Revenue Ledger means the ledger on the GDA Account of such name maintained by the Cash Manager pursuant to the Cash Management Agreement, to record credits and debits of Revenue Receipts in accordance with the terms of the Guarantor Agreement;

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

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

Rule 144A means Rule 144A under the Securities Act;

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

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

Rules means the rules, regulations and procedures creating and affecting DTC and its operations;

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S&P means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. or its successors;

Sale Proceeds means the cash proceeds realized from the sale of Selected Loans and their Related Security;

Sample has the meaning given in Section 2.2 of the Cover Pool Monitor Agreement;

Sarbanes-Oxley Act means the U.S. Sarbanes-Oxley Act of 2002;

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

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

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

Screen Rate means, for any date, the arithmetic mean of the offered quotations for Canadian Dollar deposits of the relevant term in the London inter-bank market displayed on Reuters Page LIBOR 01 as of 11:00 a.m. London time on that date; in each case, displayed on the above mentioned Reuters page (or such replacement page on that service which displays the information) or, if that service ceases to display the information, the Cash Manager (after consultation with the Issuer and the Bond Trustee) may specify another page or service displaying the appropriate rate;

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

SEC means the U.S. Securities and Exchange Commission;

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

Securities Act means the United States Securities Act of 1933, as amended;

Securities and Exchange Law means the Securities and Exchange Law of Japan;

Security means the security granted by the Guarantor to the Bond Trustee under and pursuant to the terms of the Security Agreement;

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

Security Documents means any documents entered into pursuant to the Security Agreement;

Security Interest means any mortgage, charge, pledge, hypothec, security interest, assignment, lien (statutory or otherwise), privilege, easement, servitude and any other encumbrance of any nature or any other arrangement or condition which, in substance, secures payment or performance of an obligation;

Security Sharing Agreement has the meaning given in the CMHC Guide;

Selected Loan Offer Notice means a notice from the Guarantor served on the Seller offering to sell Selected Loans and their Related Security for an offer price equal to the greater of the then Outstanding Principal Balance of the Selected Loans and the Adjusted Required Redemption Amount;

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

Selected Loans means Loans and their Related Security to be sold by the Guarantor pursuant to the terms of the Guarantor Agreement and the Mortgage Sale Agreement, in accordance with Schedule 9 of the Guarantor Agreement;

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

Selection Date has the meaning given to it in Condition 6.3 (Redemption and Purchase—Redemption at the option of the Issuer (Issuer Call)) of the Terms and Conditions;

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Seller means BMO in its capacity as Seller under the Mortgage Sale Agreement, and Sellers means, together, the Seller and any New Sellers;

Seller Accession Letter means the Seller Accession Letter substantially in the form set out in Part 1 of Appendix 4 of the Program Agreement;

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

Seller Confirmation Letter means the Seller Confirmation Letter substantially in the form set out in Part 2 of Appendix 4 of the Program Agreement;

Seller Power of Attorney means a power of attorney to be provided by the Seller, or if applicable, the applicable Originator, substantially in the form set out in Schedule 2 to the Mortgage Sale Agreement;

Seller’s Account means such account as the Seller may specify to the Guarantor from time to time;

Series means a Tranche of Covered Bonds together with any further Tranche or Tranches of Covered Bonds which are (a) expressed to be consolidated and form a single series and (b) identical in all respects (including as to listing and admission to trading) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices and the expressions Covered Bonds of the relevant Series, holders of Covered Bonds of the relevant Series and related expressions shall be construed accordingly;

Series Reserved Matter means, in relation to Covered Bonds of a Series:

(a) reduction or cancellation of the amount payable or, where applicable, modification of the method of calculating the amount payable or modification of the date of payment or, where applicable, modification of the method of calculating the date of payment in respect of any principal or interest in respect of the Covered Bonds other than in accordance with the terms thereof;

(b) alteration of the currency in which payments under the Covered Bonds, Receipts and Coupons are to be made;

(c) alteration of the majority required to pass an Extraordinary Resolution;

(d) any amendment to the Covered Bond Guarantee or the Security Agreement (except in a manner determined by the Bond Trustee not to be materially prejudicial to the interests of the Covered Bondholders of any Series or an amendment which is in the sole opinion of the Bond Trustee of a formal, minor or technical nature or to correct a manifest error or an error which is, in the sole opinion of the Bond Trustee, proven or is to comply with mandatory provisions of law);

(e) the sanctioning of any such scheme or proposal for the exchange or sale of the Covered Bonds or the conversion of the Covered Bonds into, or the cancellation of the Covered Bonds in consideration of, shares, stock, covered bonds, bonds, debentures, debenture stock and/or other obligations and/or securities of the Issuer or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, bonds, covered bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash

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and for the appointment of some person with power on behalf of the Covered Bondholders to execute an instrument of transfer of the Registered Covered Bonds held by them in favour of the persons with or to whom the Covered Bonds are to be exchanged or sold respectively; and

(f) alteration of the proviso to paragraph 5 or paragraph 6 of Schedule 4 to the Trust Deed;

Series 1 Covered Bonds means the first Series of Covered Bonds issued initially on the First Issue Date;

Servicer means BMO in its capacity as servicer under the Servicing Agreement together with any successor servicer appointed from time to time;

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

Servicer Event of Default has the meaning given to it in Section 11.1 of the Servicing Agreement;

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

Servicer Termination Event has the meaning given to it in Section 11.1 of the Servicing Agreement;

Services means the services to be provided by the Servicer pursuant to that Servicing Agreement;

Servicing Agreement means the servicing agreement entered into on the Program Date between the Guarantor, the Seller, the Servicer and the Bond Trustee;

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

(a) the installment due dates for such Loan;

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

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

Shortfall has the meaning given to it in Section 8.1(a) of the Trust Deed;

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

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

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Specified Denomination means, in respect of a Series of Covered Bonds, the denomination or denominations of such Covered Bonds specified in the applicable Final Terms Document;

Specified Interest Payment Date, in respect of Floating Rate Covered Bonds or Variable Interest Covered Bonds, has the meaning (if any) given to it in the applicable Final Terms Document;

Specified Period, in respect of Floating Rate Covered Bonds or Variable Interest Covered Bonds, has the meaning (if any) given to it in the applicable Final Terms Document;

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

Specified Time means 11.00 am (London time, in the case of determination of LIBOR, Brussels time, in the case of a determination of EURIBOR or Toronto Time, in the case of a determination of Canadian Dollar LIBOR);

Spread Determination Date means the date that is 15 Business Days prior to each Cash Flow Model Calculation Date;

Stabilized Rate means the rate to which any Loan reverts after the expiration of any period during which any alternative method(s) of calculating the interest rate specified in the Offer Conditions are used;

Standard Documentation means the standard documentation used by the Seller and any applicable Originator with respect to Loans, and any update or replacement therefor as the Seller and/or an Originator may from time to time introduce acting in accordance with the standards of a Reasonable, Prudent Mortgage Lender;

Stand-By Account Bank means Royal Bank of Canada, in its capacity as Stand-By account bank, or such other person for the time being acting as Stand-By account bank in accordance with the Stand-By Bank Account Agreement;

Stand-By Account Bank Notice means a written notice to the Stand-By Account Bank served in accordance with the provisions of the Stand-By Bank Account Agreement and stating that the appointment of the Stand-By Account Bank under the Stand-By Bank Account Agreement is to become operative;

Standby Account Bank Required Ratings means the threshold ratings of (i) P-1 with respect to the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank by Moody’s, (ii) F1 with respect to the short-term issuer default rating of the Standby Account Bank by Fitch, (iii) A with respect to long-term issuer default rating of the Standby Account Bank by Fitch; and (iv) either (A) R-1 (middle) with respect to the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank by DBRS, or (B) AA (low) with respect to the long-term unsecured, unsubordinated and unguaranteed debt obligations of the Standby Account Bank by DBRS;

Stand-By Account Bank Required Ratings Downgrade has the meaning given to it in Section 4.1(g) of the Cash Management Agreement;

Stand-By Account Mandates means the Stand-By GDA Account Mandate and the Stand-By Transaction Account Mandate;

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Stand-By Accounts means the Stand-By GDA Account and the Stand-By Transaction Account;

Stand-By Bank Account Agreement means the Stand-By bank account agreement entered into on the Program Date between the Guarantor, the Stand-By Account Bank, the Cash Manager and the Bond Trustee;

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

Stand-By GDA Balance means, on any day, the amount standing to the credit of the Stand-By GDA Account as at the opening of business on such day;

Stand-By GDA Provider means Royal Bank of Canada, in its capacity as Stand-By GDA provider, or such other person for the time being acting as provider of a Stand-By GDA Account for the Guarantor in accordance with the Stand-By Guaranteed Deposit Account Contract;

Stand-By GDA Rate means the variable rate of interest accruing on the balance standing to the credit of the Stand-By GDA Account equal to the rate of CDOR less 0.10 per cent. per annum;

Stand-By Guaranteed Deposit Account Contract means the Stand-By guaranteed deposit account contract entered into on the Program Date between the Stand-By GDA Provider, the Guarantor, the Cash Manager and the Bond Trustee;

Stand-By Transaction Account means the account in the name of the Guarantor to be opened and maintained with the Stand-By Account Bank in accordance with and subject to the terms of the Stand-By Bank Account Agreement and the Security Agreement or such other account as may for the time being be in place with the prior consent of the Bond Trustee and designated as such;

Stand-by Transaction Account Mandate means the bank account mandate between the Guarantor and the Stand-by Account Bank relating to the operation of the Stand-by Transaction Account;

Stand-By Transaction Account Provider means Royal Bank of Canada, in its capacity as Stand-By transaction account provider, or such other person for the time being acting as a provider of a Stand-By Transaction Account for the Guarantor in accordance with the Stand-By Bank Account Agreement;

Sterling LIBOR means LIBOR for Sterling deposits having the relevant maturity;

Stock Exchange means the London Stock Exchange or any other or further stock exchange(s) on which any Covered Bonds may from time to time be listed or admitted to trading and references to the relevant Stock Exchange shall, in relation to any Covered Bonds, be references to the Stock Exchange on which such Covered Bonds are, from time to time, or are intended to be, listed or admitted to trading;

Subsidiary has the meaning given to it in the Bank Act;

Substitute Cash Manager has the meaning given to it in Section 9.1(b)(ii) of the Cash Management Agreement;

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Substitution Asset Details means the following information, in electronic format, with respect to the related Substitution Asset:

(a) asset type;

(b) coupon;

(c) interest payment dates;

(d) maturity date;

(e) principal amount; and

(f) CUSIP/ISIN, if applicable;

Substitution Assets means the classes and types of assets from time to time eligible under the Covered Bond Legislative Framework and the CMHC Guide to collateralise covered bonds which include the following: (a) securities issued by the Government of Canada, and (b) repos of Government of Canada securities having terms acceptable to CMHC; provided that the total exposure to Substitution Assets shall not exceed 10% of the aggregate value of (x) the aggregate loan balance of the Loans in the Portfolio; (y) the face value of any Substitution Assets; and (z) cash balances held by the Guarantor (subject to the Prescribed Cash Limitation);

in each case, provided that:

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

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

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

sub-unit means, in accordance with Condition 4.7(i), with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, euro 0.01;

Successor means, in relation to an Agent and the Calculation Agent, any successor to any one or more of them in relation to the Covered Bonds which shall become such pursuant to the provisions of the trust presents and/or the Agency Agreement (as the case may be) and/or such other or further principal paying agent, paying agents, registrar, transfer agent, exchange agent and calculation agent (as the case may be) in relation to the Covered Bonds as may (with the prior approval of, and on terms previously approved by, the Bond Trustee in writing (such approval not to be unreasonably withheld or delayed)) from time to time be appointed as such, and/or, if applicable, such other or further specified offices (in the case of the Principal Paying Agent being within the same city as those for which they are substituted) as may from time to time be nominated, in each case by the Issuer and the Guarantor, and (except in the case of the initial appointments and specified offices made under and specified in the Terms and Conditions and/or the Agency Agreement, as the case may be) notice of whose appointment or, as the case may be, nomination has been given to the Covered Bondholders;

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

Swap Agreements means the Covered Bond Swap Agreements together with the Interest Rate Swap Agreement and each a Swap Agreement;

Swap Collateral means, at any time, any asset (including, without limitation, cash and/or securities) which is paid or transferred by a Swap Provider to the Guarantor as collateral in respect of the performance by such Swap Provider of its obligations under the relevant Swap Agreement together with any income or distributions received in respect of such asset and any equivalent of such asset into which such asset is transformed;

Swap Collateral Accounts means any account in the name of the Guarantor held with BMO (or any other Account Bank from time to time) into which Swap Collateral in respect of an Interest Rate Swap or a Covered Bond Swap may be deposited in accordance with the terms of any such Swap;

Swap Collateral Available Amounts means, at any time, the amount of Swap Collateral which under the terms of the relevant Swap Agreement may be applied in satisfaction of the relevant Swap Provider’s obligations to the Guarantor following termination of a Swap to the extent that such obligations relate to payments to be made in connection with the Pre-Acceleration Priorities of Payments or the Guarantee Priorities of Payments;

Swap Collateral Excluded Amounts means, at any time, the amount of Swap Collateral which may not be applied at that time in satisfaction of the relevant Swap Provider’s obligations to the Guarantor under the terms of the relevant Swap Agreement, including Swap Collateral which is to be returned to the relevant Swap Provider upon termination of the relevant Swap;

Swap Payments Account means any account in the name of the Guarantor held with BMO (or any other Account Bank from time to time) through which payments under the Interest Rate Swaps or the Covered Bond Swaps will be made;

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

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

Swap Providers means the Covered Bond Swap Providers and the Interest Rate Swap Provider, and each a Swap Provider;

Swaps means the Covered Bond Swaps together with the Interest Rate Swap, and each a Swap;

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

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Talons means the talons (if any) appertaining to, and exchangeable in accordance with the provisions therein contained for further Coupons appertaining to, the Definitive Covered Bonds (other than Zero Coupon Covered Bonds), such talons being substantially in the form set out in Part 6 of Schedule 2 to the Trust Deed or in such other form as may be agreed between the Issuer, the Principal Paying Agent, the Bond Trustee and the relevant Dealer(s) and includes any replacements for Talons issued pursuant to Condition 10 (Replacement of Covered Bonds, Receipts, Coupons and Talons) of the Terms and Conditions;

TARGET System means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System;

Taxes or taxes means all present and future taxes, levies, imposts, duties (other than stamp duty), fees, deductions, withholdings or charges of any nature whatsoever and wheresoever imposed, including, without limitation, income tax, corporation tax, GST, VAT or other tax in respect of added value and any franchise, transfer, sales, gross receipts, use, business, occupation, excise, personal property, real property or other tax imposed by any national, local or supranational taxing or fiscal authority or agency together with any penalties, fines or interest thereon and Tax and tax, and Taxation and taxation, shall be construed accordingly;

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

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

Third Party Amounts means each of:

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

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

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

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

Time of Sale means the time specified in the relevant Subscription Agreement or as may otherwise be agreed between the parties thereto;

Time of Sale Information means, in the case of the offer and sale of Rule 144A Covered Bonds and subject to satisfaction of the applicable provisions the Program Agreement, any Pricing Supplement together with the appropriate Prospectus thereto;

Total Credit Commitment means an amount equal to Canadian $12,000,000,000;

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

(a) the last selling price;

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

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

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

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

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

plus accrued return where applicable (with currency translations undertaken using or at the average close of day foreign exchange rates posted on the Bank of Canada website for the month in relation to which the calculation is made); provided that, in each case, the methodology selected, the reasons therefor and the determination of value pursuant to such selected methodology shall be duly documented;

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

Transaction Account means the account (to the extent maintained) designated as such in the name of the Guarantor held with the Account Bank and maintained subject to the terms of the Bank Account Agreement and the Security Agreement or such other account as may for the time being be in place with the prior consent of the Bond Trustee and designated as such;

Transaction Documents means:

(a) the Mortgage Sale Agreement;

(b) the Servicing Agreement;

(c) the Cover Pool Monitor Agreement;

(d) the Intercompany Loan Agreement;

(e) the Guarantor Agreement;

(f) the Cash Management Agreement;

(g) the Interest Rate Swap Agreement;

(h) each Covered Bond Swap Agreement;

(i) the Guaranteed Deposit Account Contract;

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(j) the Stand-By Guaranteed Deposit Account Contract;

(k) the Bank Account Agreement;

(l) the Stand-By Bank Account Agreement;

(m) the Security Agreement (and each document entered into pursuant to the Security Agreement);

(n) the Trust Deed;

(o) the Agency Agreement;

(p) the Program Agreement;

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

(r) each of the prospectus supplements (as applicable in the case of each issue of listed Covered Bonds subscribed for pursuant to a subscription agreement);

(s) each Subscription Agreement (as applicable in the case of each issue of listed Covered Bonds subscribed for pursuant to a subscription agreement); and

(t) the Master Definitions and Construction Agreement;

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

Transfer Agent means, in relation to all or any Series of Registered Covered Bonds, Bank of New York Mellon at its office at 101 Barclay Street 7E, New York, NY 10286, in its capacity as transfer agent or, if applicable, any successor transfer agent in relation to all or any Series of the Covered Bonds;

Transfer Certificate means the transfer certificate substantially in the form set out in Schedule 4 to the Agency Agreement;

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

Trust Corporation means trust company incorporated under the laws of Canada;

Trust Deed means the trust deed entered into on the Program Date between the Issuer, the Guarantor and the Bond Trustee under which Covered Bonds will, on issue, be constituted and which sets out the terms and conditions on which the Bond Trustee has agreed to act as bond trustee and includes any trust deed or other document executed by the Issuer, the Guarantor and the Bond Trustee in accordance with the provisions of the Trust Deed and expressed to be supplemental to the Trust Deed;

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trust presents means the Trust Deed and the Schedules and any Trust Deed supplemental to the Trust Deed and the Schedules (if any) thereto and the Covered Bonds, the Receipts, the Coupons, the Talons, the Terms and Conditions and each of the Final Terms Documents, all as from time to time modified in accordance with the provisions therein contained;

Trustee Acts means the Trustee Act 1925 and the Trustee Act 2000 of England and Wales;

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

Unlegended Covered Bond means any Registered Covered Bond which is not a Legended Covered Bond;

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

Unpaid Excess Proceeds Percentage Amount has the meaning given to it in the Trust Deed;

U.S.$ Equivalent means (i) in relation to a Term Advance or a Series of Covered Bonds (including any calculations of the Required Redemption Amount of such Series of Covered Bonds) which is denominated in (a) a currency other than United States Dollars, the U.S.$ Dollar equivalent of such amount ascertained using the relevant Covered Bond Swap relating to such Term Advance or applicable to such Series of Covered Bonds and (b) United States Dollars, the applicable amount in United States Dollars, and (ii) in respect of any other amount in another currency, the amount of United Dollars that could be purchased with such amount at the then prevailing spot rate of exchange;

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

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

U.S. Registered Covered Bond means a Covered Bond issued under the U.S. Registration Statement;

U.S. Registered Definitive Covered Bond means a Definitive Covered Bond in registered form issued under the U.S Registration Statement;

U.S. Registered Global Covered Bond means a Registered Global Covered Bond issued under the U.S Registration Statement;

U.S. Registration Statement means a registration statement on Form F-3 in respect of certain issuances of Covered Bonds to be registered with the SEC, as revised, supplemented or amended from time to time;

VAT or Value Added Tax means value added tax imposed by the United Kingdom under the Value Added Tax Act 1994 and legislation (whether delegated or otherwise) replacing the same or supplemental thereto or in any primary or subordinate legislation promulgated by the European Union or any official body or agency thereof, and any similar turnover tax replacing or introduced in addition to any of the same;

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

Valuation Report means the valuation report or reports for mortgage purposes, in the form of the proforma report contained in the Standard Documentation, obtained by the Seller or, as applicable, any Originator, in respect of each Property obtained by the Seller in accordance with the Credit and Collection Policy or a valuation report in respect of a valuation of a Property made using a methodology which would be acceptable to a Reasonable, Prudent Mortgage Lender and which has been approved by the relevant officers of the Seller or, as applicable, any Originator;

Variable Interest Covered Bonds means Index Linked Interest Covered Bonds, Credit Linked Interest Covered Bonds, Equity Linked Interest Covered Bonds, Dual Currency Interest Covered Bonds and other Covered Bonds (excluding Floating Rate Covered Bonds) where the rate of interest is variable;

Variable Rate Loans means those Loans which are subject to a rate of interest which may at any time be varied in accordance with the relevant Mortgage Conditions (and shall, for greater certainty, exclude Fixed Rate Loans);

VC Asset Value has the meaning given to it in Schedule 10 to the Guarantor Agreement;

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

voting certificate has the meaning given to it in Schedule 4 to the Trust Deed;

WAFF means weighted average foreclosure frequency in respect of the Portfolio determined in accordance with the methodologies determined by the Cash Manager in accordance with the terms of the Cash Management Agreement;

WALS means weighted average loss severity in respect of the Portfolio determined in accordance with the methodologies determined by the Cash Manager in accordance with the terms of the Cash Management Agreement;

Weighted Average Fixed Rate has the meaning given to it in the Interest Rate Swap Agreement; and

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

2. INTERPRETATION AND CONSTRUCTION

2.1 Any Covered Bonds issued under the Program on or after the date hereof shall have the benefit of this Master Definitions and Construction Agreement other than any such Covered Bonds issued so as to be consolidated and form a single Series with any Covered Bonds issued prior to the date hereof. Save as disclosed above, this does not affect any Covered Bonds issued under the Program prior to the date of this Master Definitions and Construction Agreement.

2.2 Any reference in this Master Definitions and Construction Agreement, or in any Transaction Document or any document to which this Master Definitions and Construction Agreement is expressed to be incorporated or as to which this Master Definitions and Construction Agreement is expressed to apply (unless expressly stated otherwise in such Transaction Document or other document), to:

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

an authorization includes an authorization, consent, approval, resolution, licence, exemption, filing or registration;

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

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

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

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

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

set-off shall be construed so as to include any equivalent or analogous rights under the laws of any jurisdiction other than the Province of Ontario;

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

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

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

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

(c) words denoting persons only shall include firms and corporations and vice versa;

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

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

(f) references to the Security Agreement shall include all documents entered into pursuant thereto;

(g) clause, paragraph and Schedule headings are for ease of reference only;

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

(i) reference to a time of day shall be construed as a reference to Toronto time (unless otherwise specified);

(j) unless the contrary intention appears, a reference to the records of Euroclear and Clearstream, Luxembourg shall be to the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customer’s interest in the Covered Bonds;

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

(l) references to any person shall include references to his successors, transferees and assigns and any person deriving title under or through him.

3. RATING AGENCY CONDITION

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

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

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

the Requesting Party shall be entitled to disregard the requirement for satisfaction of the Rating Agency Condition with respect to each Non-Responsive Rating Agency and proceed

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on the basis of confirmation of the satisfaction of the Rating Agency Condition by each other Rating Agency on the basis that such confirmation by the Non-Responsive Rating Agency is not required in the particular circumstances of the request.

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

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

4. AMENDMENTS

Subject to Section 8.3 of the Security Agreement (Modification to Transaction Documents), any amendments to this Master Definitions and Construction Agreement will be made only with the prior written consent of each party to this Master Definitions and Construction Agreement. Each proposed amendment or waiver of this Agreement that is considered by the Guarantor to be a material amendment or waiver shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (a) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (b) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be a material amendment. The Guarantor (or the Cash Manager on its behalf) shall deliver notice to the Rating Agencies of any amendment or waiver with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement. Notwithstanding the foregoing, any amendment hereto for purposes of addressing changes to the CMHC Guide shall not require the consent of any party nor shall it require satisfaction of the Rating Agency Condition.

5. GOVERNING LAW

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

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6. LIABILITY OF LIMITED PARTNERS

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

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

BANK OF MONTREAL, as Seller		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary
		COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
		By:	/s/ Sean Pigott
			Name: Sean Pigott
			Title: Corporate Trust Officer
		By:	/s/ Stanley Kwan
			Name: Stanley Kwan
			Title: Associate Trust Officer

Master Definitions and Construction Agreement

8429065 CANADA INC.		KPMG LLP
By:	/s/ Stuart Swartz	By:	/s/ Steven Watts
	Name: Stuart Swartz		Name: Steven Watts
	Title: President		Title: Partner, KPMG LLP
BMO COVERED BOND GP, INC.		ROYAL BANK OF CANADA
By:	/s/ Chris Hughes	By:	/s/ James Salem
	Name: Chris Hughes		Name: James Salem
	Title: President and Secretary		Title: Executive Vice-President and Treasurer
			THE BANK OF NEW YORK MELLON,
			as Principal Paying Agent, an Exchange Agent, a Registrar and Transfer Agent
		By:	/s/ Jaime Nielsen
			Name: Jaime Nielsen
			Title: Vice President

Master Definitions and Construction Agreement

EX-4.3

Exhibit 4.3

MORTGAGE SALE AGREEMENT

BANK OF MONTREAL,

AS SELLER, SERVICER AND CASH MANAGER

AND

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP,

AS PURCHASER

AND

COMPUTERSHARE TRUST COMPANY OF CANADA,

AS BOND TRUSTEE AND CUSTODIAN

SEPTEMBER 30, 2013

CONTENTS

Section		Page
1.	Definitions and Construction		1
2.	Sale and Purchase of Initial Portfolio		2
3.	First Purchase Date		2
4.	Sale and Purchase of New Portfolios		5
5.	Trust of Moneys		9
6.	Actions Upon a Registered Title Event		9
7.	Undertakings		11
8.	Representations and Warranties; Repurchase by the Seller		12
9.	Further Assurance		16
10.	Consequences of Breach		16
11.	Sale of Selected Loans		16
12.	Custodian		18
13.	[RESERVED]		24
14.	Subordination		25
15.	Non-Merger		25
16.	No Agency or Partnership		25
17.	Payments		25
18.	Amendments, Variation and Waiver		25
19.	Notices		26
20.	Assignment		26
21.	Bond Trustee		26
22.	Non-Petition Covenant; LImitation of liability		27
23.	Delivery of Opinions		27
24.	Governing Law		27
25.	COUNTERPARTS		27

Schedules
	1.	Representations and Warranties	30
	2.	SCHEDULE 2	1
	3.	Seller Power of Attorney	1
	4.	SCHEDULE 3	1
	5.	Loan Repurchase Notice	1
	6.	SCHEDULE 4	1
	7.	New Portfolio Notice	1
	8.	SCHEDULE 5	1
	9.	Selected Loan Offer Notice	1
	10.	SCHEDULE 6	1
	11.	Selected Loan Repurchase Notice	1

THIS MORTGAGE SALE AGREEMENT is made on September 30, 2013

BETWEEN:

(1) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada), in its capacity as seller (the “Seller”), as servicer (the “Servicer”) and as cash manager (the “Cash Manager”);

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. (the “Guarantor”); and

(3) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada, in its capacity as Bond Trustee (the “Bond Trustee”) and as Custodian (the “Custodian”).

WHEREAS:

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

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

IT IS HEREBY AGREED, that for good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto agree as follows:

1. DEFINITIONS AND CONSTRUCTION

1.1 The master definitions and construction agreement made between, inter alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the “Master Definitions and Construction Agreement”) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) 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.

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

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

2. SALE AND PURCHASE OF INITIAL PORTFOLIO

2.1 Subject to the fulfilment of the conditions set out in Sections 2.2, 3.1 and 4.4 on or before the First Purchase Date, in consideration of the payment of the Purchase Price for the Initial Portfolio as set forth in this Section 2.1, the Seller hereby agrees to sell, transfer, assign and convey to the Guarantor all of its right, title, interest and benefit in and to the Loans, the Related Security and the other assets comprised in the Initial Portfolio on a fully-serviced basis on the First Purchase Date. The Purchase Price for the Initial Portfolio will be satisfied by payment by the Guarantor to the Seller in same day funds an amount equal to such Purchase Price by depositing such amount into the Seller’s Account or, if the Seller so elects in writing to the Guarantor on or before the First Purchase Date, the Guarantor shall credit the Seller’s Capital Account Ledger with an amount equal to all (or the portion of the Purchase Price for the Initial Portfolio not paid in cash) of such Purchase Price payable to the Seller.

2.2 The obligation of the Seller under Section 2.1 shall be subject to and conditional upon:

(a) the borrowing by the Guarantor under the Intercompany Loan Agreement of the Purchase Price for the Initial Portfolio paid in cash, if the Seller has not elected to have the Purchase Price credited to the Seller’s Capital Account Ledger; and

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

2.3 The sale of the Loans, their Related Security and the other assets comprised in the Initial Portfolio shall not include any obligation relating to payment of funds to a Borrower in respect of such Loans, which obligations shall at all times, and notwithstanding the sale of such Loans and their Related Security to the Guarantor, remain obligations of the Seller.

3. FIRST PURCHASE DATE

3.1 On the First Purchase Date, the Seller shall deliver the following documents:

(a) to the Custodian:

(i) two originals of the power of attorney substantially in the form set out in Schedule 2, duly executed by the Seller and where applicable, two originals of a substantially similar power of attorney duly executed by the relevant Originator (collectively, the “Powers of Attorney”), together with an opinion of legal counsel to the Seller in form and substance satisfactory to the Guarantor and the Custodian (each acting reasonably) confirming such Powers of Attorney are valid, enforceable and irrevocable, and sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security sold, transferred, assigned and conveyed by the Seller on the First Purchase Date; and

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

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(b) to the Guarantor and the Bond Trustee:

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

(ii) a certificate signed by at least one authorized signatory of the Seller dated as at the First Purchase Date certifying the names and true signatures of the officers of the Seller authorized to sign this Agreement and the other Transaction Documents to which it is a party. Until the Guarantor receives a subsequent incumbency certificate from the Seller (with copies provided to the Bond Trustee and the Custodian), the Guarantor, the Bond Trustee and the Custodian shall be entitled to rely on the last such certificates delivered to the Guarantor by the Seller;

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

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(iv) executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge or release all security interests and other rights or interests of any Person in the Loans and Related Security included in the Initial Portfolio previously granted by the Seller (other than Permitted Security Interests), together with copies of the relevant financing change statements or other discharge statements or releases with the registration particulars stamped thereon or other assurance satisfactory to the Guarantor;

(v) completed PPSA search results, dated within five Canadian Business Days of the date of the First Purchase Date, listing the financing statements referred to in Section 3.1(b)(iii) above and all other effective financing statements filed in the jurisdictions referred to in Section 3.1(b)(iii) above that name the Seller as debtor and show no other Adverse Claims on any of the Loans or Related Security being purchased on the First Purchase Date;

(vi) a solvency certificate signed by at least one authorized signatory of the Seller dated as at the First Purchase Date in a form acceptable to the Guarantor and the Bond Trustee (each acting reasonably);

(vii) if applicable, a form of assignment for purposes of the assignment, sale, transfer and conveyance of Properties located in the Province of Québec, in form and substance acceptable to the Guarantor and the Bond Trustee (acting reasonably);

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

(ix) opinions of local counsel to the Seller in form and substance satisfactory to the Guarantor and the Bond Trustee with respect to such matters as may be requested by the Guarantor and the Bond Trustee (each acting reasonably); and

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

3.2 The parties hereto acknowledge that completion on the First Purchase Date of the sale to the Guarantor of all of the Seller’s right, title, interest and benefit in and to the Loans, their Related Security and the other assets which comprise the Initial Portfolio shall occur as indicated in this Section 3 provided that the actions described in Section 6 shall not occur until the relevant time indicated therein. Upon satisfaction of the Purchase Price for the Initial Portfolio by the Guarantor pursuant to Section 2.1, the Seller shall be deemed to have sold, transferred, assigned and conveyed all of its right, title, interest and benefit in and to the Loans, their Related Security and the other assets in the Initial Portfolio without the need for any further formal or other instrument or assignment, effective as of the First Purchase Date.

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

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3.4 Until registered title to the Related Security for any Loan included in the Portfolio is transferred into the name of the Guarantor (or as it may direct) pursuant to Section 6 or otherwise, or unless otherwise required by applicable Law, (i) the Seller will, or the Seller will procure the applicable Originator to, hold the registered title to such Loan and Related Security as agent, bare trustee and nominee in trust for and on behalf of the Guarantor, and (ii) neither the Guarantor nor the Managing GP on its behalf will register or deposit or cause to be registered or deposited, and the Seller or the applicable Originator shall not be required 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 notice of the interest of the Guarantor in any of the Loans nor will the Guarantor or the Managing GP on its behalf communicate or the Seller be required to communicate in any way or manner whatsoever to the Borrowers or to any other Person having any interest in the related mortgaged properties the fact that the Guarantor has an interest in the Loans.

4. SALE AND PURCHASE OF NEW PORTFOLIOS

4.1 Subject to fulfilment of the conditions and undertakings set out in Sections 4.4 to 4.7, if the Seller shall, at any time and from time to time serve (such service to be in the Seller’s sole discretion) a properly completed New Portfolio Notice to the Guarantor with a copy to the Bond Trustee and each Rating Agency, the Seller agrees that on the date for completion of the sale specified in such New Portfolio Notice (which date shall be no less than five Canadian Business Days after the date of such New Portfolio Notice), the Seller shall sell, transfer, assign and convey to the Guarantor all of the Seller’s right, title, interest and benefit in and to the Loans, their Related Security and the other assets in the relevant New Portfolio on a fully-serviced basis.

4.2 Within three Canadian Business Days of receipt of a New Portfolio Notice in duplicate the Guarantor shall countersign that New Portfolio Notice in duplicate and return one original copy to the Seller and the Guarantor agrees, subject to the provisions of the Guarantor Agreement, to purchase the relevant Loans and their Related Security which will be New Loans and their Related Security comprised in the relevant New Portfolio on the date for completion specified in the relevant New Portfolio Notice.

4.3 If at any time prior to the occurrence of: (i) an Issuer Event of Default; or (ii) a Guarantor Event of Default, the Guarantor receives written notification from the Cash Manager that the Asset Coverage Test has not been met, as determined by the Cash Manager on any Calculation Date, then, if the Guarantor has not requested that the Seller make a further advance under the Demand Loan with respect to such deficiency, the Guarantor shall within three Canadian Business Days of receiving such written notice notify the Seller requesting that the Seller offer to sell to the Guarantor in accordance with the provisions of this Section 4 sufficient New Loans and their Related Security on or before the next Calculation Date to ensure that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date and the Guarantor shall use all reasonable endeavours to acquire from the Seller sufficient New Loans and their Related Security so that, taking into account the other assets and resources available to the Guarantor, the Asset Coverage Test is met on the next Calculation Date.

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4.4 The conditions to be met as at each Purchase Date are:

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

(b) the Guarantor, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that the proposed purchase by the Guarantor of the relevant Loans and their Related Security on the relevant Purchase Date would adversely affect the then current rating by any of the Rating Agencies of the Covered Bonds; and

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

4.5 Subject to fulfilment of the conditions referred to in Section 4.4, the relevant Purchase Price to be provided to the Seller for the sale, transfer, assignment and conveyance of a New Portfolio to the Guarantor on a Purchase Date shall be satisfied by payment to the Seller in same day funds an amount equal to the Purchase Price for such New Portfolio by depositing such amount into the Seller’s Account or, if the Seller so elects in writing to the Guarantor on or before the applicable Purchase Date, the Guarantor shall credit the Seller’s Capital Account Ledger with an amount equal to all (or the portion of the Purchase Price for such New Portfolio not paid in cash) of such Purchase Price.

4.6 Subject to Schedule 6 to the Guarantor Agreement, on each Guarantor Payment Date the Guarantor may apply Available Principal Receipts towards the purchase of New Loans and their Related Security offered to the Guarantor by the Seller in accordance with Sections 4.1 and 4.2 in an amount sufficient to ensure that, taking into account the other assets and resources available to the Guarantor, the Guarantor is in compliance with the Asset Coverage Test.

4.7 On the relevant Purchase Date, the Seller shall deliver the following documents:

(a) to the Custodian:

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

(ii) to the extent not provided on a previous Purchase Date, such number of originals of the Powers of Attorney as may reasonably be requested by the Guarantor, duly executed by the Seller and where applicable, duly executed by the relevant Originator, together with an opinion of legal counsel to the Seller in form and substance acceptable to the Guarantor and the Bond Trustee (each acting reasonably) confirming such Powers of Attorney are valid, enforceable and irrevocable, and sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security sold, transferred, assigned and conveyed by the Seller on such Purchase Date; and

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(b) to the Guarantor and the Bond Trustee:

(i) a certificate signed by at least one authorized signatory of the Seller dated as of the relevant Purchase Date attaching if applicable a copy of the board minutes of the Seller (if not previously delivered to the Guarantor and the Bond Trustee) authorizing its duly authorized representatives to agree to the sale of the relevant New Portfolio and authorizing the execution, delivery and performance of the documentation to be entered into pursuant to this Agreement and confirming that the resolutions referred to therein and in the board minutes referred to in Section 3.1(b)(i) are in full force and effect and have not been amended or rescinded as at the date of the certificate;

(ii) if applicable, a form of assignment for purposes of the assignment, sale, transfer and conveyance of Properties located in the Province of Québec, in form and substance acceptable to the Guarantor and the Bond Trustee (acting reasonably);

(iii) opinions of local counsel to the Seller in form and substance satisfactory to the Guarantor and the Bond Trustee with respect to such matters as may be requested by the Guarantor and the Bond Trustee (each acting reasonably);

(iv) executed copies of all financing statements, financing change statements, discharges and releases, if any, necessary to discharge or release all security interests and other rights or interests of any Person in the Loans and Related Security included in the Initial Portfolio previously granted by the Seller (other than Permitted Security Interests), together with copies of the relevant financing change statements or other discharge statements or releases with the registration particulars stamped thereon or other assurance satisfactory to the Guarantor;

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(v) completed PPSA search results, dated within five Canadian Business Days of the date of the First Purchase Date, listing the financing statements referred to in Section 4.7(b)(iv) above and all other effective financing statements filed in the jurisdictions referred to in Section 4.7(b)(iv) above that name the Seller as debtor and show no other Adverse Claims on any of the Loans or Related Security being purchased on the First Purchase Date;

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

(vii) an opinion of legal counsel to the Seller with respect to “true sale” matters, “non-consolidation” matters, the registrations specified in Section 4.7(b)(vi) above and other matters in form and substance satisfactory to the Guarantor and the Bond Trustee (each acting reasonably); and

(viii) a solvency certificate signed by at least one authorized signatory of the Seller dated as at the relevant Purchase Date (in form and substance satisfactory to the Guarantor and the Bond Trustee, each acting reasonably), but only in the event that (i) the relevant Purchase Date is also an Issue Date; and/or (ii) a solvency certificate has not been delivered by the Seller in the three months prior to the relevant Purchase Date; and/or (iii) as at the relevant Purchase Date the short-term, unsecured, unsubordinated and unguaranteed debt obligations of the Seller are not rated at least P-1, R-1(low) or F-1 by Moody’s, DBRS and Fitch, respectively; and/or (iv) an Issuer Event of Default has occurred and is continuing.

The parties hereto acknowledge that completion on each Purchase Date of the sale, transfer, conveyance and assignment to the Guarantor of all of the Seller’s right, title, interest and benefit in and to the relevant New Portfolio shall occur as indicated in this Section 4. Upon satisfaction of the Purchase Price by the Guarantor pursuant to Section 4.5, the Seller shall be deemed to have sold, transferred, assigned and conveyed all of its right, title, interest and benefit in and to the New Loans, their Related Security and the other assets in the New Portfolio without the need for any further formal or other instrument or assignment, effective as of the relevant Purchase Date.

4.8 The sale by the Seller of any New Loans and their Related Security to the Guarantor shall not include any obligation relating to payment of funds to a Borrower in respect of such New Loans, which obligation shall at all times, and notwithstanding the sale of such New Loans and their Related Security to the Guarantor, remain an obligation of the Seller.

4.9 If any sale of any New Portfolio by the Seller to the Guarantor on the relevant Purchase Date includes the sale of any New Loans, which are New Loan Types, the parties agree that the Eligibility Criteria and the Loan Representations and Warranties, with the prior consent of the Bond Trustee (such consent to be given in accordance with Section 8.10) and subject to satisfaction of the Rating Agency Condition with respect to the sale of such New Loan Types, be modified as appropriate to accommodate such New Loans prior to the relevant Purchase Date.

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4.10 The Seller shall not sell any New Loans to the Guarantor which have not been originated by it or another Originator and which have been purchased from third parties unless the Rating Agency Condition has been satisfied in respect thereof.

4.11 The Guarantor shall pay to the Seller all Third Party Amounts on each Guarantor Payment Date from amounts on deposit in the GDA Account.

5. TRUST OF MONEYS

5.1 Notwithstanding the sales, assignments, transfers and conveyances effected by this Agreement, if at, or at any other time after, the First Purchase Date (but prior to any repurchase in accordance with Section 8) the Seller holds, or there is held to its order, or it receives, or there is received to its order any property, interests, rights or benefits and/or the proceeds thereof hereby sold, assigned, transferred and conveyed, the Seller undertakes to each of the Guarantor and the Bond Trustee that, subject to Section 6, it will promptly remit, assign and/or transfer the same to the Guarantor or, if appropriate, the Bond Trustee or as either of them shall direct and until it does so or to the extent that the Seller is unable to effect such remittance, assignment, assignation or transfer, it will hold such property, interests, rights or benefits and/or the proceeds thereof in trust for the Guarantor.

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

6. ACTIONS UPON A REGISTERED TITLE EVENT

6.1

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

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(i) within 20 Canadian Business Days of such occurrence, give notice of the Guarantor’s ownership interest in the related Loans to each Borrower thereunder, which notice shall direct that payments of all amounts payable under such Loans be made directly to the Guarantor or its designee,; provided, that if the Seller fails to so notify each such Borrower, the Guarantor may so notify such Borrowers at the expense of the Seller;

(ii) transfer to the Guarantor (or as it may direct) the registered title to Mortgages evidencing and securing such related Loans (if the Guarantor is not in possession of a registrable transfer with respect thereto), the other Related Security (if applicable) and to any property registered in the name of the Seller as a result of foreclosure proceedings under any such Loan and will upon demand by the Guarantor, execute and deliver or cause to be executed and delivered to the Guarantor, assignments of such Loans and transfers of such property in registrable form and all further deeds, documents, instruments and writings and will do and perform all acts and things as the Guarantor may reasonably require for the purpose of transferring legal title to such Loans including, without limitation, the Related Security or such property from the Seller to the Guarantor (or as it may direct), including delivery of original or certified copies of all registered documents which show the complete chain of title from the originating mortgagee to the Guarantor; and

(iii) promptly (A) assemble all of the records then in its possession or control (including computer records and files) and which are necessary or desirable to collect the related Loans, including for greater certainty all agreements comprising part of the Customer Files, and make the same available to the Guarantor or its designee at a place selected by the Guarantor, (B) segregate all cash, cheques and other instruments received by it from time to time constituting payments with respect to the related Loans in a manner acceptable to the Guarantor and, promptly upon receipt, remit all such cash, cheques and instruments, duly endorsed or with duly executed instruments of transfer, to the Guarantor or its designee, and (C) name the Guarantor (or its designee) as loss payee on any applicable related insurance policies maintained by the Seller in respect of the Loans assigned to the Guarantor.

(b) Subject to Section 6.1(c), each of the foregoing duties shall, unless otherwise specified, be fulfilled by the Seller no later than the 60^th day following the day on which the Registered Title Event occurred. The Seller shall be liable for all costs and expenses associated with the foregoing duties, whether performed by the Seller or by the Guarantor. The Seller shall ensure that, to the extent applicable, each applicable Originator performs the foregoing duties, in each case at the expense of the Seller.

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

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(a) the Loans and their Related Security are to be sold or otherwise disposed of by the Guarantor or the Bond Trustee in the exercise of their respective rights under the Transaction Documents; or

(b) the Guarantor or the Bond Trustee is required to take actions to enforce or otherwise deal with the Loans and their Related Security.

(d) If the Seller fails to perform any of the foregoing duties, the Guarantor or the Bond Trustee will use the Powers of Attorney to transfer registered or recorded title to the Mortgages evidencing and securing the Loans sold by the Seller and their Related Security to the Guarantor into its name and perform and complete any of the other matters referred to in Section 6.1(a) and the Guarantor is hereby irrevocably and unconditionally authorized and directed by the Seller to complete the annexes to the Powers of Attorney in order to enable it to use the Powers of Attorney to complete the matters referred to in Sections 6.1(a). The Seller will provide, at no cost to the Guarantor, all necessary information required to complete such annexes to the Powers of Attorney within a reasonable time following the request of, and in a reasonable format required by, the Guarantor or the Bond Trustee, as applicable (each acting reasonably). The Seller will indemnify the Guarantor and the Bond Trustee for any losses incurred by the Guarantor or the Bond Trustee as a result of such failure and/or any costs incurred by the Guarantor or the Bond Trustee in respect of the assembly and completion of such annexes to the Powers of Attorney and/or the use of the such Powers of Attorney.

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

7. UNDERTAKINGS

7.1 The Guarantor undertakes to the Seller that it will at all times (or will direct the Servicer at all times to) administer and enforce (and exercise its powers and rights and perform its obligations under) the Loans included in the Portfolio and their Related Security in accordance with the Credit and Collection Policy (for so long as it exists and thereafter in accordance with such policies as would be applied by a Reasonable, Prudent Mortgage Lender in the conduct of its business). The entering into of the Servicing Agreement by the Guarantor shall constitute satisfaction of the undertaking in this Section 7.1. The Guarantor further undertakes to the Seller and the Bond Trustee that it will (i) comply in all material respects with its obligations under each of the Transaction Documents to which it is a party, and (ii) comply with the CMHC Guide.

7.2 The Seller undertakes to the Guarantor that, in the event that any Borrower establishes that it has at any time prior to the First Purchase Date or, as the case may be, the relevant Purchase Date, paid to the Seller any amounts in excess of sums due to the Seller as at the relevant date of payment under the Mortgage Conditions applicable to that Loan, the Seller will reimburse the Borrower for such overpayment together with any interest, cost or other expense associated therewith. The Seller further

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agrees to hold the Guarantor harmless against any such claims and to indemnify the Guarantor on an after Tax basis in relation to any costs, expense, loss or other claim which may arise in connection therewith. Any payment made by the Seller to the Guarantor in discharge of the foregoing indemnity shall be regarded as a rebate of part of the Purchase Price of the relevant Loan.

7.3 The Seller undertakes to direct the relevant insurer to pay to the Guarantor any insurance payments made under any insurance policy in effect maintained by the Seller covering risks of physical loss or damage to a Property in respect of a Loan and its Related Security in the Portfolio which applies if the related Borrower fails to maintain such an insurance policy. The Guarantor (or the Cash Manager on its behalf), will forthwith deposit any such insurance proceeds it receives from the Seller into the GDA Account (or, as applicable, the Standby GDA Account) and credit such insurance proceeds to the Principal Ledger on the GDA Account (or, as applicable, the Standby GDA Account).

8. REPRESENTATIONS AND WARRANTIES; REPURCHASE BY THE SELLER

8.1 (a)

(i) The Seller hereby makes the Corporate Representations and Warranties in respect of itself and hereby makes the Loan Representations and Warranties in respect of each Loan and its Related Security in the Initial Portfolio on the First Purchase Date in favour of the Guarantor, the Custodian and the Bond Trustee; and

(ii) The Seller hereby makes the Corporate Representations and Warranties in respect of itself and hereby makes the Loan Representations and Warranties in respect of each New Loan and its Related Security in a New Portfolio sold by the Seller pursuant to Section 4, on the relevant Purchase Date in favour of the Guarantor, the Custodian and the Bond Trustee.

(b) Each statement comprised in the Representations and Warranties shall be construed as a separate statement and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other such statement.

(c) The Seller acknowledges:

(i) that the Representations and Warranties are made with a view to inducing the Guarantor, the Custodian and the Bond Trustee (as the case may be) either to enter into this Agreement and the other Transaction Documents to which it is a party or to agree to purchase the New Loans and their Related Security comprised in the Initial Portfolio and each New Portfolio;

(ii) that each of the Guarantor, the Custodian and the Bond Trustee has entered into this Agreement and the other Transaction Documents to which it is a party in reliance upon the Representations and Warranties notwithstanding any information in fact possessed or discoverable by the Guarantor, the Custodian and/or the Bond Trustee or otherwise disclosed to any of them; and

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(iii) that prior to entering into this Agreement and the other Transaction Documents to which each is a party none of the Guarantor, the Custodian or the Bond Trustee has made any enquiries of any matter.

8.2 The Guarantor’s, the Custodian’s and the Bond Trustee’s sole remedy in respect of a breach of any of the Loan Representations and Warranties shall be to take action under Section 8.3.

8.3 In the event of (i) a Loan being the subject of a Product Switch or a request by the applicable Borrower for an advance under the Loan in respect of amounts previously paid by the Borrower thereunder, in accordance with the terms of the Loan, or (ii) a material breach of any of the Loan Representations or Warranties in respect of any Loan and/or its Related Security made under Section 8.1 or if any of those Loan Representations or Warranties proves to be untrue in any material respect in the case of the Initial Portfolio, as at the First Purchase Date or, in the case of a New Portfolio as at the relevant Purchase Date, and provided that, in the case of clause (ii) above:

(a) the Guarantor has given the Seller not less than 20 Canadian Business Days’ notice in writing; and

(b) such breach or untruth, where capable of remedy, is not remedied to the reasonable satisfaction of the Bond Trustee within the 20 Canadian Business Day period referred to in Section 8.3(a) (or such longer period as the Bond Trustee may in its absolute discretion direct the Guarantor in writing) or, if the Seller has become aware of such breach or untruth prior to delivery of a notice thereof by the Guarantor, within 20 Canadian Business Days of the date on which the Seller became aware of such breach or untruth,

then, in each case, the Guarantor shall serve upon the Seller a Loan Repurchase Notice in duplicate substantially in the form set out in Schedule 3 requiring the Seller to repurchase the relevant Loan and its Related Security in accordance with Section 8.6. For purposes of this Section 8.3, any breach of the Loan Representation and Warranty set out in Section 2.1 of Schedule 1 shall be deemed to be a material breach which is not capable of being remedied.

8.4 The Seller may at any time prior to the occurrence of an Issuer Event of Default and service of an Issuer Acceleration Notice or a Guarantor Event of Default and service of a Guarantor Acceleration Notice, offer to repurchase any Loan (including a Defaulted Loan) and its Related Security from the Guarantor. The Guarantor may in its absolute discretion accept such offer by delivering a Loan Repurchase Notice duly signed on behalf of the Guarantor and the provisions of Section 8.6 shall apply, provided that if an Issuer Event of Default has occurred and is continuing but no liquidator has been appointed to the Seller, any such repurchase shall be conditional upon the

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delivery by the Seller to the Guarantor and the Bond Trustee of a solvency certificate (in such form as the Guarantor and the Bond Trustee may reasonably require). Any repurchase under this Section 8.4 shall be subject to the Asset Coverage Test being met upon the completion of such repurchase. Any Loans and their Related Security to be purchased under this Section 8.4 will be selected in a manner that would not reasonably be expected to adversely effect the interests of the Covered Bondholders.

8.5

(a) The Seller (or an Affiliate of the Seller designated by the Seller, in which case the provisions of this Section 8.5 shall apply to such Affiliate mutatis mutandis) may, upon request and subject to the agreement of the Guarantor, at any time prior to the date (the “Repurchase Option Date”) which is 90 days prior to the related maturity date of such Loan (each, a “Mortgage Maturity Date”) repurchase any Loan on for the Repurchase Amount of such Loan, effective as of its related Mortgage Maturity Date. If the Seller does not deliver to the Guarantor on or before the related Repurchase Option Date a written notice specifying the Loans in respect of which it will not exercise the option granted to the Seller pursuant to this Section 8.5 and the Guarantor does not inform the Seller in writing that it cannot repurchase any such Loan, the Seller shall be deemed to have irrevocably exercised its option to repurchase and shall repurchase each such Loan on the Calculation Date next following the applicable Mortgage Maturity Date at the greater of (i) the Repurchase Amount of such Loan as of such Calculation Date, and (ii) the Fair Market Value of such Loan as of such Calculation Date; provided, however that the Seller shall not repurchase and shall not be required to repurchase pursuant to this Section 8.5 any Loan which (i) is or becomes a Defaulted Loan on its Mortgage Maturity Date or (ii) is repaid in full on its Mortgage Maturity Date from funding provided to the Borrower by a Person other than the Seller. On the Calculation Date next following the Mortgage Maturity Date on which the Seller becomes obligated to purchase a Loan pursuant to this Section 8.5, the Seller shall pay to the GDA Account an amount equal to the greater of (i) the Repurchase Amount for the Loans as of such Calculation Date, and (ii) the Fair Market Value of such Loans as of such Calculation Date.

(b) Upon the deposit by the Seller to the GDA Account of the aggregate Repurchase Amount for all Loans to be repurchased by the Seller on any Calculation Date, all such Loans and Related Security and proceeds thereof shall be sold, assigned and transferred to the Seller by the Guarantor without the need for any formal or other instrument or assignment effective as of such Calculation Date, free from the Security created by or pursuant to the Security Agreement. If, in respect of any Loan, the Seller delivers to the Guarantor a notice described in this Section 8.5, the Guarantor informs the Seller that the Seller cannot purchase such Loan under this Section 8.5, or if the Seller fails to deliver such notice and does not remit the related Repurchase Amount to the GDA Account as provided herein, the Guarantor may sell or assign such Loan and its Related Security in any manner permitted by law and the Seller shall not have any further or other right to purchase such Loan pursuant to this Section 8.5.

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8.6 Upon receipt of a Loan Repurchase Notice duly signed on behalf of the Guarantor the Seller shall, pursuant to its obligation or agreement pursuant to Sections 8.3 or 8.4 above or Section 13.2(c) to repurchase the applicable Loans, sign and return a duplicate copy and shall thereby repurchase from the Guarantor, and the Guarantor shall thereby re-assign or re-transfer to the Seller free from the Security created by or pursuant to the Security Agreement, the relevant Loan and its Related Security. Completion of such repurchase shall take place on the Calculation Date after receipt by the Seller of such Loan Repurchase Notice or such other date as the Guarantor may direct in the Loan Repurchase Notice (provided that the date so specified by the Guarantor shall not be later than 90 days after receipt by the Seller of such notice) when the Seller shall pay to the GDA Account (or as the Guarantor shall direct) an amount equal to (x) in the case of a repurchase pursuant to Section 8.3, the greater of (i) the aggregate Fair Market Value of such Loans, and (ii) the aggregate Repurchase Amount for such Loans, and (y) in any other case, the aggregate Fair Market Value of such Loans, and in each case the provisions of Section 8.7 will apply.

8.7 On the date of completion of any repurchase of a Loan and its Related Security in accordance with Section 8.6 above, the Bond Trustee and the Guarantor shall, at the cost of the Seller execute and deliver, or cause their respective duly authorized attorneys to execute and deliver, to the Seller any documentation necessary to release such Loan and its Related Security from the Security created by or pursuant to the Security Agreement and all related rights of the Bond Trustee and the Guarantor in respect thereof. In accordance with Section 7.1(5) of the Guarantor Agreement, any such sale will not include any representations, warranties or indemnities from the Guarantor in respect of the related Loans and the Related Security.

8.8 Upon the completion of any purchase, transfer, repurchase or re-transfer of any Loan and its Related Security in accordance with this Section 8, the Seller shall, subject to any applicable privacy and/or record retention laws, regulations or policies, cease to be under any further obligation to hold any Customer Files or other documents relating to such Loan or Loans and its or their Related Security on behalf of the Guarantor or the Bond Trustee, and if the Bond Trustee then holds any such Customer Files or other documents, the Bond Trustee shall forthwith return them to the Seller. Any such purchase, transfer, repurchase or re-transfer by or to the Seller of a Loan or Loans and its or their Related Security shall constitute a discharge and release of the Seller from any claims which the Guarantor or the Bond Trustee may have against the Seller arising from any Representation and Warranty in relation to that Loan or Loans and its or their Related Security only, but shall not affect any rights arising from a breach of any other express provision of this Agreement or any Representation and Warranty in relation to any other Loan and Related Security.

8.9 Forthwith after the Seller becomes aware of any events which may reasonably give rise to an obligation under this Section 8 to repurchase any Loan it shall notify the Guarantor and the Bond Trustee in writing thereof as soon as reasonably practicable.

8.10 The parties to this Agreement may, with the prior written consent of the Bond Trustee (subject to the following sentence), waive, amend or modify any Loan Representation and Warranty, or include new Loan Representations and Warranties, in each case, including without limitation modifications or additions to accommodate the sale of New Loan Types to the Guarantor; provided, however, that (i) any such waiver, amendment or modification that is material shall be subject to satisfaction of the Rating Agency Condition and shall not require the consent of the Bond Trustee, and notice thereof shall have been provided to CMHC, and (ii) any such waiver, amendment or modification shall be in compliance with the CMHC Guide.

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9. FURTHER ASSURANCE

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

9.2 The Seller shall provide all reasonable co-operation to the Guarantor and the Bond Trustee to enable them to carry out their respective duties and enforce their rights in relation to the Portfolio under the Transaction Documents. Without prejudice to the generality of the foregoing, the Seller shall:

(a) upon reasonable prior notice and during normal office hours, permit the Guarantor, the Bond Trustee and their authorized employees and agents and other persons nominated by the Bond Trustee and approved by the Seller (such approval not to be unreasonably withheld or delayed), to review the Customer Files in relation to the Portfolio (subject to such person(s) agreeing to keep the same confidential provided that disclosure shall be permitted to the professional advisors and auditors of the party to whom such disclosure is made and/or to the extent that such disclosure is required by law or for the purpose of any judicial or other proceedings);

(b) take all such actions and do all such things as may be necessary for the transfer of Loans and their Related Security to third-party purchasers as provided for hereunder; and/or

(c) give promptly all such information and explanations relating to the Loans and their Related Security as the Guarantor and/or the Bond Trustee may reasonably request (including a list of the Loans and their Related Security included in the Portfolio along with details of the location of the Customer Files relating thereto),

provided that prior to the occurrence of a Registered Title Event, the Seller shall be under no obligation to provide any information or documentation to any person other than the Guarantor and/or the Bond Trustee or their respective directors, officers, employees, agents and/or professional advisors or allow such person access to the Customer Files if to do so would result in a breach of the applicable Mortgage Conditions or any applicable law.

10. CONSEQUENCES OF BREACH

Without prejudice to the rights of the Guarantor under Article 8, the Guarantor, the Custodian and the Bond Trustee severally acknowledge to and agree with the Seller, that the Seller shall have no liability or responsibility for any loss or damage for or in respect of any breach of, or any act or omission in respect of, any of its obligations hereunder other than loss or damage directly (and not indirectly or consequentially) suffered by the Guarantor by reason of such breach, act or omission. For this purpose (and without limiting the scope of the above exclusion in respect of indirect or consequential loss or damage) any loss or damage suffered by the Guarantor as a result of the breach, act or omission in question also having been or having given rise to an Guarantor Event of Default or enforcement of the Security created by the Security Agreement shall be treated as indirect or consequential loss or damage.

11. SALE OF SELECTED LOANS

11.1 If, (i) following (a) service of an Asset Coverage Test Breach Notice (which has not been revoked), (b) service of a Notice to Pay, (c) a breach of the Pre-Maturity Test, or (d) a Demand Loan Repayment Event or demand for repayment of the Demand Loan by the Seller, or (ii) in the circumstances set forth in Section 7.1(2) of the Guarantor Agreement, the Guarantor is required to, or has determined that it

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shall, sell Selected Loans in accordance with Article 7 of the Guarantor Agreement, and provided that the Seller is not in default of any of its obligations hereunder or under any other Transaction Document to which it is a party, the Guarantor shall by serving on the Seller a Selected Loan Offer Notice in duplicate substantially in the form set out in Schedule 5, prior to the Guarantor making any offer to sell Selected Loans to other Purchasers, offer immediately to sell to the Seller those Selected Loans in accordance with Schedule 9 of the Guarantor Agreement.

11.2 If the Seller accepts the Guarantor’s offer to sell the relevant Selected Loans by signing the duplicate Selected Loan Offer Notice in a manner indicating acceptance and delivering it to the Guarantor with a copy to the Bond Trustee within 10 Canadian Business Days from and including the date of the Selected Loan Offer Notice and provided that (if an Issuer Event of Default has occurred and is continuing but no liquidator has been appointed to the Seller) the Seller has provided a solvency certificate in a form acceptable to the Guarantor and the Bond Trustee (each acting reasonably), the Guarantor shall within three Canadian Business Days of receipt of such acceptance serve a Selected Loan Repurchase Notice substantially in the form set out in Schedule 6 on the Seller.

11.3 The Guarantor shall offer for sale the Selected Loans in respect of which the Seller rejects or fails within the requisite time limit to accept the Guarantor’s offer to sell to Purchasers in the manner and on the terms set out in Article 7 of the Guarantor Agreement.

11.4 Upon receipt of the Selected Loan Repurchase Notice duly signed on behalf of the Guarantor, the Seller shall promptly sign and return a duplicate copy of the Selected Loan Repurchase Notice and shall repurchase from the Guarantor, and the Guarantor shall, subject to Section 7.02 of the Security Agreement, re-assign or re-transfer to the Seller free from the Security created by or pursuant to the Security Agreement, the Selected Loans (and any other Loan secured or intended to be secured by that Related Security or any part of it) referred to in the relevant Selected Loan Repurchase Notice. Completion of such repurchase shall take place on the next Guarantor Payment Date occurring after receipt by the Seller of such Selected Loan Repurchase Notice or such other date as the Guarantor may direct in the Selected Loan Repurchase Notice (provided that such date, where a Notice to Pay has been served, shall not be later than the earlier to occur of the date which is (a) 10 Canadian Business Days after receipt by the Guarantor of the returned Selected Loan Repurchase Notice and (b) the Final Maturity Date of the Earliest Maturing Covered Bonds) when the Seller shall pay to the GDA Account (or as the Guarantor shall direct) an amount in cash equal to the offer price specified in the relevant Selected Loan Repurchase Notice and the provisions of Sections 11.5 and 11.6 shall apply.

11.5 On the date of completion of the repurchase of the Selected Loans in accordance with Sections 11.3 and 11.4, the Bond Trustee and the Guarantor shall at the cost of the Seller execute and deliver, or cause their respective duly authorized attorneys to execute and deliver, to the Seller any documentation necessary to release such Selected Loans from the Security created by the Security Agreement.

11.6 Upon such completion of the repurchase of the Selected Loans in accordance with Section 11.4 above or the sale of Selected Loans by the Guarantor to the Seller or a Purchaser pursuant to Article 7 of the Guarantor Agreement, the Seller shall cease to be under any further obligation to hold any Customer Files or other documents relating to the Selected Loans to the order of the Bond Trustee and, if the Bond Trustee holds such Customer Files or other documents, it will send them to the Seller or the Purchaser, as applicable. Any repurchase by the Seller of or in respect of the Selected Loans or any sale of Selected Loans by the Guarantor to a Purchaser or Purchasers pursuant to Article 7 of the Guarantor Agreement

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shall constitute a discharge and release of the Seller from any claims which the Guarantor or the Bond Trustee may have against the Seller arising from any Loan Representation and Warranty in relation to the Selected Loans previously sold by the Seller to the Guarantor only but shall not affect any rights arising from a breach of any other express provision of this Agreement or any Representation and Warranty in relation to any other Loan and Related Security.

12. CUSTODIAN

12.1 The Guarantor hereby appoints the Custodian as its custodian with respect to the Custodial Information and authorizes the Custodian to do, make and execute all such acts, documents, matters and things which the Custodian may deem necessary or advisable to accomplish the purposes of this Agreement and its duties pursuant to this Article 12. The Custodian hereby accepts such appointment.

12.2 The Custodian hereby represents, warrants and covenants as follows:

(a) it is a federally chartered institution authorized to act in a fiduciary capacity with respect to valuable documents;

(b) it is and will continue to be in good standing with all applicable regulatory authorities;

(c) it possess the necessary experience, qualifications, facilities and other resources to perform its responsibilities as Custodian;

(d) it is and will continue to be in regulatory good standing under, and in material compliance with, all Laws applicable to it, and is in material compliance with its internal policies and procedures (including risk management policies), relevant to its duties as Custodian;

(e) it is equipped with secure, fireproof storage facilities, with adequate controls on access to assure the safety, confidentiality and security of the documents, in accordance with customary standards for such storage facilities;

(f) it has employees who are knowledgeable in the handling of mortgage and security documents and in the duties of a mortgage and security document custodian;

(g) it has computer systems that can accept electronic versions of asset details, and be able to transmit that data to CMHC, the Cover Pool Monitor, the Guarantor or its representatives or a replacement Servicer in a form that is generally readable by computer systems;

(h) it is at arm’s length from, and otherwise independent and not an Affiliate of, the Seller; and

(i) it will take all necessary steps to comply with all applicable privacy legislation in connection with any information provided to it hereunder.

12.3

(a) On or prior to the tenth Business Day following the last day of January, April, July and November of each year, commencing on the first of such dates to occur after the First Purchase Date, the Seller and the Cash Manager shall (i) provide updated Custodial Information to the

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Custodian, and (ii) confirm in writing that it is not aware of any change in Law affecting or reasonably expected to affect the validity or enforceability of any Powers of Attorney previously provided to the Custodian by the Seller pursuant to this Agreement.

(b) Forthwith upon any change in Law affecting or reasonably expected to affect the validity or enforceability of any Powers of Attorney previously provided to the Custodian by the Seller pursuant to this Agreement, the Seller shall deliver to the Custodian updated irrevocable Powers of Attorney which satisfy the requirements set forth in this Agreement, together with an opinion of legal counsel to the Seller confirming that such Powers of Attorney are sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security included in the Portfolio. A copy of such opinion shall contemporaneously be delivered to CMHC.

(c) Upon each anniversary of the Program Date, the Seller shall deliver to the Custodian an opinion of legal counsel to the Seller in form and substance satisfactory to the Guarantor and the Bond Trustee (each acting reasonably) confirming that the Powers of Attorney previously provided to the Custodian pursuant to Sections 3.1(a)(i), 4.7(a)(ii) or 12.3(b) continue to be valid and enforceable and are sufficient to allow the Guarantor (or a nominee on its behalf) to effect the transfer of registered title to the Loans and Related Security included in the Portfolio. A copy of such opinion shall contemporaneously be delivered to CMHC and DBRS.

(d) On the date of each transfer of Loans and their Related Security and/or Substitution Assets from the Guarantor to any Person, the Seller, or the Servicer or the Cash Manager, as applicable, shall deliver to the Custodian for safekeeping (a) Eligible Loan Details, and (b) Substitution Asset Details in respect of the Loans and Related Security and Substitution Assets, if any, transferred by the Guarantor on such date.

(e) On the date of each transfer of Substitution Assets from the Seller to the Guarantor and on each date on which the Cash Manager makes an investment in Substitution Assets, the Seller or the Cash Manager, as applicable, shall deliver to the Custodian for safekeeping Substitution Asset Details in respect of such Substitution Assets.

(f) Forthwith upon the occurrence of a Registered Title Event, the Seller or the Cash Manager, as applicable, shall deliver to the Custodian updated Custodial Information in relation to all Loans and Related Security and Substitution Assets included in the Portfolio and, to the extent necessary, any information required to update the Powers of Attorney previously delivered by the Seller to the Custodian, together with documentary evidence of chain of title to such Loans and Related Security and Substitution Assets, together with Registrable Transfers in relation to such Loans and Related Security.

(g) If any of the Loans that have been sold to the Guarantor hereunder were originated in the Province of Québec, upon the earlier of (i) the occurrence of a Registered Title Event, and (ii) a downgrade of the senior long-term rating assigned to the Seller by one or more of DBRS, Moody’s or Fitch below BBB(high), BBB+ or Baa1, respectively, the Seller will notify the Borrowers (and their guarantors) and deliver Registrable Transfers to the Custodian in relation to each such Loan and hypothecs included in the Québec Purchased Assets, make all registrations and generally complete all formalities required under the laws of the Province of Québec in order to render the sale and assignment of the Québec Purchased Assets opposable against the Borrowers (and their guarantors) and all third persons, in accordance with Articles 1641, 1645 and 3003 of the Civil Code of Québec. The Seller will act upon the Guarantor’s instructions under this Section 12.3(g).

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(h) Upon the occurrence of a Servicer Termination Event, the Seller shall deliver to the Custodian in electronic form (where available), or provide the Guarantor reasonable access to, all of its mortgage loan servicing files (and cause each of its Affiliates acting as a servicer of any Loans to similarly deliver or afford reasonable access to all of its mortgage loan servicing files) relating to the Covered Pool Portfolio including, in the case of each Loan, affording reasonable access to the Servicing Records for each Loan included in the Portfolio.

(i) The Seller shall make available to CMHC, upon reasonable request, all Custodial Information that has been provided to the Custodian by the Seller and all such other accounts and records of the Seller relating to the Loans and Related Security included in the Portfolio, as may be required by CMHC to verify compliance by any party to the Transaction Documents with the requirements of the CMHC Guide and Part I.1 of the National Housing Act (Canada).

(j) The Seller shall make available to the Cover Pool Monitor, upon reasonable request, all data and documentation provided by the Seller to the Custodian hereunder, as may be required for the Covered Pool Monitor to perform its duties under the Covered Pool Monitor Agreement.

12.4 The Custodian shall remain responsible for the data and documents delivered to it in accordance with this Agreement until the earlier of:

(a) the time of their release to a replacement Custodian (it being acknowledged that the replacement Custodian shall be responsible for the safe transfer of the data and documents to its premises and systems);

(b) the termination of the Program, whereupon the Custodian shall either (i) release the data and documents to the Seller or as the Seller may direct or (ii) destroy the data and documents in accordance with procedures satisfactory to the Seller, all in accordance with the Seller’s instructions; and

(c) in relation to a particular Loan or Substitution Asset included in the Portfolio, its disposition by the Guarantor or its maturity, whereupon the Custodian shall either (i) release the particular data and documents related to such Loan or Substitution Asset to the Seller or as it may direct, or (ii) destroy such data and documents in accordance with procedures satisfactory to the Seller, all in accordance with the Seller’s instructions.

12.5

(a) The Custodian may resign at any time upon giving not less than three calendar months’ prior notice in writing to the Guarantor, the Seller and the Bond Trustee without assigning any reason therefor and without being responsible for any liabilities incurred by reason of such resignation.

(b) The Guarantor may, at any time, but subject to the prior written consent of the Bond Trustee (if the Custodian is not the Bond Trustee), terminate the appointment of the Custodian hereunder upon providing the Custodian with at least 60 days’ prior written notice, provided that, subject to Section 12.5(c) below, such termination may not be effected unless and until a replacement approved by the Bond Trustee, acting reasonably, has been found by the Guarantor which agrees to perform the duties (or substantially similar duties) of the Custodian set out in this Agreement.

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Notwithstanding the foregoing, the Guarantor may unilaterally remove the Custodian by notice to the Custodian and the Issuer in the event of a default by the Custodian in the performance or observance of its covenants and obligations, or a breach by the Custodian of its representations and warranties, respectively, under Section 12.2.

(c) Notwithstanding the foregoing, except when removed as a result of a default by the Custodian in the performance or observance of its covenants and obligations, or a breach by the Custodian of its representations and warranties, respectively, under Section 12.2, where such removal shall be effective immediately, the resignation or removal of the Custodian will not become effective unless a replacement Custodian has been appointed which has agreed to the terms of this Agreement and with respect to which appointment the Rating Agency Condition has been satisfied. The Guarantor covenants that, in the event of a Custodian giving notice under Section 12.5(a) or being removed as referred to in Section 12.5(b), it will use all commercially reasonable endeavours to procure a new Custodian to be appointed as soon as reasonably practicable thereafter. If within 60 days of having given notice of its intention to resign, no appointment of such replacement Custodian has become effective, the outgoing Custodian will be entitled to appoint its successor (provided that such successor will agree to the terms of this Agreement).

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

(e) Any replacement Custodian appointed hereunder shall satisfy the requirements of the CMHC Guide applicable to custodians.

12.6

(a) The parties to this Agreement acknowledge and agree that the Custodian acts hereunder as a custodian only and (i) shall not be responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of any materials deposited with it, for the form or execution of such instruments, for the identity, authority or right of any Person or party executing or depositing such instruments or for determining or compelling compliance therewith, and shall not otherwise be bound thereby; (ii) shall be obligated only for the performance of such duties as are expressly and specifically set forth in this Agreement on its part to be performed, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part of the Custodian; (iii) shall not be required to take notice of any default or to take any action with respect to such default involving any expense or liability, unless notice in writing of such default is formally given to the Custodian, and unless it is indemnified and funded, in a manner satisfactory to it, against such expense or liability; (iv) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, instrument, statement, certificate, request or other document furnished to it

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hereunder and believed by it to be genuine and to have been signed or presented by the proper Person, and shall have no responsibility for determining the accuracy thereof; (v) may employ and consult legal counsel satisfactory to it, including in-house counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion of such counsel; and (vi) shall not be responsible for delays or failures in performance resulting from acts beyond its control, including without limitation, acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.

(b) The Custodian may employ such counsel, accountants, appraisers, other experts, agents, agencies and advisors as it may reasonably require for the purpose of discharging its duties under this Agreement, and the Custodian may act and shall be protected in acting in good faith on the opinion or advice or on information obtained from any such parties and shall not be responsible for any misconduct on the part of any of them. The reasonable costs of such services shall be added to and be part of the Custodian’s fee hereunder.

(c) The Custodian shall retain the right not to act and shall not be held liable for refusing to act unless it has received clear and reasonable documentation which complies with the terms of this Agreement. Such documentation must not require the exercise of any discretion or independent judgment.

(d) No provision of this Agreement shall require the Custodian to expend or risk its own funds or otherwise incur financial liability in the performance of its duties or the exercise of any of its rights or powers unless indemnified as provided for herein, other than as a result of its own negligence or bad faith.

(e) The Custodian shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except for its own negligence or bad faith.

(f) The Seller shall pay to the Custodian as consideration for its services provided pursuant to this Agreement an annual fee of such amount as may be agreed to from time to time by the parties hereto payable on the date hereof and thereafter at least 30 days prior to each anniversary of the date hereof. Any such fees not paid by the Seller hereunder shall be paid pursuant to and in accordance with the applicable Priorities of Payments.

(g) The Seller shall pay the costs and expenses of the Custodian’s services hereunder, and the costs and expense reasonably incurred by the Custodian in connection with the administration of its duties created hereby or the performance or observance of its duties hereunder which are in excess of its compensation for normal services hereunder and covered by the remuneration, including without limitation, all out-of-pocket expenses and disbursements incurred or made by the Custodian in the administration of its services and duties created hereby (including the reasonable fees and disbursements of its legal counsel and other outside advisors required for discharge of its duties hereunder). Any such amounts not paid by the Seller hereunder shall be paid pursuant to and in accordance with the applicable Priorities of Payments.

(h) The Seller hereby agrees to indemnify the Custodian and its officers, directors, employees, agents, successors and assigns and hold it and them harmless from and against any loss, fee,

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claim, demand, penalty, liability, damage, cost and expense of any nature incurred by the Custodian and its officers, directors, employees, agents, successors and assigns arising out of or in connection with this Agreement or with the administration of its duties hereunder, including but not limited to, reasonable legal fees and other costs and expenses of defending or preparing to defend against any claim of liability, unless and except to the extent such loss, liability, damage, cost and expense shall be caused by the Custodian’s or its officers’, directors’, employees’, agents’, successors’ or assigns’ negligence or bad faith. The foregoing indemnification and agreement to hold harmless shall survive the resignation or removal of the Custodian or the termination of this Agreement.

(i) The Custodian accepts the duties and responsibilities under this Agreement as agent, and no trust is intended to be, or is or will be, created hereby and the Custodian (in such capacity) shall owe no duties hereunder as trustee.

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13. [RESERVED]

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14. SUBORDINATION

The Seller agrees with the Guarantor and the Bond Trustee that on the enforcement of any Mortgage any sums owed to the Seller by a Borrower and which are secured under such Mortgage and the rights and remedies of the Seller in respect of the sums owed to the Seller shall at all times be subject, subordinated and postponed to any sums owed to the Guarantor by the Borrower and which are secured under such Mortgage and to the rights and remedies of the Guarantor in respect of such sums owed to the Guarantor by the Borrower.

15. NON-MERGER

Any term of this Agreement to which effect is not given on the First Purchase Date or on any Purchase Date (including in particular, but without limitation, the liability of the Seller under the Representations and Warranties and the indemnity in Section 7.2 and the provisions of Section 4) shall not merge and shall remain in full force and effect notwithstanding the sale and purchase contemplated by this Agreement.

16. NO AGENCY OR PARTNERSHIP

It is hereby acknowledged and agreed by the parties that nothing in this Agreement shall be construed as giving rise to any relationship of agency, save as expressly provided herein, or partnership between the parties and that in fulfilling its obligations hereunder, each party shall be acting entirely for its own account.

17. PAYMENTS

Except as otherwise specifically provided, all payments to be made pursuant to this Agreement shall be made in Canadian Dollars in immediately available funds without exercising or seeking to exercise any right of set-off as may otherwise exist and shall be deemed to be made when they are received by the payee and shall be accounted for accordingly unless failure to receive any payment is due to an error by the payee’s bank.

18. AMENDMENTS, VARIATION AND WAIVER

18.1 Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

18.2 Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

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19. NOTICES

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

(a) in the case of the Seller, to Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-7193) for the attention of Senior Manager, Securitization Structuring;

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

(c) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11^th Floor, Toronto, ON M5J 2Y1, (facsimile number (416) 981-9777) for the attention of Manager, Corporate Trust;

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

20. ASSIGNMENT

20.1 Subject always to the provisions of Section 20.2, no party hereto shall be entitled to assign all or any part of its rights or obligations hereunder to any other party without the prior written consent of each of the other parties hereto (which shall not, if requested, be unreasonably withheld or delayed or made subject to unreasonable conditions) save that the Guarantor shall be entitled to assign whether by way of security or otherwise all or any of its rights under this Agreement and all or any of its interest in the Loans and their Related Security without such consent to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement and all or any of its interest in the Loans and their Related Security without such consent to any successor Bond Trustee in exercise of its rights under the Security Agreement.

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

21. BOND TRUSTEE

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

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21.2 It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee shall not assume or have any obligations or liabilities to the Seller or the Guarantor under this Agreement notwithstanding any provision herein or therein and that the Bond Trustee has agreed to become a party to this Agreement for the purpose only of taking the benefit of this Agreement and agreeing to amendments to this Agreement pursuant to Article 18. For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed by the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion, without any obligation to give reasons therefor, and the Bond Trustee shall not be responsible for any liability occasioned by so acting.

22. NON-PETITION COVENANT; LIMITATION OF LIABILITY

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

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

23. DELIVERY OF OPINIONS

23.1 Copies of each opinion delivered to any party hereunder shall also be delivered to CMHC, Fitch and DBRS contemporaneously.

24. GOVERNING LAW

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

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

25. COUNTERPARTS

This Agreement may be executed in any number of counterparts (manually or by electronic or facsimile means) and by different parties hereto in separate 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 instrument.

[Signature pages follow]

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

BANK OF MONTREAL, as Seller, as Servicer and as Cash Manager		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary
		COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee and Custodian
		By:	/s/ Sean Pigott
			Name: Sean Pigott
			Title: Corporate Trust Officer
		By:	/s/ Stanley Kwan
			Name: Stanley Kwan
			Title: Associate Trust Officer

Mortgage Sale Agreement

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FOR GOOD AND VALUABLE CONSIDERATION (the receipt and sufficiency of which are hereby acknowledged), the undersigned hereby acknowledge and agree to the limitations set out in Section 6.1(e) of this Agreement as of the date first above written.

8429065 CANADA INC.
By:	/s/ Stuart Swartz

Name:	Stuart Swartz
Title:	President
BMO COVERED BOND GP, INC.

By: /s/ Chris Hughes

Name:	Chris Hughes
Title:	President and Secretary

Mortgage Sale Agreement

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SCHEDULE 1

REPRESENTATIONS AND WARRANTIES

1. Corporate Representations and Warranties

1.1 The Seller is a Canadian chartered bank under the Bank Act and has, in all material respects, full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement.

1.2 The Seller is qualified under all applicable law, and has obtained all necessary licenses and approvals and is in good standing thereunder, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Mortgage unenforceable by the Seller, any other Purchaser, the Guarantor or the Bond Trustee, as applicable, or would have a material adverse effect on the Guarantor’s rights hereunder.

1.3 The execution and delivery of this Agreement and each of the documents, agreements or instruments to be executed and delivered hereunder by the Seller, and the performance by the Seller of its obligations hereunder and thereunder, have been duly authorized by the Seller by all necessary corporate action on the part of the Seller and are enforceable against the Seller in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity).

1.4 The execution and delivery by the Seller of this Agreement and each of the documents, agreements or instruments to be executed and delivered hereunder, the performance of the transactions contemplated hereunder and thereunder, and the fulfilment of the terms hereof and thereof applicable to the Seller, will not (i) conflict with or violate the constating documents or by-laws of the Seller, any resolution of the board of directors (or any committee thereof) or, to the knowledge of the Seller, the shareholders of the Seller or any Law applicable to the Seller or (ii) conflict with, or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Seller is a party or by which it or its properties are bound, in any such case in a manner that would have a material adverse effect on the Guarantor’s rights hereunder or would materially and adversely affect the validity or enforceability of this Agreement.

1.5 There are no proceedings or investigations, to the best knowledge of the Seller, pending or threatened against the Seller before any Governmental Authority: (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that, in the reasonable judgment of the Seller, would materially and adversely affect the performance by the Seller of its obligations under this Agreement, or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement.

1.6 All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Seller in connection with the execution and delivery by the Seller of this Agreement and the performance of the transactions contemplated by this Agreement have been duly obtained, effected or given and are in full force and

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effect, other than any such authorizations, consents, orders or approvals of or registrations or declarations the absence of which would not materially and adversely affect the validity or enforceability of this Agreement or any Mortgage.

1.7 The Seller is not a Non-Resident.

1.8 None of the transactions contemplated hereunder require compliance with any applicable bulk sales legislation.

1.9 The Seller has duly and timely paid all amounts that it is liable to pay under the Income Tax Act, including all instalments on account of such amounts for the current year, that are due and payable by it whether or not assessed by the appropriate governmental authority and, in respect of amounts that it is liable to pay under the Income Tax Act in or in respect of the current year that are not yet due and payable, will pay such amounts when due, other than such amounts that are subject to a continued dispute or reassessment and for which the Seller has established sufficient reserves.

2. Loan Representations and Warranties

2.1 the Loan meets the Eligibility Criteria and is an “Eligible Loan” as defined in the CMHC Guide from time to time;

2.2 the Loan is a Fixed Rate Loan or a Variable Rate Loan;

2.3 the Borrower thereunder is a resident of Canada and is not, to the best of the knowledge of the Seller, the subject of any insolvency proceeding;

2.4 the Seller and, if applicable, the applicable Originator, is permitted to assign its rights under the Loan (including all Related Security) in whole or in part without notice to or the consent of the Borrower or any other Person and neither the Loan nor the Related Security contains any restriction on the sale, assignment or transfer of the Loan and the Related Security or an interest therein, and the Loan permits its assignment without the consent of the Borrower;

2.5 the Loan is fully advanced as of the date of transfer and is not subject to any contingent performance requirements of the Seller or the applicable Originator unless such requirements are guaranteed or insured by third parties acceptable to a Reasonable, Prudent Mortgage Lender.

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

2.7 the Loan has a remaining amortization period of less than 40 years as of the relevant Purchase Date;

2.8 the Loan contains standard terms and conditions generally contained in conventional residential first mortgages originated by the Seller or the relevant Originator and contains a restriction on the Borrower’s ability to set-off any payments owing thereunder against any amounts payable by the Seller, or as applicable, the relevant Originator to such Borrower;

2.9 the Property subject to the related Mortgage is a freehold or condominium interest in real or immovable property located in Canada which is zoned residential, or is zoned agricultural or rural and residential use is permitted by such zoning, and on which, at the time the Loan was underwritten or purchased by the Seller or the applicable Originator, a family dwelling has been constructed;

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2.10 the related Mortgage has been duly registered or recorded in the name of the Seller or, as applicable, the applicable Originator, in the appropriate land titles or land registry office or similar place of public registration for the province or territory in which the Property is located;

2.11 the Loan is accompanied by a solicitor’s or notary’s report on title from a solicitor or notary qualified to practice law in the province or territory in which the Property is located to the effect that, at the time of origination of such Loan, the Borrower had good title to, and the related Mortgage created a first charge, mortgage or hypothec against, such Property, subject only to Adverse Claims which, in the reasonable opinion of the Seller, do not in the aggregate materially impair the marketability of the title to such property or, if no such report on title was obtained, the Loan is accompanied by a policy of title insurance to the same effect from a provider acceptable to a Reasonable, Prudent Mortgage Lender;

2.12 the Loan has been duly authorized, executed and delivered by the Seller or the applicable Originator and the Borrower, which Loan, together with all Related Security, is in full force and effect and constitutes the legal, valid and binding obligation of the Borrower thereof enforceable against such Borrower in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and to equitable principles of general application (regardless of whether endorsements is sought in a proceeding at law or in equity);

2.13 the Loan or applicable law permits realization by the Seller or the applicable Originator and their respective assigns against the Property securing such Loan in accordance with the terms of such Loan, subject to applicable law, including, without limitation, the notice requirements and other limitations contained in the Bankruptcy and Insolvency Act (Canada) and statutory limitations on the rights of mortgagees to exercise their remedies, and the Loan constitutes the Borrower’s obligation to pay to the Seller or the applicable Originator and their respective assigns, in accordance with the scheduled payments set forth therein, the amounts owing thereunder;

2.14 the Loan was, when underwritten or purchased by the Seller or the applicable Originator, and is, on the date of transfer to the Guarantor, in compliance, in all material respects, with all requirements of applicable law that would affect the validity or enforceability thereof, including consumer protection legislation, privacy and interest rate disclosure legislation;

2.15 the Seller has ensured, in accordance with its customary servicing procedures, or, as applicable, has procured the relevant Originator to ensure in accordance with its customary servicing procedures, that policies of insurance satisfying the requirements set forth in the Credit and Collection Policy are in force and the Seller, or as applicable, the relevant Originator, is named as first mortgagee or hypothecary creditor, as the case may be, under such policies with the benefit of a standard mortgage clause or endorsement;

2.16 the Loan has not been satisfied or rescinded, no rights of the mortgagee thereunder have been postponed or subordinated, no Property has been discharged, reconveyed or released from the charge created by the related Mortgage in whole or in part, and no provision of the Loan has been waived, altered or modified in any respect, except in each case, (x) as permitted pursuant to Credit and Collection Policy, and (y) pursuant to a document, instrument or writing included in the related Customer File; and

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2.17 the Loan has not been originated in, and is not subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Loan by the applicable Originator to the Seller, if applicable, and by the Seller to the Guarantor, is unlawful, void or voidable.

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SCHEDULE 2

SELLER POWER OF ATTORNEY

SCHEDULE 3

LOAN REPURCHASE NOTICE

To: BANK OF MONTREAL (the “Seller”)

From: BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC. (the “Guarantor”)

1. It is hereby agreed that for the purpose of this notice the “Mortgage Sale Agreement” shall mean the mortgage sale agreement dated September 30, 2013 made between the Seller, the Guarantor, and the Bond Trustee (as the same may be or have been amended, restated or supplemented from time to time with the consent of those parties).

2. Save where the context otherwise requires, words and expressions in this notice shall have the same meanings respectively as when used in the Mortgage Sale Agreement.

3. In accordance with Section 8.6 of the Mortgage Sale Agreement, upon receipt of this Loan Repurchase Notice by the Seller there shall exist between the Seller and the Guarantor an agreement (the “Agreement for Sale”) for the sale, transfer, assignment and conveyance by the Guarantor to the Seller of the Loans and their Related Security more particularly described in the Schedule hereto. Completion of such sale shall take place on —, 20—.

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

Dated —, 20—.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:
	Name:
	Title:

[On duplicate

We hereby acknowledge receipt of and confirm the contents of the Loan Repurchase Notice dated —, 20—.

BANK OF MONTREAL
By:
	Name:
	Title:

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Schedule

[List of Loans with appropriate details.]

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SCHEDULE 4

NEW PORTFOLIO NOTICE

To: BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC. (the “Guarantor”)

From: BANK OF MONTREAL (the “Seller”)

1. It is hereby agreed that for the purpose of this notice the “Mortgage Sale Agreement” shall mean the mortgage sale agreement dated September 30, 2013 made between the Seller, the Guarantor, and the Bond Trustee (as the same may be or have been amended, restated or supplemented from time to time with the consent of those parties).

2. Save where the context otherwise requires, words and expressions in this notice shall have the same meanings respectively as when used in the Mortgage Sale Agreement.

3. In accordance with and subject to Section 4.1 of the Mortgage Sale Agreement, upon receipt by the Seller of the duplicate of this notice signed by the Guarantor, there shall exist between the Seller and the Guarantor an agreement (the “Agreement for Sale”) for the sale by the Seller to the Guarantor of the New Loans and their Related Security more particularly described in the Schedule hereto (other than any New Loans and their Related Security which have been redeemed in full prior to completion). Completion of such sale shall take place on —, 20—.

4. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant provisions of the Mortgage Sale Agreement subject to any amendment as may be agreed between the parties to the Agreement for Sale provided the parties to such agreement have substantially the same rights and obligations as under the Mortgage Sale Agreement.

Dated —, 20—.

BANK OF MONTREAL
By:
	Name:
	Title:

[On duplicate:

We hereby acknowledge receipt of the New Portfolio Notice dated —, 20—, and confirm that we are prepared to purchase New Loans as set out in that notice.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:
	Name:
	Title:

- 2 -

Schedule

[List of Loans with appropriate details.]

- 3 -

SCHEDULE 5

SELECTED LOAN OFFER NOTICE

To:	BANK OF MONTREAL (the “Seller”)
From:	BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC. (the “Guarantor”)

It is hereby agreed that for the purpose of this notice the “Mortgage Sale Agreement” shall mean the mortgage sale agreement dated September 30, 2013 made between the Seller, the Guarantor, and the Bond Trustee (as the same may be or have been amended, restated or supplemented from time to time with the consent of those parties).

Save where the context otherwise requires, words and expressions in this notice shall have the same meanings respectively as when used in the Mortgage Sale Agreement.

In accordance with and subject to Section 11 of the Mortgage Sale Agreement we make an offer to you on the following terms:

1. This Selected Loan Offer Notice constitutes an offer to sell the Selected Loans more particularly described in the Schedule hereto to you at the offer price of Canadian $— payable in cash on the earlier to occur of the date which is (a) 10 Canadian Business Days after receipt by the Guarantor of the returned Selected Loan Repurchase Notice or (b) the Final Maturity Date of the Earliest Maturing Covered Bonds on the terms set out in Section 11 of the Mortgage Sale Agreement.

2. This offer is capable of acceptance by you within 10 Canadian Business Days from and including the date of this Selected Loan Offer Notice. If you do not accept this offer, we intend to sell the Selected Loans to a third party or third parties.

3. This Selected Loan Offer Notice shall incorporate, mutatis mutandis, the relevant provisions of the Mortgage Sale Agreement.

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

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

Dated —, 20—.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:
	Name:
	Title:

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We accept the offer contained in this Selected Loan Offer Notice.

Dated —, 20—.

BANK OF MONTREAL
By:
	Name:
	Title:

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SCHEDULE 6

SELECTED LOAN REPURCHASE NOTICE

To:	BANK OF MONTREAL (the “Seller”)
From:	BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP (the “Guarantor”)

1. It is hereby agreed that for the purpose of this notice the “Mortgage Sale Agreement” shall mean the mortgage sale agreement dated September 30, 2013 made between the Seller, the Guarantor, and the Bond Trustee (as the same may be or have been amended, restated or supplemented from time to time with the consent of those parties).

2. Save where the context otherwise requires, words and expressions in this notice shall have the same meanings respectively as when used in the Mortgage Sale Agreement.

3. In accordance with Section 11 of the Mortgage Sale Agreement, upon receipt of this Selected Loan Repurchase Notice by the Seller there shall exist between the Seller and the Guarantor an agreement (the “Agreement for Sale”) for the sale by the Guarantor to the Seller of the Selected Loans more particularly described in the Schedule hereto. Completion of such sale shall take place on —, 20— and the price payable by the Seller for the Selected Loans more particularly described in the Schedule hereto shall be Canadian $—.

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

Dated —, 20—.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:
	Name:
	Title:

[On duplicate]

We hereby acknowledge receipt of and confirm the contents of the Selected Loan Repurchase Notice dated —, 20—.

Dated —, 20—.

BANK OF MONTREAL
By:
	Name:
	Title:

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SCHEDULE 7

FORM OF QUÉBEC SELLER ASSIGNMENT

THIS QUÉBEC SELLER ASSIGNMENT made this — day of — , 2013.

BETWEEN:

BANK OF MONTREAL, a bank named in Schedule I to the Bank Act (the “Seller”)

- and -

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under the laws of the Province of Ontario, by its Managing GP, BMO COVERED BOND GP, INC., (in its capacity as the Guarantor) (the “Guarantor”)

WHEREAS the Seller, the Guarantor, as purchaser, and Computershare Trust Company of Canada, as Bond Trustee and Custodian, have entered into the Mortgage Sale Agreement (as hereinafter defined).

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

(1) Defined Terms

Unless otherwise defined herein or unless the context requires otherwise, capitalized terms will have the same meanings herein as in the Mortgage Sale Agreement. In this Québec Assignment the following terms will have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“BMO Group” means Bank of Montreal and its Subsidiaries collectively.

“Borrower” means, in relation to a Loan, each Person specified as such in the relevant Mortgage Conditions together with each Person (if any) from time to time assuming an obligation to repay such Loan or any part of it.

“Credit and Collection Policy” means the customary credit and collection policies and practices of the Seller, or as applicable, the relevant Originator, relating to the granting of credit on the security of a Mortgage and the collection and enforcement of Loans, as in effect on the date on the Program Date, as modified in compliance with the Mortgage Sale Agreement from time to time.

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

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“Customer Files” means, with respect to any Loan, (a) the original fully executed copy of the document(s) evidencing the Loan and the Mortgage, (b) the duplicate registered Mortgage evidencing and securing such Loan bearing a certificate of registration from the applicable land registry office, land titles office or similar place of public record in which the related Mortgage is registered together with the promissory note, if any, evidencing such Loan fully executed by the Borrower, (c) fully executed copies of the other loan and/or security agreements, if any, securing the Loan, fully executed by the Borrower, (d) a record or facsimile of the original credit application fully executed by the Borrower and all other credit information obtained by the Seller or the relevant Originator in connection with the Loan and the related Borrower, (e) the solicitor’s or notary’s report of title or title insurance policy obtained by the Seller or the relevant Originator in connection with the initial advance of the Loan together with the survey or certificate of location relied upon by the solicitor or notary or title insurance company in issuing his or its report or title insurance policy, (f) the most recent Valuation Report of the related mortgaged property obtained by the Seller or the relevant Originator in accordance with the Credit and Collection Policy, (g) the insurance policy or certificate of insurance evidencing the Borrower’s insurance against fire and other standard risks showing the Seller or the relevant Originator as first mortgagee and loss payee and containing a standard mortgage endorsement, and (h) any and all other documents that the Servicer or the Seller or the relevant Originator shall keep on file relating to such Loan.

“Eligibility Criteria” means the following criteria:

(a) no Loan has an Outstanding Principal Balance of more than $3,000,000.00;

(b) if the Loan constitutes a New Loan Type, the Rating Agency Condition has been satisfied in accordance with the terms of the Mortgage Sale Agreement that such Loan may be sold to the Guarantor;

(c) the Loan is not secured by a Mortgage that also secures one or more other loans that has the benefit of insurance from any Prohibited Insurer;

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

(e) no payments of principal or interest in respect of the Loan are in arrears;

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

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(g) the related Mortgage constitutes a valid first mortgage lien or a valid first-ranking hypothec over the related Property, subject to Permitted Security Interests;

(h) the Loan is not subject to any dispute proceeding, set-off, counterclaim or defence whatsoever; [and]

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

(j) [to the extent the Loan is extended, advanced or renewed on or after July 1, 2014 (which for greater certainty will not include further advances under an existing non-amortizing Loan unless amended), an express waiver of set-off rights on the part of the Borrower is included in the terms and conditions of the Loan or the provisions of any other documentation applicable to the Loan and enforceable against the Borrower contain an express waiver of set-off rights on the part of the Borrower][NTD: TO BE INSERTED IN QUÉBEC SELLER ASSIGNMENTS EXECUTED AFTER JULY 1, 2014].

“Eligible Loans” means a Loan which at the Purchase Date satisfies each of the Eligibility Criteria.

“Loan” means each mortgage loan referenced by its mortgage loan identifier number and and comprising the aggregate of all principal sums, interest, costs, charges, expenses and other monies due or owing with respect to that mortgage loan under the relevant Mortgage Conditions by a Borrower on the security of a Mortgage from time to time outstanding or, as the context may require, the Borrower’s obligations in respect of the same;

“Mortgage” means a lien or a hypothec securing a Loan.

“Mortgage Conditions” means all the terms and conditions applicable to a Loan.

“Mortgage Sale Agreement” means the mortgage sale agreement entered into on the Program Date between the Seller, the Servicer, the Cash Manager, the Guarantor, the Custodian and the Bond Trustee (as amended, modified, supplemented or restated from time to time).

“Originator” means a Person that is a member of the BMO Group and has originated Loans included in the Québec Purchased Assets.

“Person” means a reference to any person, individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organisation, governmental entity or other entity of similar nature (whether or not having separate legal personality).

“Program Date” means September 30 , 2013.

“Property” means a freehold or leasehold residential property located in Canada (or owned residential immovable property situated in the Province of Québec) that is subject to a Mortgage.

“Purchase Date” means — , 2013.

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“Québec Eligible Loans” means all Eligible Loans (i) which are repayable by a Borrower resident in the Province of Québec, or (ii) which are subject to loan documentation which requires that payments of interest or principal in respect thereof be made at a location or an account situated or maintained in the Province of Québec, or (iii) where the related Properties are situated in the Province of Québec.

“Québec Purchased Assets” means the universality of all present and future claims and rights of action arising from all Québec Eligible Loans of the Seller described in Annex A hereto and their Related Security.

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

“Related Security” means, in relation to a Loan:

(a) all of the Seller’s right, title and interest in the related Customer File, including the Mortgage and the security interest or hypothec granted to the Seller (or, as applicable, the relevant Originator) by the related Borrower in the related mortgaged property as security for or pursuant to such Loan and all proceeds thereof;

(b) all other security interests, hypothecs or liens and property subject thereto from time to time purporting to secure payment of such Loan, whether pursuant to the Related Security or otherwise, together with all personal property financing statements or other filings relating thereto;

(c) all guaranties, indemnities, insurance (other than blanket insurance coverage maintained by the Seller) and other agreements (including the Mortgage) or arrangements of whatever character from time to time supporting or securing payment of such Loan which are or should be included in the Customer Files whether pursuant to the Related Security or otherwise and all proceeds thereof; and

(d) all Records related to such Loan.

“Servicer” means the Seller in its capacity as servicer under the Servicing Agreement together with any successor servicer appointed from time to time.

“Servicing Agreement” means the servicing agreement entered into on the Program Date between the Guarantor, the Seller, the Servicer and the Bond Trustee (as amended, modified, supplemented or restated from time to time).

“Standard Documentation” means the standard documentation used by the Seller and any applicable Originator with respect to Loans, and any update or replacement therefor as the Seller and/or an Originator may from time to time introduce acting in accordance with the standards of a Reasonable, Prudent Mortgage Lender.

- 6 -

“Subsidiary” has the meaning given to it in the Bank Act (Canada).

“Valuation Report” means the valuation report or reports for mortgage purposes, in the form of the proforma report contained in the Standard Documentation, obtained by the Seller or, as applicable, any Originator, in respect of each Property obtained by the Seller in accordance with the Credit and Collection Policy or a valuation report in respect of a valuation of a Property made using a methodology which would be acceptable to a Reasonable, Prudent Mortgage Lender and which has been approved by the relevant officers of the Seller or, as applicable, any Originator.

(2) Sale and Purchase of Québec Purchased Assets

For the purposes of the laws of the Province of Québec and in furtherance of the Mortgage Sale Agreement, the Seller hereby sells, transfers and assigns unto the Guarantor and the Guarantor hereby purchases from the Seller, without any legal warranty except and subject to the representations and warranties expressly provided for in the Mortgage Sale Agreement and below, all of the Seller’s right, title, interest and benefit in and to the Québec Purchased Assets.

(3) Purchase Price

The purchase price for the sale by the Seller to the Guarantor of the Québec Purchased Assets hereunder will be calculated and paid in accordance with the terms of the Mortgage Sale Agreement.

(4) Seller Representations and Warranties

The Seller represents and warrants to the Guarantor as of the Purchase Date that:

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

(b) the Guarantor, acting on the advice of the Cash Manager, is not aware, and could not reasonably be expected to be aware, that the purchase by the Guarantor of the Québec Purchased Assets on the Purchase Date does not satisfy the Rating Agency Condition;

(c) each Loan included in the Québec Purchased Assets satisfies the eligibility criteria prescribed by the CMHC Guide from time to time;

(d) at the time of transfer, the Guarantor will acquire the entire legal and beneficial ownership interest of the Seller in the applicable Loans and their Related Security, excluding registered title therein, free and clear of any encumbrances or ownership interests, other than (i) Permitted Security Interests, and (ii) Security Interests that are reflected in a Security Sharing Agreement and the subject of a release in favour of the Guarantor, in each case that complies with the CMHC Guide; and

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

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(5) Additional Actions Upon a Title Trigger Event

Without limiting the provisions of the Mortgage Sale Agreement, upon the earlier of (i) the occurrence of a Registered Title Event, and (ii) a downgrade of the senior long-term rating assigned to the Seller by one or more of DBRS, Moody’s or Fitch below BBB(high), BBB+ or Baa1, respectively, the Seller will notify the Borrowers (and their guarantors) or cause the Borrowers (and their guarantors) to be notified, and deliver or cause to be delivered, Registrable Transfers to the Custodian in relation to each Québec Eligible Loan and hypothecs included in the Québec Purchased Assets, make all registrations and generally complete all formalities required under the laws of the Province of Québec in order to render the sale and assignment of the Québec Purchased Assets opposable against the Borrowers (and their guarantors) and all third persons, in accordance with Articles 1641, 1645 and 3003 of the Civil Code of Québec. The Seller will act upon the Guarantor’s instructions under this Article 5.

Without limiting any of the powers of the Guarantor hereunder or under the Mortgage Sale Agreement, the Guarantor will be entitled to discharge the Mortgages and give acquittance and receipts for amounts due, including with respect to amounts due to the Seller before the date of this Agreement.

(6) Power of Attorney

The Seller will execute and deliver to the Guarantor, concurrently herewith, two originals of the Power of Attorney substantially in the form set out in Schedule 2 to the Mortgage Sale Agreement.

(7) Confirmation

The Seller hereby confirms to the Guarantor that:

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

(b) it has made a notation in its records that the Québec Purchased Assets have been sold to the Guarantor.

(8) Mortgage Sale Agreement

This Québec Assignment will be construed as having been executed in furtherance of the Mortgage Sale Agreement and will form an integral part thereof.

(9) Governing Law

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

(10) Number and Gender

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

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(11) Counterparts

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

(12) Limitation of Liability

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

(13) Language

The parties confirm that it is their wish that this Agreement, as well as any other documents relating to this Agreement, including notices, schedules and authorizations, have been and will be drawn up in the English language only. Les signataires confirment leur volonté que la présente convention, de même que tous les documents s’y rattachant, y compris tout avis, annexe et autorisation, soient rédigés en anglais seulement.

[The remainder of this page left intentionally blank]

- 9 -

IN WITNESS WHEREOF the parties hereto have executed this Québec Seller Assignment.

BANK OF MONTREAL
By:
	Name:
	Title:
BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its Managing GP BMO COVERED BOND GP, INC.
By:
	Name:
	Title:

The foregoing is hereby acknowledged by the undersigned.

COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:
	Name:
	Title:
By:
	Name:
	Title:

* * *

CERTIFICATION

I, — , advocate, certify that:

1. This certificate concerns an application for the Québec Seller Assignment and the Annex A thereto (the “Assignment”) entered into between Bank of Montreal, as Seller, and BMO Covered Bond GP, Inc. in its capacity as managing general partner of BMO Covered Bond Guarantor Limited Partnership (the “Guarantor”) executed under private signature at Toronto, Province of Ontario, on —, 2013;

2. I have verified the identity, quality and capacity of Bank of Montreal and the Guarantor to the said Assignment;

3. Such Assignment represents the will expressed by Bank of Montreal and the Guarantor; and

4. Such Assignment is valid as to form.

CERTIFIED at Toronto, Province of Ontario on the — day of the month of —, 2013.

Name:
Quality:	Advocate
Address:
	, advocate

ANNEX A

[List of Québec Eligible Loans Comprised in Québec Purchased Assets]

EX-4.4

Exhibit 4.4

COVER POOL MONITOR AGREEMENT

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP,

as Guarantor

- and -

BANK OF MONTREAL,

as Issuer and Cash Manager

- and -

KPMG LLP,

as Cover Pool Monitor

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA,

as Bond Trustee

DATED AS OF SEPTEMBER 30, 2013

CONTENTS

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

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

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ARTICLE 13 COUNTERPARTS	22
13.1        Counterparts	22
ARTICLE 14 THE BOND TRUSTEE	22
14.1        Change of Bond Trustee	22
14.2        Limitation of Liability of Bond Trustee	22
ARTICLE 15 LIMITATION OF LIABILITY	23
15.1        Limitation of Liability	23
ARTICLE 16 AMENDMENTS, MODIFICATION, VARIATION OR WAIVER	23
16.1        Amendments, Modification, Variation or Waiver	23
16.2        Non-Petition	23
ARTICLE 17 EXCLUSION OF THIRD PARTY RIGHTS	24
17.1        Exclusion of Third Party Rights	24
ARTICLE 18 AGENCY	24
18.1        Agency	24
ARTICLE 19 CONTINUING PROVISIONS	24
19.1        Continuing Provisions	24
ARTICLE 20 ENTIRE AGREEMENT	24
20.1        Entire Agreement	24
ARTICLE 21 FURTHER ASSURANCE	24
21.1        Further Assurance	24
ARTICLE 22 GOVERNING LAW	25
22.1        Governing Law	25
22.2        Submission to Jurisdiction	25

SCHEDULE 1	CERTAIN SPECIFIED PROCEDURES
SCHEDULE 2	VALUATION CALCULATIONS

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THIS COVER POOL MONITOR AGREEMENT is made as of September 30, 2013

BETWEEN:

(1) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada), in its capacity as the “Issuer” and the “Cash Manager”;

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC., in its capacity as the “Guarantor”;

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

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

WHEREAS:

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

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

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

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

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

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

The Master Definitions and Construction Agreement made between the parties to the Transaction Documents on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time) (the “Master Definitions and Construction Agreement”) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) will, except where the context otherwise requires and save where otherwise defined herein, have the same meanings in this Agreement, including the recitals hereto, and this Agreement will be construed in accordance with the interpretation provisions set out in Section 2 (Interpretation and Construction) of the Master Definitions and Construction Agreement.

1.2 Interpretation

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

1.3 Schedule

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

Schedule 1—Certain Specified Procedures

Schedule 2—Valuation Calculation

1.4 Acknowledgment

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

ARTICLE 2

APPOINTMENT AND SERVICES OF THE COVER POOL MONITOR

2.1 Appointment and Annual Cover Pool Monitor Report

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

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

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

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

(iii) detailing the results of the Specified Procedures.

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

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

2.2 Certain Testing Services

(a) Test Period: In connection with each Annual Cover Pool Monitor Report, the Cover Pool Monitor will randomly select one Investor Report (such Investor Report, the “Selected Investor Report”) from the Investor Reports prepared since the date of its last report (or, in the case of the Annual Cover Pool Monitor Report delivered in connection with the First Issue Date, the Selected Investor Report prepared in relation to such issuance, which may be prepared on a pro forma basis in accordance with Section 5.5.1 of the CMHC Guide).

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

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(c) Procedures:

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

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

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

(ii) with reference to the Source Materials, the Cover Pool Monitor will (A) agree that the assets in the Sample meet the criteria specified in Sections 4.1.1, 4.1.2 and 4.1.3 of the CMHC Guide, and (B) perform the specified procedures set forth in Schedule 1 hereto with respect to the Substitution Assets in the Sample by inspection of the data elements identified in Schedule 1 under the heading “Category”.

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

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

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

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

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

(iv) there is evidence of any Loans advanced under the same mortgage or other hypothecary instrument having been insured by CMHC, Canada Guaranty Mortgage Insurance Company, the Genworth Financial Mortgage Insurance Company of Canada, the PMI Mortgage Insurance Company Canada, any other private mortgage insurer recognized by CMHC for purposes hereof or otherwise identified in the Protection of Residential Mortgage or Hypothecary Insurance Act (Canada), or any successor to any of them.

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2.3 Sampling Methodology

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

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

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

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

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

(i) recalculate such Valuation Calculation;

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

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

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

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

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

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

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

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

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

2.6 Confirming Accuracy of Latest Valuation Determinations

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

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

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

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

2.7 Hedging Arrangements and Use of ISDA Documentation

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

2.8 Errors

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

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

2.9 Reporting Non-Compliance with CMHC Guide and Other Information

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

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

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

2.10 Cover Pool Monitor Assumptions

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

2.11 Compliance with Requirements

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

2.12 No Responsibility to Update

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

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2.13 Timely Performance of Tests

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

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

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

ARTICLE 3

PROVISION OF INFORMATION TO THE COVER POOL MONITOR

3.1 Asset Coverage Test

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

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

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

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

3.2 Amortization Test

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

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

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

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

3.3 Valuation Calculation

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

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

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

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

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3.4 Access to Information

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

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

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

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

3.5 Ratings Information

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

3.6 Reliance

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

3.7 Nominated Persons

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

3.8 Preparation of Final Annual Cover Pool Monitor Report

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

11

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

3.9 Ownership of Working Papers

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

ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COVER POOL

MONITOR

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

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

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

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

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

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

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

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

ARTICLE 5

TERMINATION

5.1 Resignation

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

5.2 Resignation Costs

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

5.3 Removal

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

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

5.4 Removal Costs

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

5.5 Replacement Cover Pool Monitor

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

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

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

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

5.6 Co-Operation

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

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

5.7 Other

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

5.8 Notice of Termination or Resignation

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

ARTICLE 6

FEES

6.1 Cover Pool Monitor Fee

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

6.2 Cover Pool Monitor Payment Date

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

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

6.3 Other Costs

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

6.4 Priorities of Payments

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

6.5 Payment in Error

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

6.6 Other

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

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ARTICLE 7

ASSIGNMENTS AND TRANSFERS

7.1 Assignment

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

7.2 Assignment under Security Agreement

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

7.3 Agency, Partnership and Joint Venture

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

ARTICLE 8

CONFIDENTIALITY

8.1 General

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

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

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

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

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

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

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

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

8.2 Limitation

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

8.3 Disclosure Required by Law, CMHC Guide, etc.

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

ARTICLE 9

PROVISION OF INFORMATION TO THE BOND TRUSTEE

9.1 Provision of Information to the Bond Trustee

The Cash Manager, solely in its capacity as cash manager, the Guarantor and the Cover Pool Monitor will each provide to the Bond Trustee, or procure the provision to the Bond Trustee of, such information and evidence available to that party in respect of any dealing

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

ARTICLE 10

LIABILITY

10.1 General

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

10.2 Limitation of Liability

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

10.3 Claims

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

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

The Cover Pool Monitor will not be liable to any other party hereto for any loss, liability, claim, expense or damage suffered by them or any one of them as a result of the proper performance of the duties of the Cover Pool Monitor hereunder save to the extent that any loss,

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liability, claim, expense or damage is suffered or incurred as a result of any bad faith, wilful misconduct, gross negligence or reckless disregard of the Cover Pool Monitor or as a result of a breach by the Cover Pool Monitor of the terms and provisions of this Agreement in relation to such functions.

10.5 Sole Responsibility of the Cover Pool Monitor

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

10.6 Other

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

ARTICLE 11

FURTHER PROVISIONS

11.1 Rights

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

11.2 Invalidity, Illegality and Unenforceability

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

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or

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unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each party hereto hereby waives any provision of law (where permitted by law) which renders any provision of this Agreement prohibited or unenforceable in any respect.

11.3 Insolvency of the Issuer

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

ARTICLE 12

NOTICES

12.1 General

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

(a) in the case of the Cash Manager, to Bank of Montreal, 18th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-4166) for the attention of Senior Manager, Corporate Funding;

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

(c) in the case of the Cover Pool Monitor, to KPMG LLP, Suite 3300, Commerce Court West, 199 Bay Street, Toronto, ON M5L 1B2, (facsimile number 416-777-8818) for the attention of Steve Watts;

(d) in the case of the Issuer, to Bank of Montreal, 18th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-7193) for the attention of Senior Manager, Corporate Funding; and

(e) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11th Floor, Toronto, ON M5J 2Y1, (facsimile number 416-981-9777) for the attention of Manager, Corporate Trust.

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12.2 Change in Address

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

ARTICLE 13

COUNTERPARTS

13.1 Counterparts

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

ARTICLE 14

THE BOND TRUSTEE

14.1 Change of Bond Trustee

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

14.2 Limitation of Liability of Bond Trustee

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

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ARTICLE 15

LIMITATION OF LIABILITY

15.1 Limitation of Liability

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

ARTICLE 16

AMENDMENTS, MODIFICATION, VARIATION OR WAIVER

16.1 Amendments, Modification, Variation or Waiver

(a) Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

(b) Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers which does not require satisfaction of the Rating Agency Condition, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

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

16.2 Non-Petition

Each of the Cover Pool Monitor and the Cash Manager agrees that it will not institute against, or join any other Person or entity in instituting against, or with respect to, the Guarantor, or any general partner of the Guarantor, any bankruptcy, reorganisation, arrangement, insolvency or liquidation proceeding under any federal, provincial or foreign bankruptcy, insolvency or similar law, for one year and one day after all Covered Bonds have been repaid in full. The foregoing provision will survive the termination of this Agreement by any of the parties.

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ARTICLE 17

EXCLUSION OF THIRD PARTY RIGHTS

17.1 Exclusion of Third Party Rights

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

ARTICLE 18

AGENCY

18.1 Agency

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

ARTICLE 19

CONTINUING PROVISIONS

19.1 Continuing Provisions

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

ARTICLE 20

ENTIRE AGREEMENT

20.1 Entire Agreement

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

ARTICLE 21

FURTHER ASSURANCE

21.1 Further Assurance

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

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ARTICLE 22

GOVERNING LAW

22.1 Governing Law

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

22.2 Submission to Jurisdiction

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

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

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Chris Hughes
	Name: Chris Hughes   Title: President and Secretary

BANK OF MONTREAL, in its capacity as Issuer and Cash Manager
By:	/s/ Cathy Cranston
	Name: Cathy Cranston   Title: Senior Vice President, Finance & Treasurer

KPMG LLP, as Cover Pool Monitor
By:	/s/ Steven Watts
	Name: Steven Watts   Title: Partner, KPMG LLP

COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:	/s/ Sean Pigott
	Name: Sean Pigott   Title: Corporate Trust Officer
By:	/s/ Stanley Kwan
	Name: Stanley Kwan   Title: Associate Trust Officer

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SCHEDULE 1

CERTAIN SPECIFIED PROCEDURES

Eligible Loans
Procedure Reference	Category	Specific Procedures
1.	Name	Agree the borrower(s)’ first name (or initials) and surname with the following: (i) Certificate of Title (COT) or Report on Title (ROT), and (ii) Registered Mortgage document (or, if not on file, either the mortgage loan agreement or the mortgage application form)
2.	Address	Inspect that the property address confirmed to be in Canada and agree on the following (allowing for common abbreviations but with no exception for spelling): (i) Certificate of Title (COT) or Report on Title (ROT), and (ii) Valuation report, where commissioned
3.	Loan/Account number	Agree the loan/account number with the primary system of record
4.	Term	Agree the latest agreed term of the loan with the latest mortgage offer or account statement (or agree it is a HELOC)
5.	Interest rate	Agree the interest rate (or spread to index), interest rate type, interest rate index and interest rate with the most current loan document or account statement
6.	Amortization	Agree the remaining amortization as reported with the remaining amortization on the mortgage administration system as of cut-off date (or agree it is a HELOC)
7.	Amount advanced	Agree the total amount advanced to the latest offer/loan documents
8.	Mortgage balance	Agree the mortgage balance (and the limit in the case of a HELOC) on the mortgage administration extraction file with the balance on the mortgage loan processing system at the cut-off date
9.	Maturity date	Agree the maturity date of each mortgage on the primary system of record with the latest offer document or account statement, and that it is within a 30 day range (or agree it is a HELOC)

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

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

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SCHEDULE 2

VALUATION CALCULATION

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

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

A+B+C+D+E+F

where,

A        =        the aggregate “LTV Adjusted Loan Present Value” of (i) each Loan that is a Performing Eligible Loan, which shall be the lower of (1) the Present Value of the relevant Loan on such Calculation Date, and (2) 80% multiplied by the Latest Valuation relating to that Loan, and (ii) each Loan that is not a Performing Eligible Loan, which shall be equal to zero

minus

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

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

(2) a Seller, in any preceding Calculation Period, was in breach of any other material warranty under the Mortgage Sale Agreement and/or the Servicer was, in any preceding Calculation Period, in breach of a material term of the Servicing Agreement. In this event, the aggregate LTV Adjusted Loan Present Value of the Loans in the Portfolio on such Calculation Date will be deemed to be reduced by an amount equal to the resulting financial loss incurred by the Partnership in the immediately preceding Calculation Period (such financial loss to be calculated by the Cash Manager without double counting and to be reduced by any amount paid (in cash or in kind) to the Partnership by the applicable Seller to indemnify the Partnership for such financial loss);

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

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

D        =        the Trading Value of any Substitution Assets;

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

F        =        the Trading Value of the Swap Collateral.

- 2 -

EX-4.5

Exhibit 4.5

SERVICING AGREEMENT

BANK OF MONTREAL,

AS SERVICER, SELLER AND CASH MANAGER

AND

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP,

AS GUARANTOR

AND

COMPUTERSHARE TRUST COMPANY OF CANADA,

AS BOND TRUSTEE

SEPTEMBER 30, 2013

CONTENTS

Section		Page
1.	Definitions and Interpretation		1
2.	Servicing duties		1
3.	Servicer Covenants; Representations and Warranties		4
4.	Delegation of Duties		7
5.	Indemnification by Servicer		8
6.	No Liability		9
7.	Powers of Attorney		9
8.	Information		10
9.	Remuneration		11
10.	Services Non-Exclusive		11
11.	Termination		11
12.	Further Assurance		14
13.	Miscellaneous		15
14.	Confidentiality		15
15.	Notices		16
16.	Amendments, Variation and Waiver		16
17.	No Agency or Partnership		17
18.	Assignment		17
19.	Bond Trustee		17
20.	Non-Petition Covenant; LImitation of liability		17
21.	Counterparts		18
22.	Governing Law		18
Schedules
1.	Location of Records

THIS SERVICING AGREEMENT is made on September 30, 2013

BETWEEN:

(1) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada), in its capacity as seller (the “Seller”), in its capacity as initial servicer (the “Servicer”) and in its capacity as cash manager (the “Cash Manager”);

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. (the “Guarantor”); and

(3) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada, in its capacity as Bond Trustee (the “Bond Trustee”).

WHEREAS:

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

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

IT IS HEREBY AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 The master definitions and construction agreement made between, inter alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the Master Definitions and Construction Agreement) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) 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.

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

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

2. SERVICING DUTIES

2.1 Until the termination of the Servicer pursuant to Section 11.1, the Loans included in the Portfolio shall be administered, serviced and collected by the Seller, as Servicer. The Seller hereby agrees to perform the duties and obligations of the Servicer pursuant to the terms hereof at no additional cost to the Guarantor, in consideration of the consideration paid for the Loans and the Related Security pursuant to the Mortgage Sale Agreement. Subject to the provisions hereof, the Servicer shall administer, service and collect the Loans and their Related Security as agent for the Guarantor until

the date of termination of this Agreement in accordance with the provisions of this Agreement. The Bond Trustee consents to the appointment of the Servicer on the terms and subject to the conditions of this Agreement.

2.2 The Servicer, as agent for the Guarantor (to the extent provided herein), shall perform its duties hereunder with reasonable care and diligence, using that degree of skill and attention that the Servicer exercises in managing, servicing, administering, collecting on and performing similar functions relating to comparable loans that it services for itself or other Persons and in accordance with the Credit and Collection Policy.

2.3 Without limiting the generality of the authority granted by the appointment of the Servicer, and subject to the other provisions hereof, the Servicer is hereby authorized and empowered by the Guarantor to take any and all reasonable steps in its name and on its behalf that are necessary or desirable and not inconsistent with the sale, transfer and assignment of the Loans and the Related Security to the Guarantor, except that the Servicer shall not be required to notify any Person of the Guarantor’s interest therein until the occurrence of a Registered Title Event, to collect all amounts due under any and all Loans, including executing and delivering, on behalf of the Guarantor and any subsequent assignees, any and all instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable instruments, with respect to the Loans or the Related Security and, after delinquency of any such Loans and to the extent permitted under and in compliance with applicable Law, to commence proceedings with respect to enforcing payment of such Loans and the Related Security, and adjusting, settling or compromising the account or payment thereof, to the same extent as the Seller could have done if it owned all such Loans. The Guarantor shall furnish the Servicer with any powers of attorney and other documents that are within the ability of the Guarantor to furnish and which are reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder as agent of the Guarantor.

2.4 Subject to Section 2.5, for the benefit of the Guarantor, the Servicer shall use reasonable efforts, consistent with the Credit and Collection Policy and its customary servicing procedures used with respect to Loans serviced by the Servicer on its own behalf and on behalf of others, to (a) collect or enforce each Loan and Related Security and any related insurance policy (against the related Property, Borrower, insurer or otherwise), and (b) liquidate or convert the related Property securing any Loan which is and continues to be a Defaulted Loan and as to which no satisfactory arrangements can be made with the Borrower for the collection of delinquent payments thereunder or as to which the Servicer shall have otherwise determined eventual payment in full is unlikely; provided, however, that the Servicer shall, subject to applicable Law, liquidate or convert any real or immovable property securing such Defaulted Loan within 180 days of the date of the payment default under such Defaulted Loan, unless such Defaulted Loan shall have been paid in full within such 180-day period. The Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of similar conventional mortgage loan receivables owned or serviced by it, which may include selling the related Property at public or private sale.

2.5 If in any enforcement suit or legal proceeding, it shall be held that the Servicer may not enforce a right under a Loan or the Related Security on the grounds that it should not be or is not a real party in interest or a holder entitled to enforce rights in respect of the Loan or Related Security, the Guarantor shall, at the Servicer’s expense and direction, take such steps as are necessary to enforce the Loan or the Related Security.

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2.6 If the Servicer receives any funds whatsoever arising from the Loans and their Related Security included in the Portfolio which belong to the Guarantor and are to be paid to the GDA Account (or, if applicable, the Stand-by GDA Account) or to the Cash Manager pursuant to this Agreement or any of the other Transaction Documents or otherwise, it will hold such funds in trust for the Guarantor and shall (a) prior to a downgrade of the ratings of the Servicer by one or more Rating Agencies below the Servicer Deposit Threshold Ratings, transfer such monies on or before the next Guarantor Payment Date (i) at any time prior to a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, to the Cash Manager, and (ii) at any time following a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, directly into the GDA Account; and (b) in the event of a downgrade of the ratings of the Servicer by one or more of the Rating Agencies below the Servicer Deposit Threshold Ratings, transfer such monies (i) at any time prior to a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, to the Cash Manager, and (ii) at any time following a downgrade of the ratings of the Cash Manager by one or more of the Rating Agencies below the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, directly into the GDA Account, in either case within two Canadian Business Days of the collection and/or receipt thereof.

2.7 The Servicer shall remit to the relevant Governmental Authority all Taxes collected by it pursuant to the terms of, or in respect of, a Loan, and to prepare and file all returns and reports related thereto, and the Guarantor shall forthwith remit to the Servicer any amounts paid by a Borrower in respect of Taxes that are paid to the Guarantor. In accordance with the Credit and Collection Policy, the Servicer will, with respect to any Loan, pay (i) arrears of Taxes or utilities, (ii) costs of repairing, maintaining, insuring or securing the related Property, (iii) costs of liquidating or disposing of such Loan if it becomes a Defaulted Loan or the related Property, and (iv) any other cost or expense, which the Servicer deems necessary or advisable, acting in a reasonable and prudent manner, to preserve or maintain the realizable value of such Loan or the related Property.

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3. SERVICER COVENANTS; REPRESENTATIONS AND WARRANTIES

3.1 The Servicer covenants and agrees that it shall at its own expense take or cause to be taken all such reasonable actions as may be necessary, convenient, incidental or advisable from time to time to administer and service each Loan and the Related Security in accordance herewith and with applicable Law. In addition, the Servicer covenants and agrees that it shall at its own expense, in accordance with the Credit and Collection Policy, with respect to each Loan and its Related Security included in the Portfolio:

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

(b) keep and maintain records in relation to the Loan and its Related Security for the purposes of identifying amounts paid by the related Borrower, any amount due from such Borrower and the Outstanding Principal Balance of such Loan and such other records as would be kept by a Reasonable, Prudent Mortgage Lender;

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

(d) record the Loan as being a Delinquent Loan or Defaulted Loan, as the case may be, in accordance with the Credit and Collection Policy;

(e) investigate all delinquencies and defaults under the Loan;

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

(g) take such steps as are necessary to maintain the perfection and priority, as the case may be, of the security interests created pursuant to the Loan and the Related Security, and, subject to Sections 3.1(j) and (k), refrain from releasing any such security interest in whole or in part except in the event of payment in full by the Borrower of all amounts owing under the Loan or upon foreclosure or sale by the Servicer of the Property secured thereby, but only to the extent that the Servicer would have done so in a similar situation with respect to Mortgages administered by it on its own behalf;

(h) determine the advisability of taking action and instituting and carrying out legal proceedings with respect to the Loan and the Related Security pertaining thereto in case of default by the Borrower under such Loan and take such action and institute and carry out such legal proceedings using the discretion of a Reasonable, Prudent Mortgage Lender in applying the enforcement procedures forming part of the Seller’s policy;

(i) hold as trust property for and on behalf of the Guarantor, free of any Adverse Claim, all Customer Files with respect to the Loan at any one or more of the offices identified in Schedule 1;

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

4

(k) settle, compromise and otherwise deal with any claims under the Loan or the Related Security if necessary, advisable or otherwise permitted in accordance with the Credit and Collection Policy.

3.2 The Servicer covenants and agrees that it shall at its own expense:

(a) comply with the Credit and Collection Policy in regard to the Loans and the Related Security and otherwise, as applicable, in performing its covenants hereunder, except to the extent that non-compliance therewith would not reasonably be expected to have a Material Adverse Effect;

(b) notify each Rating Agency of any material changes it makes to its Credit and Collection Policy;

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

(d) pay all general administrative expenses and other costs incurred by it in carrying out its obligations hereunder and all fees and expenses of any administrator appointed or subcontractor retained by it;

(e) cause its employees to perform their employment responsibilities in collecting and administering the Loans in the same manner as if the Loans were beneficially owned by the Servicer, except (i) to the extent necessary or desirable to accommodate the exercise by the Guarantor of its rights hereunder, or (ii) as otherwise required hereby;

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

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

(h) maintain the Guarantor as a loss payee, as its interest may appear, or an additional named insured, under all policies of insurance, if any, carried by the Servicer or the Seller in respect of third party liability, fire and all perils, and extended coverage claims applicable to or relating to the Loans, and make and enforce all claims that may be made thereunder from time to time;

(i) take all reasonable steps to ensure the maintenance by Borrowers of appropriate fire and all perils or property damage insurance;

(j) settle all losses in the event of damage to or destruction by fire or other insured casualty of the property mortgaged by any of the Loans in the same manner as a Reasonable Prudent Mortgage Lender would settle losses in respect of mortgages administered by it on its own behalf;

5

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

(l) forthwith upon becoming aware of any event which may reasonably give rise to an obligation of the Seller to repurchase any Loan pursuant to the Mortgage Sale Agreement, notify the Guarantor in writing of such event;

(m) upon the Seller being required to do so pursuant to Section 6 of the Mortgage Sale Agreement, do or procure the doing of all or any of the acts, matters or things required thereunder on behalf of the Seller or, if requested to do so by the Bond Trustee, provide sufficient information to enable the Guarantor or the Bond Trustee to do so at the Servicer’s expense;

(n) obtain, and maintain in force, any necessary approvals to act as Servicer with respect to the Loans from any Person providing insurance with respect to the Loans;

(o) if at any time the Servicer’s issuer default rating is less than F2 by Fitch, notify the Borrowers within two Canadian Business Days to make payments in respect of the Loans directly to the Stand-By GDA Account;

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

(q) enforce any Loan which is in default in accordance with the Seller’s or, as applicable, an Originator’s enforcement procedures or, to the extent that such enforcement procedures are not applicable having regard to the nature of the default in question, with the procedures that would be undertaken by a Reasonable, Prudent Mortgage Lender on behalf of the Guarantor.

3.3 The Servicer covenants and agrees that it shall not:

(a) except as required by applicable Law or by OSFI or the Canada Deposit Insurance Corporation or any other regulatory authority having jurisdiction over the Servicer, make any change to the Credit and Collection Policy that would reasonably be expected to have a Material Adverse Effect without satisfaction of the Rating Agency Condition;

(b) except in accordance with the Credit and Collection Policy, extend, amend or otherwise modify or waive the terms of any Loan or the Related Security, or amend, modify or waive any term or condition of any agreement related thereto, if the result of such amendment could reasonably be expected to have a material adverse effect on the value or collectibility of such Loan except upon satisfaction of the Rating Agency Condition;

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

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

6

3.4 The Servicer hereby represents, warrants and covenants that, at the date hereof:

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

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

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

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

(e) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder;

(f) it will comply with the provisions of, and perform its obligations under, this Agreement and the other Transaction Documents to which it is party;

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

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

4. DELEGATION OF DUTIES

4.1 The Servicer may sub-contract or delegate the performance of all or any of its powers and obligations under this Agreement, provided that (but subject to Section 4.2):

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

(b) where the arrangements involve or may involve the receipt by the sub-contractor or delegate of funds belonging to the Guarantor which, in accordance with this Agreement, are to be paid into the GDA Account (or, if applicable, the Standby GDA Account), the sub-contractor or delegate has executed a declaration in form and substance acceptable to the Guarantor that any such funds held by it or to its order are held in trust for the Guarantor and will be paid forthwith, and in any event within five Canadian Business Days (inclusive of all cure periods), to the Cash Manager prior to a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, and following a downgrade of the ratings of the Cash Manager by one or more Rating Agencies below the Cash Management Deposit Ratings or the occurrence of a Covered Bond Guarantee Activation Event, into the GDA Account (or, as applicable, the Standby GDA Account);

(c) the prior written consent of the Guarantor and the Bond Trustee to the proposed arrangement (including, if the Guarantor and the Bond Trustee consider it necessary, approving any contract which sets out the terms on which such arrangements are to be made) has been obtained and subject to satisfaction of the Rating Agency Condition;

7

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

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

4.2 The provisos in Sections 4.1(a), (b) and (c) shall not apply:

(a) to the engagement by the Servicer of:

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

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

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

(b) to any delegation to any wholly-owned subsidiary of the Seller from time to time.

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

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

5. INDEMNIFICATION BY SERVICER

(a) The Servicer shall indemnify the Guarantor on demand on an after-Tax basis for any loss, liability, claim, expense or damage suffered or incurred by the Guarantor in respect of the gross negligence, dishonesty, bad faith, fraud or wilful misconduct of the Servicer in carrying out its functions as Servicer under this Agreement or the other Transaction Documents or as a result of a breach by the Servicer of the terms and provisions of this Agreement or the other Transaction Documents in relation to such functions.

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(b) For the avoidance of doubt, the Servicer shall not be liable in respect of any loss, liability, claim, expense or damage suffered or incurred by the Guarantor and/or any other person as a result of the proper performance of the Services by the Servicer save where such loss, liability, claim, expense or damage is suffered or incurred as a result of any gross negligence, dishonesty, bad faith, fraud or wilful misconduct of the Servicer or as a result of a breach by the Servicer of the terms and provisions of this Agreement or the other Transaction Documents in relation to such functions.

6. NO LIABILITY

6.1 The Servicer shall have no liability for any obligation of a Borrower under any Loan included in the Portfolio or any Related Security and nothing herein shall constitute a guarantee, indemnity or similar obligation, by or of the Servicer of or in relation to any Loan, any Related Security or any Borrower.

6.2 Save as otherwise provided in this Agreement, the Servicer shall have no liability for the obligations of the Guarantor under any of the Transaction Documents or otherwise and nothing herein shall constitute a guarantee, indemnity or similar obligation, by or of the Servicer of the Guarantor in respect of any of those obligations.

7. POWERS OF ATTORNEY

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

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

(b) executing all documents necessary for the purpose of releasing or discharging a Mortgage in accordance with this Agreement;

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

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

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

7.2 The appointment contained in Section 7.1 shall be coupled with an interest and shall be irrevocable unless and until the termination of the appointment of the Servicer pursuant to Section 11 of this Agreement upon which the appointments contained in Section 7.1 shall be automatically revoked.

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8. INFORMATION

8.1 Maintenance of Records

(a) The Servicer shall keep the Customer Files relating to the Loans included in the Portfolio in safe custody in a fire-proof location and shall take appropriate technical and organisational measures against the unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data. The Servicer shall maintain in an adequate form such records as are necessary to enforce each Mortgage included in the Portfolio and, where relevant, any Related Security. The Servicer shall keep Customer Files relating to Loans included in the Portfolio in such a way that they can be distinguished from information held by the Servicer for its own behalf as mortgagee or for other third persons.

(b) A duplicate of any computer records held by the Servicer which contains information relating to the Loans and their Related Security included in the Portfolio shall be lodged by the Servicer on a daily basis with the originating branch and/or (in accordance with operational requirements) the Seller’s mortgage servicing centres or at such other locations selected by the Servicer, such records to be held to the order of the Bond Trustee and to be replaced by a revised duplicate as and when the original records are revised. The Servicer shall keep the Bond Trustee informed of the location of the Customer Files and duplicate computer records and shall ensure that each such location complies with the requirements set forth in Section 8.1(a).

8.2 Access to Books and Records

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

8.3 Information Covenants

(a) The Servicer shall assist the Cash Manager in the production of the Monthly Reports substantially in the form set out in the Cash Management Agreement.

(b) The Servicer shall, upon request but subject to any restrictions under applicable privacy Laws, provide the Guarantor, the Bond Trustee and each Rating Agency quarterly with a report stored upon electronic media including, but not limited to, a CD-ROM in a form acceptable to the Guarantor and Bond Trustee (each acting reasonably) containing information regarding the Loans then included in the Portfolio including, but not limited to, details of the relevant mortgage reference number, the relevant Borrower’s name and the postal code of the relevant Property and the completion date of the relevant Mortgage.

(c) The Servicer shall, at the request of the Guarantor and the Bond Trustee, provide the Guarantor, the Bond Trustee and the Rating Agencies with such other information relating to its business and financial condition and (to the extent that it has such information and subject to any confidentiality restrictions binding upon it) that of any person to whom it has sub-contracted or delegated part of its obligations hereunder as it may be reasonable for the Guarantor and the Bond Trustee (as appropriate) to request in connection with the ratings of any Covered Bonds issued under the Program and other matters contemplated by the Program, provided that the Guarantor or the Bond Trustee (as appropriate) shall not make

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such a request more than once every three months unless, in the belief of the Guarantor or the Bond Trustee (as appropriate), an Issuer Event of Default or a Servicer Termination Event shall have occurred and is continuing or may reasonably be expected to occur.

9. REMUNERATION

The Servicer shall not be entitled to any additional compensation for the performance of its obligations under this Agreement or any reimbursement for the cost and expenses incurred by the Servicer in connection therewith, it being acknowledged that the Loans, the Related Security and the other assets included in the Portfolio have been sold pursuant to the Mortgage Sale Agreement on a fully-serviced basis.

10. SERVICES NON-EXCLUSIVE

Nothing in this Agreement shall prevent the Servicer from rendering or performing services similar to those provided for in this Agreement to or for itself or other persons, firms or companies or from carrying on business similar to or in competition with the business of the Guarantor.

11. TERMINATION

11.1 If any of the following events (each, a Servicer Termination Event and, in relation to the events referred to in Sections 11.1(a) to 11.1(d), a Servicer Event of Default) shall occur:

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

(b) the Servicer defaults in the payment on the due date of any amount due and payable by it under this Agreement and does not remedy that default within three Canadian Business Days after the earlier of the Servicer becoming aware of the default or receipt by the Servicer of written notice from the Bond Trustee or the Guarantor requiring the default to be remedied;

(c) the Servicer defaults in the performance or observance of any of its other covenants and obligations under this Agreement which failure in the reasonable opinion of the Bond Trustee is materially prejudicial to the interests of the Covered Bondholders, and does not remedy that default within 20 Canadian Business Days after the earlier of the Servicer becoming aware of the default or receipt by the Servicer of written notice from the Guarantor or the Bond Trustee requiring the default to be remedied, provided however that where the relevant default occurs as a result of a default by any person to whom the Servicer has sub-contracted or delegated part of its obligations hereunder, such default shall not constitute a Servicer Termination Event if, within such period of 20 Canadian Business Days, the Servicer terminates the relevant sub-contracting or delegation arrangements and takes such steps as the Guarantor and the Bond Trustee may specify to remedy such default or to indemnify the Guarantor against the consequences of such default;

(d) default is made by the Servicer (or any delegate thereof) in the performance of its obligations under Section 2.6 at any time that the Servicer’s unsecured, unguaranteed and unsubordinated debt obligations or its issuer default ratings has been downgraded by one or more Rating Agencies below the Servicer Deposit Threshold Ratings and such default continues unremedied for a period of one (1) Canadian Business Day after the earlier of the Servicer becoming aware of such default and receipt by the Servicer of written notice from the Bond Trustee or the Guarantor requiring the same to be remedied;

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

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(f) a breach of a representation, warranty or covenant provided in Sections 3.4 (a), (b), (c), (e), (f), (g) or (h); or

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

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

11.2 The appointment of the Servicer under this Agreement may be terminated by the Servicer upon the expiry of not less than 12 months’ written notice of termination given by the Servicer to the Bond Trustee, the Guarantor and each Rating Agency provided that:

(a) If the Servicer who wishes to terminate its appointment is BMO, the Bond Trustee consents in writing to such termination;

(b) a New Servicer having at least the Servicer Replacement Threshold Ratings shall be appointed by the Guarantor, with the consent in writing of the Bond Trustee and satisfaction of the Rating Agency Condition with respect to such appointment, such appointment to be effective not later than the date of such termination;

(c) such New Servicer is qualified to act as such under applicable mortgage broker legislation;

(d) such New Servicer has a management team with experience of administering residential mortgages in Canada of the type included in the Portfolio;

(e) such New Servicer enters into an agreement substantially on the same terms as the relevant provisions of this Agreement with the Guarantor and the Bond Trustee (which agreement may, for the avoidance of doubt, provide for the payment of such fees, costs and expenses of the New Servicer as the Bond Trustee may deem appropriate, but which shall comply with the CMHC Guide and shall include a covenant on the part of the New Servicer to comply with the CMHC Guide in connection with its duties and obligations thereunder) and the Servicer shall not be released from its obligations under the relevant provisions of this Agreement until such New Servicer has entered into such new agreement; and

(f) the Rating Agency Condition will be satisfied with respect to such termination, unless the termination is otherwise agreed to by an Extraordinary Resolution of the holders of the Covered Bonds.

11.3 On and after termination of the appointment of the Servicer under this Agreement pursuant to this Section 11, all authority and power of the Servicer under this Agreement shall be terminated and be of no further effect and the Servicer shall not thereafter hold itself out in any way as the agent of the Guarantor pursuant to this Agreement. On and after any termination of the appointment of the Servicer under this Agreement with respect to Selected Loans pursuant to Section 12.1, all authority and power of the Servicer under this Agreement in respect of such Selected Loans will be terminated and be of no further effect and it will not thereafter hold itself out in any way as the agent of the Guarantor pursuant to this Agreement in connection with any such Selected Loans.

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11.4 Upon termination of the appointment of the Servicer under this Agreement pursuant to this Section 11, the Servicer shall:

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

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

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

(d) co-operate and consult with and assist the Guarantor, the Bond Trustee and their nominees (which shall, for the avoidance of doubt, include any New Servicer appointed by any of them) for the purposes of explaining the file layouts and the format of the magnetic tapes, CD-ROMs and/or other form of electronic media generally containing such computer records on the computer system of the Guarantor, the Bond Trustee or such nominee.

11.5 The Servicer shall deliver to the Guarantor and the Bond Trustee as soon as reasonably practicable but in any event within five days of becoming aware thereof a notice of any Servicer Termination Event or any event which with the giving of notice or lapse of time or certification would constitute the same, including any breach by a sub-contractor or delegate contemplated in Section 4.4.

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

11.7 Termination of this Agreement or the appointment of the Servicer under this Agreement shall be without prejudice to the liabilities of the Guarantor to the Servicer or vice versa incurred before the date of such termination. The Servicer shall have no right of set-off or any lien in respect of such amounts against amounts held by it on behalf of the Guarantor.

11.8 This Agreement shall terminate at such time as the Guarantor has no further interest in any Loans or their Related Security that have been included in the Portfolio, provided that this shall be without prejudice to any claims in respect of obligations or rights arising hereunder on or prior to the date of such termination.

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

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12. FURTHER ASSURANCE

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

12.2 Without prejudice to the generality of Section 12.1, the Guarantor and the Bond Trustee shall upon request by the Servicer forthwith give to the Servicer such further powers of attorney or other written authorisations, mandates or instruments as are necessary to enable the Servicer to perform the Services.

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

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13. MISCELLANEOUS

Each of the Seller and the Servicer agrees that it will not, notwithstanding any termination of this Agreement:

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

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

(c) institute against, or join any other party in instituting against, the Guarantor or any general partner of the Guarantor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal, provincial or foreign bankruptcy, insolvency or similar Law, for one year and one day after all Covered Bonds have been repaid in full.

14. CONFIDENTIALITY

During the continuance of this Agreement or after its termination, the Guarantor shall not to disclose to any person, firm or company whatsoever any information relating to the business, finances or other matters of a confidential nature of any other party hereto of which it may exclusively by virtue of being party to the Transaction Documents have become possessed and shall use all reasonable endeavours to prevent any such disclosure as aforesaid, provided however that the provisions of this Section 14 shall not apply:

(a) to any information already known to the Guarantor or the Bond Trustee otherwise than as a result of entering into any of the Transaction Documents;

(b) to any information subsequently received by the Guarantor or the Bond Trustee which it would otherwise be free to disclose;

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

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

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

(f) in relation to any information disclosed to the professional advisers of the Guarantor or the Bond Trustee or (in connection with the review of current ratings of any Covered Bonds issued under the Program or with a prospective rating of any debt to be issued by the Issuer) to any credit rating agency or any prospective New Servicer.

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15. NOTICES

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

(a) in the case of the Servicer, to Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-4166) for the attention of Senior Manager, Securitization Finance and Operations ;

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

(c) in the case of the Seller, to Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-7193) for the attention of Senior Manager, Corporate Funding; and

(d) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11^th Floor, Toronto, ON M5J 2Y1, (facsimile number (416) 981-9777) for the attention of Manager, Corporate Trust;

or to such other address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written notice in accordance with the provisions of this Section 15. All notices served under this Agreement shall be simultaneously copied to the Bond Trustee by the person serving the same.

16. AMENDMENTS, VARIATION AND WAIVER

16.1 Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorised by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

16.2 Subject to the following sentence, each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition and the Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers for which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement. For certainty, any amendment to (a) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (b) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall, with respect to each affected Rating Agency only, be deemed to be a material amendment and shall be subject to satisfaction of the Rating Agency Condition with respect to each affected Rating Agency. The Guarantor will deliver notice to CMHC from time to time of any amendment, variation or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

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17. NO AGENCY OR PARTNERSHIP

It is hereby acknowledged and agreed by the parties that nothing in this Agreement shall be construed as giving rise to any relationship of agency, save as expressly provided herein, or partnership between the parties and that in fulfilling its obligations hereunder, each party shall be acting entirely for its own account.

18. ASSIGNMENT

18.1 None of the Seller, the Servicer or the Guarantor may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Bond Trustee, such consent not to be unreasonably withheld or delayed, except as provided for in the Transaction Documents, save that the Guarantor shall be entitled to assign whether by way of security or otherwise all or any of its rights under this Agreement to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement without such consent to any successor Bond Trustee in exercise of its rights under the Security Agreement.

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

19. BOND TRUSTEE

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

19.2 It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee shall not assume or have any obligations or liabilities to the Seller, the Servicer or the Guarantor under this Agreement notwithstanding any provision herein or therein 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 16. For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed by the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion, without any obligation to give reasons therefor, and the Bond Trustee shall not be responsible for any liability occasioned by so acting.

20. LIMITATION OF LIABILITY

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

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21. COUNTERPARTS

This Agreement may be executed in any number of counterparts (manually, electronically or by facsimile) and by different parties hereto in separate 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 instrument.

22. GOVERNING LAW

22.1 This Agreement shall be governed by and construed in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.

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

[Signature page follows]

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

BANK OF MONTREAL, as Seller, Servicer and Cash Manager		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC., as Guarantor
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary
		COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
		By:	/s/ Sean Pigott
			Name: Sean Pigott
			Title: Corporate Trust Officer
		By:	/s/ Stanley Kwan
			Name: Stanley Kwan
			Title: Associate Trust Officer

Servicing Agreement

19

SCHEDULE 1

LOCATION OF RECORDS

20

EX-4.6

Exhibit 4.6

AGENCY AGREEMENT

U.S.$10,000,000,000

REGISTERED GLOBAL COVERED BOND PROGRAM

of

BANK OF MONTREAL,

as Issuer

- and -

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP,

as Guarantor

- and -

BANK OF NEW YORK MELLON,

as Principal Paying Agent, a Registrar, a Transfer Agent and the Exchange Agent

-and-

COMPUTERSHARE TRUST COMPANY OF CANADA,

as Bond Trustee

DATED AS OF SEPTEMBER 30, 2013

CONTENTS

ARTICLE 1 DEFINITIONS AND INTERPRETATION	1
1.1     Definitions	1
1.2     Interpretation	2
1.3     Schedules	2
ARTICLE 2 APPOINTMENT OF AGENTS	3
ARTICLE 3 ISSUE OF BEARER GLOBAL COVERED BONDS AND REGISTERED GLOBAL COVERED BONDS	7
ARTICLE 4 EXCHANGE OF GLOBAL COVERED BONDS	8
ARTICLE 5 ISSUE OF DEFINITIVE COVERED BONDS	10
ARTICLE 6 TERMS OF ISSUE	10
ARTICLE 7 EXCHANGE AND TRANSFER OF COVERED BONDS	12
ARTICLE 8 PAYMENTS	13
ARTICLE 9 NOTICE OF ANY WITHHOLDING OR DEDUCTION	18
ARTICLE 10 OTHER DUTIES OF THE REGISTRAR	19
ARTICLE 11 DUTIES OF THE TRANSFER AGENTS	21
ARTICLE 12 REGULATIONS FOR TRANSFERS AND EXCHANGES OF REGISTERED COVERED BONDS	22
ARTICLE 13 DUTIES OF THE AGENTS IN CONNECTION WITH EARLY REDEMPTION	22
ARTICLE 14 EXTENDABLE OBLIGATIONS	23
ARTICLE 15 RECEIPT AND PUBLICATION OF NOTICES	24
ARTICLE 16 CANCELLATION OF COVERED BONDS, COUPONS AND TALONS	24
ARTICLE 17 ISSUE OF REPLACEMENT COVERED BONDS, COUPONS AND TALONS	25

ARTICLE 18 COPIES OF DOCUMENTS TO BE MADE AVAILABLE	27
ARTICLE 19 MEETINGS OF COVERED BONDHOLDERS	27
ARTICLE 20 COMMISSIONS AND EXPENSES	27
ARTICLE 21 INDEMNITY	27
ARTICLE 22 RESPONSIBILITY OF THE AGENTS	28
ARTICLE 23 CONDITIONS OF APPOINTMENT	29
ARTICLE 24 COMMUNICATIONS BETWEEN THE PARTIES	30
ARTICLE 25 CHANGES IN AGENTS	31
ARTICLE 26 CHANGE OF BOND TRUSTEE	34
26.1     Change of Bond Trustee	34
26.2     Limitation of Liability	34
ARTICLE 27 MERGER AND CONSOLIDATION	34
ARTICLE 28 NOTIFICATION OF CHANGES TO AGENTS	34
ARTICLE 29 CHANGE OF SPECIFIED OFFICE	35
ARTICLE 30 COMMUNICATIONS	35
ARTICLE 31 TAXES AND STAMP DUTIES	35
ARTICLE 32 ASSIGNMENT	36
32.1     Assignment	36
32.2     Assignment under Security Agreement	36
ARTICLE 33 AMENDMENTS	36
ARTICLE 34 FURTHER ASSURANCE	37
ARTICLE 35 LIMITATION OF LIABILITY	37
ARTICLE 36 NON-PETITION	37
ARTICLE 37 GOVERNING LAW	37
37.1     Governing Law	37

- ii -

37.2     Submission to Jurisdiction	38
ARTICLE 38 COUNTERPARTS	38
SCHEDULE 1	1
SCHEDULE 2	1
SCHEDULE 3	1
SCHEDULE 4	1
SCHEDULE 5	1

- iii -

THIS AGENCY AGREEMENT is dated as of September 30, 2013

BETWEEN:

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

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under the laws of the Province of Ontario, whose registered office is at 100 King Street West, Suite 6100, 1 First Canadian Place, Toronto, Ontario, M5X 1B8, by its managing general partner, BMO Covered Bond GP, Inc. in its capacity as the Guarantor;

(3) BANK OF NEW YORK MELLON, a New York banking corporation, acting through its offices located at 101 Barclay Street 7E, New York, NY 10286, in its capacity as the Principal Paying Agent, a Registrar, a Transfer Agent and the Exchange Agent; and

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

WHEREAS:

A. The Issuer has established the Program, in connection with which it has entered into the Program Agreement.

B. Covered Bonds may be issued on a listed or unlisted basis. The Issuer may make applications to the UK Listing Authority for Covered Bonds issued under the Program to be admitted to the Official List and to the London Stock Exchange for such Covered Bonds to be admitted to trading on either the Market or the PSM.

C. The Issuer has filed a U.S. Registration Statement with the U.S. Securities and Exchange Commission for the sale of Covered Bonds in the United States.

D. The parties hereto wish to record certain arrangements which they have made in relation to the Covered Bonds to be issued under the Program.

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

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

The Master Definitions and Construction Agreement made between the parties to the Transaction Documents on the date hereof (as the same may be amended, restated and/or supplemented from time to time, with the consent of the parties thereto) (the “Master

Definitions and Construction Agreement”) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) will, except where the context otherwise requires and save where otherwise defined herein, have the same meanings in this Agreement, including the recitals hereto and this Agreement will be construed in accordance with the interpretation provisions set out in Section 2 (Interpretation and Construction) of the Master Definitions and Construction Agreement.

1.2 Interpretation

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

In this Agreement, any reference to payments of principal or interest includes any additional amounts payable in relation thereto under the Terms and Conditions.

(a) In this Agreement, any reference to Euroclear and/or Clearstream, Luxembourg and/or DTC will, wherever the context so permits (other than in relation to a NGCB), be deemed to include a reference to any other clearing system agreed as is approved by the Issuer, the Principal Paying Agent, each Paying Agent, the Registrar, the Exchange Agent and the Bond Trustee or as may otherwise be specified in the applicable Final Terms Document.

(b) In this Agreement, any reference to the “records” of an ICSD shall be to the records that each of the ICSDs holds for its customer that reflect the amount of such customer’s interest in the Covered Bonds (but excluding any interest in any Covered Bonds of one ICSD shown in the records of another ICSD).

(c) All references herein to Covered Bonds having a “listing” or being “listed” on a Stock Exchange shall (i) in relation to the London Stock Exchange, be construed to mean that such Covered Bonds have been admitted to the Official List by the UK Listing Authority and admitted to trading on the Market and/or the PSM or (ii) in relation to any Stock Exchange in the European Economic Area, be construed to mean that such Covered Bonds have been admitted to trading on a market which is a regulated market for purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC) or (iii) to any other Stock Exchange, be construed to mean that the Covered Bonds have been listed on that Stock Exchange and/or to trading on the relevant market, as the case may be, and all references in the trust presents to “listing” and “listed” will include references to “quotation” and “quoted” respectively.

1.3 Schedules

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

- 2 -

ARTICLE 2

APPOINTMENT OF AGENTS

2.1 The Principal Paying Agent is appointed, and the Principal Paying Agent agrees to act, as agent of the Issuer, the Guarantor (and, in the circumstances set out in Sections 2.6 and 2.7 below, the Bond Trustee), upon the terms and subject to the conditions set out below, for the following purposes and all matters incidental thereto:

(a) completing, authenticating and delivering Temporary Global Covered Bonds and Permanent Global Covered Bonds and (if required) authenticating and delivering Definitive Covered Bonds;

(b) giving effectuation instructions in respect of each Global Covered Bond which is a Eurosystem-eligible NGCB;

(c) exchanging Temporary Global Covered Bonds for Permanent Global Covered Bonds or Definitive Covered Bonds, as the case may be, in accordance with the terms of such Temporary Global Covered Bonds and, in respect of any such exchange, (i) making all notations on Temporary Global Covered Bonds which are CGCBs as required by their terms and (ii) instructing Euroclear and Clearstream, Luxembourg to make appropriate entries in their records in respect of all Temporary Global Covered Bonds which are NGCBs;

(d) exchanging Permanent Global Covered Bonds for Definitive Covered Bonds in accordance with the terms of such Permanent Global Covered Bonds and, in respect of any such exchange, (i) making all notations on Permanent Global Covered Bonds which are CGCBs as required by their terms and (ii) instructing Euroclear and Clearstream, Luxembourg to make appropriate entries in their records in respect of all Permanent Global Covered Bonds which are NGCBs;

(e) paying sums due on Global Covered Bonds, Definitive Covered Bonds and Coupons and instructing Euroclear and Clearstream, Luxembourg to make appropriate entries in their records in respect of all Global Covered Bonds which are NGCBs;

(f) exchanging Talons for Coupons in accordance with the Terms and Conditions;

(g) arranging on behalf of and at the expense of the Issuer and/or the Guarantor for notices to be communicated to the Covered Bondholders in accordance with the Terms and Conditions;

(h) ensuring that, as directed by the Issuer, all necessary action is taken to comply with any reporting requirements of any competent authority in respect of any relevant currency as may be in force from time to time with respect to the Covered Bonds to be issued under the Program;

(i) submitting to the relevant authority or authorities such number of copies of each of the Final Terms Document which relates to Covered Bonds which are to be listed as the relevant authority or authorities may require;

(j) acting as Calculation Agent in respect of Covered Bonds where named as such in the applicable Final Terms Document provided that, in respect of a particular Series of Covered Bonds, the Issuer and Guarantor shall not appoint the Principal Paying Agent as the Calculation Agent where the Principal Paying Agent has advised the Issuer, in writing and within a reasonable amount of time prior to the issuance of such a Series of Covered Bonds, that it does not have the appropriate financial expertise to perform the role of Calculation Agent. The Issuer shall, at its discretion, select another institution to appoint in place of the Principal Paying Agent as the Calculation Agent, in respect of such Series of Covered Bonds only; and

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(k) performing all other obligations and duties imposed upon it by the Terms and Conditions and this Agreement.

2.2 Each Paying Agent is appointed, and each Paying Agent agrees to act, as paying agent of the Issuer and the Guarantor (and, in the circumstances set out in Sections 2.6 and 2.7 below, the Bond Trustee) upon the terms and subject to the conditions set out below, for the purposes of paying sums due on any Covered Bonds and Coupons and performing all other obligations and duties imposed upon it by the Terms and Conditions and this Agreement.

2.3 The Exchange Agent is hereby appointed, and the Exchange Agent hereby agrees to act as exchange agent of the Issuer and the Guarantor (and, in the circumstances set out in Sections 2.6 and 2.7 below, the Bond Trustee) upon and subject to the terms and conditions set out in Section 8.11 for the purposes of effecting the conversion of non-U.S. dollar payments into U.S. dollars and performing all other obligations and duties imposed upon it by the Terms and Conditions and this Agreement.

2.4 Each Transfer Agent is hereby appointed, and each Transfer Agent hereby agrees to act, as transfer agent of the Issuer and the Guarantor (and, in the circumstances set out in Sections 2.6 and 2.7 below, the Bond Trustee) upon the terms and subject to the conditions set out below for the purposes of effecting transfers of Registered Definitive Covered Bonds and performing all the other obligations and duties imposed upon it by the Terms and Conditions and this Agreement.

2.5 The Registrar is hereby appointed, and the Registrar hereby agrees to act, as registrar and transfer agent of the Issuer and the Guarantor (and, in the circumstances set out in Sections 2.6 and 2.7 below, the Bond Trustee) upon the terms and subject to the conditions set out below, for the following purposes:

(a) completing, authenticating and delivering U.S. Registered Global Covered Bonds, Regulation S Global Covered Bonds and Rule 144A Global Covered Bonds and authenticating and delivering Registered Definitive Covered Bonds; and

(b) performing all other obligations and duties imposed upon it by the Terms and Conditions and this Agreement, including, without limitation, those set out in Article 11 (Other Duties of the Registrar).

The Registrar may from time to time, subject to the prior written consent of the Issuer, delegate certain of its functions and duties set out in this Agreement to the Principal Paying Agent.

2.6 At any time after an Issuer Event of Default or Potential Issuer Event of Default will have occurred and is continuing or the Bond Trustee will have received any money from the Issuer which it proposes to pay under Article 11 (Application of Funds) of the Trust Deed to the relevant Covered Bondholders and/or Couponholders, the Bond Trustee may:

(a) by notice in writing to the Issuer, the Guarantor and the Agents, require the Agents pursuant to this Agreement to act thereafter as Agents of the Bond Trustee in relation to payments of such funds to be made by or on behalf of the Bond Trustee under the terms of the Trust Deed mutatis mutandis on the terms

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provided in this Agreement (save that the Bond Trustee’s liability under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Agents will be limited to the amounts for the time being held by the Bond Trustee on the trusts of the Trust Deed relating to the Covered Bonds of the relevant Series and available for such purpose) and thereafter to hold all Covered Bonds and Coupons and all sums, documents and records held by them in respect of Covered Bonds and Coupons on behalf of the Bond Trustee; or

(b) by notice in writing to the Issuer, the Guarantor and the Agents, require the Agents pursuant to this Agreement to deliver up all Covered Bonds and Coupons and all sums, documents and records held by them in respect of Covered Bonds and Coupons to the Bond Trustee or as the Bond Trustee will direct in such notice provided that such notice will be deemed not to apply to any documents or records which the Agents are obliged not to release by any law or regulation; and

(c) by notice in writing to the Issuer (but not the Guarantor), require the Issuer to make all subsequent payments in respect of the Covered Bonds and Coupons to or to the order of the Bond Trustee and not to the Principal Paying Agent, any Paying Agent or the Registrar, as the case may be, and with effect from the issue of any such notice to the Issuer and until such notice is withdrawn proviso (a) to Section 2.2 (Covenant to Repay Principal and to Pay Interest) of the Trust Deed relating to the Covered Bonds will cease to have effect in respect of the Issuer.

2.7 At any time after a Guarantor Event of Default or Potential Guarantor Event of Default will have occurred and is continuing or the Bond Trustee will have received any money from the Guarantor which it proposes to pay under Article 11 (Application of Funds) of the Trust Deed to the relevant Covered Bondholders and/or Couponholders, the Bond Trustee may:

(a) by notice in writing to the Issuer, the Guarantor, the Agents or any one or more of them, pursuant to this Agreement to act thereafter as Agents respectively of the Bond Trustee in relation to payments of such funds to be made by or on behalf of the Bond Trustee under the terms of the Trust Deed mutatis mutandis on the terms provided in this Agreement (save that the Bond Trustee’s liability under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Agents will be limited to the amounts for the time being held by the Bond Trustee on the trusts of the Trust Deed relating to the Covered Bonds of the relevant Series and available for such purpose) and thereafter to hold all Covered Bonds and Coupons and all sums, documents and records held by them in respect of Covered Bonds and Coupons on behalf of the Bond Trustee; or

(b) by notice in writing to the Issuer, the Guarantor, the Agents or any one or more of them, pursuant to this Agreement to deliver up all Covered Bonds and Coupons and all sums, documents and records held by them in respect of Covered Bonds and Coupons to the Bond Trustee or as the Bond Trustee will direct in such notice provided that such notice will be deemed not to apply to any documents or records which the Principal Paying Agent and the other Paying Agents or the Registrar, as the case may be, are obliged not to release by any law or regulation; and

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(c) by notice in writing to the Guarantor require it to make all subsequent payments in respect of the Covered Bonds and Coupons to or to the order of the Bond Trustee and not to the Principal Paying Agent, any Paying Agent or the Registrar, as the case may be, and with effect from the issue of any such notice to the Guarantor and until such notice is withdrawn proviso (a) to Section 2.2 (Covenant to Repay Principal and to Pay Interest) of the Trust Deed relating to the Covered Bonds will cease to have effect.

2.8 In relation to each issue of Eurosystem-eligible NGCBs, the Issuer hereby authorizes and instructs the Principal Paying Agent to elect Euroclear as common safekeeper (the “Common Safekeeper”). From time to time, the Issuer and the Principal Paying Agent may agree to vary this election. The Issuer acknowledges that any such election is subject to the right of Euroclear and Clearstream, Luxembourg to jointly determine that the other will act as Common Safekeeper in relation to any such issue and agrees that no liability will attach to the Principal Paying Agent in respect of any such election made by it.

2.9 The obligations of the Agents under this Agreement are several and not joint.

2.10 Each Agent, by entering into this Agreement, represents and warrants to, and covenants with, the Issuer, the Guarantor and the Bond Trustee that as of the date hereof and as long as it remains a party to this Agreement:

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

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

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

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

(e) it will comply with the CMHC Guide and each of the Transaction Documents to which it is a party;

(f) it will 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 hereunder and the other Transaction Documents to which it is a party; and

(g) in case of a Paying Agent, the unsecured, unsubordinated and unguaranteed debt obligations of such Paying Agent, and its issuer default ratings, are rated by each of the Rating Agencies at or above the Paying Agent Required Ratings.

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ARTICLE 3

ISSUE OF BEARER GLOBAL COVERED BONDS AND

REGISTERED GLOBAL COVERED BONDS

3.1 Subject to Section 3.2, following receipt of an electronic copy of a Final Terms Document signed by the Issuer, the Issuer authorizes each of the Principal Paying Agent and the Registrar, and each of the Principal Paying Agent and the Registrar agrees, to perform the following duties on behalf of the Issuer, as applicable:

(a) in the case of the Principal Paying Agent, prepare a Temporary Global Covered Bond and/or (if so specified in the applicable Final Terms Document) a Permanent Global Covered Bond or (in the case of the Registrar) prepare a U.S. Registered Global Covered Bond and/or a Regulation S Global Covered Bond and/or a Rule 144A Global Covered Bond by completing a copy of the relevant signed master Global Covered Bond and attaching a copy of the applicable Final Terms Document to such copy of the signed master Global Covered Bond;

(b) in the case of the first Tranche of any Series of Covered Bonds authenticate (or procure the authentication of) the relevant Global Covered Bonds;

(c) in the case of the Principal Paying Agent, deliver the Temporary Global Covered Bond and/or Permanent Global Covered Bond to the Common Depositary (if the Bearer Global Covered Bond is a CGCB) or Common Safekeeper (if the Bearer Global Covered Bond is an NGCB) for Euroclear and Clearstream, Luxembourg and, in the case of a Bearer Global Covered Bond which is a Eurosystem-eligible NGCB, instruct the Common Safekeeper to effectuate the same;

(d) in the case of the Principal Paying Agent, if the Bearer Global Covered Bond is an NGCB, instruct Euroclear and Clearstream, Luxembourg to make the appropriate entries in their records to reflect the initial outstanding aggregate principal amount of the relevant Tranche of Covered Bonds;

(e) in the case of the Principal Paying Agent, if specified in the applicable Final Terms Document that a Permanent Global Covered Bond will represent the Regulation S Global Covered Bonds on issue, in the case of a Tranche subsequent to the first Tranche of any Series of Covered Bonds, deliver the applicable Final Terms Document to the Common Depositary or Common Safekeeper, as the case may be, for attachment to the Permanent Global Covered Bond and where the Permanent Global Covered Bond is a CGCB, make all appropriate entries on the relevant Schedule to the Permanent Global Covered Bond to reflect the increase in its nominal amount or where the Permanent Global Covered Bond is an NGCB, instruct Euroclear and Clearstream, Luxembourg to make the appropriate entries in their records to reflect the increased outstanding aggregate principal amount of the relevant Series; and

(f) in the case of the Registrar, deliver: (i) in the case of a Registered Global Covered Bond registered in the name of a nominee for the Common Depositary for Euroclear and Clearstream, Luxembourg, the Registered Global Covered Bond to such Common Depositary for Euroclear and Clearstream, Luxembourg against receipt from the Common Depositary of confirmation that the Common

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Depositary is holding the Registered Global Covered Bond in safe custody for the account of Euroclear and Clearstream, Luxembourg and will instruct Euroclear or Clearstream, Luxembourg or both of them (as the case may be) unless otherwise agreed in writing between the Registrar and the Issuer (A) in the case of Regulation S Global Covered Bonds issued on a non-syndicated basis, to credit the Covered Bonds represented by the Registered Global Covered Bond to the Registrar’s distribution account and (B) in the case of Regulation S Global Covered Bonds issued on a syndicated basis, to hold the Regulation S Global Covered Bonds represented by the Registered Global Covered Bond to the Issuer’s order; and (ii) in the case of a Registered Global Covered Bond registered in the name of DTC or a nominee, the Registered Global Covered Bond to a custodian for DTC against receipt from DTC of confirmation that (A) in the case of an issue of Registered Covered Bonds on a non-syndicated basis, that the Registered Covered Bonds represented by such Registered Global Covered Bond have been credited to the relevant Dealer’s participant account (or the participant account of the DTC participant through which the relevant Dealer is acting) and (B) in the case of an issue of Registered Covered Bonds on a syndicated basis, that the Registered Covered Bonds represented by such Registered Global Covered Bond are held to the Issuer’s order.

3.2 Each of the Principal Paying Agent and the Registrar will only be required to perform its obligations under Section 3.1 if it receives (as applicable):

(a) a master Temporary Global Covered Bond and a master Permanent Global Covered Bond, each duly executed by a person or persons duly authorized to execute the same on behalf of the Issuer, which may be used by the Principal Paying Agent for the purpose of preparing Temporary Global Covered Bonds and Permanent Global Covered Bonds, respectively, in accordance with Section 3.1(a) and Article 4 (Exchange of Global Covered Bonds); and

(b) a master U.S. Registered Global Covered Bond, a master Regulation S Global Covered Bond and a master Rule 144A Global Covered Bond, each duly executed by a person or persons duly authorized to execute the same on behalf of the Issuer, which may be used by the Registrar for the purpose of preparing Registered Global Covered Bonds in accordance with Section 3.1(a).

3.3 Where the Principal Paying Agent delivers any authenticated Bearer Global Covered Bond to a Common Safekeeper for effectuation using electronic means, the Principal Paying Agent is authorized and instructed to destroy the Bearer Global Covered Bond retained by it following its receipt of confirmation from the Common Safekeeper that the relevant Bearer Global Covered Bond has been effectuated.

ARTICLE 4

EXCHANGE OF GLOBAL COVERED BONDS

4.1 The Principal Paying Agent will determine the Exchange Date for each Temporary Global Covered Bond in accordance with its terms. Immediately after determining any Exchange Date, the Principal Paying Agent will notify its determination to the Issuer, the Guarantor, the Bond Trustee, the other Agents, the relevant Dealer, Euroclear and Clearstream, Luxembourg. On and after the Exchange Date, the Principal Paying Agent will deliver, upon notice from

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Euroclear and Clearstream, Luxembourg, a Permanent Global Covered Bond or Bearer Definitive Covered Bonds, as the case may be, in accordance with the terms of the Temporary Global Covered Bond.

4.2 Where a Temporary Global Covered Bond is to be exchanged for a Permanent Global Covered Bond, the Principal Paying Agent is authorized by the Issuer and instructed:

(a) in the case of the first Tranche of any Series of Bearer Covered Bonds, to prepare a Permanent Global Covered Bond in accordance with the terms of the Temporary Global Covered Bond applicable to such Tranche by completing a copy of the signed master Global Covered Bond and attaching a copy of the applicable Final Terms Document to such copy of the master Permanent Global Covered Bond;

(b) in the case of the first Tranche of any Series of Bearer Covered Bonds, to authenticate the Permanent Global Covered Bond;

(c) in the case of the first Tranche of any Series of Bearer Covered Bonds, if the Permanent Global Covered Bond is a CGCB, to deliver the Permanent Global Covered Bond to the Common Depositary which is holding the Temporary Global Covered Bond representing the Tranche for the time being on behalf of Euroclear and/or Clearstream, Luxembourg to hold on behalf of the Issuer pending its exchange for the Temporary Global Covered Bond and on exchange entering the details of such exchange or, in the case of a partial exchange, entering details of the partial exchange, of the Temporary Global Covered Bond in the relevant spaces in Schedule 2 of both the Temporary Global Covered Bond and the Permanent Global Covered Bond;

(d) in the case of the first Tranche of any Series of Bearer Covered Bonds, if the Permanent Global Covered Bond is an NGCB, to deliver the Permanent Global Covered Bond to the Common Safekeeper which is holding the Temporary Global Covered Bond representing the Tranche for the time being on behalf of Euroclear and/or Clearstream, Luxembourg to effectuate (in the case of a Permanent Global Covered Bond which is a Eurosystem-eligible NGCB) and to hold on behalf of the Issuer pending its exchange for the Temporary Global Covered Bond and on exchange entering the details of such exchange or, in the case of a partial exchange, entering details of the partial exchange, of the Temporary Global Covered Bond in the relevant spaces in Schedule 2 of both the Temporary Global Covered Bond and the Permanent Global Covered Bond and instruct the ICSDs to make the appropriate entries in their records;

(e) in the case of a subsequent Tranche of any Series of Bearer Covered Bonds, if the Permanent Global Covered Bond is a CGCB, to attach a copy of the applicable Final Terms Document to the Permanent Global Covered Bond applicable to the relevant Series and to enter details of any exchange in whole or part as stated above and instruct the ICSDs to make the appropriate entries in their records; and

(f) in the case of a subsequent Tranche of any Series of Bearer Covered Bonds, if the Permanent Global Covered Bond is an NGCB, to deliver the applicable Final Terms Document to the Common Safekeeper for attachment to the Permanent Global Covered Bond applicable to the relevant Series.

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ARTICLE 5

ISSUE OF DEFINITIVE COVERED BONDS

5.1 Upon notice from Euroclear or Clearstream, Luxembourg (in the case of Bearer Covered Bonds only) pursuant to the terms of the relevant Bearer Global Covered Bonds or upon the Issuer becoming obliged pursuant to Condition 2 (in the case of Registered Covered Bonds only) to issue Definitive Covered Bonds, the Principal Paying Agent (in the case of Bearer Covered Bonds) and the Registrar (in the case of Registered Covered Bonds) are each hereby authorized to:

(a) authenticate such Definitive Covered Bonds in accordance with the provisions hereof; and

(b) deliver such Definitive Covered Bonds, in the case of Bearer Definitive Covered Bonds, to or to the order of Euroclear and/or Clearstream, Luxembourg or, in the case of Registered Definitive Covered Bonds, as the Registrar may be directed by the registered holder of such Registered Definitive Covered Bonds.

The Principal Paying Agent will notify the Issuer forthwith upon receipt of a request for the issue of Bearer Definitive Covered Bonds in accordance with the provisions of a Temporary Global Covered Bond or Permanent Global Covered Bond, as the case may be, and the aggregate nominal amount of such Temporary Global Covered Bond or Permanent Global Covered Bond, as the case may be, to be exchanged in connection therewith. The Registrar will notify the Issuer forthwith upon receipt of a request for the issue of Registered Definitive Covered Bonds in accordance with the provisions of a Registered Global Covered Bond, as the case may be, or upon the exchange of Regulation S Definitive Covered Bonds for Rule 144A Definitive Covered Bonds and vice versa, and the aggregate nominal amount of the relevant Registered Covered Bond to be exchanged in connection therewith.

5.2 The Issuer undertakes to deliver to the Principal Paying Agent or the Registrar, as the case may be, sufficient numbers of executed Definitive Covered Bonds with, in the case of Bearer Definitive Covered Bonds (if applicable), Coupons and Talons attached, to enable the Principal Paying Agent or the Registrar, as the case may be, to comply with its obligations under this Article.

ARTICLE 6

TERMS OF ISSUE

6.1 Each of the Principal Paying Agent and the Registrar will cause all Covered Bonds delivered to and held by it or them under this Agreement to be maintained in safe custody and will ensure that Covered Bonds are issued only in accordance with the provisions of this Agreement, the Trust Deed, the Terms and Conditions and, where applicable, the relevant Global Covered Bonds.

6.2 For the purposes of Article 2 (Appointment of Agents), each of the Principal Paying Agent and the Registrar, as the case may be, is entitled to treat a telephone, electronic or facsimile communication from a person purporting to be (and whom the Principal Paying Agent or the Registrar, as the case may be, believes in good faith to be) the authorized representative of the Issuer named in the list referred to in, or notified pursuant to, Section 23.7, or any other list

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duly provided for the purpose by the Issuer to the Principal Paying Agent or the Registrar, as the case may be, as sufficient instructions and authority of the Issuer for the Principal Paying Agent or the Registrar to act in accordance with Article 3 (Issue of Bearer Global Covered Bonds and Registered Global Covered Bonds).

6.3 In the event that a person who has signed a master Temporary Global Covered Bond, a master Permanent Global Covered Bond, a master Registered Global Covered Bond or a Registered Definitive Covered Bond held by the Principal Paying Agent or the Registrar, as the case may be, on behalf of the Issuer ceases to be an authorized representative of the Issuer as described in Section 23.7, the Principal Paying Agent or the Registrar will (unless the Issuer gives notice to the Principal Paying Agent or the Registrar, as the case may be that Covered Bonds signed by that person do not constitute valid and binding obligations of the Issuer or otherwise until replacements have been provided to the Principal Paying Agent or the Registrar, as the case may be) continue to have authority to issue Covered Bonds signed by that person, and the Issuer warrants to the Principal Paying Agent and the Registrar that those Covered Bonds will be valid and binding obligations of the Issuer. Promptly upon any person ceasing to be an authorized representative of the Issuer, the Issuer will provide the Principal Paying Agent with replacement master Temporary Global Covered Bond(s) and replacement Permanent Global Covered Bond(s) and will provide the Registrar with replacement master Registered Global Covered Bonds and Registered Definitive Covered Bonds and the Principal Paying Agent and the Registrar, as the case may be, will, upon receipt of such replacements, cancel and destroy the master Temporary Global Covered Bond(s), master Permanent Global Covered Bond(s), master Registered Global Covered Bonds and Registered Definitive Covered Bonds, as applicable, held by them which are signed by such person and will provide the Issuer with a certificate of destruction in respect thereof, specifying the Covered Bonds so cancelled and destroyed.

6.4 Each of the Principal Paying Agent and the Registrar will provide Euroclear and/or Clearstream, Luxembourg and, in the case of the Registrar, DTC, with the notifications, instructions or information to be given by it to Euroclear and/or Clearstream, Luxembourg and/or DTC, as the case may be.

6.5 Where Registered Global Covered Bonds or Bearer Global Covered Bonds that are CGCBs are to be issued and are to be credited on a delivery against payment basis, unless otherwise agreed, the Principal Paying Agent shall give instructions to Euroclear and/or Clearstream, Luxembourg to credit such Covered Bonds represented by the Registered Global Covered Bonds or Bearer Global Covered Bonds, as the case may be, to the Principal Paying Agent’s distribution account following the delivery of such Global Covered Bond to the Common Depositary. Each Bearer Covered Bond that is a CGCB, or each Registered Global Covered Bond which is so credited to the Principal Paying Agent’s distribution account with Euroclear, DTC or Clearstream, Luxembourg, as the case may be, or the Paying Agent’s account with DTC, shall be held to the order of the Issuer pending delivery to the relevant Dealer on a delivery against payment basis (unless otherwise indicated in the relevant Final Terms Document) in accordance with the normal procedures of Euroclear, DTC or Clearstream, Luxembourg, as the case may be. The Principal Paying Agent shall on the Issue Date and against receipt of funds from the relevant Dealer(s) (unless otherwise indicated in the relevant Final Terms Document) transfer the proceeds of issue to the Issuer to the account notified to it by the Issuer and instruct the Common Depositary to instruct Euroclear, DTC or Clearstream, Luxembourg, as the case may be, to credit the relevant securities account(s) of the relevant Dealer(s).

6.6 If the Bearer Covered Bonds are NGCBs, the Principal Paying Agent shall, on behalf of the Issuer, instruct the Common Safekeeper to effectuate the relevant Global Covered Bond and

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instruct Euroclear and Clearstream, Luxembourg to make the appropriate entries in their records to reflect the initial outstanding aggregate principal amount of the relevant Tranche of Covered Bonds.

6.7 If the Principal Paying Agent pays an amount (the “Payment Advance”) to the Issuer on the basis that a payment (the “Payment”) has been or will be received from a Dealer and if the Payment is not received by the Principal Paying Agent on the date the Principal Paying Agent pays the Issuer, the Issuer will repay to the Principal Paying Agent the Payment Advance and will pay interest on the Payment Advance (or the unreimbursed portion thereof) from (and including) the date the Payment Advance is made to (but excluding) the earlier of repayment of the Payment Advance or receipt by the Principal Paying Agent of the Payment at a rate quoted at that time by the Principal Paying Agent as its cost of funding the Payment Advance provided that evidence of the basis of such rate is given in writing by the Principal Paying Agent to the Issuer. For the avoidance of doubt, the Principal Paying Agent will not be obliged to pay any amount to the Issuer if it has not received satisfactory confirmation that it is to receive the amount from a Dealer.

6.8 Except in the case of an issue where the Principal Paying Agent does not act as receiving bank for the Issuer in respect of the purchase price of the Covered Bonds being issued, if on the Issue Date a Dealer does not pay the full purchase price due from it in respect of any Covered Bond (the “Defaulted Covered Bond”) and, as a result, such Defaulted Covered Bond remains in the Principal Paying Agent’s distribution account with DTC and/or Euroclear and/or Clearstream, Luxembourg after the Issue Date, the Principal Paying Agent will continue to hold such Defaulted Covered Bond pursuant to the order of the Issuer. The Principal Paying Agent will notify the Issuer immediately of the failure of the Dealer to pay the full purchase price due from it in respect of any Defaulted Covered Bond and, subsequently, will (a) notify the Issuer immediately on receipt from the Dealer of the full purchase price in respect of any Defaulted Covered Bond and (b) pay to the Issuer the amount so received.

ARTICLE 7

EXCHANGE AND TRANSFER OF COVERED BONDS

7.1 Upon any exchange of all or a portion of an interest in a Temporary Global Covered Bond for an interest in a Permanent Global Covered Bond or upon any exchange of, in the case of a Temporary Global Covered Bond, all or a portion of an interest in such Temporary Global Covered Bond or, in the case of a Permanent Global Covered Bond, all of such Permanent Global Covered Bond for Bearer Definitive Covered Bonds, the Principal Paying Agent will (i) procure that the relevant Global Covered Bond will, if it is a CGCB, be endorsed by the Principal Paying Agent or on its behalf to reflect the reduction of its nominal amount by the aggregate nominal amount so exchanged and the Permanent Global Covered Bond will be endorsed by the Principal Paying Agent or on its behalf to reflect the increase in its nominal amount as a result of such exchange or (ii) in the case of any Global Covered Bond which is an NGCB, instruct Euroclear, DTC and Clearstream, Luxembourg to make appropriate entries in their records to reflect such exchange. Until exchanged in full, the holder of an interest in any Bearer Global Covered Bond will in all respects be entitled to the same benefits under this Agreement as the holder of Bearer Definitive Covered Bonds and Coupons authenticated and delivered hereunder, subject as set out in the Terms and Conditions and in the relevant Bearer Global Covered Bond. The Principal Paying Agent is hereby authorized on behalf of the Issuer (a) in the case of any Global Covered Bond which is a CGCB, to endorse or to arrange for the endorsement of the relevant Bearer Global Covered Bond to reflect the reduction in the nominal amount represented

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thereby by the amount so exchanged and, if appropriate, to endorse the Permanent Global Covered Bond to reflect any increase in the nominal amount represented thereby and, in either case, to sign in the relevant space on the relevant Bearer Global Covered Bond recording such exchange and reduction or increase, (b) in the case of any Global Covered Bond which is an NGCB, to instruct Euroclear, DTC and Clearstream, Luxembourg to make appropriate entries in their records to reflect such exchange and (c) in the case of a total exchange, to cancel or arrange for the cancellation of the relevant Bearer Global Covered Bond.

7.2 Upon any exchange of all or a portion of an interest in a Rule 144A Global Covered Bond for an interest in a Regulation S Global Covered Bond or vice versa, the relevant Global Covered Bond(s) will be surrendered to the Registrar and endorsed to reflect the reduction or increase (as the case may be) in its/their nominal amount by the Registrar or on its behalf. The Registrar is hereby authorized on behalf of the Issuer (a) to endorse or to arrange for the endorsement of the relevant Global Covered Bond(s) to reflect the reduction or increase (as the case may be) in the nominal amount represented thereby and, in either case, to sign in the relevant space on the relevant Global Covered Bond(s) recording such exchange and reduction or increase, (b) to make all appropriate entries in the Register and (c) in the case of a total exchange, to cancel or arrange for the cancellation of the relevant Global Covered Bond.

7.3 Upon any exchange of all or a portion of an interest in a Registered Global Covered Bond for an interest in a Registered Definitive Covered Bond or vice versa, the relevant Registered Global Covered Bond(s) or Registered Definitive Covered Bond(s) will be surrendered to the Registrar and endorsed to reflect the reduction or increase (as the case may be) in its/their nominal amount by the Registrar or on its behalf. The Registrar is hereby authorized on behalf of the Issuer (a) to endorse or to arrange for the endorsement of the relevant Registered Global Covered Bond(s) or Registered Definitive Covered Bond(s) to reflect the reduction or increase (as the case may be) in the nominal amount represented thereby and, in either case, to sign in the relevant space on the relevant Registered Global Covered Bond(s) or Registered Definitive Covered Bond(s) recording such exchange and reduction or increase, (b) to make all appropriate entries in the Register and (c) in the case of a total exchange, to cancel or arrange for the cancellation of the relevant Registered Global Covered Bond(s) or Registered Definitive Covered Bond(s).

ARTICLE 8

PAYMENTS

8.1 The Issuer will, before the Relevant Time on each date on which any payment in respect of any Covered Bond becomes due under the Terms and Conditions, transfer to an account specified by the Principal Paying Agent such amount in the relevant currency sufficient for the purposes of the payment in same day funds settled through such payment system as the Principal Paying Agent and the Issuer may agree.

Relevant Time means, (i) in the case of payment in Sterling or Euro, 11:00 a.m., London time, (ii) in the case of payments in U.S. dollars or Canadian dollars, 8:00 a.m. (New York time), (iii) in the case of payments in Japanese Yen, 9:00 a.m. (Tokyo time), in each case one Business Day prior to the day on which payment is due to the Principal Paying Agent and (iv) for any other currency, at the time mutually agreed between the Issuer and the Principal Paying Agent.

8.2 Any funds paid by or by arrangement with the Issuer to the Principal Paying Agent under Section 8.1 will be held in the relevant account referred to in Section 8.1 for payment to the

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Covered Bondholders or Couponholders, as the case may be, until any Covered Bonds or Coupons become void under Condition 8. In that event the Principal Paying Agent will repay to the Issuer sums equivalent to the amounts which would otherwise have been repayable on the relevant Covered Bonds or Coupons.

8.3 The Issuer will ensure that no later than the third Business Day (as defined below) immediately preceding the date on which any payment is to be made to the Principal Paying Agent, under Section 8.1, the Principal Paying Agent, will receive (i) a copy of an irrevocable payment instruction to the paying bank of the Issuer and (ii) a notice setting out the amounts of principal and/or (as the case may be) interest to be paid in respect of each relevant series of Covered Bonds on their relevant due dates. For the purposes of this Article, Business Day means a day on which commercial banks and foreign exchange markets settle payments and are open for general business in London and any Additional Business Centre specified in the applicable Final Terms Document.

8.4 The Principal Paying Agent will notify the other Paying Agents, the Cash Manager, the Guarantor and the Bond Trustee immediately:

(a) if it has not by the relevant date set out in Section 8.1 received unconditionally the full amount in the Specified Currency required for the payment; and

(b) if it receives unconditionally the full amount of any sum payable in respect of the Covered Bonds or Coupons after that date and time.

The Principal Paying Agent will, at the expense of the Issuer, immediately on receiving any amount as described in subparagraph (b), cause notice of that receipt to be published in accordance with Condition 13.

8.5 The Principal Paying Agent will ensure that payments of both principal and interest in respect of a Temporary Global Covered Bond will only be made if certification of non-U.S. beneficial ownership as required by U.S. Treasury regulations (in the form set out in the Trust Deed) has been received from Euroclear and/or Clearstream, Luxembourg in accordance with the terms of the Temporary Global Covered Bond.

8.6 Unless it has received notice under Section 8.4(a), each Paying Agent will pay or cause to be paid all amounts due in respect of the Covered Bonds on behalf of the Issuer and the Guarantor in the manner provided in the Trust Deed and the Terms and Conditions. If any payment provided for in Section 8.1 is made late but otherwise in accordance with the provisions of this Agreement, the relevant Paying Agent will nevertheless make payments in respect of the Covered Bonds as stated in Section 8.4(b) following receipt by it of such payment.

8.7 If for any reason the Principal Paying Agent reasonably considers that the amounts to be received by it under Section 8.1 will be, or the amounts actually received by it are, insufficient to satisfy all claims in respect of all payments then falling due in respect of the Covered Bonds, neither the Principal Paying Agent nor the Paying Agents will be obliged to pay any such claims until the Principal Paying Agent has received the full amount of all such payments.

8.8 Without prejudice to Sections 8.6 and 8.7, if the Principal Paying Agent pays any amounts to the Covered Bondholders or Couponholders or to any other Paying Agent at a time when it has not received payment in full in respect of the relevant Covered Bonds in accordance

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with Section 8.1 (the excess of the amounts so paid over the amounts so received being the “Shortfall”), the Issuer will, in addition to paying amounts due under Section 8.1, pay to the Principal Paying Agent on demand interest (at a rate which represents the Principal Paying Agent’s cost of funding the Shortfall provided that evidence of the basis of such rate is given to the Issuer) on the Shortfall (or the unreimbursed portion thereof) until the receipt in full by the Principal Paying Agent of the Shortfall.

8.9 The Principal Paying Agent will on demand promptly reimburse each other Paying Agent for payments in respect of Covered Bonds properly made by each Paying Agent in accordance with this Agreement and the Terms and Conditions unless the Principal Paying Agent has notified the relevant Paying Agent, prior to its opening of business on the due date of a payment in respect of the Covered Bonds, that the Principal Paying Agent does not expect to receive sufficient funds to make payment of all amounts falling due in respect of the Covered Bonds.

8.10 While any Covered Bonds are represented by Global Covered Bonds, all payments due in respect of the Covered Bonds will be made to, or to the order of, the holder of the Global Covered Bonds and subject to and in accordance with the provisions of the Global Covered Bonds. On the occasion of each payment, (i) in the case of a CGCB, the Paying Agent to which such Global Covered Bond was presented for the purpose of making the payment will cause the appropriate Schedule to the relevant Global Covered Bond to be annotated so as to evidence the amounts and dates of the payments of principal and/or interest as applicable or (ii) in the case of any Global Covered Bond which is an NGCB, the Principal Paying Agent will instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records to reflect such payment.

8.11 With respect to any Registered Global Covered Bond that is denominated in any currency other than U.S. dollars and that is registered in the name of DTC or its nominee (a “DTC Covered Bond”), the Principal Paying Agent shall pay to the Exchange Agent, and the Exchange Agent shall receive, all payments thereunder that are to be exchanged into U.S. dollars.

The Exchange Agent shall, in accordance with normal DTC practice, be advised by the Principal Paying Agent on or prior to the fifth New York Business Day (as defined below) after the relevant Record Date for any payment of interest, or the tenth New York Business Day prior to the relevant payment date for any payment of principal by DTC or its nominee:

(a) if any Beneficial Owner of the DTC Covered Bond in respect of which payment is due has elected to receive such payment in U.S. dollars and, if so, the amount of the payment (expressed in the Specified Currency) which the Beneficial Holder wished to receive in U.S. dollars; and

(b) of the payment details for each Beneficial Owner.

The Exchange Agent through its foreign exchange desk shall convert the relevant Specified Currency into U.S. dollars in an amount equal to the aggregate amount that Beneficial Owners wish to receive in U.S. dollars (i.e. with respect to which DTC has notified the Exchange Agent that Beneficial Owners wish to receive such amount in U.S. dollars) at its spot rate on the applicable payment date. The “spot rate” is a base rate adjusted by a spread, each component determined by the foreign exchange desk in its absolute discretion on the relevant payment date. The Exchange Agent shall, on the relevant payment date:

(a) pay all amounts converted into U.S. dollars in accordance with the above to DTC or its nominee for distribution to the relevant Beneficial Owners; and

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(b) pay all the other amounts due which are denominated otherwise than in U.S. dollars directly to the relevant Beneficial Owners in accordance with the payment instructions received from DTC or its nominee.

The rate of exchange will be adjusted by, local fees, taxes and forward points (if applicable). There is no obligation on the foreign exchange desk or the Exchange Agent to make any conversion or to conclude any foreign exchange transaction. In connection with the conversion transaction, the Exchange Agent (and its foreign exchange desk) shall act as principal for its own account, and not in the interest of, or as agent, fiduciary, or broker on behalf of any other party. The Exchange Agent (and its foreign exchange desk) has no obligation to provide the best foreign exchange rate and shall not be liable for losses associated with the determination of such rate. The Exchange Agent may retain for its own account any fees, including any spread on foreign exchange transactions, customarily charged by it in connection with any such conversion.

For the purposes of this Clause, “New York Business Day” means a day (other than a Saturday or a Sunday) on which foreign exchange markets are open for business in New York City that is neither a legal holiday nor a day on which banking institutions are authorised or required by law or regulation to close in New York City and (i) with respect to Covered Bonds payable in a Specified Currency other than euro, in the principal financial centre of the relevant Specified Currency or as otherwise specified in the applicable Final Terms Document and (ii) with respect to Covered Bonds payable in euro, a day on which the TARGET System is open.

In the event that the Exchange Agent is unable to convert the relevant Specified Currency into U.S. dollars, the Exchange Agent will notify DTC that the entire payment will be made in the relevant Specified Currency, and the Exchange Agent will make the payment in accordance with the payment instructions received from DTC following such notification.

8.12 If the amount of principal and/or interest then due for payment is not paid in full (otherwise than by reason of (A) a withholding or deduction required by law to be made therefrom in circumstances in which the Issuer or Guarantor is not obliged to gross-up such payments in accordance with Condition 7 or (B) a certification required by the terms of a Covered Bond not being received), (i) in the case of CGCB, the Paying Agent to which a Covered Bond or Coupon (as the case may be) is presented for the purpose of making such payment will make a record of such shortfall on the Covered Bond or Coupon and each record will, in the absence of manifest error, be prima facie evidence that the payment in question has not to that extent been made or (ii) in the case of any Global Covered Bond which is an NCGB, the Principal Paying Agent will instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records to reflect such shortfall in payment.

8.13 Following service of a Notice to Pay on the Guarantor, this Article 8 will be amended as follows:

(a) Section 8.1 (above) will be deleted in its entirety and replaced with the following:

“8.1 The Guarantor will, before the Relevant Time on each date on which any payment in respect of any Guaranteed Amounts becomes Due for Payment, transfer to an account specified by the Principal Paying Agent, such amount in the relevant currency sufficient for the purposes of the payment of such Guaranteed Amounts in same day funds settled through such payment system as the Principal Paying Agent and the Guarantor may agree.”;

(b) Section 8.3(above) will be deleted in its entirety and replaced with the following:

“8.3 The Guarantor will ensure that no later than the third Business Day (as defined below) immediately preceding the date on which any payment is to be made to the Principal Paying Agent, under Section 8.1, the Principal Paying Agent will receive (i) a copy of an irrevocable payment instruction to the paying bank of the Guarantor or other relevant party, and (ii) a notice setting out the amounts of principal and/or (as the case may be)

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interest to be paid in respect of each relevant series of Covered Bonds on their relevant due dates. For the purposes of this Section, Business Day means a day on which commercial banks and foreign exchange markets settle payments and are open for general business in London, Toronto and any Additional Business Centre specified in the applicable Final Terms Document.”; and

(c) Consequential amendments will be made pursuant to Article 33 (Amendments) to the remainder of Article 8.

8.14 If the Issuer determines, in its sole discretion, that it will be required to withhold or deduct any FATCA Withholding in connection with the next scheduled payment, the Issuer will be entitled to re-direct or reorganize such payment in any way that it sees fit in order that the payment may be made free from FATCA Withholding.

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ARTICLE 9

NOTICE OF ANY WITHHOLDING OR DEDUCTION

9.1 If the Issuer or the Guarantor are, in respect of any payment in respect of Covered Bonds, required by law to withhold or deduct any amount for or on account of Taxes, duties, assessments or governmental charges as specifically contemplated under the Terms and Conditions, the Issuer or the Guarantor, as the case may be, will give notice of that fact to the Bond Trustee and the Principal Paying Agent (who will give notice thereof to each Paying Agent) as soon as it becomes aware of the requirement to make the withholding or deduction and will give to the Bond Trustee and the Principal Paying Agent such information as either of them will require to enable the Bond Trustee and the Principal Paying Agent to comply with the requirement.

9.2 If any Paying Agent or the Exchange Agent is, in respect of any payment of principal or interest in respect of the Covered Bonds, required by law to withhold or deduct any amount for or on account of any Taxes, duties, assessments or governmental charges as specifically contemplated under the Terms and Conditions, other than arising under Section 9.1 or by virtue

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of the relevant holder failing to satisfy any certification or other requirement in respect of its Covered Bonds, it will give notice of that fact to the Issuer, the Bond Trustee, the Guarantor and the Principal Paying Agent as soon as it becomes aware of the requirement to withhold or deduct.

ARTICLE 10

OTHER DUTIES OF THE REGISTRAR

10.1 The Registrar will perform such duties as are set out herein and the Terms and Conditions and, in performing those duties, will act in accordance with the Terms and Conditions and the provisions of this Agreement.

10.2 The Registrar will, so long as any Registered Covered Bond is outstanding:

(a) maintain outside the United Kingdom, a register (the “Register”) of the holders of the Registered Covered Bonds which will show (i) the nominal amount of Covered Bonds represented by each Registered Global Covered Bond, (ii) the nominal amounts and the serial numbers of the Registered Definitive Covered Bonds, (iii) the dates of issue of all Registered Covered Bonds, (iv) all subsequent transfers and changes of ownership of Registered Covered Bonds, (v) the names and addresses of the holders of the Registered Covered Bonds, (vi) all cancellations of Registered Covered Bonds, whether because of their purchase by the Issuer, their replacement or otherwise, and (vii) all replacements of Registered Covered Bonds (subject, where appropriate, in the case of (vi), to the Registrar having been notified as provided in this Agreement);

(b) effect exchanges of interests between different Registered Global Covered Bonds of the same series and interests in Registered Global Covered Bonds for Registered Definitive Covered Bonds and vice versa, in accordance with the Terms and Conditions and this Agreement, keep a record of all exchanges and ensure that the Principal Paying Agent is notified forthwith after any exchange;

(c) register all transfers of Definitive Covered Bonds;

(d) make any necessary notations on Registered Global Covered Bonds following transfer or exchange of interests in them;

(e) receive any document in relation to or affecting the title to any of the Registered Covered Bonds including all forms of transfer, forms of exchange, probates, letters of administration and powers of attorney;

(f) forthwith, and in any event within ten Business Days (being days when banks are open for business in the city in which the specified office of the Registrar is located) of the relevant request (or such longer period as may be required to comply with any applicable fiscal or other regulations), (i) upon receipt by it of Registered Definitive Covered Bonds for transfer (together with any certifications required by it including, but not limited to, any applicable Transfer Certificates) or (ii) following the endorsement of a reduction in nominal amount of a Registered Global Covered Bond for exchange into Registered Definitive Covered Bonds, authenticate and deliver at its specified office to the transferee or (at the risk of the transferee) send to the address requested by the transferee duly

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dated and completed Registered Definitive Covered Bonds of a like aggregate nominal amount to the Registered Definitive Covered Bonds transferred and, in the case of the transfer of part only of a Registered Definitive Covered Bond, authenticate and deliver at its specified office to the transferor or (at the risk of the transferor) send to the address requested by the transferor a duly dated and completed Registered Definitive Covered Bond in respect of the balance of the Registered Definitive Covered Bonds not so transferred;

(g) if applicable, charge to the holder of a Registered Covered Bond presented for exchange or transfer (i) the costs or expenses (if any) of delivering Registered Covered Bonds issued on exchange or transfer other than by regular uninsured mail and (ii) a sum sufficient to cover any stamp duty or Tax that may be imposed in relation to the registration;

(h) maintain proper records of the details of all documents and certifications (including, but not limited to, Transfer Certificates) received by itself or any other Transfer Agent (subject to receipt of all other necessary information from the other Transfer Agents);

(i) prepare all such lists of holders of the Registered Covered Bonds as may be required by the Issuer, the Guarantor or the Principal Paying Agent or any person authorized by any of them;

(j) subject to applicable laws and regulations at all reasonable times during office hours make the Register available to the Issuer, the Bond Trustee, any holder of a Registered Covered Bond or any person authorized by any of them for inspection and for the taking of copies of it or extracts from it, provided however that the Register may be closed by the Issuer for such periods at such times (not exceeding in total 30 days in any one year) as it may think fit;

(k) make available for inspection (at all reasonable times during office hours) by Covered Bondholders at its specified office copies of the Trust Deed, this Agreement and the then latest audited balance sheet and profit and loss accounts of the Issuer;

(l) comply with the reasonable requests of the Issuer with respect to the maintenance of the Register and give to the Paying Agents and the Transfer Agents such information as may be reasonably required by them for the proper performance of their duties; and

(m) comply with the terms of any notice of transfer to the extent such notice of transfer is given in accordance with the Terms and Conditions and the provisions of this Agreement.

10.3 Notwithstanding anything to the contrary in this Agreement, in the event of a partial redemption of Covered Bonds under Condition 6, the Registrar will not be required, unless so directed by the Issuer, (a) to register the transfer of Registered Definitive Covered Bonds (or parts of Registered Definitive Covered Bonds) or to effect exchanges of interests in Registered Global Covered Bonds for Registered Definitive Covered Bonds or vice versa during the period beginning on the sixty-fifth day before the date of the partial redemption and ending on the day on which notice is given specifying the serial numbers of Covered Bonds called (in whole or in part) for redemption (both inclusive) or (b) to register the transfer of any Registered Covered Bond (or part of a Registered Covered Bond) called for partial redemption.

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10.4 Registered Covered Bonds will be dated:

(a) in the case of a Registered Definitive Covered Bond issued on the Issue Date, the Issue Date; or

(b) in the case of a Registered Definitive Covered Bond issued in exchange for an interest in a Registered Global Covered Bond, or upon transfer, the date of registration in the Register of the exchange or transfer; or

(c) in the case of a Registered Definitive Covered Bond issued to the transferor upon transfer in part of a Registered Covered Bond, the same date as the date of the Registered Covered Bond transferred; or

(d) in the case of a Registered Definitive Covered Bond issued pursuant to Article 17 (Issue of Replacement Covered Bonds, Coupons and Talons), with the same date as the date of the lost, stolen, mutilated, defaced or destroyed Registered Covered Bond in replacement of which it is issued.

ARTICLE 11

DUTIES OF THE TRANSFER AGENTS

11.1 The Transfer Agents will perform such duties as are set out herein and in the Terms and Conditions and, in performing those duties, will act in accordance with the Terms and Conditions and the provisions of this Agreement.

11.2 Each Transfer Agent will:

(a) accept Registered Covered Bonds delivered to it, with the form of transfer on them duly executed, together with, where applicable, any Transfer Certificate for the transfer or exchange of all or part of the Registered Covered Bonds in accordance with the Terms and Conditions, and will, in each case, give to the Registrar all relevant details required by it;

(b) keep a stock of the form of Transfer Certificate in the form set out in Schedule 4 where applicable, and make such forms available on demand to holders of the Covered Bonds;

(c) immediately, and in any event within ten Business Days of the relevant request (or such longer period as may be required to comply with any applicable fiscal or other laws or regulations), (i) upon receipt by it of Registered Definitive Covered Bonds for transfer (together with any certifications required by it including, but not limited to, where applicable Transfer Certificates) or (ii) following the endorsement of a reduction in nominal amount of a Registered Global Covered Bond for exchange into Registered Definitive Covered Bonds, authenticate and deliver at its specified office to the transferee or (at the risk of the transferee) send to the address requested by the transferee duly dated and completed Registered Definitive Covered Bonds of a like aggregate nominal amount to the Registered Definitive Covered Bonds transferred and, in the case of the transfer

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of part only of a Registered Definitive Covered Bond, authenticate and deliver at its specified office to the transferor or (at the risk of the transferor) send to the address requested by the transferor a duly dated and completed Registered Definitive Covered Bond in respect of the balance of the Registered Definitive Covered Bonds not so transferred;

(d) if applicable, charge to the holder of a Registered Covered Bond presented for exchange or transfer (i) the costs or expenses (if any) of the Registrar in delivering Registered Covered Bonds issued on such exchange or transfer other than by regular uninsured mail and (ii) a sum sufficient to cover any stamp duty or Tax that may be imposed in relation to the exchange or transfer and, in each case, account to the Registrar for those charges; and

(e) at the request of any Paying Agent deliver new Registered Covered Bonds to be issued on partial redemptions of Registered Covered Bonds.

ARTICLE 12

REGULATIONS FOR TRANSFERS

AND EXCHANGES OF REGISTERED COVERED BONDS

12.1 Subject as provided below, the Issuer may from time to time agree with the Principal Paying Agent, the Bond Trustee, the Transfer Agent and the Registrar reasonable regulations to govern the transfer and registration of Registered Covered Bonds and the exchange of Registered Covered Bonds. The initial regulations, which will apply until amended under this Section, are set out in Schedule 5 to this Agreement. The Transfer Agents agree to comply with the regulations as amended from time to time.

ARTICLE 13

DUTIES OF THE AGENTS IN CONNECTION WITH EARLY REDEMPTION

13.1 If the Issuer decides to redeem any Covered Bonds for the time being outstanding before their Final Maturity Date in accordance with the Terms and Conditions, the Issuer will give notice of the decision to the Bond Trustee and the Paying Agents, and in the case of redemption of Registered Covered Bonds, the Registrar, stating the date on which the Covered Bonds are to be redeemed and the nominal amount of Covered Bonds to be redeemed, not less than 10 days before the date on which the Issuer will give notice to the Covered Bondholders in accordance with the Terms and Conditions of the redemption in order to enable the Paying Agents and, if applicable, the Registrar to carry out its duties in this Agreement and in the Terms and Conditions.

13.2 If some only of the Covered Bonds are to be redeemed, the Principal Paying Agent will, in the case of Definitive Covered Bonds, make the required drawing in accordance with the Terms and Conditions but will give the Issuer and the Bond Trustee reasonable notice of the time and place proposed for the drawing and the Issuer and the Bond Trustee will be entitled to send representatives to attend the drawing and will, in the case of Covered Bonds in global form, co-ordinate the selection of Covered Bonds to be redeemed with Euroclear, DTC and/or Clearstream, Luxembourg, all in accordance with the Terms and Conditions.

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13.3 The Principal Paying Agent will publish the notice required in connection with any redemption and will, if applicable, at the same time also publish a separate list of the serial numbers of any Definitive Covered Bonds previously drawn and not presented for redemption. The redemption notice will specify the date fixed for redemption, the redemption amount, the manner in which redemption will be effected and, in the case of a partial redemption of Definitive Covered Bonds, the serial numbers of the Covered Bonds to be redeemed. The notice will be published in accordance with the Terms and Conditions. The Principal Paying Agent will also notify the Bond Trustee, the other Paying Agents, the Registrar, the Transfer Agents and, if applicable, the Exchange Agent, of any date fixed for redemption of any Covered Bonds.

ARTICLE 14

EXTENDABLE OBLIGATIONS

14.1 The applicable Final Terms Document may provide that the obligations to pay the Final Redemption Amount of the applicable Series of Covered Bonds on their Final Maturity Date may be deferred until the Extended Due for Payment Date, provided that any amount representing the amount due on the Final Maturity Date as set out in the applicable Final Terms Document due and remaining unpaid on the Final Maturity Date may be paid on any Interest Payment Date thereafter up to (and including) the relevant Extended Due for Payment Date. Such deferral will occur automatically if the Issuer fails to pay the Final Redemption Amount of the relevant Series of Covered Bonds on its Final Maturity Date (subject to applicable grace periods) and if the Guarantor fails to pay in full on the Extension Determination Date, Guaranteed Amounts equal to the Final Redemption Amount of the relevant series of Covered Bonds. Interest will continue to accrue on any unpaid amount and will be payable on each Interest Payment Date falling after the Final Maturity Date up to (and including) the Extended Due for Payment Date.

14.2 The Issuer undertakes to notify the Paying Agents not less than four Business Days prior to the Final Maturity Date whether (a) payment will be made of the Final Redemption Amount of the applicable Series of Covered Bonds in full on their (i) Final Maturity Date or (ii) Extension Determination Date or (b) the obligation to pay the Final Redemption Amount of the applicable Series of Covered Bonds on their Final Maturity Date will be deferred until the Extended Due for Payment Date (such notice, the “Extension Notice”).

14.3 Forthwith upon the receipt by the Principal Paying Agent of the Extension Notice, the Principal Paying Agent will notify both Clearstream, Luxembourg and Euroclear and, if applicable, DTC, not less than three Business Days prior to the Final Maturity Date (provided that the Issuer provides the applicable notice to the Paying Agents in accordance with the time period specified in Section 14.2) whether (a) payment will be made of the Final Redemption Amount of the applicable Series of Covered Bonds in full on their Final Maturity Date or (b) the obligation to pay the Final Redemption Amount of the applicable Series of Covered Bonds on their Final Maturity Date will be deferred until the Extended Due for Payment Date.

14.4 For the avoidance of doubt, a failure by the Issuer to make a notification under this Article 14 will not affect the validity or effectiveness of any extension of a Series of Covered Bonds under Condition 6.1.

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ARTICLE 15

RECEIPT AND PUBLICATION OF NOTICES

15.1 Immediately after it receives a demand, notice or written request from any Covered Bondholder in accordance with the Terms and Conditions, the Principal Paying Agent or the Registrar, as the case may be, will forward a copy to the Issuer, the Guarantor and the Bond Trustee.

15.2 On behalf of and at the request and expense of the Issuer (or following service of a Notice to Pay on the Guarantor, the Guarantor), the Principal Paying Agent or the Registrar, as the case may be, will cause to be published all notices required to be given by the Issuer, the Guarantor and the Bond Trustee to the Covered Bondholders in accordance with the Terms and Conditions, the U.S. Registration Statement or Final Terms Document.

ARTICLE 16

CANCELLATION OF COVERED BONDS, COUPONS AND TALONS

16.1 All Covered Bonds which are redeemed, all Global Covered Bonds which are exchanged in full, all Registered Covered Bonds which have been transferred, all Coupons which are paid and all Talons which are exchanged will be cancelled by the Agent by which they are redeemed, exchanged, transferred or paid. In addition, the Issuer will immediately notify the Principal Paying Agent and the Bond Trustee in writing of all Covered Bonds which are purchased on behalf of the Issuer, the Guarantor or any of the Issuer’s Subsidiaries and all such Covered Bonds surrendered to a Paying Agent or the Registrar for cancellation, together (in the case of Bearer Definitive Covered Bonds) with all unmatured Coupons or Talons (if any) attached to them or surrendered with them, will be cancelled by the Agent to which they are surrendered. Each of the Agents will give to the Principal Paying Agent details of all payments made by it and will deliver all cancelled Covered Bonds, Coupons and Talons to the Principal Paying Agent or as the Principal Paying Agent may specify.

16.2 The Principal Paying Agent will deliver upon written request to the Issuer and the Bond Trustee as soon as reasonably practicable and in any event within three months after the date of each repayment, payment, cancellation or replacement, as the case may be, a certificate stating:

(a) the aggregate nominal amount of Covered Bonds which have been redeemed and the aggregate amount paid in respect of them;

(b) the number of Covered Bonds cancelled together (in the case of Bearer Definitive Covered Bonds) with details of all unmatured Coupons or Talons attached to them or delivered with them;

(c) the aggregate amount paid in respect of interest on the Covered Bonds;

(d) the total number by maturity date of Coupons and Talons cancelled; and

(e) (in the case of Definitive Covered Bonds) the serial numbers of the Covered Bonds.

16.3 The Principal Paying Agent will destroy all cancelled Covered Bonds, Coupons and Talons and, immediately following their destruction, send to the Issuer upon written request a certificate stating the serial numbers of the Covered Bonds (in the case of Definitive Covered Bonds) and the number by maturity date of Coupons and Talons destroyed.

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16.4 Without prejudice to the obligations of the Principal Paying Agent under Section 16.2, the Principal Paying Agent will keep a full and complete record of all Covered Bonds, Coupons and Talons (other than serial numbers of Coupons) and of their redemption, purchase on behalf of the Issuer or the Guarantor or any of the Issuer’s Subsidiaries and cancellation, payment or replacement (as the case may be) and of all replacement Covered Bonds, Coupons or Talons issued in substitution for mutilated, defaced, destroyed, lost or stolen Covered Bonds, Coupons or Talons. The Principal Paying Agent will in respect of the Coupons of each maturity retain (in the case of Coupons other than Talons) until the expiry of ten years from the Relevant Date in respect of such Coupons and (in the case of Talons) indefinitely either all paid or exchanged Coupons of that maturity or a list of the serial numbers of Coupons of that maturity still remaining unpaid or unexchanged. The Principal Paying Agent will subject to applicable laws and regulations at all reasonable times during office hours make the record available to the Issuer, the Guarantor, the Bond Trustee or any Person authorized by any of them for inspection and for the taking of copies of it or extracts from it. The Principal Paying Agent is authorized by the Issuer and instructed to (a) in the case of any Global Covered Bond which is a CGCB, to endorse or to arrange for the endorsement of the relevant Global Covered Bond to reflect the reduction in the nominal amount represented by it by the amount so redeemed or purchased and cancelled and (b) in the case of any Global Covered Bond which is an NGCB, to instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records to reflect such redemption or purchase and cancellation, as the case may be; provided, that, in the case of a purchase or cancellation, the Issuer has notified the Principal Paying Agent of the same in accordance with Section 16.1.

ARTICLE 17

ISSUE OF REPLACEMENT COVERED BONDS,

COUPONS AND TALONS

17.1 The Issuer will cause a sufficient quantity of additional forms of (a) Bearer Covered Bonds, Coupons and Talons to be available, upon request, to the Principal Paying Agent at its specified office for the purpose of issuing replacement Bearer Covered Bonds, Coupons and Talons as provided below and (b) Registered Covered Bonds to be available, upon request, to the Registrar at its specified office for the purpose of issuing replacement Registered Covered Bonds as provided below.

17.2 The Principal Paying Agent and the Registrar will, subject to and in accordance with the Terms and Conditions and this Article 17, cause to be delivered any replacement Covered Bonds, Coupons and Talons which the Issuer may determine to issue in place of Covered Bonds, Coupons and Talons which have been lost, stolen, mutilated, defaced or destroyed.

17.3 In the case of a mutilated or defaced Bearer Covered Bond, the Principal Paying Agent will ensure that (unless otherwise covered by such indemnity as the Issuer may reasonably require) any replacement Bearer Covered Bond will only have attached to it Coupons and Talons corresponding to those (if any) attached to the mutilated or defaced Bearer Covered Bond which is presented for replacement.

17.4 The Principal Paying Agent or the Registrar, as the case may be, will obtain verification in the case of an allegedly lost, stolen or destroyed Covered Bond, Coupon or Talon in respect of

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which the serial number is known, that the Covered Bond, Coupon or Talon has not previously been redeemed, paid or exchanged, as the case may be. Neither the Principal Paying Agent nor the Registrar will issue any replacement Covered Bond, Coupon or Talon unless and until the claimant will have:

(a) paid the costs and expenses incurred in connection with the issue;

(b) provided it with such evidence and indemnity for the protection of the Issuer, the Principal Paying Agent and the Registrar as the Issuer may reasonably require; and

(c) in the case of any mutilated or defaced Covered Bond, Coupon or Talon, surrendered it to the Principal Paying Agent or, as the case may be, the Registrar.

17.5 The Principal Paying Agent or, as the case may be, the Registrar will cancel any mutilated or defaced Covered Bonds, Coupons and Talons in respect of which replacement Covered Bonds, Coupons and Talons have been issued under this Section and will furnish the Issuer with a certificate stating the serial numbers of the Covered Bonds, Coupons and Talons cancelled and, unless otherwise instructed by the Issuer in writing, will destroy the cancelled Covered Bonds, Coupons and Talons and give to the Issuer and the Bond Trustee a destruction certificate containing the information specified in Section 16.3.

17.6 The Principal Paying Agent or, as the case may be, the Registrar will, on issuing any replacement Covered Bond, Coupon or Talon, immediately inform the Issuer and the other Paying Agents (in the case of Bearer Covered Bonds) or the Transfer Agents (in the case of Registered Covered Bonds) of the serial number of the replacement Covered Bond, Coupon or Talon issued and (if known) of the serial number of the Covered Bond, Coupon or Talon in place of which the replacement Covered Bond, Coupon or Talon has been issued. Whenever replacement Coupons or Talons are issued pursuant to this Article 17, the Principal Paying Agent or, as the case may be, the Registrar will also notify the other Paying Agents (in the case of Bearer Covered Bonds) or the Transfer Agents (in the case of Registered Covered Bonds) of the maturity dates of the lost, stolen, mutilated, defaced or destroyed Coupons or Talons and of the replacement Coupons or Talons issued.

17.7 The Principal Paying Agent and the Registrar will each keep a full and complete record of all replacement Covered Bonds, Coupons and Talons issued and will subject to applicable laws and regulations at all reasonable times during office hours make the record available to the Issuer, the Guarantor, the Bond Trustee or any person authorized by any of them for inspection and for the taking of copies of it or extracts from it.

17.8 Whenever any Bearer Covered Bond, Coupon or Talon for which a replacement Bearer Covered Bond, Coupon or Talon has been issued and in respect of which the serial number is known is presented to a Paying Agent for payment, the relevant Paying Agent will immediately send notice of that fact to the Issuer and the other Paying Agents and not make payment.

17.9 The Paying Agents will issue further Coupon sheets against surrender of Talons. A Talon so surrendered will be cancelled by the relevant Paying Agent who (except where the Paying Agent is the Principal Paying Agent) will inform the Principal Paying Agent of its serial number. Further Coupon sheets issued on surrender of Talons will carry the same serial number as the surrendered Talon.

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ARTICLE 18

COPIES OF DOCUMENTS TO BE MADE AVAILABLE

18.1 Each of the Paying Agents, the Registrar and the Transfer Agents will hold available for inspection at its specified office during normal business hours copies of all documents required to be so available, including any supplements and documents incorporated by reference, by the Terms and Conditions, the U.S. Registration Statement or Final Terms Document for any Covered Bonds or the rules of any relevant Stock Exchange (or any other relevant authority). For these purposes, the Issuer and the Guarantor will provide the Paying Agents, the Registrar and the Transfer Agents with sufficient copies of each of the relevant documents.

ARTICLE 19

MEETINGS OF COVERED BONDHOLDERS

19.1 The provisions of Schedule 5 to the Trust Deed will apply to meetings of the Covered Bondholders and will have effect in the same manner as if set out in this Agreement.

19.2 Without prejudice to Section 19.1, each of the Paying Agents on the request of any holder of Bearer Covered Bonds will issue voting certificates and block voting instructions in accordance with Schedule 5 to the Trust Deed and will immediately give notice to the Issuer in writing (with a copy to the Bond Trustee) of any revocation or amendment of a block voting instruction. Each of the Paying Agents will keep a full and complete record of all voting certificates and block voting instructions issued by it and will, not less than 24 hours before the time appointed for holding a meeting or adjourned meeting, deposit at such place as the Bond Trustee will approve, full particulars of all voting certificates and block voting instructions issued by it in respect of the meeting or adjourned meeting.

ARTICLE 20

COMMISSIONS AND EXPENSES

20.1 The Issuer and, following service of a Notice to Pay on the Guarantor, the Guarantor agree(s) to pay to the Principal Paying Agent such fees and commissions (including any applicable Taxes) as the Issuer, the Guarantor and the Principal Paying Agent will separately agree in respect of the services of the Agents under this Agreement together with any reasonable out of pocket expenses (including legal, printing, postage, facsimile, cable and advertising expenses) incurred by the Agents in connection with their services under this Agreement.

20.2 The Principal Paying Agent will make payment of the fees and commissions due under this Agreement to the other Agents (including any applicable Taxes) and will reimburse their expenses promptly after the receipt of the relevant funds from the Issuer or the Guarantor (as the case may be). Neither the Issuer, the Guarantor nor the Bond Trustee will be responsible for any payment or reimbursement by the Principal Paying Agent to the other Agents.

ARTICLE 21

INDEMNITY

21.1 The Issuer (and, at any time following a Covered Bond Guarantee Activation Event, the Guarantor) will indemnify each of the Agents against any losses, liabilities, costs, claims, actions or expenses (including reasonable legal costs, disbursements and any applicable taxes) (together, “Losses”) paid or incurred in disputing or defending any Losses) which it may incur or which may be made against it as a result of or in connection with its appointment or

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the exercise of its powers and duties under this Agreement except for any Losses resulting from the breach by it of the terms of this Agreement or from its willful misconduct or gross negligence hereunder or that of its officers, directors or employees. The foregoing indemnity shall extend also to the employees, officers, directors and agents of such indemnified party and to any person controlling any indemnified party (within the meaning of the Securities Act) and the Issuer and Guarantor agrees that each indemnified party shall have and hold the covenants of the Issuer and the Guarantor contained in this Section 21.1 in trust for the benefit of its respective employees, officers, directors and controlling person.

21.2 Each of the Agents (other than the Registrar, the Exchange Agent and the Transfer Agent) will severally indemnify the Issuer against any Losses which the Issuer or the Guarantor may incur or which may be made against the Issuer or the Guarantor under this Agreement as a result of the willful misconduct or gross negligence of that Agent or of its officers, directors or employees or the material breach by it of the terms of this Agreement, other than any Losses resulting from the Issuer’s or the Guarantor’s own gross negligence or willful misconduct. Notwithstanding the foregoing, no party will be liable to any other party hereunder for any consequential loss (including but not limited to lost profits) whether or not foreseeable and however caused or arising.

21.3 The indemnities set out above will survive any termination or expiry of this Agreement.

21.4 Each Agent will only be liable to the Issuer for losses, liabilities, costs, expenses and demands arising directly from the performance of its obligations under this Agreement suffered by or occasioned to the Issuer and/or the Guarantor resulting from the willful misconduct or gross negligence of the Agent in respect of its obligations under this Agreement. Each Agent will not otherwise be liable or responsible for any Liabilities or inconvenience which may result from anything done or omitted to be done by it in connection with this Agreement. The Agents shall not be liable for any error of judgment made in good faith unless it is proved that the Agent was negligent in ascertaining the pertinent facts.

21.5 Any Agent may, at any time, appoint a sub-agent or delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in such Agent by this Agreement; provided, however, that no Agent shall appoint a sub-agent or delegate any material rights, powers or obligations hereunder without the consent of the Issuer, such consent not to be unreasonably withheld. The appointment or delegation shall be made on the same terms as this Agreement (including the power to sub-delegate) and, provided that it has exercised due care in the selection of such sub-agent, delegate or sub-delegate, such Agent shall not be bound to monitor, oversee or supervise, or be in any way responsible for any liability incurred by reason of any misconduct or default on the part of any sub-agent, delegate or sub-delegate, including a sub-custodian or depository, which is not an affiliate of The Bank of New York Mellon.

21.6 Liabilities arising under Section 21.4 will be limited to the amount of the Issuer’s and/or the Guarantor’s, as applicable, actual loss (such loss will be determined as at the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at the time of entering into the Agreement, or at the time of accepting any relevant instructions, which increase the amount of the loss. In no event will the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, of for special, punitive or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

21.7 The liability of the Agents will not extend to any Liabilities arising through any acts, events or circumstances not reasonably within its control, or resulting from the general risks of investment in or the holding of assets in any jurisdiction, including Liabilities arising from: nationalisation, expropriation or other governmental actions; any law, order or regulation of a governmental, supranational or regulatory body; regulation of the banking or securities industry including changes in market rules or practice, currency restrictions, devaluations or fluctuations; market conditions affecting the execution or settlement of transactions or the value of assets; breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; and strikes or industrial action.

ARTICLE 22

RESPONSIBILITY OF THE AGENTS

22.1 No Agent will be responsible to anyone with respect to the validity of this Agreement or the Covered Bonds or Coupons or for any act or omission by it in connection with this Agreement or any Covered Bond or Coupon except for its own willful misconduct or gross negligence, including that of its directors, officers and employees.

22.2 No Agent will have any duty or responsibility in the case of any default by any of the Issuer or the Guarantor in the performance of its obligations under the Terms and Conditions or the Trust Deed or, in the case of receipt of a written request from a Covered Bondholder or Couponholder, with respect to such default, provided however that immediately on receiving any written request by a Covered Bondholder in accordance with Condition 9, the Principal Paying Agent notifies the Issuer, the Guarantor and the Bond Trustee of the fact and furnishes them with a copy of such written request.

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22.3 Whenever in the performance of its duties under this Agreement an Agent will deem it desirable that any matter be established by the Issuer, any of the Guarantor or the Bond Trustee prior to taking or suffering any action under this Agreement, the matter may be deemed to be conclusively established by a certificate signed by the Issuer, the Guarantor or the Bond Trustee and delivered to the relevant Agent and the certificate will be a full authorization to such Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon the certificate.

22.4 No Paying Agent shall be required to make any payment in respect of a Covered Bond unless the funds required to make such payment have actually been received by such Paying Agent in accordance with the Terms and Conditions of such Covered Bond.

ARTICLE 23

CONDITIONS OF APPOINTMENT

23.1 Each Agent will be entitled to deal with money paid to it by the Issuer or the Guarantor (as the case may be) for the purpose of this Agreement in the same manner as other money paid to a banker by its customers except:

(a) that it will not exercise any right of set-off, lien or similar claim in respect of the money;

(b) that it will not be liable to account to the Issuer or the Guarantor for any interest on the money; and

(c) that it will not be required to segregate any money held by it except as required by law.

23.2 In acting under this Agreement and in connection with the Covered Bonds, each Agent will act solely as an agent of the Issuer, the Guarantor (and, in the circumstances referred to in Sections 2.6 and 2.7, the Bond Trustee) and will not assume any obligations towards or relationship of agency or trust for or with any of the owners or holders of the Covered Bonds, Coupons or Talons, or be responsible for or liable in respect of the authorization, validity or legality of this Agreement any Covered Bond, Coupon or Talon issued or paid by it hereunder or any act or omission of any other person.

23.3 Each Agent undertakes to the Issuer and the Guarantor and, in the circumstances referred to in Sections 2.6 and 2.7, the Bond Trustee to perform its duties, and will be obliged to perform the duties and only the duties, specifically stated in this Agreement (including Schedule 5 in the case of the Principal Paying Agent) and the Terms and Conditions, and no implied duties or obligations will be read into any of those documents against any Agent. Each of the Agents (other than the Principal Paying Agent) agrees that if any information that is required by the Principal Paying Agent to perform the duties set out in Schedule 5 becomes known to it, it will promptly provide such information to the Principal Paying Agent.

23.4 Each Agent may, at the Issuer’s expense, consult with legal and other professional advisers and the opinion of the advisers will be full and complete protection in respect of any action taken, omitted or suffered under this Agreement in good faith and in accordance with the opinion of the advisers.

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23.5 Each Agent will be protected and will incur no liability in respect of any action taken, omitted or suffered in reliance on (i) any instruction from the Issuer or the Bond Trustee (in the circumstances referred to in Sections 2.6 and 2.7) or the Guarantor, or (ii) any document which it reasonably believes to be genuine and to have been delivered by the proper party, or (iii) on written instructions from the Issuer or the Guarantor.

23.6 Any Agent, its affiliated companies and its officers, directors and employees may become the owner of, and/or acquire any interest in, any Covered Bonds, Coupons or Talons with the same rights that it or he would have had if the Agent concerned were not appointed under this Agreement, and may engage or be interested in any financial or other transaction with the Issuer or the Guarantor or any owner or holder of Covered Bonds, Coupons or Talons and may act on, or as depositary, trustee or agent for, any committee or body of holders of Covered Bonds or Coupons or in connection with any other obligations of the Issuer or the Guarantor as freely as if the Agent were not appointed under this Agreement.

23.7 The Issuer and the Guarantor will provide the Agents with a certified copy of the list of Authorized Signatories to execute documents and take action on its behalf in connection with this Agreement and will notify the Agents immediately in writing if any of those persons ceases to be authorized or if any additional person becomes authorized together, in the case of an additional authorized signatory, with evidence satisfactory to the Agents that the person has been authorized.

23.8 Except as otherwise permitted in the Trust Deed and the Terms and Conditions or as ordered by a court of competent jurisdiction or as required by law or applicable regulations, in the case of Bearer Covered Bonds, the Issuer, the Guarantor, the Bond Trustee and each of the Agents will be entitled to treat the bearer of any Bearer Covered Bond or Coupon and the registered holder of any Registered Covered Bond as the absolute owner of it (whether or not it is overdue and notwithstanding any notice of ownership or writing on it or notice of any previous loss or theft of it).

23.9 The amount of the Program may be increased by the Issuer in accordance with the procedure set out in the Program Agreement. Upon any increase being effected, all references in this Agreement to the amount of the Program will be deemed to be references to the increased amount.

23.10 The Issuer hereby covenants with the Agents that it will provide the Agents with such information as may be available to the Issuer so as to assist the Agents to determine whether or not such Agent is obliged, in respect of any payments to be made pursuant to the Transaction Documents, to make any FATCA Withholding.

23.11 Each Agent is entitled to treat a telephone, facsimile or e-mail communication or communication by other similar electronic means in a form satisfactory to the Agent from a person purporting to be (and whom the Agent, acting reasonably, believes in good faith to be) the authorized representative of the Issuer or the Guarantor, as sufficient instructions and authority of the Issuer or the Guarantor for the Agent to act and shall have no duty to verify or confirm that such person is so authorized. Each Agent shall have no liability for any losses, liabilities, costs or expenses incurred by it as a result of such reliance upon or compliance with such instructions or directions. Each Agent shall be entitled to request and shall receive upon request an incumbency certificate from the Issuer in respect of such authorized representative of the Issuer in a form reasonably acceptable to the Agent.

23.12 Each Agent shall be entitled to take any action or to refuse to take any action which such Agent regards as necessary for the Agent to comply with any applicable law, regulation or fiscal requirement, or the rules, operating procedures or market practice of any relevant stock exchange or other market or clearing system.

23.13 Each Agent shall have no duty or responsibility in the case of any default by the Issuer or the Guarantor in the performance of their obligations under the relevant Terms and Conditions.

23.14 For greater certainty, nothing herein shall be construed to imply any relationship of partnership, joint venture or similar relationship between any Agent and any of the Issuer, the Guarantor and the Bond Trustee.

23.15 No provision of this Agreement will require an Agent to expend or risk its own funds or otherwise incur any financial or other liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

ARTICLE 24

COMMUNICATIONS BETWEEN THE PARTIES

24.1 A copy of all communications relating to the subject matter of this Agreement between the Issuer, the Guarantor, the Bond Trustee and any Agent (other than the Principal Paying Agent) will be sent to the Principal Paying Agent.

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ARTICLE 25

CHANGES IN AGENTS

25.1 Each of the Issuer and the Guarantor agrees, for the benefit of the Bond Trustee, that, for so long as any Covered Bond is outstanding, or until funds for the payment of all amounts in respect of all outstanding Covered Bonds have been made available to the Principal Paying Agent and have been returned to the Issuer or the Guarantor, as the case may be, as provided in this Agreement:

(a) there will at all times be a Principal Paying Agent and a Registrar;

(b) it will so long as any Covered Bond is outstanding, maintain a Paying Agent (which may be the Principal Paying Agent) having a specified office in a city approved by the Bond Trustee in Europe;

(c) so long as any Covered Bond is listed on any stock exchange or admitted to listing or trading by any other relevant authority, there will at all times be a Paying Agent (in the case of Bearer Covered Bonds) and a Transfer Agent (in the case of Registered Covered Bonds) with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or, as the case may be, other relevant authority;

(d) so long as any of the Registered Global Covered Bonds payable in a Specified Currency other than U.S. dollars are held through DTC or its nominee, there will at all times be an Exchange Agent; and

(e) it will ensure that it maintains a Paying Agent in a Member State of the European Union that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any other directive implementing the conclusions of the ECOFIN Council Meeting of 26 to 27 November 2000 or any law implementing or complying with, or introduced in order to conform to any such directive, provided that the Issuer will not, under any circumstances, be obliged to maintain a Paying Agent with a specified office in such Member State unless at least one European Member State does not require a Paying Agent making payments through a specified office in that Member State to so withhold or deduct tax.

In addition, the Issuer and the Guarantor will forthwith appoint a Paying Agent having a specified office in the United States in the circumstances described in Condition 5.5. Any variation, termination, appointment or change will only take effect (other than in the case of insolvency (as provided in Section 26.5), when it will be of immediate effect) after not less than 30 nor more than 45 days’ prior notice will have been given to the Covered Bondholders in accordance with Condition 13.

25.2 Each of the Principal Paying Agent and the Registrar may (subject as provided in Sections 25.1 and 25.4) at any time resign by giving at least 60 days’ written notice to the Issuer, the Guarantor and the Bond Trustee specifying the date on which its resignation will become effective.

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25.3 Each of the Principal Paying Agent and the Registrar may (subject as provided in Sections 25.1 and 25.4) be removed at any time by the Issuer and the Guarantor with the prior written approval of the Bond Trustee, which approval will not be unreasonably withheld, on at least 45 days’ notice in writing from the Issuer and the Guarantor specifying the date when the removal will become effective.

25.4 Any resignation under Section 25.2 or removal under Sections 25.3 or 26.5 of the Principal Paying Agent or the Registrar will only take effect upon the appointment by the Issuer and the Guarantor of a successor Principal Paying Agent or successor Registrar, as the case may be, approved in writing by the Bond Trustee, which approval will not be unreasonably withheld, and (other than in cases of insolvency of the Principal Paying Agent or the Registrar, as the case may be) on the expiry of the notice to be given under Article 28 (Notification of Changes to Agents). The Issuer and each of the Guarantor agree with the Principal Paying Agent and the Registrar that if, by the day falling 10 days before the expiry of any notice under Section 25.2, the Issuer and the Guarantor have not appointed a successor Principal Paying Agent or Registrar, as the case may be, approved in writing by the Bond Trustee, which approval will not be unreasonably withheld, then the Principal Paying Agent or the Registrar, as the case may be, will be entitled, on behalf of the Issuer and the Guarantor, to appoint in its place as a successor Principal Paying Agent or Registrar, as the case may be, a reputable financial institution of good standing which the Issuer, the Guarantor and the Bond Trustee will approve.

25.5 In case at any time any Agent resigns, or is removed, or becomes incapable of acting or is adjudged bankrupt or insolvent, or files a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of an administrator, liquidator or administrative or other receiver of all or a substantial part of its property, or admits in writing its inability to pay or meet its debts as they mature or suspends payment of its debts, or if any order of any court is entered approving any petition filed by or against it under the provisions of any applicable bankruptcy or insolvency law or if a receiver of it or of all or a substantial part of its property is appointed or if any officer takes charge or control of it or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, a successor Agent which will be a reputable financial institution of good standing may be appointed by the Issuer and the Guarantor with the prior written approval of the Bond Trustee. Upon the appointment of a successor Agent and acceptance by it of its appointment and (other than in case of insolvency of the Agent or when the Paying Agent is an FFI and does not become, or ceases to be, a Participating FFI, when it will be of immediate effect) upon expiry of the notice to be given under Article 28 (Notification of Changes to Agents), the Agent so superseded will cease to be an Agent under this Agreement.

25.6 Subject to Section 25.1, the Issuer and the Guarantor may, with the prior written approval of the Bond Trustee, which approval will not be unreasonably withheld, terminate the appointment of all or any of the Agents (other than the Principal Paying Agent and the Registrar) at any time and/or appoint one or more further or other Agents by giving to the Principal Paying Agent and to the relevant other Agent notice in writing to that effect. Notwithstanding the foregoing, the Guarantor may revoke the appointment of any Agent in the event such Agent defaults in the performance or observance of its covenants or breaches its representations and warranties made, respectively, under Section 2.10.

25.7 Subject to Sections 25.1 and 25.4, all or any of the Agents (other than the Principal Paying Agent and the Registrar) may resign their respective appointments under this Agreement at any time by giving the Issuer, the Guarantor, the Bond Trustee and the Principal Paying Agent at least 60 days’ written notice to that effect.

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25.8 Upon its resignation or removal becoming effective, an Agent will:

(a) in the case of the Principal Paying Agent, any other Paying Agent and the Registrar, immediately transfer all funds and records held by it under this Agreement to the successor Agent; and

(b) be entitled to the payment by the Issuer (and, following service of a Notice to Pay on the Guarantor, the Guarantor) of the commissions, fees and expenses payable in respect of its services under this Agreement before termination in accordance with the terms of Article 20 (Commissions and Expenses).

25.9 Upon its appointment becoming effective, a successor or new Agent will, without any further action, become vested with all the authority, rights, powers, duties and obligations of its predecessor or, as the case may be, an Agent with the same effect as if originally named as an Agent under this Agreement.

25.10 Notwithstanding anything to the contrary in this Agreement, if a Rating Agency has downgraded the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating of a Paying Agent below the Paying Agent Required Ratings at any time that (a) the Guarantor is Independently Controlled and Governed, the Guarantor may, and (b) the Guarantor is not Independently Controlled and Governed, the Guarantor shall, terminate the appointment of such Paying Agent and appoint one or more further or other Agents by giving to the Principal Paying Agent and to the relevant other Agent notice in writing to that effect.

25.11 Notwithstanding anything to the contrary in this Agreement, if an Issuer Event of Default (A) occurs and is continuing, or (B) has previously occurred and is continuing, at any time that the Guarantor is Independently Controlled and Governed, the Guarantor may terminate the appointment of an Agent which is the Issuer or an Affiliate of the Issuer and appoint one or more further or other Agents by giving to the Principal Paying Agent and to the relevant other Agent notice in writing to that effect.

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

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ARTICLE 26

CHANGE OF BOND TRUSTEE

26.1 Change of Bond Trustee

If there is any change in the identity of the Bond Trustee in accordance with the Security Agreement or the Trust Deed (as applicable), the parties to this Agreement will execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require for the purpose of vesting in the successor Bond Trustee the rights of the outgoing Bond Trustee under this Agreement.

26.2 Limitation of Liability

It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee will not assume or have any of the obligations or liabilities of any of the other parties hereto 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 Article 33 (Amendments). 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 will not be responsible for any liability occasioned by so acting, except if acting in breach of the standard of care set out in Section 11.1 (Standard of Care) of the Security Agreement, or if acting in breach of the standard of care set out Article 18 (Bond Trustee’s Liability) of the Trust Deed.

ARTICLE 27

MERGER AND CONSOLIDATION

27.1 Any corporation into which any Agent may be merged or converted, or any corporation with which an Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which an Agent will be a party, or any corporation to which an Agent will sell or otherwise transfer all or substantially all of its assets will, on the date when the merger, conversion, consolidation or transfer becomes effective and to the extent permitted by any applicable laws, become the successor Agent under this Agreement without the execution or filing of any paper or any further act on the part of the parties to this Agreement, unless otherwise required by the Issuer, the Guarantor or the Bond Trustee and after the said effective date all references in this Agreement to the relevant Agent will be deemed to be references to such successor corporation. Written notice of any such merger, conversion, consolidation or transfer will immediately be given to the Issuer, the Guarantor, the Bond Trustee and the Rating Agencies by the relevant Agent.

ARTICLE 28

NOTIFICATION OF CHANGES TO AGENTS

28.1 Following receipt of notice of resignation from an Agent and immediately after appointing a successor or new Agent or on giving notice to terminate the appointment of any Agent, the Principal Paying Agent (on behalf of and at the expense of the Issuer and, following service of a Notice to Pay on the Guarantor, the Guarantor) will give or cause to be given not more than 45 days’ nor less than 30 days’ notice of the fact to the Covered Bondholders in accordance with the Terms and Conditions.

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ARTICLE 29

CHANGE OF SPECIFIED OFFICE

29.1 If any Agent determines to change its specified office it will give to the Issuer, the Guarantor, the Bond Trustee and the Principal Paying Agent written notice of that fact giving the address of the new specified office which will be in the same city and stating the date on which the change is to take effect, which will not be less than 45 days after the notice. The Principal Paying Agent (on behalf of the Issuer (and, following service of a Notice to Pay on the Guarantor, the Guarantor)) will within 15 days of receipt of the notice (unless the appointment of the relevant Agent is to terminate pursuant to Article 25 (Changes in Agents) on or prior to the date of the change) give or cause to be given not more than 45 days’ nor less than 30 days’ notice of the change to the Covered Bondholders in accordance with the Terms and Conditions.

ARTICLE 30

COMMUNICATIONS

30.1 All communications will be by facsimile, e-mail or letter delivered by hand. Each communication will be made to the relevant party at the facsimile number, e-mail address or physical address or telephone number and, in the case of a communication by facsimile or letter, marked for the attention of the person or department from time to time specified in writing by that party to the others for the purpose. The initial telephone number, facsimile number and person or department so specified by each party are set out in Schedule 2.

30.2 A communication is deemed to be received (if by facsimile or e-mail) when an acknowledgement of receipt is received, (if by telephone) when made or (if by letter) when delivered, in each case in the manner required by this Article. However, if a communication is received after business hours on any Business Day or on a day which is not a Business Day in the place of receipt it will be deemed to be received and become effective at the opening of business on the next Business Day in the place of receipt. Every communication will be irrevocable save in respect of any manifest error in it.

30.3 Any notice given under or in connection with this Agreement will be in English. All other documents provided under or in connection with this Agreement will be: (a) in English; or (b) if not in English, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a statutory or other official document.

ARTICLE 31

TAXES AND STAMP DUTIES

31.1 The Issuer (and, following service of a Notice to Pay on the Guarantor, the Guarantor) agree(s) to pay any stamp, issue, registration, documentary and other fees, duties or taxes of a similar nature (if any), including interest and penalties and other Taxes or duties which may be payable in connection with the execution, delivery, performance and enforcement of this Agreement.

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ARTICLE 32

ASSIGNMENT

32.1 Assignment

Subject always to the provisions of Section 33.2 (Assignment under Security Agreement) herein, no party hereto will be entitled to assign all or any part of its rights or obligations hereunder to any other party without the prior written consent of each of the other parties hereto (which will not, if requested, be unreasonably withheld or delayed or made subject to conditions) save that the Guarantor will be entitled to assign whether by way of security or otherwise all or any of its rights under this Agreement and all or any of its interest in the Loans and their Related Security without such consent to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement and all or any of its interest in the Loans and their Related Security without such consent in exercise of its rights under the Security Agreement.

32.2 Assignment under Security Agreement

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

ARTICLE 33

AMENDMENTS

33.1 The Bond Trustee, each Agent, the Guarantor and the Issuer may also agree, without the consent of the Covered Bondholders or Couponholders of any Series and without the consent of the other Secured Creditors (and for this purpose the Bond Trustee may disregard whether any such modification relates to a Series Reserved Matter), to:

(a) any modification of this Agreement provided that in the opinion of the Bond Trustee such modification is not materially prejudicial to the interests of any of the Covered Bondholders of any Series; or

(b) any modification of this Agreement which is of a formal, minor or technical nature or is made to correct a manifest error or an error established as such to the satisfaction of the Bond Trustee or to comply with mandatory provisions of law.

Any such modification will be binding on all Covered Bondholders of all Series of Covered Bonds for the time being outstanding, the related Couponholders and unless the Bond Trustee otherwise agrees, any such modification will be notified by the Issuer to the Covered Bondholders of all Series of Covered Bonds for the time being outstanding in accordance with the relevant terms and conditions as soon as practicable thereafter.

33.2 Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this

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Agreement will be effective unless it is in writing and signed by (or by some Person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement will constitute a waiver or preclude any other or further exercise of that or any other right.

33.3 Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, will be subject to satisfaction of the Rating Agency Condition. The Guarantor and/or the Issuer will deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement. The Guarantor and/or the Issuer will deliver notice to CMHC from time to time of any amendment, variation or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

ARTICLE 34

FURTHER ASSURANCE

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

ARTICLE 35

LIMITATION OF LIABILITY

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

ARTICLE 36

NON-PETITION

36.1 The Issuer, the Bond Trustee and each Agent agree that they will not institute against, or join any other party in instituting against, the Guarantor, or any general partners of the Guarantor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any federal, provincial or foreign bankruptcy, insolvency or similar law, for one year and one day after all the Covered Bonds have been repaid in full. The foregoing provision will survive the termination of this Agreement by any party.

ARTICLE 37

GOVERNING LAW

37.1 Governing Law

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

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37.2 Submission to Jurisdiction

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

37.3 Waiver of Jury Trial

Each of the parties hereto hereby irrevocably waives to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement, the Covered Bonds or the transactions contemplated hereby.

ARTICLE 38

COUNTERPARTS

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

[The remainder of this page left intentionally blank]

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

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner BMO COVERED BOND GP, INC.
By:	/s/ Chris Hughes
	Name: Chris Hughes
	Title: President and Secretary
BANK OF MONTREAL, as Issuer
By:	/s/ Cathy Cranston
	Name: Cathy Cranston
	Title: Senior Vice President, Finance & Treasurer
BANK OF NEW YORK MELLON, as Principal Paying Agent, a Registrar, a Transfer Agent and the Exchange Agent
By:	/s/ Jaime Nielsen
	Name: Jaime Nielsen
	Title: Vice President
COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:	/s/ Sean Pigott
	Name: Sean Pigott
	Title: Corporate Trust Officer
By:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title: Associate Trust Officer

SCHEDULE 1

FORM OF CALCULATION AGENCY AGREEMENT

CALCULATION AGENCY AGREEMENT

[—]

U.S. $10,000,000,000

REGISTERED GLOBAL COVERED BOND PROGRAM

of

BANK OF MONTREAL

unconditionally and irrevocably guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

CALCULATION AGENCY AGREEMENT

in respect of a

U.S. $10,000,000,000

REGISTERED GLOBAL COVERED BOND PROGRAM

THIS AGREEMENT is dated [                    ]

BETWEEN:

(1) BANK OF MONTREAL (the “Issuer”);

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner, BMO COVERED BOND GP, INC. (acting in its capacity as guarantor, the “Guarantor”);

(3) COMPUTERSHARE TRUST COMPANY OF CANADA (acting in its capacity as bond trustee, the “Bond Trustee”); and

(4) [    ] of [    ] (the “Calculation Agent”, which expression will include any successor calculation agent appointed under this Agreement).

IT IS AGREED:

1. APPOINTMENT OF THE CALCULATION AGENT

The Calculation Agent is appointed, and the Calculation Agent agrees to act, as Calculation Agent in respect of each Series of Covered Bonds described in the Schedule (the “Relevant Covered Bonds”) for the purposes set out in Article 2 and on the terms of this Agreement. The agreement of the parties that this Agreement is to apply to each Series of Relevant Covered Bonds will be evidenced by the manuscript annotation and signature in counterpart of the Schedule.

2. DUTIES OF CALCULATION AGENT

The Calculation Agent will in relation to each series of Relevant Covered Bonds (each a “Series”) perform all the functions and duties imposed on the Calculation Agent by the terms and conditions of the Relevant Covered Bonds (the “Terms and Conditions”) including endorsing the Schedule appropriately in relation to each Series of Relevant Covered Bonds. In addition, the Calculation Agent agrees that it will provide a copy of all calculations made by it which affect the nominal amount outstanding of any Relevant Covered Bonds which are identified on the Schedule as being NGCBs to the Principal Paying Agent to the contact details set out on the signature page hereof.

3. EXPENSES

The arrangements in relation to expenses will be separately agreed in relation to each issue of Relevant Covered Bonds.

4. INDEMNITY

4.1 The Issuer (and, following a Covered Bond Guarantee Activation Event, the Guarantor) will indemnify the Calculation Agent against any losses, liabilities, costs, claims, actions, demands or expenses (including reasonable legal costs, disbursements and any applicable taxes) (together, “Losses”) paid or incurred in disputing or defending any Losses) which it may incur or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement except for any Losses resulting from the breach by it of the terms of this Agreement or from its own willful default or gross negligence or that of its officers, directors or employees.

4.2 The Calculation Agent will indemnify the Issuer and the Guarantor against any Losses which the Issuer or the Guarantor may incur or which may be made against the Issuer or the Guarantor as a result of the Calculation Agent’s willful default or gross negligence or that of its officers, directors or employees or the material breach by any of them of the terms of this Agreement, other than Losses resulting from the willful misconduct or gross negligence of the Issuer or the Guarantor. Notwithstanding the foregoing, the Calculation Agent will not be liable to the Issuer, the Guarantor or any other party to this Agreement for any consequential loss (including but not limited to lost profits) whether or not foreseeable and however caused or arising.

4.3 Except as provided in Section 4.2 above, the Calculation Agent in acting hereunder will incur no liability in respect of any action taken, omitted or suffered to be taken in good faith in reliance upon:

(a) the written advice of any lawyer or professional adviser;

(b) any instruction, request or order from the Issuer, the Guarantor or the Bond Trustee; or

(c) any relevant Covered Bond or Coupon, notice, direction, consent, certificate, affidavit, endorsement, assignment, statement, resolution, letter, facsimile transaction or other paper or document which it reasonably believes to be genuine and signed by the proper party or parties.

4.4 The provisions of Article 21 of the Agency Agreement shall apply mutatis mutandis.

5. CONDITIONS OF APPOINTMENT

5.1 In acting under this Agreement and in connection with the Relevant Covered Bonds, the Calculation Agent will act solely as an agent of the Issuer, the Guarantor and, in the circumstances described in Section 5.2, the Bond Trustee and will not assume any obligations towards or relationship of agency or trust for or with any of the owners or holders of the Relevant Covered Bonds or the coupons (if any) appertaining to the Relevant Covered Bonds (the “Coupons”).

5.2 At any time after an Issuer Event of Default or Potential Issuer Event of Default will have occurred and is continuing or the Bond Trustee will have received any money from the Issuer which it proposes to pay under Article 11 (Application of Funds) of the Trust Deed to the relevant Covered Bondholders and/or Couponholders, the Bond Trustee may:

(a) by notice in writing to the Issuer, the Guarantor and the Calculation Agent require the Calculation Agent pursuant to this Agreement to act thereafter as Calculation Agent of the Bond Trustee in relation to payments of such funds to be made by or

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on behalf of the Bond Trustee under the terms of these presents mutatis mutandis on the terms provided in this Agreement (save that the Bond Trustee’s liability under any provisions of this Agreement for the indemnification, remuneration and payment of out-of-pocket expenses of the Calculation Agent will be limited to the amounts for the time being held by the Bond Trustee on the trusts of these presents relating to the Covered Bonds of the relevant Series and available for the purpose) and thereafter to hold all Covered Bonds and Coupons and all sums, documents and records held by it in respect of Covered Bonds and Coupons on behalf of the Bond Trustee; or

(b) by notice in writing to the Issuer require it (but not the Guarantor) to make all subsequent payments in respect of the Covered Bonds and Coupons to or to the order of the Bond Trustee and not to the Principal Paying Agent and with effect from the issue of any such notice to the Issuer.

5.3 At any time after a Guarantor Event of Default or Potential Guarantor Event of Default will have occurred and is continuing or the Bond Trustee will have received any money from the Guarantor which it proposes to pay under Article 11 (Application of Funds) of the Trust Deed to the relevant Covered Bondholders and/or Couponholders, the Bond Trustee may:

(a) by notice in writing to the Issuer, the Guarantor and the Calculation Agent require the Calculation Agent pursuant to this Agreement to act thereafter as Calculation Agent on behalf of the Bond Trustee in relation to payments of such funds to be made by or on behalf of the Bond Trustee under the terms of the trust presents mutatis mutandis on the terms provided in this Agreement (save that the Bond Trustee’s liability under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Calculation Agent will be limited to the amounts for the time being held by the Bond Trustee on the trusts of the trust presents relating to the Covered Bonds of the relevant Series and available for such purpose) and thereafter to hold all Covered Bonds and Coupons and all sums, documents and records held by them in respect of Covered Bonds and Coupons on behalf of the Bond Trustee; or

(b) by notice in writing to the Guarantor require it to make all subsequent payments in respect of the Covered Bonds and Coupons to or to the order of the Bond Trustee and not to the Calculation Agent and with effect from the issue of any such notice to the Guarantor.

5.4 In relation to each issue of Relevant Covered Bonds, the Calculation Agent will be obliged to perform the duties and only the duties specifically stated in this Agreement and the Terms and Conditions and no implied duties or obligations will be read into this Agreement or the Terms and Conditions against the Calculation Agent, other than.

5.5 The Calculation Agent may, at the expense of the Issuer, consult with legal and other professional advisers and the opinion of the advisers will be full and complete protection in respect of any action taken, omitted or suffered under this Agreement in good faith and in accordance with the opinion of the advisers.

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5.6 The Calculation Agent will be protected and will incur no liability in respect of any action taken, omitted or suffered in reliance on (i) any instruction from the Issuer, the Guarantor or the Bond Trustee, (ii) any document which it reasonably believes to be genuine and to have been delivered by the proper party, or (iii) written instructions from the Issuer, the Guarantor or the Bond Trustee.

5.7 The Calculation Agent and any of its officers, directors and employees may become the owner of, or acquire any interest in, any Covered Bonds or Coupons (if any) with the same rights that it or he would have had if the Calculation Agent were not appointed under this Agreement, and may engage or be interested in any financial or other transaction with the Issuer or the Guarantor and may act on, or as depositary, trustee or agent for, any committee or body of holders of Covered Bonds or Coupons or in connection with any other obligations of the Issuer or the Guarantor as freely as if the Calculation Agent were not appointed under this Agreement.

5.8 The Calculation Agent is entitled to treat a telephone, facsimile or e-mail communication or communication by other similar electronic means in a form satisfactory to the Agent from a person purporting to be (and whom the Calculation Agent, acting reasonably, believes in good faith to be) the authorized representative of the Issuer or the Guarantor, as sufficient instructions and authority of the Issuer or the Guarantor for the Calculation Agent to act and shall have no duty to verify or confirm that such person is so authorized. The Calculation Agent shall have no liability for any losses, liabilities, costs or expenses incurred by it as a result of such reliance upon or compliance with such instructions or directions. The Calculation Agent shall be entitled to request and shall receive upon request an incumbency certificate from the Issuer in respect of such authorized representative of the Issuer in a form reasonably acceptable to the Calculation Agent.

5.9 The Calculation Agent shall be entitled to take any action or to refuse to take any action which such Agent regards as necessary for the Calculation Agent to comply with any applicable law, regulation or fiscal requirement, or the rules, operating procedures or market practice of any relevant stock exchange or other market or clearing system.

5.10 The Calculation Agent shall have no duty or responsibility in the case of any default by the Issuer or the Guarantor in the performance of its obligations under the relevant Terms and Conditions.

5.11 For greater certainty, nothing herein shall be construed to imply any relationship of partnership, joint venture or similar relationship between the Calculation Agent and any of the Issuer, the Guarantor and the Bond Trustee.

5.12 No provision of this Agreement will require the Calculation Agent to expend or risk its own funds or otherwise incur any financial or other liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

5.13 The provisions of Article 22 of the Agency Agreement shall apply mutatis mutandis.

6. TERMINATION OF APPOINTMENT

6.1 The Issuer and the Guarantor may, with the prior written approval of the Bond Trustee, terminate the appointment of the Calculation Agent at any time by giving to the Calculation Agent at least 45 days’ prior written notice to that effect, provided that, so long as any of the Relevant Covered Bonds is outstanding:

(a) the notice will not expire less than 45 days before any date on which any calculation is due to be made in respect of any Relevant Covered Bonds; and

(b) notice will be given in accordance with the Terms and Conditions to the holders of the Relevant Covered Bonds at least 30 days before any removal of the Calculation Agent.

6.2 Notwithstanding the provisions of Section 6.1, if at any time:

(a) the Calculation Agent becomes incapable of acting, or is adjudged bankrupt or insolvent, or files a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of an administrator, liquidator or administrative or other receiver of all or any substantial part of its property, or admits in writing its inability to pay or meet its debts as they may mature or suspends payment of its debts, or if any order of any court is entered approving any petition filed by or against it under the provisions of any applicable bankruptcy or insolvency law or if a receiver of it or of all or a substantial part of its property is appointed or if any officer takes charge or control of the Calculation Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; or

(b) the Calculation Agent fails duly to perform any function or duty imposed on it by the Terms and Conditions and this Agreement or is in breach of any of its representation and warranty under this Agreement.

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the Issuer, with the prior written approval of the Bond Trustee, may immediately without notice terminate the appointment of the Calculation Agent, in which event notice of the termination will be given to the holders of the Relevant Covered Bonds in accordance with the Terms and Conditions as soon as practicable.

6.3 The termination of the appointment of the Calculation Agent under Section 6.1 or 6.2 will not entitle the Calculation Agent to any amount by way of compensation but will be without prejudice to any amount then accrued due.

6.4 The Calculation Agent may resign its appointment under this Agreement at any time by giving to the Issuer, the Guarantor and the Bond Trustee at least 60 days’ prior written notice to that effect. Following receipt of a notice of resignation from the Calculation Agent, the Issuer will promptly give notice of the resignation to the holders of the Relevant Covered Bonds in accordance with the Terms and Conditions.

6.5 Notwithstanding the provisions of Sections 6.1, 6.2 and 6.4, so long as any of the Relevant Covered Bonds is outstanding, the termination of the appointment of the Calculation Agent (whether by the Issuer, the Guarantor or by the resignation of the Calculation Agent) will not be effective unless upon the expiry of the relevant notice a successor Calculation Agent approved in writing by the Bond Trustee has been appointed. The Issuer and the Guarantor agree with the Calculation Agent that if, by the day falling 10 days before the expiry of any notice under Section 6.4, the Issuer and the Guarantor have not appointed a replacement Calculation Agent approved in writing by the Bond Trustee, the Calculation Agent will be entitled, on behalf of the Issuer and the Guarantor, to appoint as a successor Calculation Agent in its place a reputable financial institution of good standing which the Issuer, the Guarantor and the Bond Trustee will approve.

6.6 Upon its appointment becoming effective, a successor Calculation Agent will without further action, become vested with all the authority, rights, powers, duties and obligations of its predecessor with the same effect as if originally named as the Calculation Agent under this Agreement.

6.7 If the appointment of the Calculation Agent under this Agreement is terminated (whether by the Issuer and the Guarantor or by the resignation of the Calculation Agent), the Calculation Agent will on the date on which the termination takes effect deliver to the successor Calculation Agent any records concerning the Relevant Covered Bonds maintained by it (except those documents and records which it is obliged by law or regulation to retain or not to release), but will have no other duties or responsibilities under this Agreement.

6.8 Any corporation into which the Calculation Agent may be merged or converted, or any corporation with which the Calculation Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Calculation Agent will be a party, or any corporation to which the Calculation Agent will sell or otherwise transfer all or substantially all of its assets will, on the date when the merger, consolidation or transfer becomes effective and to the extent permitted by any applicable laws, become the successor Calculation Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, unless otherwise required by the Issuer and the Guarantor, and after the said effective date all references in this Agreement to the Calculation Agent will be deemed to be references to such successor corporation. Written notice of any such

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merger, conversion, consolidation or transfer will immediately be given to the Issuer, the Guarantor, the Bond Trustee, the Principal Paying Agent and the Rating Agencies by the Calculation Agent.

6.9 Upon any termination or resignation of the Calculation Agent hereunder, the Guarantor shall provide notice to Canada Mortgage and Housing Corporation (“CMHC”) of such termination or resignation and of the Calculation Agent’s replacement contemporaneously with the earlier of (i) notice of such termination or resignation and replacement to a rating agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available to holders of Covered Bonds, and (iii) five (5) business days following such termination or resignation and replacement (unless the replacement Calculation Agent has yet to be identified at that time, in which case notice of the replacement Calculation Agent may be provided no later than ten (10) business days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Calculation Agent, and all information relating to the replacement Calculation Agent required by the CMHC Guide to be provided to CMHC in relation to the Calculation Agent and this Agreement.

7. COMMUNICATIONS

7.1 All communications will be by facsimile, e-mail or letter delivered by hand. Each communication will be made to the relevant party at the facsimile number or address and marked for the attention of the Person or department from time to time specified in writing by that party to the others for the purpose. The initial facsimile number and Person or department so specified by each party are set out in Schedule 2 of the Agency Agreement or, in the case of the Calculation Agent, on the signature page of this Agreement.

7.2 A communication (if by facsimile) when an acknowledgement of receipt is received or (if by letter) when delivered, in each case in the manner required by this Section. However, if a communication is received after business hours on any Business Day or on a day which is not a Business Day in the place of receipt it will be deemed to be received and become effective at the opening of business on the next Business Day in the place of receipt. Every communication will be irrevocable save in respect of any manifest error in it.

8. CHANGE OF BOND TRUSTEE

8.1 If there is any change in the identity of the Bond Trustee in accordance with the Trust Deed, the parties of this Agreement will execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require for the purpose of vesting in the successor Bond Trustee the rights of the outgoing Bond Trustee under this Agreement.

8.2 It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee will not assume or have any obligations or liabilities to any of the other parties hereto 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

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agreeing to amendments thereto. 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 will not be responsible for any Liability occasioned by so acting but subject always to the provisions of Article 18 (Bond Trustee’s Liability) of the Trust Deed.

9. Representations, Warranties and Covenants

The Calculation Agent represents and warrants to, and covenants with, each of the Issuer, the Guarantor and the Bond Trustee at the date hereof, and for as long as it is a party to this Agreement, that:

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

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

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

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

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

10. DESCRIPTIVE HEADINGS AND COUNTERPARTS

10.1 The descriptive headings in this Agreement are for convenience of reference only and will not define or limit the provisions hereof.

10.2 This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

11. DEFINED TERMS

Capitalized terms used herein and not defined have the meaning given to them, directly or by reference, in the Agency Agreement dated as of September 30, 2013 made between Bank of Montreal, BMO Covered Bond Guarantor Limited Partnership, Computershare Trust Company of Canada and Bank of New York Mellon, as the same may be amended, supplemented or restated from time to time.

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12. GOVERNING LAW

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

13. SUBMISSION TO JURISDICTION

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

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

BANK OF MONTREAL, as Issuer		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner BMO COVERED BOND GP, INC.
By:		By:
	Name:		Name:
	Title:		Title:
By:		By:
	Name:		Name:
	Title:		Title:
BANK OF NEW YORK MELLON, as Principal Paying Agent, Calculation Agent, a Registrar and a Transfer Agent		COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:		By:
	Name:		Name:
	Title:		Title:
By:		By:
	Name:		Name:
	Title:		Title:
		[—], as Calculation Agent
		By:
			Name:
			Title:
		By:
			Name:
			Title:

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SCHEDULE TO THE CALCULATION AGENCY AGREEMENT

Series number Issue Date Maturity Date Title and Nominal Amount NGCB [Yes/No] Annotation by Calculation
Agent/Issuer

SCHEDULE 2

TRADING DESK AND ADMINISTRATIVE INFORMATION

The Issuer

BANK OF MONTREAL

18^th Floor, 100 King Street West

Toronto, Ontario

M5X 1A1

Facsimile:        416-867-4166

Attention:       Senior Manager, Securitization Finance and Operations

The Guarantor

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner, BMO Covered Bond GP, Inc.

c/o Bank of Montreal

18^th Floor, 100 King Street West

Toronto, Ontario

M5X 1A1

Facsimile:        416-867-4166

Attention:       Senior Manager, Securitization Finance and Operations

The Principal Paying Agent, a Registrar,

the Exchange Agent and a Transfer Agent

BANK OF NEW YORK MELLON

101 Barclay Street, 7E

New York, New York

10286

Facsimile:        212-815-5366

Attention:        International Corporate Trust

The Bond Trustee

COMPUTERSHARE TRUST COMPANY OF CANADA

100 University Avenue, 11^th Floor

Toronto, ON M5J 2Y1

Attention:        416-981-9777

Facsimile:        Manager, Corporate Trust

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SCHEDULE 3

FORM OF FINAL TERMS DOCUMENT

- Attached -

SCHEDULE 4

FORM OF CERTIFICATE FOR EXCHANGE OR TRANSFER

OF REGISTERED COVERED BONDS OR BENEFICIAL INTEREST IN REGISTERED COVERED BONDS

[Reserved]

[This certificate is not required for transfers of interests in a Registered Global Covered Bond to

persons who wish to hold the transferred interest in the same Registered Global Covered Bond]

[DATE]

To: [    ]

(as Registrar)

[    ]

(as Issuer)

BANK OF MONTREAL (the “Issuer”)

[Title of Series of Covered Bonds] (the “Covered Bonds”)

issued pursuant to a Registered Global Covered Bond Program (the “Program”)

guaranteed as to payments of interest and principal by

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

Reference is made to the terms and conditions of the Covered Bonds (the “Terms and Conditions”) set out in Schedule 1 to the Trust Deed dated as of September 30, 2013, as supplemented, amended and restated from time to time between the Issuer and the other parties named therein relating to the Program. Terms defined in the Terms and Conditions shall have the same meaning when used in this Certificate unless otherwise stated.

This Certificate relates to [insert Specified Currency and nominal amount of Covered Bonds] of Covered Bonds which are held in the form of [one or more Regulation S Definitive Covered Bonds] [beneficial interests in one or more Regulation S Covered Bonds (ISIN No. [specify]) represented by a Regulation S Global Covered Bond] [Rule 144A Definitive Covered Bonds] [beneficial interests in one or more Rule 144A Covered Bonds (ISIN No. [specify]; CUSIP No. [specify]) represented by a Rule 144A Global Covered Bond] in the name of [transferor] (the “Transferor”). The Transferor has requested an exchange or transfer of such [Regulation S Definitive Covered Bonds] [Rule 144A Definitive Covered Bonds] [beneficial interests in one or more Regulation S Covered Bonds] [beneficial interests in one or more Rule 144A Covered Bonds] for [Regulation S Definitive Covered Bonds] [an interest in Regulation S Covered Bonds represented by a Regulation S Global Covered Bond] [Rule 144A Definitive Covered Bonds] [an interest in Rule 144A Covered Bonds represented by a Rule 144A Global Covered Bond].

In connection therewith, the Transferor certifies that such exchange or transfer has been effected in accordance with the transfer restrictions set forth in the Covered Bonds and in accordance with any applicable securities laws of the United States of America, any State of the United States of America or any other jurisdiction and any applicable rules and regulations of DTC, Euroclear and Clearstream, Luxembourg or any other relevant clearing system from time to time and, accordingly, the Transferor certifies as follows (terms used in this paragraph that are defined in Rule 144A or in Regulation S are used herein as defined therein):

Either:

1. [the offer of the Covered Bonds was not made to a person in the United States;

2. either the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on the Transferor’s behalf knows that the transaction was pre-arranged with a transferee in the United States or the transferee is outside the United States, or the Transferor and any person acting on its behalf reasonably believes that the transferee is outside the United States;

3. no directed selling efforts have been made in contravention of the requirement of Rule 903 or 904 of Regulation S, as applicable; and

4. the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.]¹

Or:

[Such Covered Bonds are being transferred in accordance with Rule 144A to a transferee that the Transferor reasonably believes is purchasing the Covered Bonds for its own account or any account with respect to which the transferee and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, in each case in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction.]²

[The Covered Bonds are being transferred in a transaction permitted by Rule 144 under the Securities Act.]³

The Transferor understands that this Certificate is required in connection with certain securities or other legislation in the United States and/or in connection with the Covered Bonds being eligible for clearance in one or more clearance systems. If administrative or legal proceedings are commenced or threatened in connection with which this notice is or might be relevant, the Transferor irrevocably authorises the entity to whom the Certificate is addressed to produce this Certificate or a copy hereof to any interested party in such proceedings.

This Certificate and the statements contained herein are made for the benefit of the addressee hereof and the benefit of the Dealers of the above Covered Bonds.

[Insert name of Transferor]

By:                                                     

Name:

Title:

Dated:                                                

¹  Include as applicable. Relevant only if the proposed transfer or exchange is being made to a person holding in the form of or for a beneficial interest in one or more Regulation S Global Covered Bonds or Definitive Regulation S Covered Bonds.

²  Include as applicable. Relevant only if the proposed transfer or exchange is being made to a person holding in the form of or for a beneficial interest in one or more Rule 144A Global Covered Bonds or Rule 144A Definitive Covered Bonds.

³  Include as applicable.

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SCHEDULE 5

REGISTER AND TRANSFER OF REGISTERED COVERED BONDS

1. The Issuer will at all times ensure that the Registrar maintains outside the United Kingdom the Register showing the amount of the Registered Covered Bonds from time to time outstanding and the dates of issue and all subsequent transfers and changes of ownership thereof and the names and addresses of the holders of the Registered Covered Bonds. The holders of the Registered Covered Bonds or any of them and any Person authorized by it or any of them may at all reasonable times during office hours inspect the Register and take copies of or extracts from it. The Register may be closed by the Issuer for such periods at such times (not exceeding in total 30 days in any one year) as it may think fit.

2. Each Registered Covered Bond will have an identifying serial number which will be entered on the Register.

3. The Registered Covered Bonds are transferable by execution of the form of transfer endorsed thereon under the hand of the transferor or, where the transferor is a corporation, under its common seal or under the hand of two of its officers duly authorized in writing.

4. The Registered Covered Bonds to be transferred must be delivered for registration to the specified office of the Registrar with the form of transfer endorsed thereon duly completed and executed and must be accompanied by such documents, evidence and information (including, but not limited to, Transfer Certificates where applicable) as may be required pursuant to the Terms and Conditions and such other evidence as the Issuer and/or the Registrar may reasonably require to prove the title of the transferor or his right to transfer the Registered Covered Bonds and, if the form of transfer is executed by some other Person on his behalf or in the case of the execution of a form of transfer on behalf of a corporation by its officers, the authority of that Person or those Persons to do so.

5. The executors or administrators of a deceased holder of Registered Covered Bonds (not being one of several joint holders) and in the case of the death of one or more of several joint holders the survivor or survivors of such joint holders will be the only Person or Persons recognized by the Issuer as having any title to such Registered Covered Bonds.

6. Any Person becoming entitled to Registered Covered Bonds in consequence of the death or bankruptcy of the holder of such Registered Covered Bonds may upon producing such evidence that he holds the position in respect of which he proposes to act under this paragraph or of his title as the Issuer will require be registered himself as the holder of such Registered Covered Bonds or, subject to the preceding paragraphs as to transfer, may transfer such Registered Covered Bonds. The Issuer will be at liberty to retain any amount payable upon the Registered Covered Bonds to which any Person is so entitled until such Person will be registered as aforesaid or will duly transfer the Registered Covered Bonds.

7. Unless otherwise requested by him, the holder of Registered Covered Bonds of any Series will be entitled to receive only one Registered Covered Bond in respect of his entire holding of such Series.

8. The joint holders of Registered Covered Bonds of any Series will be entitled to one Registered Covered Bond only in respect of their joint holding of such Series which will, except where they otherwise direct, be delivered to the joint holder whose name appears first in the Register in respect of such joint holding.

9. Where a holder of Registered Covered Bonds has transferred part only of his holding of any Series there will be delivered to him without charge a Registered Covered Bond in respect of the balance of such holding.

10. The Issuer will make no charge to the Covered Bondholders for the registration of any holding of Registered Covered Bonds or any transfer thereof or for the issue thereof or for the delivery thereof at the specified office of the Registrar or by post to the address specified by the holder. If any holder entitled to receive a Registered Covered Bond wishes to have the same delivered to him otherwise than at the specified office of the Registrar, such delivery will be made, upon his written request to the Registrar, at his risk and (except where sent by post to the address specified by the holder) at his expense.

11. The holder of a Registered Covered Bond may (to the fullest extent permitted by applicable laws) be treated at all times, by all Persons and for all purposes as the absolute owner of such Registered Covered Bond notwithstanding any notice any Person may have of the right, title, interest or claim of any other Person thereto. The Issuer will not be bound to see to the execution of any trust to which any Registered Covered Bond may be subject and no notice of any trust will be entered on the Register. The holder of a Registered Covered Bond will be recognized by the Issuer as entitled to his Registered Covered Bond free from any equity, set-off or counterclaim on the part of the Issuer against the original or any intermediate holder of such Registered Covered Bond.

12. A Registered Covered Bond may not be exchanged for a Bearer Covered Bond or vice versa.

EX-4.7

Exhibit 4.7

INTERCOMPANY LOAN AGREEMENT

SEPTEMBER 30, 2013

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

as Guarantor

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

BANK OF MONTREAL

as Intercompany Loan Provider and Cash Manager

CONTENTS

Section		Page
1.	Interpretation		1
2.	The Facility		1
3.	Purpose		2
4.	Conditions Precedent		3
5.	Advances		3
6.	Interest		4
7.	Repayment		6
8.	Taxes		8
9.	Illegality		8
10.	Mitigation		8
11.	Payments		9
12.	Representations and Warranties		11
13.	Further Provisions		12
Schedule
Schedule 1 Advance Request			17
Schedule 2 Asset Coverage Test			20

THIS INTERCOMPANY LOAN AGREEMENT is dated September 30, 2013

BETWEEN:

(1) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. in its capacity as Guarantor;

(2) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada) (in its capacity as Intercompany Loan Provider and in its capacity as Cash Manager); and

(3) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada, in its capacity as the Bond Trustee.

WHEREAS:

(A) The Intercompany Loan Provider has agreed that it will lend funds to the Guarantor by way of Advances hereunder.

(B) This Agreement sets out the agreement between the Intercompany Loan Provider and the Guarantor in relation to the lending of Advances by the Intercompany Loan Provider to the Guarantor.

IT IS AGREED as follows:

1. INTERPRETATION

1.1 Master Definitions

The master definitions and construction agreement made between, inter alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the Master Definitions and Construction Agreement) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) 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. For purposes of this Agreement, this Agreement has the same meaning as Intercompany Loan Agreement in the Master Definitions and Construction Agreement.

2. THE FACILITY

2.1 The Intercompany Loan

Subject to the terms of this Agreement, the Intercompany Loan Provider agrees to make available to the Guarantor an intercompany loan (the “Intercompany Loan”) in an aggregate amount equal to the Total Credit Commitment. On any Canadian Business Day, the Guarantor may request that advances (each an “Advance” and collectively “Advances”) denominated in Canadian Dollars under the Intercompany Loan be made available to it, subject to the terms of this Agreement, on such Canadian Business Day (each such date, a “Drawdown Date”).

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2.2 Total Credit Commitment

The Guarantor may from time to time request that the amount of the Total Credit Commitment be increased and upon written notice by the Intercompany Loan Provider to the Guarantor, the amount of the Total Credit Commitment shall be increased in the amount as set out in such notice.

3. PURPOSE

3.1 Application of Advances by Guarantor

Each Advance hereunder may only be used by the Guarantor:

(a) to purchase Loans and their Related Security pursuant to the Mortgage Sale Agreement;

(b) to invest in Substitution Assets (in an amount up to but not exceeding the limit set forth in Section 9.1 of the Guarantor Agreement);

(c) to make a deposit of the proceeds in the GDA Account (or, as applicable, the Standby GDA Account) (including, without limitation, to fund the Reserve Fund to an amount not exceeding the limit prescribed in Section 6.1 of the Guarantor Agreement);

(d) subject to written confirmation from the Cash Manager that the Asset Coverage Test is met on the relevant repayment date, in the case of a repayment to be made on a Calculation Date, or on a Calculation Date immediately prior to the relevant Guarantor Payment Date, in the case of a repayment to be made on a Guarantor Payment Date (both before and immediately following the making of the relevant repayment), to make a Capital Distribution to the Seller (in its capacity as a Partner) by way of a distribution of that Partner’s equity in the Guarantor in an amount equal to the Advance or any part thereof, which shall be paid to the Partner on the relevant next Payment Date by wire transfer or as otherwise directed by the Partner; and

(e) to fund the Pre-Maturity Liquidity Ledger.

3.2 Record of Advances

The aggregate principal amount of Advances outstanding at any time will be recorded in the Intercompany Loan Ledger in accordance with Section 5.4 and deemed to be comprised of:

(a) a guarantee loan (the “Guarantee Loan”) having a principal balance equal to:

(X/Y) multiplied by Z

where,

X = the ACT Asset Value (see Schedule 2 for reference) at such time, but where “A” in the calculation of such amount is equal to the aggregate Outstanding Principal Balance of the Loans in the Portfolio for the purposes of determining X;

Y = the maximum Canadian Dollar Equivalent of the aggregate Principal Amount Outstanding of Covered Bonds that could be issued by the Issuer without contravening the Asset Coverage Test at such time based on the assets of the Guarantor at such time; and

Z = the actual Canadian Dollar Equivalent of the aggregate Principal Amount Outstanding of the Covered Bonds at such time,

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and

(b) a demand loan (the “Demand Loan”) will be a revolving credit facility, the outstanding balance of which will be equal to the difference between the balance of the Intercompany Loan and the balance of the Guarantee Loan at any relevant time as determined above.

The respective balances of the Guarantee Loan and the Demand Loan will fluctuate with the issuances and redemptions of Covered Bonds and the requirements of the Asset Coverage Test, provided that at any time and for so long as the Asset Coverage Test is not satisfied, the Demand Loan cannot have a positive balance.

3.3 Revolving Intercompany Loan

Any amount under the Intercompany Loan repaid hereunder may be re-borrowed provided that (i) such re-borrowing is for the purposes set out in Section 3.1, and (ii) each of the conditions set forth in Section 4 have been satisfied. Unless otherwise agreed by the Intercompany Loan Provider and subject to satisfaction of the Rating Agency Condition, no further Advances will be made to the Guarantor under the Intercompany Loan following the occurrence of a Demand Loan Repayment Event.

3.4 No obligation to monitor

Without prejudice to the obligations of the Guarantor under this Section 3, neither the Bond Trustee nor any of the other Secured Creditors shall be obliged to concern themselves as to the application of amounts drawn by the Guarantor under this Agreement.

4. CONDITIONS PRECEDENT

Conditions precedent

Save as the Intercompany Loan Provider and the Bond Trustee may otherwise agree, each Advance will not be available unless on the date of the proposed Advance:

(a) such Advance does not result in the Guarantor being unable to satisfy the Asset Coverage Test on a pro forma basis following such Advance and the application of the proceeds thereof;

(b) the aggregate outstanding amount of Advances after giving effect to such Advance does not exceed the Total Credit Commitment; and

(c) no Issuer Event of Default, Guarantor Event of Default or Demand Loan Repayment Event has occurred.

5. ADVANCES

5.1 Giving of Advance Requests

Not later than 10:00 a.m. (Toronto Time) on each Drawdown Date (or such later time as may be agreed in writing between the Guarantor and the Intercompany Loan Provider), the Guarantor shall give to the Intercompany Loan Provider a duly completed request for an Advance in writing (each an “Advance Request”) completed in the form attached hereto as Schedule 1 specifying whether such request is for an Advance pursuant to the Guarantee Loan or the Demand Loan. Each Advance Request is irrevocable and (subject to the terms of this Agreement) obliges the Guarantor to borrow the whole amount specified in the Advance Request on the relevant Drawdown Date upon the terms and subject to the conditions of this Agreement.

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5.2 Advances

On receipt of an Advance Request from the Guarantor and if the relevant conditions set out in Section 4 have been met, the Intercompany Loan Provider shall make the requested Advances available to the Guarantor on the Drawdown Date.

5.3 Single drawing of the Advances

Each Advance shall, subject to satisfaction of the matters specified in Section 4, only be available for drawing in one amount by the Guarantor on the relevant Drawdown Date.

5.4 Intercompany Loan Ledger

The Cash Manager shall ensure that each Advance, each repayment thereof, all payments of interest and repayments of principal of each Advance hereunder and the amount of the Guarantee Loan and the Demand Loan at each Calculation Date are recorded in the Intercompany Loan Ledger at the appropriate time (which in the case of the amount of the Guarantee Loan and the Demand Loan shall be at least two Canadian Business Days prior to the Guarantor Payment Date following such Calculation Date).

6. INTEREST

6.1 Interest Periods

(a) Each loan interest period (each a “Loan Interest Period”) will correspond to each Calculation Period and each date on which interest is payable hereunder (each a “Loan Interest Payment Date”) will correspond to each Guarantor Payment Date, provided that the Loan Interest Period for any Advance made during a Calculation Period shall commence on the date of such Advance.

(b) Whenever it is necessary to compute an amount of interest in respect of an Advance for any period (including any Loan Interest Period), such interest shall be calculated on the basis of actual days elapsed in a 365 day year.

(c) Interest payable in respect of an Advance shall be payable in respect of the preceding Loan Interest Period for such Advance on each Loan Interest Payment Date following the Drawdown Date of that Advance and shall be paid on such Loan Interest Payment Date subject to the applicable Priorities of Payments.

(d) All payments of interest hereunder will be made in accordance with the relevant Priorities of Payments.

(e) Interest that is payable in respect of a Loan Interest Period for an Advance that is not paid on a Loan Interest Payment Date shall remain outstanding and shall bear interest at the same rate as that payable on such Advance.

6.2 Interest Rate

(a) Subject to the applicable Priorities of Payments, the rate of interest payable in respect of each Advance for each Loan Interest Period in respect of that Advance shall be the rate per annum notified in writing by the Intercompany Loan Provider to the Guarantor from time to time.

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(b) With respect to each Loan Interest Period, the Intercompany Loan Provider shall, as soon as practicable following the relevant Loan Interest Period, determine and notify the Cash Manager, the Guarantor and the Bond Trustee of the amount (the “Intercompany Loan Interest Amount”), in each case, payable in respect of such Loan Interest Period. The Intercompany Loan Interest Amount in respect of each Advance shall be determined by applying the applicable rate of interest (determined in accordance with sub-clause (a)) to the outstanding principal balance of the relevant Advance, multiplying the result of that calculation by the actual number of days in the applicable Loan Interest Period divided by 365 days and rounding the resultant figure to the nearest penny (half a penny being rounded upwards) provided that the amount of interest hereunder payable in respect of any Loan Interest Period shall not exceed the amounts payable to the Guarantor pursuant to the Interest Rate Swap Agreement less the sum of (i) a minimum spread to be notified in writing by the Intercompany Loan Provider to the Guarantor from time to time, and (ii) an amount equal to the amount of the Guarantor Expenses for the corresponding Guarantor Calculation Period.

(c) All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of this Section 6, shall (in the absence of wilful default, bad faith or proven error) be binding on the Guarantor and the Cash Manager and (in such absence as aforesaid) no liability to the Guarantor shall attach to the Cash Manager or the Intercompany Loan Provider in connection with the exercise or non-exercise by them or any of them of their powers, duties and discretions hereunder.

(d) Solely for the purposes of the Interest Act (Canada), whenever the amount of interest payable hereunder in respect of any Loan Interest Period is not the amount obtained by applying the applicable rate of interest to the outstanding principal balance of the relevant Advance and multiplying the result of that calculation by the actual number of days in the applicable Loan Interest Period divided by 365 days, the annual rate of interest payable hereunder in respect of such Loan Interest Period is equivalent to the product obtained when (i) the amount of interest payable hereunder in respect of such Loan Interest Period is divided by the sum of the daily average aggregate amount of Advances outstanding hereunder and the result of such division is multiplied by (ii) 365 divided by the number of calendar days in such Loan Interest Period.

6.3 Criminal Rate of Interest

In no event shall the aggregate “interest” (as defined in Section 347 (the “Criminal Code Section”) of the Criminal Code (Canada)), payable to the Intercompany Loan Provider under this Agreement or any other Transaction Document exceed the effective annual rate of interest lawfully permitted under the Criminal Code Section on the “credit advanced” (as defined in such section) under this Agreement or any other Transaction Document. Further, if any payment, collection or demand pursuant to this Agreement or any other Transaction Document in respect of such “interest” is determined to be contrary to the provisions of the Criminal Code Section, such payment, collection, or demand shall be deemed to have been made by mutual mistake of the Intercompany Loan Provider and the Guarantor and such “interest” shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the Criminal Code Section so result in a receipt by the Intercompany Loan Provider of interest at a rate not in contravention of the Criminal Code Section, such adjustment to be effected, to the extent necessary, as follows:

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(a) firstly, by reducing the amounts or rates of interest required to be paid to the Intercompany Loan Provider; and

(b) then, by reducing any fees, charges, expenses and other amounts required to be paid to the Intercompany Loan Provider which would constitute “interest”.

Notwithstanding the above, and after giving effect to all such adjustments, if the Intercompany Loan Provider shall have received an amount in excess of the maximum permitted by the Criminal Code Section, then the Guarantor shall be entitled, by notice in writing to the Intercompany Loan Provider, to obtain reimbursement from the Intercompany Loan Provider in an amount equal to such excess. For greater certainty, to the extent that any charges, fees or expenses are held to be within such meaning of “interest”, such amounts shall be pro-rated over (i) the period of time to which they relate or (ii) otherwise over the period from the initial Drawdown Date to the date on which all of the Covered Bonds are irrevocably repaid.

7. REPAYMENT

7.1 Repayment of Demand Loan on Demand

Subject to the applicable Priorities of Payments and Section 7.2, the principal amount of the Demand Loan (or any portion thereof for which demand is made by the Intercompany Loan Provider in accordance with this Section) shall be due and payable by the Guarantor on a Canadian Business Day no later than 60 days after the demand is made therefor by the Intercompany Loan Provider by notice in writing to the Guarantor unless on such day:

(a) (i) a Demand Loan Repayment Event (as hereinafter defined) has occurred and is continuing (in which case payment shall be made in accordance with Section 7.2); or (ii) the Asset Coverage Test as calculated by the Cash Manager, will not be satisfied after giving effect to such repayment and after taking into account all other amounts to be paid as provided for pursuant to the applicable Priorities of Payments on the next following Guarantor Payment Date (including for the avoidance of doubt amounts required to be credited to the Pre-Maturity Liquidity Ledger); in which case only the amount, if any, which could be repaid while remaining in compliance with the Asset Coverage Test shall be due and payable on such day; or

(b) an Asset Coverage Test Breach Notice has been given on or prior to such day and has not been revoked.

7.2 Mandatory Repayment Upon Demand Loan Repayment Event

Subject to the applicable Priorities of Payments and Section (b) below, the Guarantor shall repay the amount, if any, by which the Demand Loan exceeds the Demand Loan Contingent Amount on the first Guarantor Payment Date following 30 days or, if the Guarantor does not have sufficient funds on such date, following 60 days, in either case after the earlier of the date on which:

(i) BMO is required to assign the Interest Rate Swap Agreement to a third party pursuant to the terms thereof;

(ii) a Notice to Pay has been served on the Guarantor;

(iii) to the extent Fitch is a Rating Agency, if Fitch either (a) downgrades the issuer default ratings of the Intercompany Loan Provider below the Fitch Demand Loan Repayment Ratings, or (b) withdraws the issuer default ratings of the Intercompany Loan Provider; or

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(iv) this Agreement is terminated;

(each of (i), (ii), (iii) and (iv) above a “Demand Loan Repayment Event”).

(b) Subject to the applicable Priorities of Payments, following a Demand Loan Repayment Event, the Guarantor shall repay the full amount of the then outstanding Demand Loan on the date on which the Asset Percentage is next calculated (whether or not such calculation is a scheduled calculation or a calculation made at the request of BMO) provided that the Asset Coverage Test, as calculated by the Cash Manager, is met on the date of repayment after giving effect to such repayment. For greater certainty, following an Issuer Event of Default, the Asset Coverage Test will be conducted and the Asset Percentage calculated, solely for the purpose of determining the amount of the Demand Loan repayable on the relevant repayment date and that the Asset Coverage Test will be met after giving effect to any such repayment. In calculating the Asset Coverage Test following an Issuer Event of Default for such purpose, the amount of any Excess Proceeds received by the Guarantor from the Bond Trustee will be deducted from the ACT Asset Value.

7.3 Payments discharge Guarantor’s obligations under this Agreement

To the extent that the Guarantor makes, or there is made on its behalf, a payment under the Covered Bond Guarantee, the Intercompany Loan Provider will on such payment being made become indebted to the Guarantor for an amount equal to such payment. Any amounts owing by the Intercompany Loan Provider to the Guarantor in respect of amounts paid by the Guarantor under the terms of the Covered Bond Guarantee or the repurchase of Covered Bonds, as applicable, shall be set-off automatically (and without any action being required by the Guarantor, the Intercompany Loan Provider or the Bond Trustee) against any amounts repayable by the Guarantor under the terms of this Agreement. The amount set-off shall be the Canadian Dollar Equivalent of the relevant payment made by the Guarantor under the Covered Bond Guarantee or the Principal Amount Outstanding of any Covered Bonds purchased and cancelled by the Guarantor in accordance with Conditions 6.8 and 6.9, as applicable, which amount shall be applied to reduce amounts repayable under the Intercompany Loan in the following order of priority:

(a) first, to reduce and discharge interest (including accrued interest) due and unpaid on the outstanding principal balance of the Advances; and

(b) second, to reduce and discharge the outstanding principal balance of the Advances.

7.4 Repayment of Guarantee Loan

The Guarantee Loan shall be repaid in accordance with the applicable Priorities of Payments and is subordinated to the Demand Loan and the Covered Bond Guarantee in accordance with such Priorities of Payments. Such repayment will be made (a) using (i) funds being held for the account of the Guarantor by its service providers and/or funds in the Guarantor Accounts (other than any amount in the Pre-Maturity Liquidity Ledger); and/or, (ii) proceeds from the sale of Substitution Assets; and/or (iii) proceeds from the sale, pursuant to the Guarantor Agreement, of Loans and their Related Security to the Seller or to another person subject to a right of pre-emption on the part of the Seller; and/or (b) at any time that no Covered Bonds are outstanding, by selling, transferring or assigning to the Seller all of the Guarantor’s right, title and interest in and to the Loans and their Related Security forming part of the Portfolio in satisfaction in full of the Guarantee Loan.

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8. TAXES

8.1 No gross up

All payments by the Guarantor under this Agreement shall be made without any deduction or withholding for or on account of and free and clear of, any Taxes, except to the extent that the Guarantor is required by Law to make payment subject to any Taxes. The Guarantor shall have no obligation to gross-up any payment to the Intercompany Loan Provider under this Agreement in respect of which any such deduction or withholding applies.

8.2 Tax receipts

All Taxes required by Law to be deducted or withheld by the Guarantor from any amounts paid or payable under this Agreement shall be paid, to the relevant taxation authority, by the Guarantor when due and the Guarantor shall, within 90 days of the payment being made, deliver to the Intercompany Loan Provider evidence satisfactory to the Intercompany Loan Provider (including all relevant Tax receipts) that the payment has been duly remitted to the appropriate taxation authority.

9. ILLEGALITY

If, at any time, it is unlawful for the Intercompany Loan Provider to make, fund or allow to remain outstanding an Advance made or to be made by it under this Agreement, then the Intercompany Loan Provider shall, promptly after becoming aware of the same, deliver to the Guarantor, the Bond Trustee and (for information only and on the basis that they may not rely thereon) the Rating Agencies a legal opinion to that effect from reputable counsel and the Intercompany Loan Provider may require the Guarantor to prepay, on any Guarantor Payment Date, having given not more than 60 days’ and not less than 30 days’ (or such shorter period as may be required by any relevant Law) prior written notice to the Guarantor and the Bond Trustee, and while the relevant circumstances continue, the applicable Advance(s) without penalty or premium but subject to Article 6 of the Security Agreement and Section 10 of this Agreement.

10. MITIGATION

If circumstances arise in respect of the Intercompany Loan Provider which would, or would upon the giving of notice, result in:

(a) the prepayment of the Advances pursuant to Section 9; or

(b) a withholding or deduction from the amount to be paid by the Guarantor on account of Taxes, pursuant to Section 0,

then, without in any way limiting, reducing or otherwise qualifying the obligations of the Guarantor under this Agreement, the Intercompany Loan Provider shall:

(i) promptly upon becoming aware of the circumstances, notify the Bond Trustee, the Guarantor and the Rating Agencies; and

(ii) upon written request from the Guarantor, take such steps as may be practical to mitigate the effects of those circumstances including (without limitation) the transfer or assignment of all its rights under this Agreement to, and assumption of all its obligations under this Agreement by, another Person reasonably satisfactory to the Bond Trustee, which is willing to participate in the relevant Advances in its place and which is not subject to (a) or (b) above,

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provided that no such transfer or assignment and assumption may be permitted unless the Rating Agency Condition shall have been satisfied with respect thereto and the Intercompany Loan Provider indemnifies (subject to Article 6 of the Security Agreement) the Guarantor and the Bond Trustee for any reasonable costs and expenses properly incurred by them as a result of such transfer or assignment and assumption.

11. PAYMENTS

11.1 Payment

(a) Subject to the applicable Priorities of Payments all amounts to be paid to the Intercompany Loan Provider under this Agreement shall be paid for value by the Guarantor to such account as is notified to the Guarantor by the Intercompany Loan Provider for this purpose by not less than 5 Canadian Business Days prior notice on each Guarantor Payment Date.

(b) Subject to the applicable Priorities of Payments, the Guarantor may elect, at its sole discretion, to repay the Demand Loan (or any portion thereof) pursuant to Section 7.1 or Section 7.2 in the following manner:

(i) in Canadian dollars for value by the Guarantor, provided that any amount paid in Canadian dollars pursuant to this clause (i) shall not have been derived from the sale of any Loan and its Related Security by the Guarantor for less than the True Loan Balance of such Loan at the time of such sale; or

(ii) by selling, transferring and assigning to the Issuer all of the Guarantor’s right, title and interest in and to Loans and their Related Security and any Collections related to such Loans from and after the date of the Payment in Kind Notice in accordance with Section 11.1(c) and for the consideration of a reduction in the amount outstanding under the Demand Loan in accordance with Section 11.1(d) (a “Payment in Kind”); provided that any Loans and their Related Security applied towards a Payment in Kind will be selected in a manner that would not reasonably be expected to adversely effect the interests of the Covered Bondholders.

(c) If the Guarantor elects to make a Payment in Kind, the Guarantor will provide the Issuer with a notice (a “Payment in Kind Notice”), at least 5 Canadian Business Days and not more than 30 days in advance of the proposed date of such Payment in Kind (the “Payment in Kind Date”), setting out the following:

(i) the Payment in Kind Date;

(ii) the aggregate amount of the Demand Loan to be repaid as determined in accordance with Section 11.1(d); and

(iii) a listing of the Loans to be sold, transferred and assigned to the Issuer on the Payment in Kind Date, including:

(A) for each such Loan, the Eligible Loan Details;

(B) the aggregate number of Loans identified in the Payment in Kind Notice; and

(C) the aggregate Outstanding Principal Balance of such Loans as of the date of the Payment in Kind Notice.

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(d) Upon any Payment in Kind, the outstanding amount of the Demand Loan will be reduced by the Fair Market Value of such Loans determined as of the Payment in Kind Date, less an amount equal to the Collections received by or on behalf of the Guarantor after the date of the Payment in Kind Notice and prior to the Payment in Kind Date in respect of the Loans listed in the Payment in Kind Notice. In addition, if the Payment in Kind occurs on or after a Covered Bond Guarantee Activation Event and the Intercompany Loan Provider is the Limited Partner, the Limited Partner shall be deemed to have made a Capital Contribution to the Guarantor on the Payment in Kind Date in an amount equal to the excess, if any, of the True Loan Balance of the Loans and their Related Security applied towards the Payment in Kind over the aggregate Fair Market Value of such Loans and their Related Security, and such Capital Contribution shall be deemed to have been applied by the Guarantor against the Demand Loan, such that the outstanding amount of the Demand Loan will be reduced by the greater of (i) the True Loan Balance of such Loans, and (ii) the Fair Market Value of such Loans.

(e) If upon a Payment in Kind, the outstanding amount of the Demand Loan is reduced in accordance with Section 11.1(d), then upon such Payment in Kind (and notwithstanding the terms of the Interest Rate Swap Agreement):

(i) if the Interest Rate Swap Provider is the Issuer or an Affiliate of the Issuer, no termination payment will be payable in respect of such sale of Loans; and

(ii) if the Interest Rate Swap Provider is not the Issuer or an Affiliate of the Issuer, (A) the termination payment, if any, payable by the Guarantor to the Interest Rate Swap Provider in respect of such sale of Loans will be paid by the Issuer to the Interest Rate Swap Provider for and on behalf of the Guarantor, and (B) the Guarantor shall direct that the termination payment, if any, payable by the Interest Rate Swap Provider to the Guarantor in respect of such sale of Loans will be paid by the Interest Rate Swap Provider to the Issuer or as the Issuer may direct.

(f) Upon a Payment in Kind, all of the Guarantor’s right, title and interest in and to each of the Loans listed in the Payment in Kind Notice and their Related Security from and after the Payment in Kind Date shall be sold, transferred and assigned to the Issuer without recourse, representation or warranty (whether express, implied, statutory or otherwise) to, against, by or on behalf of the Guarantor save and except that the Guarantor shall be deemed to represent and warrant to the Issuer that (x) such Loans and the proceeds thereof are free and clear of any Adverse Claim created by the Guarantor, and (y) the Guarantor has the power and authority to sell, transfer and assign such Loans and their Related Security and the proceeds thereof as herein provided. In consideration of the foregoing, the outstanding amount of the Demand Loan shall be reduced in accordance with Section 11.1(d).

(g) The Guarantor will, at the expense of the Issuer (i) execute and deliver such assignments or other instruments of conveyance, (ii) make such filings (including filings of financing statements), and (iii) with respect to the Loan and Related Security, Customer Files or other documents relating to the Loans and their Related Security sold, transferred and assigned to the Issuer upon a Payment in Kind (A) to the extent held by the Issuer, confirm that the Issuer ceases to be under any further obligation to hold such documents to the order of the Guarantor or the Bond Trustee, or (B) to the extent not held by the Issuer, deliver or cause to be delivered to the Issuer or as the Issuer may direct all such documents that are in its possession or otherwise held to its order.

(h) Without limiting anything in this Agreement, each Payment in Kind shall constitute a discharge and release of the Issuer from any claims which the Guarantor or the Bond Trustee

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may have against the Issuer arising from the Loan Representations and Warranties in relation to the Loans and their Related Security sold, transferred and assigned to the Issuer on the related Payment in Kind Date.

11.2 Alternative payment arrangements

If, at any time, it shall become impracticable (by reason of any action of any governmental authority or any change in Law, exchange control regulations or any similar event) for the Guarantor to make any payments under this Agreement in the manner specified in Section 11.1, then the Guarantor shall, at the expense of the Intercompany Loan Provider, make such alternative arrangements for the payment of amounts due under this Agreement as are acceptable to the Intercompany Loan Provider and the Bond Trustee (acting reasonably).

12. REPRESENTATIONS AND WARRANTIES

12.1 Representations, Warranties and Covenants

Each of the Intercompany Loan Provider and the Cash Manager hereby represents and warrants to, and covenants with, the Guarantor and the Bond Trustee that as of the date of this Agreement and for so long as it remains a party to this Agreement:

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

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

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

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

(e) it will comply with the provisions of, and perform its obligations under, this Agreement and the other Transaction Documents to which it is party;

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

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

12.2 Undertaking

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

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13. FURTHER PROVISIONS

13.1 No set-off

The Intercompany Loan Provider agrees that it will advance the Advances to the Guarantor on each Drawdown Date (subject to the terms of this Agreement, including without limitation, Section 4 (Conditions Precedent)) without set-off (including, without limitation, in respect of any amounts owed to it under any other Advance or in its capacity as a partner of the Guarantor) or counterclaim.

13.2 Evidence of indebtedness

In any proceeding, action or claim relating to this Agreement a statement as to any amount due and payable to the Intercompany Loan Provider under this Agreement which is certified as being correct by an officer of the Bond Trustee shall, unless otherwise provided in this Agreement, be prima facie evidence that such amount is in fact due and payable.

13.3 Rights cumulative, waivers

The respective rights of the Guarantor, the Intercompany Loan Provider and the Bond Trustee under this Agreement:

(a) may be exercised as often as necessary;

(b) are cumulative and not exclusive of its rights under the general Law; and

(c) may be waived only in writing and specifically.

Delay in exercising or non-exercise of any such right is not a waiver of that right.

13.4 Severability

If a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect or impair:

(a) the validity or enforceability in that jurisdiction of any other provision of this Agreement; or

(b) the validity or enforceability in other jurisdictions of that or any other provision of this Agreement.

13.5 Notices

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

(a) in the case of the Intercompany Loan Provider, to Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-7193) for the attention of Senior Manager, Securitization Structuring;

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

12

(c) in the case of the Cash Manager, to Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-4166) for the attention of Senior Manager, Securitization Finance and Operations; and

(d) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11^th Floor, Toronto, ON M5J 2Y1, (facsimile number (416) 981-9777) for the attention of Manager, Corporate Trust;

or to such other address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written notice in accordance with the provisions of this Section 13.5.

13.6 Assignment

(a) None of the Intercompany Loan Provider, the Guarantor or the Cash Manager may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Bond Trustee except as provided for in the Transaction Documents, save that the Guarantor shall be entitled to assign whether by way of security or otherwise all or any of its rights under this Agreement to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement without such consent to any successor Bond Trustee in exercise of its rights under the Security Agreement. If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS.

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

13.7 Amendments, Variation and Waiver

(a) Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorised by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

(b) Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

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(c) The Guarantor shall deliver notice to CMHC from time to time of any amendment, variations or waivers under this Agreement to the extent required by the CMHC Guide, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

13.8 Change of Issuer or Cash Manager

If any entity assumes the obligations of the Issuer under the Covered Bonds, then for so long as any amount is outstanding under this Agreement, the parties to this Agreement shall execute such documents and take such action as the Bond Trustee may reasonably require for the purposes of vesting in the successor Issuer and/or Cash Manager all the rights and obligations of the Intercompany Loan Provider and/or Cash Manager under this Agreement.

13.9 Change of Bond Trustee

In the event that there is any change in the identity of the Bond Trustee or an additional Bond Trustee is appointed in accordance with the Security Agreement, as the case may be, the parties to this Agreement shall execute such documents and take such actions as such new Bond Trustee may reasonably require for the purposes of vesting in such new Bond Trustee the rights or powers of the Bond Trustee under this Agreement and under the Security Agreement and releasing the retiring Bond Trustee from further obligations thereunder.

13.10 Bond Trustee Liability

It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee shall not assume or have any obligations or liabilities to the Guarantor, the Intercompany Loan Provider or the Cash Manager under this Agreement notwithstanding any provision of 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 13.7. For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed by the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion without any obligation to give reasons therefor and the Bond Trustee shall not be responsible for any liability occasioned by so acting.

13.11 Limitation of Liability

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

13.12 Non-Petition

Each of the Intercompany Loan Provider and the Cash Manager agrees that it shall not institute against, or join any other party in instituting against, the Guarantor, or any general partner of the Guarantor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal, provincial or foreign bankruptcy, insolvency or similar Law, for one year and one day after all Covered Bonds have been repaid in full. The foregoing provision will survive the termination of this Agreement.

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13.13 Agency

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

13.14 Counterparts

This Agreement may be signed (manually or by electronic or facsimile means) and delivered in more than one counterpart all of which, taken together, shall constitute one and the same Agreement.

13.15 Enurement

This Agreement enures to the benefit of and is binding upon each of the parties to this Agreement and their respective successors (including any successor by reason of amalgamation of any party).

13.16 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each party to this Agreement hereby irrevocably submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement.

[signature page follows]

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

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND, GP, INC.
By:	/s/ Chris Hughes
	Name: Chris Hughes
	Title:   President and Secretary

BANK OF MONTREAL, in its capacity as Issuer and Cash Manager
By:	/s/ Cathy Cranston
	Name: Cathy Cranston
	Title:   Senior Vice President, Finance &              Treasurer

COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:	/s/ Sean Pigott
	Name: Sean Pigott
	Title:   Corporate Trust Officer
By:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title:   Associate Trust Officer

Intercompany Loan Agreement

16

SCHEDULE 1

ADVANCE REQUEST

From:   BMO Covered Bond Guarantor Limited Partnership (“Guarantor”)

To:     Bank of Montreal (the “Intercompany Loan Provider”)

Date:

Dear Sirs,

We refer to the Intercompany Loan Agreement between, inter alios, ourselves, the Intercompany Loan Provider and the Bond Trustee (as from time to time amended, restated, novated or supplemented (the “Intercompany Loan Agreement”)) dated September 30, 2013 whereby an Intercompany Loan was made available to us. Terms defined in the Intercompany Loan Agreement shall have the same meaning in this Request.

We hereby give you notice that, pursuant to the Intercompany Loan Agreement and upon the terms and subject to the conditions contained therein, we wish you to make the following Advances available to us as follows:

(a) [List Advances specifying type]

(b) Aggregate Amount: [currency][$— ].

(c) Drawdown Date: [    ]

We confirm that following the making of the Advance(s) requested, the aggregate principal amount outstanding of all Advances will not exceed the amount of the Total Credit Commitment.

The net proceeds of this drawdown should be credited to our account numbered [    ] with [    ].

We hereby confirm that no Guarantor Event of Default is outstanding that has not been waived or remedied to the satisfaction of the Bond Trustee or would result from the making of such Advance(s).

Yours faithfully,

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:
	Name:
	Title:

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SCHEDULE 2

ASSET COVERAGE TEST

The “Asset Coverage Test” is met if the ACT Asset Value (as defined below) shall be in an amount at least equal to the ACT Liability Value (as defined below). For greater certainty, references in this Schedule to “immediately preceding Calculation Date” and “previous Calculation Date” are to the Calculation Period ending on the Calculation Date and references to Loans are to Loans in the Portfolio.

Asset Coverage Test = ACT Asset Value – ACT Liability Value

“ACT Asset Value” = A + B + C + D + E - F

where:

A. the lower of (1) and (2) :

(1) the sum of the LTV Adjusted Loan Balance of each Loan in the Portfolio net of Adjustments; and

(2) the sum of the Asset Percentage Adjusted Loan Balance of each Loan in the Portfolio, net of Adjustments

B. Principal Receipts up to Calculation Date not otherwise applied

C. Cash Capital Contributions made by Partners of the Partnership (as recorded in capital account ledger for each Partner) or proceeds advanced under the Intercompany Loan Agreement or proceeds from any sale of Eligible Loans or other cash exclusive of Revenue Receipts up to the Calculation Date

D. Outstanding principal amount of any Substitution Assets

E. Reserve Fund balance and/or amount credited to the Pre-Maturity Liquidity Ledger, in either case if applicable

F. Product of:

(1) weighted average remaining maturity of all outstanding Covered Bonds (in years and, where less than a year, deemed to be a year);

(2) principal amount outstanding of all Covered Bonds; and

(3) Negative Carry Factor

“LTV Adjusted Loan Balance” = lower of (1) and (2), where:

(1) the True Loan Balance of the relevant Loan; and

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(2) if such Loan is a Performing Eligible Loan, 80% of the Market Value of the related Property, or if such Loan is not a Performing Eligible Loan, zero

“Asset Percentage Adjusted Loan Balance” = Asset Percentage x lower of (1) and (2):

(1) the True Loan Balance of the relevant Loan; and

(2) if such Loan is a Performing Eligible Loan, the Market Value of the related Property, or if such Loan is not a Performing Eligible Loan, zero

“Performing Eligible Loans” = Eligible Loans less than three months in arrears

“Adjustments” = sum of:

(1) LTV Adjusted Loan Balance or Asset Percentage Adjusted Loan Balance (as the case may be) of any Performing Eligible Loan in breach of the Loan Representations and Warranties or otherwise subject to the Seller’s repurchase obligation (but yet to be repurchased) under the Mortgage Sale Agreement; and

(2) financial losses (yet to be recompensed) resulting from any breach by the Seller of any other material warranty in the Mortgage Sale Agreement or from any breach by a Servicer of a material term of the Servicing Agreement

“True Loan Balance” = sum of:

(1) outstanding loan balance of the relevant Loan; and

(2) all Arrears of Interest and Accrued Interest with respect to the relevant Loan

“Asset Percentage” = As determined below

“Negative Carry Factor” =

(1) if the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is less than or equal to 0.1% per annum, then 0.5%; and

(2) if the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is greater than 0.1% per annum, then the sum of (x) 0.5% and (y) the weighted average margin of the interest rate payable on the outstanding Covered Bonds less 0.1%,

unless the interest rate risk represented by the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is addressed or mitigated by the Interest Rate Swap and the “Effective Date” thereunder has occurred, whereupon the Negative Carry Factor shall be nil

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“ACT Liability Value” =       Nominal amount of Covered Bond liabilities in Canadian Dollars

                                         (with currency transaction undertaken using or at foreign exchange rates

                                         reflected in the related Covered Bond Swap Agreement)

The “Asset Percentage” shall be determined as follows:

(i) On or prior to the Guarantor Payment Date immediately following the Calculation Date falling in February, May, September and November of each year, and on such other date as the Limited Partner may request following the date on which the Limited Partner is required to assign the Interest Rate Swap Agreement to a third party (each such date a “Cash Flow Model Calculation Date”), the Managing GP (or the Cash Manager on its behalf) will determine the percentage figure selected by it as the Asset Percentage based on such methodologies as the Rating Agencies may prescribe from time to time (to ensure sufficient credit enhancement for the Covered Bond Guarantee will be maintained) for the Portfolio based on the value of the Loans and their Related Security in the Portfolio as at the Calculation Date immediately preceding the Cash Flow Model Calculation Date as a whole or on the basis of a sample of Randomly Selected Loans in the Portfolio, such calculations to be made on the same basis throughout unless the Rating Agency Condition has been satisfied in respect thereof.

(1) The Asset Percentage will from time to time be adjusted in accordance with the various methodologies of the Rating Agencies to ensure that sufficient credit enhancement for the Covered Bond Guarantee will be maintained.

(2) The Managing GP (or the Cash Manager on its behalf) will, or will use all reasonable efforts to cause the one or more Rating Agencies to, determine the Asset Percentage at least two days prior to the Guarantor Payment Date following the Cash Flow Model Calculation Date and the Asset Percentage so determined shall be the lowest percentage so determined by any of the Rating Agencies in accordance with this Schedule 2 and shall apply to any calculations in respect of the Calculation Period ending on such Cash Flow Model Calculation Date and each Calculation Period thereafter to but excluding the last day of the following Calculation Period ending on a Cash Flow Model Calculation Date. To the extent a Rating Agency does not respond to a request for a newly-determined Asset Percentage, the Asset Percentage last determined by such Rating Agency shall be applicable with respect to such Rating Agency.

(3) Notwithstanding anything to the contrary in this Schedule 2, the Asset Percentage shall at all times be less than or equal to 95%, as determined in accordance with this Schedule 2 and as provided by Section 15.1(y) of the Trust Deed, provided that the Asset Percentage shall not be less than 80% unless otherwise agreed by the Issuer (and following an Issuer Event of Default, the Partnership for the purposes of making certain determinations in respect of the Intercompany Loan).

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EX-4.8

Exhibit 4.8

LIMITED PARTNERSHIP AGREEMENT

of

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

by and among

BMO COVERED BOND GP, INC.

as Managing GP

and

8429065 CANADA INC.

as Liquidation General Partner

and

BANK OF MONTREAL

as Limited Partner

and

Each Person who is admitted to the Limited Partnership as a General Partner or Limited

Partner hereafter

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

SEPTEMBER 30, 2013

Limited Partnership Agreement

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION		1
Section 1.1	Definitions and Construction.	1
ARTICLE 2 RELATIONSHIP AMONG PARTNERS		2
Section 2.1	Formation of Partnership.	2
Section 2.2	Name of Partnership.	2
Section 2.3	Business of the Partnership.	2
Section 2.4	Registered Office; Business Locations.	3
Section 2.5	Financial Year.	3
Section 2.6	Term.	3
Section 2.7	Private Issuer Restrictions.	3
Section 2.8	Representations, Warranties and Covenants of the Managing GP and the Liquidation GP.	3
Section 2.9	Additional Representations and Warranties of the Liquidation GP and the Managing GP.	6
Section 2.10	Representations, Warranties and Covenants of the Limited Partner.	6
Section 2.11	Limitation on Authority of Limited Partners.	7
Section 2.12	Power of Attorney.	7
Section 2.13	Unlimited Liability of the Managing GP and the Liquidation GP; Limitation of Liability.	9
Section 2.14	Limited Liability of Limited Partner.	9
Section 2.15	Indemnity of Limited Partner.	10
Section 2.16	Indemnity of Managing GP and Liquidation GP.	10
Section 2.17	Compliance with Laws.	11
Section 2.18	Other Activities of Managing GP and Liquidation GP.	11
Section 2.19	Other Activities of the Limited Partners and the Shareholders, Directors and Officers of the Partners.	11
ARTICLE 3 CAPITAL ACCOUNTS		12
Section 3.1	Capital Contributions.	12
Section 3.2	Initial Capital Contributions.	12
Section 3.3	Capital Account Ledger.	12
Section 3.4	Additional Cash Capital Contributions.	12
Section 3.5	Capital Contributions in Kind.	13
Section 3.6	Capital Distributions.	13
Section 3.7	Capital Contribution Balance.	13
Section 3.8	No Interest Payable on Accounts.	14
Section 3.9	Deficit in Accounts.	14
ARTICLE 4 PROFITS, LOSSES AND DISTRIBUTIONS		14
Section 4.1	Allocation of Profits and Losses of the Partnership.	14
Section 4.2	Restriction on Withdrawals and Receipts.	14
Section 4.3	Set-Off.	15
Section 4.4	Compliance with Agreements.	16

Limited Partnership Agreement

ARTICLE 5 ASSET COVERAGE TEST, AMORTIZATION TEST, PRE-MATURITY TEST AND VALUATION CALCULATION		16
Section 5.1	Asset Coverage Test.	16
Section 5.2	Asset Coverage Test Breach Notice.	16
Section 5.3	Amortization Test.	17
Section 5.4	Pre-Maturity Test.	17
Section 5.5	Valuation Calculation.	17
ARTICLE 6 PRIORITIES OF PAYMENTS		17
Section 6.1	Pre-Acceleration Priorities of Payment.	17
Section 6.2	Priority of Payments at any time an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred.	19
Section 6.3	Termination Payments, Indemnities and Tax Credits received in respect of the Swap Agreements, premiums received in respect of replacement Swap Agreements.	19
Section 6.4	Guarantee Priority of Payments.	20
Section 6.5	Priority of Payments when Covered Bonds Repaid.	21
ARTICLE 7 SALE OF SELECTED LOANS		21
Section 7.1	Sale of Selected Loans.	21
Section 7.2	Sale of Selected Loans Following a Breach of the Pre-Maturity Test.	22
Section 7.3	Sale of Selected Loans After a Demand Loan Repayment Event has Occurred or the Issuer has Otherwise Demanded that the Demand Loan be Repaid.	24
Section 7.4	Liquidity Options following an Issuer Event of Default.	24
Section 7.5	Voluntary Overcollateralization	24
ARTICLE 8 MANAGEMENT OF THE PARTNERSHIP		25
Section 8.1	General Authority and Obligations of the Managing GP and the Liquidation GP.	25
Section 8.2	General Powers of the Managing GP and the Liquidation GP.	26
Section 8.3	Limitation on Authority of Managing GP and Liquidation GP.	27
Section 8.4	Meetings of the Partners.	29
Section 8.5	Title to Property.	29
Section 8.6	Discharge of Duties of Managing GP and Liquidation GP.	29
Section 8.7	Reimbursement.	29
Section 8.8	Commingling of Funds.	29
Section 8.9	Execution of Documents	29
Section 8.10	Delegation	30
Section 8.11	Insurance.	30
Section 8.12	Ostensible Authority.	30
Section 8.13	Decisions by Partners following the appointment of a liquidator or receiver to any Partner.	30
ARTICLE 9 REGISTERED OFFICE, BOOKS AND RECORDS, FINANCIAL INFORMATION AND OTHER GENERAL PARTNER COVENANTS		30
Section 9.1	Registered Office.	30
Section 9.2	Records.	31

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Section 9.3	Books of Account.	31
Section 9.4	Inspection of Record and Books of Account.	32
Section 9.5	Appointment of Guarantor Auditor.	32
Section 9.6	Annual Report and Income Tax Information.	32
Section 9.7	Investing in Substitution Assets.	33
Section 9.8	Prescribed Cash Limitation	33
Section 9.9	Risk Mitigation	34
Section 9.10	Notices to CMHC re: Swap Agreements	34
ARTICLE 10 NEW LIMITED PARTNERS		34
Section 10.1	Transfer.	34
ARTICLE 11 REMOVAL AND RESIGNATION OF THE MANAGING GENERAL PARTNER AND THE LIQUIDATION GENERAL PARTNER		36
Section 11.1	Assignment of Interest.	36
Section 11.2	Removal of Managing GP.	36
Section 11.3	Resignation of Managing GP or the Liquidation GP.	37
Section 11.4	Transfer to New Managing GP.	37
Section 11.5	Release.	37
Section 11.6	Transfer of Title to New Managing GP.	37
Section 11.7	New Managing GP.	38
ARTICLE 12 DISSOLUTION OF PARTNERSHIP		38
Section 12.1	Events of Dissolution.	38
Section 12.2	Events Not Causing Dissolution.	38
Section 12.3	Receiver.	39
Section 12.4	Liquidation of Assets and Distribution of Proceeds of Liquidation.	39
Section 12.5	Termination of Partnership.	39
ARTICLE 13 AMENDMENTS		39
Section 13.1	Generally.	39
Section 13.2	Amendments by Managing GP.	40
Section 13.3	Notice of Amendment.	41
ARTICLE 14 CONFIDENTIALITY		41
Section 14.1	Confidentiality.	41
ARTICLE 15 MISCELLANEOUS		42
Section 15.1	Effective Time.	42
Section 15.2	Notices.	42
Section 15.3	Time of the Essence.	44
Section 15.4	Third Party Beneficiaries.	44
Section 15.5	Bond Trustee.	45
Section 15.6	Binding Effect.	45
Section 15.7	Further Assurances.	45
Section 15.8	Limited Partner Not A GP.	45

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Section 15.9	Waiver.	45
Section 15.10	Successors and Assigns.	46
Section 15.11	Severability.	46
Section 15.12	Governing Law.	46
Section 15.13	Counterparts.	46
Section 15.14	No Personal Liability for Limited Partners.	46
Section 15.15	Submission to Jurisdiction.	46
SCHEDULES
Schedule 1     –   Additional Liquidation General Partner Representations and Warranties
Schedule 2     –   Asset Coverage Test
Schedule 3     –   Amortization Test
Schedule 4     –   Pre-Maturity Test
Schedule 5     –   Pre-Acceleration Revenue Priority of Payments
Schedule 6     –   Pre-Acceleration Principal Priority of Payments
Schedule 7     –   Guarantee Priority of Payments
Schedule 8     –   Priority of Payments when Covered Bonds Repaid
Schedule 9     –   Method for Sale of Selected Loans
Schedule 10   –   Valuation Calculation

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LIMITED PARTNERSHIP AGREEMENT

THIS LIMITED PARTNERSHIP AGREEMENT (this “Agreement”) of BMO Covered Bond Guarantor Limited Partnership (the “Partnership”) is made as of the 30th day of September 2013.

BY AND AMONG:

(1) BMO Covered Bond GP, Inc. (the “Managing GP” or “BMO GP”), a corporation incorporated under the laws of Canada;

(2) 8429065 Canada Inc. (the “Liquidation GP”), a corporation incorporated under the laws of Canada;

(3) Bank of Montreal (the “Limited Partner” or the “Bank”), a bank named in Schedule I to the Bank Act (Canada);

(4) Computershare Trust Company of Canada (the “Bond Trustee”), a trust company formed under the laws of Canada; and

(5) Each Person who is admitted to the Limited Partnership as a General Partner or Limited Partner hereafter.

RECITALS:

(a) The Managing GP, the Liquidation GP and the Limited Partner established the Partnership under the laws of the Province of Ontario pursuant to a declaration dated May 30, 2013 (as the same may be amended, restated, varied or supplemented from time to time) (the “Declaration”); and

(b) The parties hereto are desirous of confirming their agreement respecting the Partnership on the terms and conditions set forth in this Agreement.

NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of the foregoing and the mutual covenants and agreements contained in this Agreement (the receipt and adequacy of which are acknowledged), the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

Section 1.1 Definitions and Construction.

The master definitions and construction agreement made between, inter alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the Master Definitions and Construction Agreement) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions

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defined in the Master Definitions and Construction Agreement (as so amended, restated, varied or supplemented) 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.

For the purposes hereof, “this Agreement” has the same meaning as Guarantor Agreement in the Master Definitions and Construction Agreement.

ARTICLE 2

RELATIONSHIP AMONG PARTNERS

Section 2.1 Formation of Partnership.

The Managing GP, the Liquidation GP and the Limited Partner agreed to and formed a limited partnership pursuant to the laws of the Province of Ontario on May 30, 2013 pursuant to the Declaration. The parties hereto have agreed to confirm their agreements relating to the Partnership on the terms and conditions set out in this Agreement. The Partnership will be effective as a limited partnership from May 30, 2013, the date on which the Declaration was filed in accordance with the Limited Partnerships Act (Ontario) (the “LP Act”), and the Partnership will file any documents necessary under applicable laws as a result of the amendments reflected in this Agreement.

Section 2.2 Name of Partnership.

Subject to the provisions of the LP Act and the Business Names Act (Ontario) and any other applicable legislation, the name of the Partnership will be BMO Covered Bond Guarantor Limited Partnership, or such other name as the Managing GP may, with the consent of the Limited Partner, and while there are Covered Bonds outstanding, the Bond Trustee, from time to time determine in accordance with the terms of this Agreement.

Section 2.3 Business of the Partnership.

(1) The Partners have agreed with effect from the date hereof that the sole business of the Partnership shall be to provide services to the Bank in respect of the Program by (i) entering into the Intercompany Loan Agreement and accepting Capital Contributions from the Partners; (ii) using the proceeds from the Intercompany Loan and Capital Contributions (a) to purchase the Initial Portfolio consisting of Loans and their Related Security from the Seller in accordance with the terms of the Mortgage Sale Agreement and New Loans and their Related Security pursuant to the terms of the Mortgage Sale Agreement; and/or (b) to invest in Substitution Assets in an amount not exceeding the prescribed limit; and/or (c) subject to complying with the Asset Coverage Test to from time to time make Capital Distributions to the Limited Partner; and/or (d) to make deposits of the proceeds in the Guarantor Accounts (including to fund the Reserve Fund and the Pre-Maturity Liquidity Ledger, in each case to an amount not exceeding the prescribed limit); (iii) arranging for the servicing of the Portfolio by the Servicer; (iv) entering into the Trust Deed, giving the Covered Bond Guarantee and entering into the

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Security Agreement; (v) entering into the other Transaction Documents to which it is a party; and (vi) performing its obligations hereunder and thereunder and in respect thereof and doing all things incidental or ancillary thereto.

Section 2.4 Registered Office; Business Locations.

(1) The registered office of the Partnership will be located at Suite 6100, 1 First Canadian Place, 100 King Street West, Toronto, Ontario, M5X 1B8, and/or at such other place or places in Canada as the Managing GP may from time to time determine.

(2) The Partnership will be permitted to carry on business in any jurisdiction, but the Managing GP will be required in all cases to use its reasonable best efforts to protect the limited liability of the Limited Partner in any such jurisdiction, including by registering the Partnership in other jurisdictions where the Managing GP considers it appropriate to do so.

Section 2.5 Fiscal Year.

The Fiscal Year end for tax and financial reporting purposes will be October 31 in each calendar year or such other date as the Managing GP may determine from time to time, provided that the Managing GP has obtained any necessary consents from applicable taxation authorities.

Section 2.6 Term.

The Partnership will exist until it is dissolved in accordance with this Agreement.

Section 2.7 Private Issuer Restrictions.

Notwithstanding any other provisions in this Agreement: (i) the number of Partners will be limited to no more than fifty (50), (ii) the right to Transfer any interest in the Partnership is restricted as provided in this Agreement, and (iii) any invitation to the public to subscribe for any interest in the Partnership is prohibited.

Section 2.8 Representations, Warranties and Covenants of the Managing GP and the Liquidation GP.

(1) The Managing GP represents and warrants to, and covenants with, each other Partner and, while the Covered Bonds are outstanding, the Bond Trustee, that:

(a) it is a corporation duly incorporated under the laws of Canada and is validly subsisting under such laws and has made all filings under all applicable corporate, securities and taxation laws to which the Managing GP is subject, for which the failure to file could have a material adverse affect on the Program or the Partnership;

(b) it has and will continue to have all necessary capacity and corporate authority to act as the managing general partner of the Partnership and to enter into and perform its obligations under this Agreement and each of the other Transaction

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Documents to which it is a party, and such obligations do not and will not conflict with nor do they or will they result in a breach of any of its constating documents or by-laws or any agreement by which it is bound or any applicable law the breach of which would have a material adverse effect on the Program or the Partnership;

(c) this Agreement constitutes a valid and binding obligation of the Managing GP, enforceable against it in accordance with the terms of this Agreement, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);

(d) except pursuant to the obligations of the Partnership under the Covered Bond Guarantee or any of the Transaction Documents, it will not, nor will it cause any of its Affiliates or Associates, to borrow money from the Partnership, or cause the Partnership to lend money to any of its Affiliates or Associates;

(e) it holds and shall maintain the registrations necessary for the conduct of its business and has and shall continue to have all licences and permits necessary to carry on its business as the managing general partner of the Partnership in all jurisdictions where the activities of the Partnership require such licensing or other form of registration of the Managing GP;

(f) it will make all filings in a timely manner respecting the Partnership required pursuant to the applicable legislation;

(g) it will exercise the powers conferred upon it hereunder in pursuance of the business of the Partnership and will devote such time to the conduct of the affairs of the Partnership as may be reasonably required for the proper management of the business affairs of the Partnership;

(h) it is not a Non-Resident, and will retain such status during the term of the Partnership;

(i) it will not transfer any interest it holds in the Partnership to a Non-Resident;

(j) it will at all times comply with the CMHC Guide; and

(k) it will at all times comply with, and perform its obligations under, the provisions of this Agreement and each other Transaction Document to which it is a party in any capacity.

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(2) The Liquidation GP represents and warrants to, and covenants with, each other Partner, and, while the Covered Bonds are outstanding, the Bond Trustee, that:

(a) it is a corporation duly incorporated under the laws of Canada and is validly subsisting under such laws and has made all filings under all applicable corporate, securities and taxation laws to which the Liquidation GP is subject, for which the failure to file could have a material adverse affect on the Program or the Partnership;

(b) it has and will continue to have all necessary capacity and corporate authority to act as the liquidation general partner of the Partnership and to enter into and perform its obligations under this Agreement and each of the other Transaction Documents to which it is a party, and such obligations do not and will not conflict with nor do they or will they result in a breach of any of its constating documents or by-laws or any material agreement by which it is bound or any applicable law the breach of which would have a material adverse effect on the Program or the Partnership;

(c) except pursuant to the obligations of the Partnership under the Covered Bond Guarantee or any of the Transaction Documents, it will not, nor will it cause any of its Affiliates or Associates, to borrow money from the Partnership, or cause the Partnership to lend money to any of its Affiliates or Associates;

(d) it holds and shall maintain the registrations necessary for the conduct of its business and has and shall continue to have all licences and permits necessary to carry on its business as the liquidation general partner of the Partnership in all jurisdictions where the activities of the Partnership require such licensing or other form of registration of the liquidation general partner;

(e) it is not a Non-Resident, and will retain such status during the term of the Partnership;

(f) it will not transfer any interest it holds in the Partnership to a Non-Resident;

(g) it will at all times comply with the CMHC Guide;

(h) it will at all times comply with, and perform its obligations under, the provisions of this Agreement and each other Transaction Document to which it is a party in any capacity; and

(i) it shall ensure that, if at any time it is appointed as the Managing GP, the Partnership will be Independently Controlled and Governed, and it shall take all such actions as may be necessary to ensure that the Partnership will continue to be Independently Controlled and Governed from and after such time, unless and until such time as the Liquidation GP appoints a successor Managing GP as contemplated in Section 11.7(2).

(3) The representations, warranties and covenants contained in this Section 2.8 will survive the execution and delivery of this Agreement, and the Managing GP and the Liquidation GP will be obliged to ensure the continuing accuracy of each of their respective representations and warranties contained in this Section 2.8 throughout the continuation of the Partnership.

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Section 2.9 Additional Representations and Warranties of the Liquidation GP and the Managing GP.

In addition to the representations and warranties of the Managing GP and the Liquidation GP in Section 2.8, each of the Liquidation GP and the Managing GP further represents and warrants to each other Partner and the Bond Trustee that the representations and warranties set out in Schedule 1 are true as at the date hereof in respect of itself and will be obliged to ensure the continuing accuracy of the representations and warranties in paragraphs (f) and (g) of Schedule 1 throughout the continuation of the Partnership.

Section 2.10  Representations, Warranties and Covenants of the Limited Partner.

(1) The Limited Partner represents and warrants to, and covenants with, each other Partner that:

(a) it is a validly created Canadian chartered bank under the laws of Canada and is validly subsisting under such laws;

(b) it has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement;

(c) it has the capacity and corporate authority to enter into and perform its obligations under this Agreement, and such obligations do not conflict with nor do they result in a breach of any of its constating documents or by-laws or any material agreement by which it is bound or any applicable law the breach of which would have a material adverse effect on the Program or the Partnership;

(d) no authorization, consent or approval of, or filing with or notice to, any Person is required in connection with the execution, delivery or performance of this Agreement by the Limited Partner, other than those which have been obtained;

(e) it is not a Non-Resident and will retain such status during the term of the Partnership;

(f) it will not transfer any interest it holds in the Partnership to a Non-Resident;

(g) it will at all times comply with the CMHC Guide; and

(h) it will at all times comply with, and perform its obligations under, the provisions of this Agreement and each other Transaction Document to which it is a party in any capacity.

(2) The representations, warranties and covenants contained in this Section 2.10 will survive the execution and delivery of this Agreement and the Limited Partner will be obliged to ensure the continuing accuracy of such representations, warranties and covenants throughout the continuation of the Partnership.

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Section 2.11  Limitation on Authority of Limited Partners.

The Limited Partner in its capacity as limited partner will not be entitled to:

(a) take part in the administration, control, management or operation of the business of the Partnership or exercise any power in connection therewith;

(b) transact any business on behalf of the Partnership or make any commitment on behalf of or otherwise obligate or bind the Partnership;

(c) other than by voting on a resolution of the Partners (where the Limited Partner is entitled to so vote), execute any document that binds or purports to bind the Partnership or any other Partner as such;

(d) hold itself out as having the power or authority to bind the Partnership or any other Partner as such;

(e) have any authority to act for or undertake any obligation or responsibility on behalf of the Partnership or any other Partner as such;

(f) bring any action for partition or sale or otherwise in connection with the Partnership, or any interest in any property of the Partnership, whether real or personal, tangible or intangible, or file or register or permit to be filed, registered or remain undischarged any encumbrance in respect of any property of the Partnership;

(g) compel or seek a partition, judicial or otherwise, of any of the assets of the Partnership distributed or to be distributed to the Partners in kind except in accordance with this Agreement; or

(h) take any action that will jeopardize or eliminate the status of the Partnership as a limited partnership.

Section 2.12  Power of Attorney.

(1) The Limited Partner, by its execution of this Agreement, irrevocably nominates, constitutes and appoints the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP), with full power of substitution, as its agent and true and lawful attorney to act on its behalf with full power and authority in its name, place and stead to execute, deliver, swear to, make, file and record when, as and where required in the opinion of the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP):

(a) the Declaration, the Partnership Record, any amendment to this Agreement made in accordance with the terms of this Agreement and any other document or

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instrument required to form, qualify, continue and keep in good standing the Partnership as a limited partnership in all jurisdictions in which the Partnership may conduct its business or own property in order to maintain the limited liability of the Limited Partner and to comply with the applicable laws of such jurisdiction;

(b) each of the Transaction Documents to which the Partnership is a party and any amendment thereto, to the extent such amendment is made and approved in accordance with the terms of this Agreement and any other document on behalf of and in the name of the Partnership as may be necessary to give effect to the conduct of the business of the Partnership;

(c) any document or instrument, including without limitation any amendments to the Declaration or the Partnership Record, necessary to reflect any amendment to this Agreement made in accordance with the terms of this Agreement;

(d) any document or instrument required in connection with the winding up, dissolution or termination of the Partnership in accordance with the terms of this Agreement;

(e) all elections, determinations, designations and returns or similar documents or instruments under the Income Tax Act, the Excise Tax Act (Canada) or any other taxation or other legislation or laws of like import of Canada or of any provinces or jurisdictions in respect of the affairs of the Partnership or of a Partner’s interest in the Partnership;

(f) any document or instrument required to be filed with the appropriate governmental body, agency or authority in any jurisdiction in connection with the business, property, assets and undertaking of the Partnership;

(g) any document or instrument to give effect to any Transfer of an interest in the Partnership or relating to the admission of additional Limited Partners made in accordance with and subject to the terms and restrictions of this Agreement;

(h) any other instrument or document on behalf of and in the name of the Partnership, including, without limitation, all debt instruments as may be deemed necessary or desirable by the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP) to carry out fully this Agreement in accordance with its terms; and

(i) all other instruments and documents on the Limited Partner’s behalf and in the Limited Partner’s name or in the name of the Partnership as may be deemed necessary or desirable by the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP) to carry out fully this Agreement in accordance with its terms,

and hereby ratifies such execution, delivery, swearing, making, recording and filing.

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(2) The Limited Partner by execution of this Agreement confirms that the power of attorney granted herein is irrevocable during the continuation of the Partnership and is a power coupled with an interest and will survive its insolvency, dissolution, winding up or bankruptcy and extend to bind its successors and assigns, and may, subject to its terms, be exercised by the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP) on behalf of the Limited Partner in executing any instrument. The Limited Partner agrees to be bound by any representations and actions made or taken in good faith by the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP) pursuant to such power of attorney and hereby waives any and all defences that may be available to contest, negate or disaffirm the action of the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP) taken in good faith under this power of attorney. This power of attorney will continue in respect of the Managing GP (and upon the occurrence of a Managing GP Default Event, the Liquidation GP) so long as it is the managing general partner of the Partnership, and will terminate thereafter, but will continue in respect of a New Managing GP as if such New Managing GP were the original attorney.

Section 2.13 Unlimited Liability of the Managing GP and the Liquidation GP; Limitation of Liability.

(1) The Managing GP and the Liquidation GP will each jointly and severally have unlimited liability for the debts, liabilities and obligations of the Partnership.

(2) Subject to Section 2.14, neither the Managing GP nor the Liquidation GP will be liable to the Limited Partner for any act, omission or error in judgment taken or made hereunder by the Managing GP or the Liquidation GP, as the case may be, honestly and in good faith in the conduct of the business of the Partnership. The Managing GP and the Liquidation GP may rely and act upon and will be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other document or instrument believed by it to be genuine and to have been signed or presented by the proper party. The Managing GP and the Liquidation GP may rely and act upon any statement, report or opinion prepared by, or any advice received from, the legal counsel, accountants, investment bankers, experts or other professional advisors of it or the Partnership and, provided it exercised reasonable care in selecting such advisors, neither the Managing GP nor the Liquidation GP will be responsible or held liable for any loss or damage resulting from so relying or acting if it reasonably believed the advice to be within the area of professional competence of the person from whom it was received and it acted honestly and in good faith in relying thereon.

Section 2.14 Limited Liability of Limited Partner.

Subject to the provisions of the LP Act and of such similar legislation in Canada and elsewhere as is applicable to the Partnership, the liability of the Limited Partner for the debts, liabilities and obligations of the Partnership will be limited to its Capital Contribution Balance and solely to the extent required by applicable law, the amount of any Capital Distributions received by it.

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Section 2.15  Indemnity of Limited Partner.

(1) The Managing GP and the Liquidation GP (solely to the extent of its authority under the terms of this Agreement) will operate the Partnership to ensure to the greatest extent possible the limited liability of the Limited Partner and will (to the extent that the Partnership is Independently Controlled and Governed) jointly and severally indemnify and hold harmless the Limited Partner and its shareholders, directors, officers, employees and agents from any costs, damages, liabilities or expenses suffered or incurred by the Limited Partner or its shareholders, directors, officers, employees or agents (except to the extent such persons are directors, officers, employees or agents of the Managing GP), as a result of negligence on the part of the Managing GP or the Liquidation GP, as the case may be, in performing its obligations hereunder resulting in the liability of the Limited Partner not being limited in the manner provided in Section 2.14, unless such liability arises out of any act or omission of the Limited Partner. Payments in respect of this Section 2.15 shall be made solely in accordance with Article 6 (Priorities of Payments).

(2) The Limited Partner will hold the benefit of this indemnity in trust and as agent for its shareholders, directors, officers, employees and agents.

Section 2.16  Indemnity of Managing GP and Liquidation GP.

(1) To the fullest extent permitted by law, but subject to the limitations expressly provided in this Agreement, the Partnership will indemnify and hold harmless the Managing GP and the Liquidation GP, and their respective shareholders, directors, officers, employees and agents, from any costs, damages, liabilities resulting from or arising out of any act or omission or error of judgment of the Managing GP or the Liquidation GP, or any of their respective, shareholders, directors, officers, employees and agents, on behalf of the Partnership or in furtherance of the business of the Partnership unless, in the case of any such person, such costs, damages, liabilities or expenses result from or arise out of any act or omission or error of judgment as a result of which such person is adjudged to have been guilty of negligence or wilful misconduct or to have failed to act honestly and in good faith or to have breached a fiduciary duty to the Partnership or the Limited Partner. This indemnity is in addition to and not a limitation of any other obligation of the Partnership to the Managing GP or the Liquidation GP including the obligation of the Partnership to reimburse or repay the Managing GP and the Liquidation GP on account of costs, outlays, disbursements and expenditures incurred by or on their behalf but this indemnity will not be in derogation of the provisions of Section 2.14. Payments in respect of this Section 2.16 shall be made solely in accordance with Article 6 (Priorities of Payments).

(2) Subject to complying with Article 6 (Priorities of Payments), the Partnership may purchase and maintain (or reimburse the Managing GP or Liquidation GP) insurance on behalf of such Persons in such amount as the Managing GP (or following a Managing GP Default Event, the Liquidation GP) may determine, and, while there are Covered Bonds outstanding, with the consent of the Bond Trustee, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the Partnership’s activities, whether or not the Partnership would have the power to indemnify those Persons against those liabilities under the provisions of this Agreement.

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(3) The Managing GP and the Liquidation GP will hold the benefit of this indemnity in trust and as agent for their respective shareholders, directors, officers, employees and agents.

Section 2.17  Compliance with Laws.

The Limited Partner will, on the request of the Managing GP from time to time, execute, without undue delay, any documents or instruments considered by the Managing GP to be necessary to comply with any applicable law or regulation of the Province of Ontario or any other jurisdiction in which the Partnership carries on business, for the continuation, operation and good standing of the Partnership.

Section 2.18  Other Activities of Managing GP and Liquidation GP.

Each of the Managing GP and the Liquidation GP shall devote their efforts exclusively to or for the benefit of the Partnership and the business of the Partnership and shall not engage in any business or activity, except the business of the Partnership or any activity ancillary or related thereto or in furtherance thereof.

Section 2.19  Other Activities of the Limited Partners and the Shareholders, Directors and Officers of the Partners.

(1) For greater certainty, the Limited Partner may engage in any business or any other activity and may engage in, or hold an interest in, any other business, venture, investment or activity whether or not similar to or competitive with the business of the Partnership.

(2) Without limiting the foregoing, neither the Limited Partner, nor any shareholder, director, officer or Associate or Affiliate of any Partner shall by reason of its fiduciary position be in any way precluded from:

(a) entering into or being interested in any contract or financial or other transaction or arrangement with the Partnership or any of its Associates or Affiliates (including without limitation any contract, transaction or arrangement of a banking or insurance nature or any contract, transaction or arrangement in relation to the making or assignment of loans or the provision of financial facilities or financial advice to, or the purchase, placing or underwriting of or the subscribing or procuring subscriptions for or otherwise acquiring, holding or dealing with, or acting in any capacity in relation to the Covered Bonds or any other covered bonds, bonds, stocks, shares, debenture stock, debentures or other securities of any of the Partners or any of their respective Associates or Affiliates);

(b) being a partner of any other partnership constituting or securing any other securities issued by or guaranteed by, or relating to that partnership, or any other office of profit under that partnership; or

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(c) in providing services to any other partnership or person or entity or carrying on any business (including, without limitation, any business in competition with the Partnership) and including, without limitation, the making or assigning of loans, the provision of financial facilities or financial advice to, or the issue, purchase, placing or underwriting of or the subscribing or procuring subscriptions for or otherwise acquiring, holding or dealing with, or acting in any capacity in relation to any other covered bonds, bonds, stocks, shares, debenture stock, debentures or other securities of any type whatsoever.

ARTICLE 3

CAPITAL ACCOUNTS

Section 3.1 Capital Contributions.

The Partners may from time to time make Capital Contributions to the Partnership.

Section 3.2 Initial Capital Contributions.

Contemporaneously with the execution of this Agreement, the Partners made the following Cash Capital Contributions to the Partnership, which amounts shall be reflected in such Partner’s Capital Account Ledger:

Partner	Cash Capital Contribution Amount
Managing GP	$0.05 (in respect of a 0.0495% general partnership interest in the Partnership)
Liquidation GP	$0.01 (in respect of a 0.0005% general partnership interest in the Partnership)
Limited Partner	$99.95 (in respect of a 99.95% limited partnership interest in the Partnership)

Section 3.3 Capital Account Ledger.

The Managing GP (or the Cash Manager on its behalf), shall maintain the Capital Account Ledger or sub-ledgers in respect of each Partner. Any increase or decrease in the Capital Contribution Balance of a Partner shall be credited or debited to such Partner’s Capital Account Ledger on each Calculation Date. The Capital Contribution Balance of each Partner as recorded in the Capital Account Ledger from time to time, shall represent such Partner’s interest in the capital of the Partnership, provided that at no time shall the Capital Contribution Balance of the Liquidation GP be greater than, or the Liquidation GP be entitled to a return of capital from the Partnership of greater than, $0.01 unless agreed to by each of the other Partners.

Section 3.4 Additional Cash Capital Contributions.

(1) Prior to making any additional Cash Capital Contribution to the Partnership, the Limited Partner shall be deemed to have represented and warranted to the Managing GP, the

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Liquidation GP and, while the Covered Bonds are outstanding, the Bond Trustee on behalf of the Covered Bondholders, that no Insolvency Event has occurred or will result in respect of the Limited Partner from such Cash Capital Contribution.

(2) The Partnership will from time to time make drawings on the Intercompany Loan. For greater certainty, any amount advanced under the Intercompany Loan Agreement shall not constitute a Capital Contribution on the part of the Limited Partner.

Section 3.5 Capital Contributions in Kind.

(1) From time to time the Limited Partner may sell Loans and their Related Security to the Partnership pursuant to the terms of the Mortgage Sale Agreement for cash consideration or an interest in the Partnership pursuant to the terms of the Mortgage Sale Agreement.

(2) Each sale of Loans and their Related Security by the Limited Partner to the Partnership shall, to the extent not paid for fully in cash, constitute a Capital Contribution in Kind equal to (a) the aggregate of the Fair Market Value of those Loans and their Related Security sold by it as at the relevant Purchase Date, minus (b) the cash consideration, if any, paid by or on behalf of the Partnership for the Loans and their Related Security on the relevant Purchase Date.

(3) Any Capital Contribution in Kind made by a Partner to fund the Pre-Maturity Liquidity Ledger following a breach of the Pre-Maturity Test in respect of a Series of Hard Bullet Covered Bonds shall only consist of Pre-Maturity Liquidity Eligible Assets.

Section 3.6 Capital Distributions.

(1) The Managing GP may make Capital Distributions in cash to the Partners, from time to time, as it may determine in its sole discretion, in accordance with and provided that such Capital Distributions are permitted under, Article 6 (Priorities of Payments) and if applicable, under the terms of the Security Agreement.

(2) Without limiting the foregoing, Capital Distributions made prior to a Covered Bond Guarantee Activation Event may only be made if, at the time of such Capital Distribution, the Partnership meets, and following such Capital Distribution will meet, the Asset Coverage Test.

Section 3.7 Capital Contribution Balance.

(1) The Managing GP (or the Cash Manager on its behalf) shall determine the Capital Contribution Balance of each of the Partners (which on the date hereof, in respect of each Partner, shall be equal to the initial Cash Capital Contribution set out next to such Partner’s name in Section 3.2 above) (i) on or before the Canadian Business Day that is at least two days prior to each Guarantor Payment Date (such amounts to be determined as of the immediately preceding Calculation Date); (ii) on the date that the Partnership is wound up, and (iii) on such other date as the Limited Partner may reasonably request.

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(2) Following the date hereof, the Capital Contribution Balance of each Partner on any relevant date shall be equal to the sum of the last most recently determined Capital Contribution Balance of the Partner, plus (i) the amount of any Capital Contribution made by the Partner in the period from the last date on which the Capital Contribution Balance of the Partner was calculated to the date of the current calculation (the “Calculation Period”); minus (ii) the amount of any Capital Distribution to be paid to the Partner on the next following Guarantor Payment Date (provided such amount is payable in accordance with Article 6 (Priorities of Payments)).

Section 3.8 No Interest Payable on Accounts.

No Partner has the right to receive interest on any credit balance in its Capital Contribution Balance, and no Partner is liable to pay interest to the Partnership on any deficit in its Capital Contribution Balance.

Section 3.9 Deficit in Accounts.

The interest of a Partner in the Partnership will not terminate by reason of a negative or zero Capital Contribution Balance of the relevant Partner.

ARTICLE 4

PROFITS, LOSSES AND DISTRIBUTIONS

Section 4.1 Allocation of Profits and Losses of the Partnership.

(1) Subject to Section (2) and (3) below, the Net Income and Net Loss for each Fiscal Year, including for income tax purposes, shall be allocated pro rata to the Partners in respect of their respective Capital Contribution Balances.

(2) Prior to an Issuer Event of Default or other circumstance in which the Liquidation GP shall assume the duties of the Managing GP hereunder, the Liquidation GP’s share of the Net Income shall be limited to the lesser of its pro rata share and $10,000 annually, payable in accordance with Article 6 (Priorities of Payments) and any amount in excess thereof shall be allocated to the Limited Partner and following any such event the Liquidation GP (for so long as it assumes the duties and responsibilities of the Managing GP) shall be entitled to its pro rata share of the Net Income.

(3) The Managing GP shall make distributions of income to the Partners in a manner consistent with this Section 4.1 and in accordance with Article 6 (Priorities of Payments) and applicable law, provided that at the time of any such distribution, the Partnership is, and following such distribution, will remain in compliance with the Asset Coverage Test and/or Amortization Test, as applicable.

Section 4.2 Restriction on Withdrawals and Receipts.

(1) No Partner (whether in its capacity as such or otherwise) will have any right to withdraw any amount or receive any distribution from the Partnership except in accordance with Article 6 (Priorities of Payments) and applicable law.

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(2) Each of the Partners agrees that, notwithstanding any other provision contained herein or in any other Transaction Document:

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

(b) without prejudice to the foregoing, whether in the liquidation of the Partnership or any other party to the Transaction Documents or otherwise, if any payment or distribution (or the proceeds of any enforcement of any security) is received by a Partner in respect of any amount payable by the Partnership (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to that Partner under the relevant Transaction Document at a time when, by virtue of the provisions of Article 6 (Priorities of Payments), no payment or distribution should have been made, the amount so received shall be held by such Partner in trust for the payor of such amount and shall be paid over to such payor forthwith following receipt thereof (whereupon the relevant payment or distribution shall be deemed not to have been made or received); and

(c) it shall not claim, rank, prove or vote as creditor of the Partnership or its estate in competition with any prior ranking creditors in the relevant Priorities of Payments in Article 6 (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 in Article 6 (Priorities of Payments) have been irrevocably paid in full.

(3) Without limiting this Section 4.2, each Limited Partner for so long as such person is a Limited Partner, hereby waives any right it may have to receive or hold any property of the Partnership as collateral security or to receive from the Managing GP, the Liquidation GP, in such capacity, or the Partnership, any payment, conveyance, or release from liability, if at such time the assets of the Partnership are not sufficient to discharge partnership liabilities of the Partnership to persons who are not general or limited partners of the Partnership, in each case, solely to the extent required by Section 12 of the LP Act.

Section 4.3 Set-Off.

Subject to Section 4.2, the Partnership may set-off any of its liabilities or obligations to any Partner against any liabilities or obligations of such Partner to the Partnership under this Agreement or any other agreement, subject to the terms of any relevant agreements between the Partnership and such Partner.

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Section 4.4 Compliance with Agreements.

Notwithstanding anything in this Agreement, no Partner will have the right to enforce any distribution that is contrary to any agreements binding on the Partnership or any applicable law.

ARTICLE 5

ASSET COVERAGE TEST, AMORTIZATION TEST, PRE-MATURITY

TEST

AND VALUATION CALCULATION

Section 5.1 Asset Coverage Test.

(1) For so long as the Covered Bonds remain outstanding, the Partners (other than the Liquidation GP) shall use all reasonable efforts to ensure that, on each Calculation Date, the Partnership is in compliance with the Asset Coverage Test as set out in Schedule 2.

(2) If it is determined that the Partnership does not meet the Asset Coverage Test as of any Calculation Date, the Managing GP (or the Cash Manager on its behalf) shall immediately (and in any event no later than the Canadian Business Day that is at least two days prior to the next Guarantor Payment Date) notify in writing the Partnership, CMHC, the Partners and the Bond Trustee thereof.

(3) If the Asset Coverage Test is not met as of the next Calculation Date following delivery of a notice pursuant to Section 5.1(3), the Managing GP (or the Cash Manager on its behalf) shall serve an Asset Coverage Test Breach Notice on the Partnership and deliver a copy of such Asset Coverage Test Breach Notice to each of the Partners and the Bond Trustee on the Canadian Business Day that is at least two days prior to the Guarantor Payment Date after such Calculation Date.

(4) If the Asset Coverage Test is met as of the next Calculation Date following service of an Asset Coverage Test Breach Notice, the Managing GP (or the Cash Manager on its behalf) shall revoke such Asset Coverage Test Breach Notice by serving notice on the Partnership that the Asset Coverage Test has been met and delivering a copy of such notice to each of the Partners and the Bond Trustee on the Canadian Business Day that is at least two days prior to the Guarantor Payment Date after such Calculation Date.

Section 5.2 Asset Coverage Test Breach Notice.

If at any time, the Managing GP or the Limited Partner receives an Asset Coverage Test Breach Notice (but prior to the occurrence of an Issuer Event of Default), the Managing GP shall use all reasonable efforts to ensure that the Partnership satisfies the Asset Coverage Test as of the next following Calculation Date and the Limited Partner shall use all reasonable efforts to, as the Limited Partner may determine in its sole discretion, (i) make a Cash Capital Contribution; (ii) make a Capital Contribution in Kind to the Partnership; (iii) sell New Loans and their Related Security to the Partnership; or (iv) make advances under the Intercompany Loan, in any such case, in an amount or amounts sufficient to ensure the Partnership is or will be, prior to the next Calculation Date following delivery of such Asset Coverage Test Breach Notice, in compliance with the Asset Coverage Test.

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Section 5.3 Amortization Test.

(1) Following the occurrence and during the continuance of an Issuer Event of Default, for as long as there are Covered Bonds outstanding, the Partnership must ensure that, on each Calculation Date following the occurrence and during the continuance of such Issuer Event of Default, the Partnership is in compliance with the Amortization Test as set out in Schedule 3.

(2) If as of any Calculation Date following the occurrence and during the continuance of an Issuer Event of Default, the Partnership is not in compliance with the Amortization Test, the Managing GP (or the Cash Manager on its behalf) shall immediately (and in any event no later than the Canadian Business Day that is at least two days prior to the Guarantor Payment Date after such Calculation Date) notify in writing CMHC, the Partners and the Bond Trustee thereof.

Section 5.4 Pre-Maturity Test.

(1) For so long as any Hard Bullet Covered Bonds remain outstanding, the Partnership and the Partners (other than the Liquidation GP) shall use all commercially reasonable efforts to ensure that on each Pre-Maturity Test Date the Partnership is in compliance with the Pre-Maturity Test as set out in Schedule 4.

(2) If it is determined that the Partnership does not meet the Pre-Maturity Test as of any Pre-Maturity Test Date, the Managing GP (or the Cash Manager on its behalf) shall immediately notify in writing the Partnership, the Partners and the Bond Trustee.

(3) If the Pre-Maturity Test is breached, and unless the Pre-Maturity Liquidity Ledger is otherwise funded from other sources pursuant to Section 7.2(1)(a) through (c), the Partnership shall sell Selected Loans if required pursuant to Section 7.2.

Section 5.5 Valuation Calculation.

For so long as the Covered Bonds remain outstanding, the Partnership must ensure that, as of each Calculation Date, the Partnership performs the Valuation Calculation as set out in Schedule 10.

ARTICLE 6

PRIORITIES OF PAYMENTS

Section 6.1 Pre-Acceleration Priorities of Payment.

(1) Subject to Section 6.1(2), at any time during which no Asset Coverage Test Breach Notice is outstanding and no Covered Bond Guarantee Activation Event has occurred:

(a) the Managing GP (or the Cash Manager on its behalf) shall on or before the Canadian Business Day that is at least two days prior to any Guarantor Payment Date calculate the following amounts as of the immediately preceding Calculation Date:

(i) the amount of Available Revenue Receipts available for distribution on the immediately following Guarantor Payment Date;

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(ii) the Reserve Fund Required Amount if applicable in accordance with Section 6.1(2);

(iii) where the Pre-Maturity Test has been breached in respect of a Series of Hard Bullet Covered Bonds, on each Calculation Date falling in the 12 months prior to the Final Maturity Date of the relevant Series of Hard Bullet Covered Bonds, whether or not the amount standing to the credit of the Pre-Maturity Liquidity Ledger including the principal amount of any Substitution Assets standing to the credit of the Pre-Maturity Liquidity Ledger at such date is less than the Pre-Maturity Liquidity Required Amount at such date; and

(iv) the amount of Available Principal Receipts available for distribution on the immediately following Guarantor Payment Date;

(b) on each Guarantor Payment Date, the Managing GP or the Cash Manager on its behalf will transfer Available Revenue Receipts from the Revenue Ledger to the Payment Ledger and Available Principal Receipts from the Principal Ledger to the Payment Ledger, and use (or direct the Cash Manager to use) Available Revenue Receipts and Available Principal Receipts held by the Cash Manager for and on behalf of the Partnership and, as necessary, transfer Available Revenue Receipts and Available Principal Receipts from the GDA Account to the Transaction Account (to the extent maintained), or apply such Available Revenue Receipts and Available Principal Receipts directly from the GDA Account, in an amount equal to the lower of (a) the amount required to make the payments set out in Schedule 5 (the “Pre-Acceleration Revenue Priority of Payments”) in the case of Available Revenue Receipts and Schedule 6 (the “Pre-Acceleration Principal Priority of Payments”) in the case of Available Principal Receipts, and (b) the aggregate amount of Available Revenue Receipts and Available Principal Receipts standing to the credit of the GDA Account; and

(c) on each Guarantor Payment Date (except for the amounts due to third parties by the Partnership under Section (a) of Schedule 5 and any Third Party Amounts, which in each case shall be paid when due), the Managing GP (or the Cash Manager on its behalf) will apply:

(i) Available Revenue Receipts to make the payments and provisions set forth in Schedule 5 in the order of priority set forth in Schedule 5 (in each case only if and to the extent that payments or provisions of a higher priority have been made in full); and

(ii) Available Principal Receipts to make the payments, provisions or credits set forth in Schedule 6 in the order of priority set forth in Schedule 6 (in each case only if and to the extent that payments or provisions of a higher priority have been made in full).

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(2) If, at any time prior to the occurrence of an Issuer Event of Default, one or more Rating Agencies downgrades the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating of the Issuer below the Reserve Fund Required Amount Ratings, the Partnership (or the Cash Manager on its behalf):

(a) shall establish the Reserve Fund on the GDA Account in the books of account of the Partnership maintained pursuant to Section 9.3; and

(b) provided that the Partnership shall have paid all of its obligations in respect of items ranking higher than the Reserve Ledger in the Pre-Acceleration Revenue Priority of Payments and the Pre-Acceleration Principal Priority of Payments on each subsequent Guarantor Payment Date, shall credit or cause to be credited to the Reserve Fund funds up to an amount equal to the Reserve Fund Required Amount with Available Revenue Receipts and Available Principal Receipts, respectively.

(3) At any time that no Asset Coverage Test Breach Notice is outstanding and a Covered Bond Guarantee Activation Event has not occurred, any Cash Capital Contributions made by the Limited Partner from time to time (excluding its initial Cash Capital Contribution) shall be distributed, if permitted in accordance with Section 3.6, to the Limited Partner as a Capital Distribution on each Guarantor Payment Date unless otherwise agreed to by the Limited Partner prior to such Guarantor Payment Date.

Section 6.2 Priority of Payments at any time an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred.

At any time an Asset Coverage Test Breach Notice is outstanding but no Covered Bond Guarantee Activation Event has occurred, the Partnership shall continue to comply with Section 6.1, except that, while any Covered Bonds remain outstanding, no moneys will be applied under paragraphs (b), (e), (j) (to the extent only that such amounts are payable to a Partner or the Intercompany Loan Provider), (k) or (l) of Schedule 5 or paragraphs (b), (c), (e) or (g) of Schedule 6 and for greater certainty, Capital Distributions shall not be distributed to the Limited Partner and payments on the Intercompany Loan will not be made to the Intercompany Loan Provider.

Section 6.3 Termination Payments, Indemnities and Tax Credits received in respect of the Swap Agreements, premiums received in respect of replacement Swap Agreements.

(1) Notwithstanding anything else in this Article 6:

(a) if the Partnership receives any termination payment from a Swap Provider in respect of a Swap Agreement, such termination payment will first be used, to the extent necessary (prior to service of a Guarantor Acceleration Notice) to pay a replacement Swap Provider to enter into a replacement Swap Agreement with the Partnership, unless a replacement Swap Agreement has already been entered into on behalf of the Partnership. If the Partnership receives any premium from a

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replacement Swap Provider in respect of a replacement Swap Agreement, such premium will first be used to make any termination payment due and payable by the Partnership with respect to the previous Swap Agreement, unless such termination payment has already been made on behalf of the Partnership;

(b) if the Swap Provider breaches certain tax representations in the relevant Swap Agreement and a Partner of the Partnership suffers a loss as a result thereof, the Partnership may receive payment of indemnity amounts from the Swap Provider on the affected Partner’s behalf, provided that the Partnership shall have first been fully reimbursed from any such indemnity amounts if it has also suffered a loss as a result of such breach. The Partnership shall account to the relevant Partner for such amounts and shall pay such amounts upon receipt to the relevant Partner. For the avoidance of doubt, indemnity amounts received by the Partnership on behalf of an affected Partner in accordance with this Section 6.3(1)(b) shall not be funds of the Partnership and will not be construed to be amounts received in respect of Available Revenue Receipts or Available Principal Receipts; and

(c) any amounts received in the circumstances described in this Section 6.3 other than pursuant to Section 6.3(1)(b) which are not applied to pay a replacement Swap Provider to enter into a replacement Swap Agreement will be credited to the Revenue Ledger and applied as Available Revenue Receipts in accordance with this Article 6 on the next succeeding Guarantor Payment Date.

Section 6.4 Guarantee Priority of Payments.

(1) If a Notice to Pay is served on the Partnership, the Managing GP will on the relevant Final Maturity Date for any Series of Hard Bullet Covered Bonds, apply the funds standing to the credit of the Pre-Maturity Liquidity Ledger in respect of such Series of Hard Bullet Covered Bonds (and, if applicable, transferred to the Transaction Account on the relevant Guarantor Payment Date) to repay such Series of Hard Bullet Covered Bonds.

(2) Subject to Section 6.4(1), at any time after the service of a Notice to Pay on the Partnership, but prior to service of a Guarantor Acceleration Notice:

(a) on each Guarantor Payment Date, the Managing GP (or the Cash Manager on its behalf) will transfer Available Revenue Receipts and Available Principal Receipts from the Revenue Ledger, the Reserve Ledger, the Principal Ledger or the Capital Account Ledger, as the case may be, to the Payment Ledger, in an amount equal to the lower of (a) the amount required to make the payments set out in Schedule 7 (the “Guarantee Priority of Payments”); and (b) the amount of all Available Revenue Receipts and Available Principal Receipts standing to the credit of such Ledgers;

(b) the Managing GP (or the Cash Manager on its behalf) will create and maintain ledgers for each Series of Covered Bonds and record amounts allocated to such Series of Covered Bonds in accordance with paragraph (g) of Schedule 7, and such amounts, once allocated, will only be available to pay amounts due under the obligations of the Partnership in respect of the Covered Bond Guarantee and amounts due in respect of the relevant Series of Covered Bonds under the Covered Bond Swap Agreement on the scheduled repayment dates thereof; and

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(c) on each Guarantor Payment Date after the service of a Notice to Pay on the Partnership (but prior to the occurrence of a Guarantor Event of Default), the Partnership (or the Cash Manager on its behalf) will apply Available Revenue Receipts and Available Principal Receipts to make the payments, provisions or credits set forth in the Guarantee Priority of Payments in the order of priority set forth therein (in each case only if and to the extent that payments or provisions of a higher priority have been made in full).

(3) At any time after the service of a Guarantor Acceleration Notice but prior to the Covered Bonds having been repaid, the terms of the Security Agreement provide that all moneys received or recovered by the Bond Trustee (or a receiver appointed on its behalf) (excluding all amounts due or to become due in respect of any Third Party Amounts) will be applied following the enforcement of the Security in accordance with the Post-Enforcement Priority of Payments set out in the Security Agreement.

Section 6.5 Priority of Payments when Covered Bonds Repaid.

From the date when either (a) the Covered Bonds have been irrevocably and fully repaid and the Security constituted by the Security Agreement has been released by the Bond Trustee; or (b) the Bond Trustee is satisfied that the Partnership has cash standing to the credit of the GDA Account equal to the Required Redemption Amount in respect of each Series of Covered Bonds outstanding, all remaining amounts standing to the credit of the Guarantor Accounts (excluding all amounts required to repay higher ranking amounts in the relevant Priority of Payment pursuant to this Article 6) shall be allocated and paid by the Managing GP (or the Cash Manager on its behalf) in accordance with Schedule 8.

ARTICLE 7

SALE OF SELECTED LOANS

Section 7.1 Sale of Selected Loans.

(1) Sales of Selected Loans shall at all times be subject to the rights of pre-emption enjoyed by the Seller pursuant to the terms of the Mortgage Sale Agreement.

(2) At any time that no Asset Coverage Test Breach Notice is outstanding, the Pre-Maturity Test has not been breached and no Covered Bond Guarantee Activation Event has occurred, the Partnership may sell Selected Loans provided it is in compliance with the Asset Coverage Test and the Pre-Maturity Test and will, following such sale, remain in compliance with the Asset Coverage Test and the Pre-Maturity Test and for greater certainty, the proceeds from such sale may be held by the Cash Manager on behalf of the Partnership prior to a downgrade by one or more of the Rating Agencies of the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating of the Cash Manager below the Cash Management Deposit Ratings and following such a downgrade deposited in the GDA Account. Any such sale shall be made in accordance with Schedule 9.

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(3) At any time an Asset Coverage Test Breach Notice is outstanding or a Notice to Pay has been served on the Partnership, but prior to the service of a Guarantor Acceleration Notice, unless the Asset Coverage Test breach is otherwise cured, the Partnership shall sell Selected Loans in accordance with Schedule 9, subject to the rights of pre-emption enjoyed by the Seller to buy the Selected Loans pursuant to the terms of the Mortgage Sale Agreement and subject to additional advances on the Intercompany Loan and any Cash Capital Contribution made by the Limited Partner, made in accordance with this Agreement.

(4) The Partnership will through a tender process appoint a portfolio manager of recognized standing on a basis intended to incentivise the portfolio manager to achieve the best price for the sale of the Selected Loans (if such terms are commercially available in the market) to advise it in relation to the sale of the Selected Loans to Purchasers (except where the Seller is buying the Selected Loans in accordance with its right of pre-emption in the Mortgage Sale Agreement). The terms of the agreement giving effect to the appointment in accordance with such tender shall be approved by the Bond Trustee.

(5) Any sale of Selected Loans will not include any representations, warranties or indemnities from the Partnership in respect of such Loans and their Related Security.

(6) The terms of any sale and purchase agreement with respect to the sale of Selected Loans (which shall give effect to the recommendations of the portfolio manager) will be subject to the prior written approval of the Bond Trustee. The Bond Trustee will not be required to release the Selected Loans from the Security unless the conditions relating to the release of the Security as set out in the Security Agreement are satisfied.

(7) The proceeds from any sale of Selected Loans shall be credited to the GDA Account to be applied in accordance with Article 6 (Priorities of Payments).

Section 7.2 Sale of Selected Loans Following a Breach of the Pre-Maturity Test.

(1) Following a breach of the Pre-Maturity Test in respect of a Series of Hard Bullet Covered Bonds, and unless the Pre-Maturity Liquidity Ledger is otherwise funded from other sources pursuant to subsections (a) through (c) below, the Partnership shall sell Selected Loans to Purchasers in accordance with Schedule 9, subject to:

(a) any right of pre-emption of the Seller pursuant to the terms of the Mortgage Sale Agreement;

(b) a Capital Contribution in Kind made by one or more of the Partners (as recorded in the Capital Account Ledger for such Partners) of Pre-Maturity Liquidity Eligible Assets in accordance with this Agreement with an aggregate principal amount up to the Pre-Maturity Liquidity Required Amount (which shall be a credit to the Pre-Maturity Liquidity Ledger); or

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(c) Cash Capital Contributions made by one or more of the Partners (as recorded in the Capital Account Ledger for each applicable Partner) or proceeds advanced under the Intercompany Loan Agreement which have not been applied to acquire further Loans and their Related Security or otherwise applied in accordance with this Agreement and/or the other Transaction Documents with an aggregate principal amount up to the Pre-Maturity Liquidity Required Amount (which shall be a credit to the Pre-Maturity Liquidity Ledger).

(2) If the Pre-Maturity Test in respect of any Series of Hard Bullet Covered Bonds is breached less than six months prior to the Final Maturity Date of that Series of Hard Bullet Covered Bonds, an Issuer Event of Default will occur if the Partnership has not taken the required action as described in Section 7.2(1) within the earlier to occur of (i) 10 Canadian Business Days from the date that the Issuer is notified of the breach of the Pre-Maturity Test and (ii) the Final Maturity Date of that Series of Hard Bullet Covered Bonds.

(3) To cure a Pre-Maturity Test breach within the period described in (2) above, the Pre-Maturity Liquidity Ledger shall be funded so that by the end of such period, there will be an amount equal to the Pre-Maturity Liquidity Required Amount standing to the credit of the Pre-Maturity Liquidity Ledger.

(4) The proceeds of sale of Selected Loans in accordance with this Section 7.2 shall be credited to the GDA Account with a corresponding credit to the Pre-Maturity Liquidity Ledger.

(5) In certain circumstances, Revenue Receipts will also be available to repay a Hard Bullet Covered Bond in accordance with Schedule 5.

(6) Failure by the Issuer to pay the full amount due in respect of a Series of Hard Bullet Covered Bonds on the Final Maturity Date thereof, subject to applicable cure periods, will constitute an Issuer Event of Default.

(7) If the Issuer and/or the Partnership fully repay the relevant Series of Hard Bullet Covered Bonds on the Final Maturity Date thereof, cash standing to the credit of the Pre-Maturity Liquidity Ledger on the GDA Account will be applied by the Partnership in accordance with the Pre-Acceleration Principal Priority of Payments, unless:

(a) the Issuer is failing the Pre-Maturity Test in respect of any other Series of Hard Bullet Covered Bonds, in which case the cash will remain on the Pre-Maturity Liquidity Ledger in order to provide liquidity for that other Series of Hard Bullet Covered Bonds; or

(b) the Issuer is not failing the Pre-Maturity Test in respect of any other Series of Hard Bullet Covered Bonds, but the Cash Manager elects to retain the cash on the Pre-Maturity Liquidity Ledger in order to provide liquidity for any future Series of Hard Bullet Covered Bonds.

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Section 7.3 Sale of Selected Loans After a Demand Loan Repayment Event has Occurred or the Issuer has Otherwise Demanded that the Demand Loan be Repaid.

If, prior to the service of an Asset Coverage Test Breach Notice or a Notice to Pay, a Demand Loan Repayment Event has occurred or the Issuer has demanded that the Demand Loan be repaid, the Partnership may either (a) sell Selected Loans in accordance with Schedule 9, subject to the rights of pre-emption enjoyed by the Seller to purchase the Selected Loans pursuant to the terms of the Mortgage Sale Agreement, or (b) make a Payment in Kind in accordance with the terms of the Intercompany Loan Agreement. Any such sale or Payment in Kind will be subject to the condition that the Asset Coverage Test will be satisfied following the receipt or deemed receipt of the proceeds of such sale or Payment in Kind and repayment, and after giving effect to such repayment.

Section 7.4 Liquidity Options following an Issuer Event of Default.

In addition to the obligations of the Partnership provided in this Article 7, if, following the service of a Notice to Pay on the Partnership, the Partnership has insufficient cash to meet its obligations to pay any Guaranteed Amounts that are due, the Partnership may:

(1) borrow money and grant a Security Interest over the Portfolio to and in favour of the lender thereof ranking pari passu with Covered Bondholders (provided the Partnership has provided at least 10 Canadian Business Days’ prior written notice of such borrowing and grant of security to DBRS, if DBRS is a Rating Agency);

(2) issue additional securities which may be secured by a Security Interest over the Portfolio ranking pari passu with Covered Bondholders; and

(3) enter into repurchase arrangements in respect of the Covered Bonds.

Section 7.5 Voluntary Overcollateralization

From time to time, the Partnership may hold Loans and Related Security, Substitution Assets and cash with a value in excess of the value required to satisfy the coverage tests prescribed by this Agreement, the other Transaction Documents and the CMHC Guide, including the Asset Coverage Test and/or the Amortization Test, as applicable. Such excess collateral is the “Voluntary Overcollateralization”. Subject to compliance by the Partnership with this Agreement, the other Transaction Documents, the Asset Coverage Test and/or the Amortization Test, as applicable, and the CMHC Guide, the Partnership may from time to time:

(a) apply cash (in an amount up to the Voluntary Overcollateralization) to the repayment of any loan advanced by the Issuer, including the Intercompany Loan;

(b) distribute cash in an amount up to the Voluntary Overcollateralization to the Partners; and

(c) agree with the Seller to substitute assets owned by the Partnership with other Loans and Related Security and/or Substitution Assets that in each case comply with the terms of the Transaction Documents, the CMHC Guide and the Covered Bond Legislative Framework.

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Any Loans and their Related Security and/or Substitution Assets withdrawn from the Portfolio in accordance with this Section 7.5 will be selected in a manner that would not reasonably be expected to adversely effect the interests of the Covered Bondholders and the consideration received by the Partnership therefor (whether in cash or in kind) will not be less than the fair market value thereof.

ARTICLE 8

MANAGEMENT OF THE PARTNERSHIP

Section 8.1 General Authority and Obligations of the Managing GP and the Liquidation GP.

(1) Subject to Section 8.3, the Managing GP (i) has unlimited liability for the debts, liabilities and obligations of the Partnership, (ii) except as expressly provided in this Agreement, is authorized and obliged to manage, control, administer and operate the business and affairs of the Partnership and to make all decisions regarding the business of the Partnership and to represent the Partnership, and (iii) has the full right, power and authority to do any act, take any proceeding, make any decision and execute and deliver any instrument, deed, agreement or document necessary for or incidental to carrying out the objects, purposes and business of the Partnership for and on behalf of the Partnership. In so doing, the Managing GP has all of the rights and powers of a general partner as provided in the LP Act and as otherwise provided by law and any action taken by the Managing GP will constitute the act of and shall serve to bind the Partnership. The power of the Managing GP to represent the Partnership in dealings with third parties is unrestricted insofar as third parties are concerned and no person dealing with the Partnership will be required to inquire into the authority of the Managing GP to take any act or proceeding, to make any decision or to execute and deliver any instrument, deed, agreement or document for or on behalf of or in the name of the Partnership.

(2) Subject to Section 8.3, the Liquidation GP (i) has unlimited liability for the debts, liabilities and obligations of the Partnership, (ii) following a Managing GP Default Event, is authorized and obliged to manage, control, administer and operate the business and affairs of the Partnership and to make decisions regarding the business of the Partnership and to represent the Partnership, and (iii) following a Managing GP Default Event, has the full right, power and authority to do any act, take any proceeding, make any decision and execute and deliver any instrument, deed, agreement or document necessary for or incidental to carrying out the objects, purposes and business of the Partnership for and on behalf of the Partnership. In so doing, the Liquidation GP has all of the rights and powers of a general partner as provided in the LP Act and as otherwise provided by law and any action taken by the Liquidation GP will, subject to the provisions of this Agreement, constitute the act of and shall serve to bind the Partnership. The power of the Liquidation GP to represent the Partnership in dealings with third parties is unrestricted insofar as third parties are concerned and no person dealing with the Partnership will be required to inquire into the authority of the Liquidation GP to take any act or proceeding, to make any decision or to execute and deliver any instrument, deed, agreement or document for or on behalf of or in the name of the Partnership.

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Section 8.2 General Powers of the Managing GP and the Liquidation GP.

(1) Subject to Section 8.3, and without limiting the generality of Section 8.1, the Managing GP has full power and authority for and on behalf of and in the name of the Partnership:

(a) to negotiate, enter into and to perform any agreement in connection with the establishment, operation, conduct or expansion of the business of the Partnership;

(b) to manage and control all of the activities of the Partnership and take all measures necessary or appropriate for the business of the Partnership or ancillary thereto, including ensuring compliance by the Partnership with the CMHC Guide;

(c) to maintain the Partnership Records and accounts of the Partnership including those required to be maintained pursuant to the terms of this Agreement, the CMHC Guide and applicable law and provide reports to the Partners;

(d) acquire any real or personal property required or desirable for the business of the Partnership and to dispose of any property of the Partnership;

(e) to borrow money from time to time without limit as to the amount, cost or terms of payment thereof, to draw, make, execute and issue promissory notes, evidences of notes, evidences of indebtedness and other negotiable or non-negotiable instruments and to secure the payment thereof by mortgage, charge, debenture, hypothecation, pledge or by the creation of any other appropriate security interest;

(f) to cause the Partnership to provide guarantees, indemnities and other forms of assurance;

(g) to cause the Partnership to provide security for any of its obligations;

(h) to cause the Partnership to acquire or maintain insurance coverage of any type;

(i) to employ, retain, engage or dismiss all Persons necessary for the conduct of the business of the Partnership;

(j) to delegate any of its duties to such other Persons as it sees fit;

(k) to retain such legal counsel, experts, advisors or consultants as the Managing GP considers appropriate, including the retention of any of same as the Managing GP may, in its discretion, determine to engage on behalf of the Limited Partner in the representation of the Limited Partner, and to rely upon the advice of such persons;

(l) to open and operate any bank account;

(m) to establish any required place of business of the Partnership;

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(n) to pay all costs and expenses of the Partnership;

(o) to commence or defend any action or proceeding by, against or in connection with the Partnership;

(p) to collect, sue for and receive all sums of money or other property or items that are believed due to the Partnership;

(q) to file returns required by any Governmental Authority;

(r) to execute and file on behalf of the Partnership any elections that are referred to in the Income Tax Act or other applicable tax legislation as are in its reasonable opinion appropriate in the circumstances;

(s) to invest funds of the Partnership not immediately required for the business of the Partnership;

(t) to enter into hedge contracts or similar arrangements to permit the Partnership to mitigate or eliminate the Partnership’s exposure to interest rate fluctuations or foreign exchange or other risks associated with the business;

(u) to make distributions; and

(v) to do anything that is provided for in this Agreement or that is in furtherance of or is incidental to or is necessary or desirable in respect of the business of the Partnership, including, without limitation, to do all such acts and things and execute all such agreements and other instruments as are necessary to give effect to the transactions described or contemplated by the Prospectus whether or not specifically mentioned in this Agreement.

(2) Subject to Section 8.3, and without limiting the generality of Section 8.1, the Liquidation GP shall, following a Managing GP Default Event, have full power and authority for and on behalf of and in the name of the Partnership to do any act that prior to the Managing GP Default Event was within the power and authority of the Managing GP.

Section 8.3 Limitation on Authority of Managing GP and Liquidation GP.

(1) Notwithstanding the general authority and powers granted to the Managing GP or the Liquidation GP hereunder, unless contemplated in or required to comply with any of the Transaction Documents to which the Partnership is a party, the Managing GP and the Liquidation GP will not, without the consent of the Limited Partner, and while there are any Covered Bonds outstanding, the Bond Trustee (and in the case of Section 8.3(1)(i) below the Liquidation GP) and will not cause the Partnership to:

(a) have an interest in any bank account, other than as set out in the Transaction Documents;

(b) have any employees or premises or subsidiaries;

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(c) acquire any material assets (including Substitution Assets) other than pursuant to or in accordance with the terms of the Mortgage Sale Agreement, this Agreement and the other Transaction Documents to which it is a party;

(d) transfer, sell, exchange, lend, part with or otherwise dispose of, or deal with, or grant any option or present or future right to acquire any of its assets or undertakings or any interest, estate, right, title or benefit therein or thereto or agree or attempt or purport to do so except pursuant to and in accordance with the terms of the Security Agreement or other Transaction Documents to which it is a party;

(e) enter into any contracts, agreements or other undertakings other than the Transaction Documents;

(f) incur any indebtedness in respect of borrowed money whatsoever or give any guarantee or indemnity in respect of any such indebtedness other than pursuant to the Transaction Documents;

(g) create or permit to subsist any mortgage, security, pledge, lien, charge, hypothec or other security interest whatsoever (unless arising by operation of law), upon the whole or any part of its assets or its undertakings, present or future other than as created or permitted in the Security Agreement or the other Transaction Documents to which it is a party;

(h) change the name or business of the Partnership or do any act in contravention of, or make any amendment to this Agreement, except in accordance with the terms of this Agreement;

(i) do any act which makes it impossible to carry on the business of the Partnership, including dissolving, terminating, winding-up or otherwise discontinuing the Partnership;

(j) compromise, compound or release any debt due to it;

(k) commence, defend, consent to a judgment, settle or compromise any litigation or other claims relating to it or any of its assets;

(l) permit a person to become a general or limited partner (except in accordance with the terms of this Agreement); or

(m) consolidate or merge with any other person or convey or transfer its properties or assets substantially as an entirety to any other person.

(2) Notwithstanding the general authority and powers granted to the Managing GP and the Liquidation GP hereunder, all material transactions and agreements involving the Partnership (other than the Transaction Documents) must be approved by the Managing GP’s board of directors and following a Managing GP Default Event the Liquidation GP’s board of directors.

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Section 8.4 Meetings of the Partners.

(1) A meeting of the Partners will be held annually or more frequently if a Partners’ meeting is called by the Managing GP in its discretion.

(2) The Managing GP shall, upon a request from the Limited Partner, call a meeting of the Partners.

(3) The Managing GP shall deliver notice of the time, place and business to be conducted at any meeting of the Partners at least 15 Canadian Business Days prior to any meeting of the Partners unless such period of notice is waived by the Limited Partner.

Section 8.5 Title to Property.

The Managing GP or the Liquidation GP (if directed by the Managing GP or following a Managing GP Default Event) may hold legal title to any or all property of the Partnership in its name for the benefit of the Partnership.

Section 8.6 Discharge of Duties of Managing GP and Liquidation GP.

Each of the Managing GP and the Liquidation GP agrees to exercise its powers and discharge its duties under this Agreement honestly, in good faith and in the best interests of the Partnership and in connection therewith shall exercise the standard and degree of care, diligence and skill that a reasonably prudent Person would exercise in comparable circumstances.

Section 8.7 Reimbursement.

The Managing GP and the Liquidation GP will, subject to the terms of Article 6 (Priorities of Payments), each be entitled to be reimbursed by the Partnership for all out-of-pocket expenses incurred in the performance of its duties hereunder.

Section 8.8 Commingling of Funds.

The funds and assets of the Partnership shall not (except in accordance with the terms of this Agreement, the other Transaction Documents and the CMHC Guide) be commingled with the funds or assets of the Managing GP or the Liquidation GP or of any other Persons. For greater certainty, subject to commingling as permitted in accordance with the terms of this Agreement, the other Transaction Documents and the CMHC Guide, all cash and Substitution Assets of the Partnership shall be held in one or more Guarantor Accounts and all Substitution Assets shall be segregated from the assets of the Account Bank.

Section 8.9 Execution of Documents

Any and all powers of the Managing GP or of the Liquidation GP may be exercised by the execution and delivery by such person or an agent, director, officer or employee of such person designated by such person for and on behalf of and in the name of the Partnership, and under seal or otherwise, of agreements, instruments, deeds or other documents in such forms as the Managing GP or Liquidation GP, as the case may be, or their respective agent, director, officer or employee designated for such purpose may deem sufficient.

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Section 8.10 Delegation

Each of the Managing GP and the Liquidation GP may contract with any other Person to carry out any of their respective duties and may delegate to such person any power and authority of such person hereunder, but no such contract or delegation will relieve such person of any of its obligations hereunder, including its obligations in connection with the control of the business, affairs and undertaking of the Partnership.

Section 8.11 Insurance.

The Managing GP may, on behalf of the Partnership, purchase and maintain, or cause to be purchased and maintained, for the benefit of the Partnership and the operation of the business thereof, property, casualty and other insurance of such types and coverages as the Managing GP determines to be appropriate in the circumstances.

Section 8.12 Ostensible Authority.

Each of the Managing GP and the Liquidation GP will, where it deems necessary and practicable, insert, and cause agents of the Partnership to insert, the following clause in any contracts or agreements to which the Partnership is a party or by which it is bound:

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

Section 8.13 Decisions by Partners following the appointment of a liquidator or receiver to any Partner.

Without limiting anything else contained herein, at any time a liquidator or receiver is appointed in respect of a Partner, any decisions of the Partnership that are reserved to that Partner or that requires the unanimous consent of the Partners will be made by the Partner(s) not then in liquidation or receivership, as the case may be, and such Partner shall be deemed to have consented to such decision.

ARTICLE 9

REGISTERED OFFICE, BOOKS AND RECORDS, FINANCIAL

INFORMATION AND OTHER GENERAL PARTNER COVENANTS

Section 9.1 Registered Office.

The Managing GP will maintain a registered office at Suite 6100, 1 First Canadian Place, 100 King Street West, Toronto, Ontario, M5X 1B8 and/or at such other place or places in

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Canada as the Managing GP may from time to time determine, and keep there a copy of this Agreement and any amendments hereto and copies of any other documents required to be so kept pursuant to section 33 of the LP Act or any other laws of similar application in any other jurisdiction in which the Partnership carries on business.

Section 9.2 Records.

The Managing GP will:

(a) maintain a record (the “Record”) and record therein the full names and addresses of the Partners;

(b) maintain and update the Partnership Record and such other records as may be required by law; and

(c) from time to time make on behalf of the Partnership all filings with any Governmental Authority that are required to be made by the Partnership.

Section 9.3 Books of Account.

The Managing GP must keep and maintain, or cause to be kept and maintained, at its principal place of business, separate from any records of the Managing GP or any other Person, full, complete and accurate books of account, and records of the business of the Partnership, including:

(a) the Principal Ledger, which shall record all receipts of Principal Receipts and distribution of Principal Receipts;

(b) the Pre-Maturity Liquidity Ledger, which will record the credits and debits of funds available to repay any Series of Hard Bullet Covered Bonds on the Final Maturity Date thereof if the Pre-Maturity Test has been breached;

(c) the Revenue Ledger, which shall record all receipts of Revenue Receipts and distribution of Revenue Receipts;

(d) the Reserve Ledger, which shall record all Revenue Receipts and Principal Receipts credited to the Reserve Fund up to the Reserve Fund Required Amount and debits made to the Reserve Fund;

(e) the Capital Account Ledger for each Partner which shall record the balance of each Partner’s Capital Contributions and distribution of those Capital Contributions; and

(f) the Payment Ledger, which shall record payments by or on behalf of the Partnership.

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Section 9.4 Inspection of Record and Books of Account.

(1) Any Partner may, upon five (5) Canadian Business Days’ written notice to the Managing GP, inspect copies of the books and records of the Partnership including, without limitation, the Partnership Record, any of the documents to which access is permitted pursuant to section 33(3) of the LP Act and any documents referred to in Section 9.3, at the Limited Partner’s expense during normal business hours.

(2) Without limitation of any audit rights the Limited Partner may have pursuant to any other agreement among the parties hereto, the Limited Partner may, at its expense and upon reasonable written notice to the Managing GP, audit the books of account and records of the business of the Partnership.

Section 9.5 Appointment of Guarantor Auditor.

(1) The Managing GP, with the consent of the Limited Partner, may retain the Guarantor Auditor to review and report to the Partners upon the financial statements of the Partnership for, and as at the end of each Financial Year.

(2) Following appointment, the Guarantor Auditor may be replaced by the Managing GP, or a new Guarantor Auditor may be appointed by the Managing GP in each case with the consent of the Limited Partner.

Section 9.6 Annual Report and Income Tax Information.

Within 90 days after the end of each Fiscal Year (or such shorter period of time as may be required by, or necessary in order to comply with, applicable law), the Managing GP will forward or cause to be forwarded to each Partner and to each Person who was shown on the Partnership Record as a Partner during such Fiscal Year:

(a) if requested by a Partner, financial statements of the Partnership as at the end of, and for, such Fiscal Year (prepared in accordance with IFRS, consistently applied), together with a report of the Guarantor Auditor if applicable;

(b) a report of distributions to Partners in respect of such Fiscal Year;

(c) such other information as is required to be provided to Partners pursuant to applicable legislation; and

(d) information concerning the amount of Taxable Income or Taxable Loss and credits and charges to capital allocated to such Person and such other information as may be necessary to enable such Person to file applicable Canadian federal and provincial income tax returns with respect to such Person’s income from the Partnership in respect of such Fiscal Year.

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Section 9.7 Investing in Substitution Assets.

(1) At any time that no Asset Coverage Test Breach Notice is outstanding and prior to a Notice to Pay having been served on the Partnership, the Partnership may invest in and hold Substitution Assets, provided that the aggregate value of the Substitution Assets held by the Partnership does not at any time exceed 10% of the aggregate value of (x) the aggregate loan balance of the Loans in the Portfolio; (y) the face value of any Substitution Assets; and (z) the aggregate cash balances held by the Partnership (subject to the Prescribed Cash Limitation), and provided that such investments are made in accordance with the terms of the Cash Management Agreement and subject to Article 6 (Priorities of Payments).

(2) At any time an Asset Coverage Test Breach Notice is outstanding or a Covered Bond Guarantee Activation Event has occurred, the Managing GP must, or must cause the Cash Manager (on behalf of the Partnership) to sell the Substitution Assets held by or on behalf of the Partnership as quickly as reasonably practicable, the proceeds of which shall be credited to the GDA Account, subject at all times to the Prescribed Cash Limitation.

Section 9.8 Prescribed Cash Limitation

(1) The maximum amount of cash which may be held by the Partnership (the “Prescribed Cash Limitation”) being equal to (i) the amount necessary to meet its payment obligations for the immediately succeeding six months pursuant to the terms of the Transaction Documents, or (ii) such greater amount of cash as CMHC may at its discretion permit in accordance with the Covered Bond Legislative Framework and the CMHC Guide; provided that to the extent that cash receipts of the Partnership cause it to hold cash in excess of the amount specified in clause (i), the Partnership will not be in breach of this covenant if it uses such excess amount (x) to purchase New Loans and their Related Security for the Portfolio pursuant to the terms of the Mortgage Sale Agreement; and/or (y) to invest in Substitution Assets in an amount not exceeding the prescribed limit under the CMHC Guide; and/or (z) subject to complying with the Asset Coverage Test and/or the Amortization Test, as applicable, to make Capital Distributions to the Limited Partner, in each case, within 31 days of receipt.

(2) For greater certainty, amounts standing to the credit of the Pre-Maturity Liquidity Ledger and the Reserve Fund (other than, in each case, those amounts that constitute Substitution Assets) constitute cash and are subject to the Prescribed Cash Limitation.

(3) In the event that the Partnership is required to fund the Pre-Maturity Liquidity Ledger and/or the Reserve Fund in accordance with the Transaction Documents and such funding would cause the Partnership to hold cash in excess of the Prescribed Cash Limitation, any cash held by the Partnership in excess of such cash standing to the credit of the Pre-Maturity Liquidity Ledger and the Reserve Fund may be used in accordance with clauses (x), (y) and (z) in paragraph (1) above. In the event that the Partnership is in breach of the Prescribed Cash Limitation and either (i) it does not hold any cash other than the amounts it is required to hold in order to fund the Pre-Maturity Liquidity Ledger and the Reserve Fund in accordance with the Transaction Documents, or (ii) a Notice to Pay has

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been served on the Partnership, the Partnership may request that CMHC, in accordance with the discretion granted to it under the Covered Bond Legislative Framework and the CMHC Guide, permit the Partnership to hold such amount of cash in excess of the Prescribed Cash Limitation as may be required to allow it to comply with the Transaction Documents in the circumstances.

Section 9.9 Risk Mitigation

(1) To the extent not already in place, the Managing GP shall cause the Partnership to enter into a Covered Bond Swap Agreement at the time of issuance of each Series or Tranche of Covered Bonds and an Interest Rate Swap Transaction at the time of each transfer of Loans and their Related Security to the Portfolio, in each case, the purpose or effect of which is to materially mitigate the Partnership’s risk of financial loss or exposure from fluctuations in interest rates or currency exchange rates affecting, or which may come to affect, its obligation to make one or more payments, in accordance with Section 4.5 of the CMHC Guide.

(2) Notwithstanding the foregoing, Swap Agreements entered into as required pursuant to Section 9.9(a) may be structured to allow for the postponement of cash flows thereunder until the Covered Bond Swap Effective Date or the Interest Rate Swap Effective Date, as applicable.

Section 9.10 Notices to CMHC re: Swap Agreements

(1) The Partnership shall provide notice to CMHC of the termination (or novation) of each Swap Agreement contemporaneously with the earlier of (i) notice of such termination (or novation) to a Rating Agency, (ii) notice of such termination (or novation) being provided to or otherwise made available to Covered Bondholders and (iii) five Canadian Business Days following such termination (or novation). Any such notice shall include the reasons for the termination (or novation) and, if the applicable Swap Agreement has been novated, all information relating to the replacement Swap Provider required by the CMHC Guide and the documentation governing such novated Swap Agreement.

(2) In the event that a Ratings Trigger under a Swap Agreement is breached and the obligations of the applicable Swap Provider are guaranteed by another entity, the Partnership shall forthwith notify CMHC of the identity of such guarantor and the ratings by each of the Rating Agencies of the short-term, unsecured, unsubordinated and unguaranteed debt obligations of such guarantor.

ARTICLE 10

NEW LIMITED PARTNERS

Section 10.1 Transfer.

(1) No change of name or address of a Limited Partner, no Transfer of an interest in the Partnership and no admission of a new Partner will be effective for the purposes of this Agreement unless and until: (a) prior written notice of the same has been delivered to CMHC, each of the Partners and the Bond Trustee, (b) each of the Partners and the Bond

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Trustee pursuant to Section 10.1(2)(e) below has consented thereto (provided that such consent shall not be required for the Limited Partner to Transfer all or a portion of its interest in the Partnership to a Subsidiary, provided such Subsidiary is not a Non-Resident), (c) the transferee has in accordance with the requirements of this Agreement, delivered a form of transfer and power of attorney satisfactory to the Managing GP, acting reasonably, and agreed to accede to and become bound by this Agreement and has delivered such documents and other instruments as the Managing GP may reasonably request, (d) such change, transfer or addition is duly reflected in the Partnership Record, (e) the Rating Agency Condition has been satisfied in respect of such change, transfer or addition, and (f) such Transfer will not cause, or would not reasonably be expected to cause, a breach of the CMHC Guide. The names and addresses of the Limited Partner(s) as reflected from time to time in the Partnership Record, as from time to time amended, will be conclusive as to such facts for all purposes of the Partnership.

(2) In addition to the requirements set forth in Section 10.1(1), any new Limited Partner (except a Subsidiary of the Limited Partner, provided such Subsidiary is not a Non-Resident) shall while there are Covered Bonds outstanding:

(a) accede to the terms of the Mortgage Sale Agreement (with such subsequent amendments as may be agreed by the parties thereto) or enter into a new mortgage sale agreement with the Partnership and the Bond Trustee, in each case so that it has, in relation to New Loans and their Related Security to be sold by such new Limited Partner, substantially the same rights and obligations as the Limited Partner had in relation to those Loans and their Related Security (as applicable) comprised in the Initial Portfolio under the Mortgage Sale Agreement;

(b) accede to the Dealership Agreement and enter into such other documents as may be required by the Bond Trustee and/or the Partnership to give effect to the addition of such new Limited Partner to the transactions contemplated under the Program;

(c) ensure that any New Loans and their Related Security sold by such new Limited Partner to the Partnership comply with the Loan Representations and Warranties set out in the Mortgage Sale Agreement;

(d) procure that either the Servicer services the New Loans and their Related Security sold by the new Limited Partner on the terms set out in the Servicing Agreement (with such subsequent amendments as may be agreed by the parties thereto) or the new Limited Partner (or its nominee) enter into a servicing agreement with the Partnership and the Bond Trustee which sets out the servicing obligations of the new Limited Partner (or its nominee) in relation to the New Loans and their Related Security and which is on terms substantially similar to the terms set out in the Servicing Agreement (the fees, if any, payable to the Servicer or the new Limited Partner (or its nominee) acting as servicer of such New Loans and their Related Security would be determined on the date of the accession of such new Limited Partner to the Program); and

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(e) while there are Covered Bonds outstanding, procure written confirmation from the Bond Trustee that it is satisfied that the accession of such new Limited Partner to the Partnership will not prejudice the Asset Coverage Test and is not materially prejudicial to Covered Bondholders.

(3) Upon receipt of any notice in writing from any Partner complying with the terms of this Agreement and requiring the updating of the Partnership Record or any similar document or instrument or other filing under the LP Act or legislation similar to the LP Act in other provinces and territories, the Managing GP shall prepare, file and record such update in the Partnership Record or other document or instrument or other filing.

ARTICLE 11

REMOVAL AND RESIGNATION OF THE MANAGING GENERAL

PARTNER

AND THE LIQUIDATION GENERAL PARTNER

Section 11.1 Assignment of Interest.

Except with the prior approval of all other Partners, or as otherwise expressly provided in this Agreement and provided that at least 10 Canadian Business Days’ prior written notice has been provided to DBRS (if DBRS is a Rating Agency), neither the Managing GP nor the Liquidation GP shall sell, assign, Transfer or otherwise dispose (including by way of amalgamation, arrangement, merger or consolidation) of its interest in the Partnership.

Section 11.2 Removal of Managing GP.

(1) Upon the occurrence of any of the following events:

(i) the passing of any resolution of the directors or the shareholder of the Managing GP requiring or approving the bankruptcy, dissolution, liquidation or winding up of the Managing GP;

(ii) the making of any assignment for the benefit of creditors of the Managing GP, or upon the appointment of a receiver of the assets and undertaking of the Managing GP,

(iii) the appointment of a receiver of the assets and undertaking of the Managing GP, or

(iv) the occurrence of an Issuer Event of Default,

(each a “Managing GP Default Event”),

the Managing GP shall cease to be the managing general partner of the Partnership.

(2) Forthwith following a Managing GP Default Event, the Liquidation GP shall be automatically appointed as the new Managing GP without the need for consent on the part of any Person or any further act or formality and notice of such appointment shall be delivered forthwith to each of the other Partners, CMHC, DBRS (as long as it is a Rating Agency) and the Bond Trustee.

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Section 11.3 Resignation of Managing GP or the Liquidation GP.

The Managing GP or the Liquidation GP may resign as the Managing GP or the liquidation general partner, as the case may be, on not less than 180 days’ prior written notice to the other Partners, and such resignation will become effective upon the earlier of the appointment of a replacement by unanimous consent of the remaining Partners (provided that the Rating Agency Condition has been satisfied in respect thereof), and while any Covered Bonds are outstanding, the Bond Trustee, and the last day of such 180 day period, following which in the case of the Managing GP resigning, the Liquidation GP shall be deemed to be appointed as the new Managing GP, provided, however, that neither the Managing GP nor the Liquidation GP may resign if the effect thereof would be to dissolve the Partnership. In the event the Liquidation GP resigns in accordance with this Section 11.3, the Managing GP shall forthwith use its best commercially reasonable efforts to without delay locate a new liquidation general partner that meets the requirements of the CMHC Guide to be appointed by the unanimous consent of the other Partners, and, while there are Covered Bonds outstanding, the Bond Trustee.

Section 11.4 Transfer to New Managing GP.

On the admission to the Partnership of the new Managing GP of the Partnership (the “New Managing GP”) and the removal or resignation of the Managing GP, the departing Managing GP (the “Departing Managing GP”) must do all things and take all steps necessary or desirable to transfer to the New Managing GP the administration, management, control and operation of the business of the Partnership and the books, records and accounts of the Partnership to the New Managing GP and must execute and deliver all deeds, certificates, declarations and other documents necessary or desirable to effect such transfer in a timely fashion.

Section 11.5 Release.

On the resignation or removal of the Managing GP or of the Liquidation GP, the Partnership will release and hold harmless the resigning or removed Managing GP or Liquidation GP, as the case may be, from all costs, damages, liabilities or expenses suffered or incurred by it as a result of or arising out of events occurring after such resignation or removal, as the case may be, other than as a result of or arising out of any wilful act by the Departing Managing GP or departing Liquidation GP, as the case may be, in relation to the Partnership occurring after such resignation or removal, as the case may be.

Section 11.6 Transfer of Title to New Managing GP.

On the removal or withdrawal of the Managing GP and the admission of the New Managing GP, the Departing Managing GP, at the cost of the Partnership, must transfer title to all of the Partnership’s property that is registered in the name of the Departing Managing GP to the name of the New Managing GP or a nominee on its behalf. The Departing Managing GP must execute and deliver all deeds, certificates, declarations and other documents necessary or desirable to effect such transfer in a timely fashion.

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Section 11.7 New Managing GP.

(1) The New Managing GP must not be a Non-Resident and must become a party to this Agreement by signing a counterpart hereof and confirming that the representations, warranties and covenants in Section 2.8(1) are true and correct in respect of the New Managing GP. The New Managing GP must agree to be bound by all of the provisions of this Agreement and any other agreement respecting the Partnership to which the Departing Managing GP is bound and must assume the obligations, duties and liabilities of the Managing GP under such agreements as of the date that the New Managing GP becomes the Managing GP.

(2) At any time the Liquidation GP becomes the Managing GP pursuant to the terms of this Agreement, it may appoint a replacement Managing GP for itself, with the consent of the Limited Partner and, while there are Covered Bonds outstanding, the Bond Trustee; provided, however, that if an Issuer Event of Default has occurred and is continuing, the replacement Managing GP shall not be the Issuer or an Affiliate of the Issuer. Following the appointment of a replacement Managing GP for the Liquidation GP, the Liquidation GP shall cease to be the Managing GP and resume its rights and obligations hereunder as liquidation general partner, and shall be treated as a Departing Managing GP, provided that it will not be released as the liquidation general partner pursuant to Section 11.5.

ARTICLE 12

DISSOLUTION OF PARTNERSHIP

Section 12.1 Events of Dissolution.

The Partnership will be dissolved on the earliest to occur of:

(a) the authorization by a resolution of the Limited Partner in writing of such dissolution, provided that the effective time of such resolution is at least two years after the Final Maturity Date for the final Tranche or Series of Covered Bonds then outstanding; and

(b) the date of a dissolution caused by operation of law.

Section 12.2 Events Not Causing Dissolution.

Except as expressly provided in Section 12.1(a) above, the Partnership will not be dissolved or terminated by the amendment of this Agreement or the Partnership Record or by the resignation, removal, bankruptcy, insolvency, dissolution, liquidation, winding up or receivership of, or the admission, resignation or withdrawal of any Partner.

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Section 12.3 Receiver.

Subject to the terms of the Security Agreement, upon the occurrence of any of the events set out in Section 12.1, and while there are Covered Bonds outstanding, the Liquidation GP, and when there are no Covered Bonds outstanding, the Managing GP will serve as the receiver of the Partnership, provided that if such person is unable or unwilling to act in such capacity, such Person shall, with the consent of the Limited Partner, and while there are no Covered Bonds outstanding, the Bond Trustee will appoint some other appropriate person or party to act as the receiver of the Partnership.

Section 12.4 Liquidation of Assets and Distribution of Proceeds of Liquidation.

(1) The receiver appointed pursuant to Section 12.3 will prepare or cause to be prepared a statement of financial position of the Partnership which will be reported upon by the Guarantor Auditors, if applicable, and a copy of which will be forwarded to each Person who was shown on the Partnership Record as a Partner at the date of dissolution. Subject to the terms of the Transaction Documents, the receiver will wind up the affairs of the Partnership and all property of the Partnership will be liquidated in an orderly manner and will distribute the net proceeds of the liquidation of the Partnership in accordance with Article 6 (Priorities of Payments). The receiver will manage and operate the assets and undertaking of the Partnership and will have all powers and authority of the Managing GP under this Agreement. The receiver will be paid its reasonable fees and disbursements incurred in carrying out its duties as such.

(2) If the Partnership is required to make “in specie” distributions of property in lieu of cash, then the fair market value (as determined by the receiver) thereof shall be used to determine the amounts to be distributed under this Section 12.4, and in the event that “in specie” distributions are required in a case where the Partnership has granted security on any of its assets, then such assets may be distributed directly or indirectly (including via another entity) in such manner as is considered appropriate by the Managing GP and while there are Covered Bonds outstanding, the Bond Trustee, so as to preserve such security interest while giving the Partners (except for the Liquidation GP), directly or indirectly, the pro rata interests they are entitled to.

Section 12.5 Termination of Partnership.

The Partnership will terminate when all of its assets have been sold and the net proceeds therefrom, after payment of or due provision for the payment of all debts, liabilities and obligations of the Partnership to creditors and all reserves, have been distributed as provided in this Article 12.

ARTICLE 13

AMENDMENTS

Section 13.1 Generally.

Subject to Section 13.2, this Agreement may be amended only by an agreement in writing signed by each of the Partners and while there are Covered Bonds outstanding, with the written consent of

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the Bond Trustee. Each proposed amendment to or waiver of this Agreement that is considered by the Managing GP to be a material amendment or waiver shall be subject to satisfaction of the Rating Agency Condition. Notwithstanding the foregoing, any amendment to this Agreement for the purposes of addressing changes to the CMHC Guide shall not require the consent of any party nor shall it require satisfaction of the Rating Agency Condition. For certainty, any amendment to (a) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (b) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall, with respect to each affected Rating Agency only, be deemed to be a material amendment and shall be subject to satisfaction of the Rating Agency Condition.

Section 13.2 Amendments by Managing GP.

(1) From time to time and without prior notice to, or the consent of, any Partner, the Managing GP may amend any provision of this Agreement or add any provision hereto if such amendment or addition is, in the opinion of counsel to the Partnership, necessary or desirable for the protection or benefit of the Limited Partner or necessary or desirable to cure an ambiguity in, or to correct or supplement, any provision contained in this Agreement which is defective or inconsistent with any other provision contained in this Agreement or any of the Transaction Documents, provided that such cure, correction or supplemental provision does not and will not affect adversely the interests of the Limited Partner, the Liquidation GP, or, while there are Covered Bonds outstanding, the Bond Trustee (on behalf of the holders of the Covered Bonds) without such Person’s written consent.

(2) For purposes of greater certainty and without limiting Section 13.2(1), the Managing GP may make amendments to this Agreement (subject to the consent of the Limited Partner, the Liquidation GP, or, while there are Covered Bonds outstanding the Bond Trustee if such party’s respective interests would be adversely affected) to reflect:

(a) a change in the name of the Partnership or the location of the principal office of the Partnership or the registered office of the Partnership;

(b) the admission, substitution, withdrawal or removal of the Limited Partner in accordance with this Agreement;

(c) a change that, as determined by the Managing GP, is reasonable and necessary or appropriate to qualify or continue the qualification of the Partnership as a limited partnership in which the Limited Partner has limited liability under the applicable laws;

(d) a change that, as determined by the Managing GP, is reasonable, necessary or appropriate to enable the Partnership to take advantage of, or not be detrimentally affected by, changes in the Income Tax Act or other taxation laws; or

(e) a change to amend or add any provision, or to cure any ambiguity or to correct or supplement any provisions contained in this Agreement that may be defective or

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inconsistent with any other provision contained in the Agreement or any of the Transaction Documents, or which should be made to make the Agreement consistent with the disclosure set out in the Prospectus.

Section 13.3 Notice of Amendment.

The Managing GP shall notify or shall cause notice to be delivered to each of the other Partners and, while there are Covered Bonds outstanding, the Bond Trustee and the Rating Agencies, and if required pursuant to the CMHC Guide, CMHC, of the full details of any amendment, variation or waiver to this Agreement or any other Transaction Document to which it is a party within five Canadian Business Days of the effective date of such amendment provided that failure to deliver such notice shall not constitute a breach of its obligations under this Agreement or any other Transaction Document.

ARTICLE 14

CONFIDENTIALITY

Section 14.1 Confidentiality.

(1) Subject to Section 14.1(2) below, each of the Partners agrees not to disclose to any person any information relating to the business, finances or other matters of a confidential nature of or relating to any other party to this Agreement or any of the Transaction Documents which it may have obtained as a result of having entered into this Agreement or otherwise.

(2) The provisions of Section 14.1(1) above shall not apply:

(a) to the disclosure of any information to any person who is a party to any of the Transaction Documents as expressly permitted by the Transaction Documents or to CMHC or any other Person as may be required under the CMHC Guide and the Covered Bond Legislative Framework;

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

(c) to the extent that the recipient is required to disclose the same pursuant to and in accordance with (i) any law or order of any court or pursuant to any direction or requirement (whether or not having the force of law) of any central bank or any governmental or other regulatory, securities or taxation authority, or (ii) the CMHC Guide and the Covered Bond Legislative Framework;

(d) to the extent required to protect or enforce any of its rights under any of the Transaction Documents or hereunder or for the purpose of discharging, in such manner as it thinks fit, its duties under or in connection with such agreements in each case to such persons as require to be informed of such information for such purposes;

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(e) to the disclosure of any information to professional advisers who receive the same under a duty of confidentiality;

(f) to the disclosure of any information with the consent of the parties to this Agreement and, while there are Covered Bonds outstanding, the Bond Trustee;

(g) to the disclosure to the Rating Agencies or any of them of such information as may be requested by any of them for the purposes of setting or reviewing the rating assigned to the Covered Bonds (or any of them), provided that no information which would disclose the identity of a Borrower shall be disclosed to the Rating Agencies or any of them; or

(h) to the disclosure of any information disclosed to a prospective transferee of the Limited Partner (provided that it is disclosed on the basis that the recipient will hold it confidential).

ARTICLE 15

MISCELLANEOUS

Section 15.1 Effective Time.

This Agreement shall be effective at 12:00 a.m. (Toronto time) on the date first noted above.

Section 15.2 Notices.

(1) Any notice, direction or other communication given under this Agreement shall be in writing and given by delivering it or sending it by prepaid first class mail to, in the case of the Bond Trustee the address provided below and in the case of the Partners, to the registered office of such person set forth in the Partnership Record, by facsimile transmission to facsimile number set forth below, or by e-mail to the e-mail address set forth below, as applicable:

(a) in the case of the Partnership to:

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

18^th Floor, 1 First Canadian Place

100 King Street West

Toronto, ON M5X 1A1

Attention:	Senior Manager, Securitization Finance and Operations
Fax:	416-867-4166

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(b) in the case of the Managing GP to:

BMO Covered Bond GP, Inc.

c/o Bank of Montreal

18^th Floor, 1 First Canadian Place

100 King Street West

Toronto, ON M5X 1A1

Attention:	Senior Manager, Securitization Finance and Operations
Fax:	416-867-4166

(c) in the case of the Liquidation GP to:

8429065 Canada Inc.

c/o Computershare Trust Company of Canada

100 University Avenue

8th Floor, North Tower

Toronto, Ontario

Canada M5J 2Y1

Attention:	Manager, Corporate Trust
Fax:	(416) 981-9777

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(d) in the case of the Limited Partner to:

Bank of Montreal

18^th Floor

1 First Canadian Place

100 King Street West

Toronto ON M5X 1A1

Attention:	Senior Manager, Securitization Structuring
Fax:	416-867-7193

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

Computershare Trust Company of Canada

100 University Avenue

8th Floor, North Tower

Toronto, Ontario

Canada M5J 2Y1

Attention:	Manager, Corporate Trust
Fax:	(416) 981-9777

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

(3) Any party may change its physical or e-mail 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 physical or e-mail address, or facsimile contact information, as applicable.

Section 15.3 Time of the Essence.

Time will be of the essence of this Agreement.

Section 15.4 Third Party Beneficiaries.

Except as expressly otherwise provided herein, the parties intend that this Agreement will not benefit or create any right or cause of action in, or on behalf of, any Person other than the parties hereto and no Person, other than a party will be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum.

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Section 15.5 Bond Trustee.

(1) 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 Partnership or any of the Partners 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, including the right of the Bond Trustee to agree to amendments to the terms hereof. For greater certainty, the parties to this Agreement acknowledge that the rights and obligations of the Bond Trustee are governed by the terms of the Trust Deed and the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion without any obligation to give reasons therefore 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.

(2) In the event that there is any change in the identity of the Bond Trustee, the Managing GP, and the Partners, if required, shall execute such documents with any other parties to this Agreement and take such actions as such new Bond Trustee may reasonably require for the purposes of vesting in such new Bond Trustee the rights of the Bond Trustee under this Agreement and under the Security Agreement and while any of the Covered Bonds remain outstanding shall give notice thereof to the Rating Agencies.

Section 15.6 Binding Effect.

This Agreement will be binding upon and enure to the benefit of the parties hereto and any partner who may from time to time be admitted to the Partnership in accordance with the terms of this Agreement, their respective successors and, to the extent permitted hereunder, assigns.

Section 15.7 Further Assurances.

The parties will perform and cause to be performed any further and other acts and things and execute and deliver or cause to be executed and delivered any further and other documents as may be reasonably necessary to carry out the terms and intent of this Agreement.

Section 15.8 Limited Partner Not A GP.

If any provision of this Agreement has the effect of imposing upon the Limited Partner any of the liabilities or obligations of a general partner, such provision will be of no force and effect but the remainder of this Agreement will continue in effect.

Section 15.9 Waiver.

(1) No waiver of any of the provisions of this Agreement will be deemed to constitute a waiver of any other provision (whether or not similar), nor will such waiver be binding unless executed in writing by the party to be bound by the waiver.

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(2) No failure on the part of a party to exercise, and no delay in exercising, any right under this Agreement will operate as a waiver of such right; nor will any single or partial exercise of any such right preclude any other or further exercise of such right or the exercise of any other right.

Section 15.10 Successors and Assigns.

(1) This Agreement will be binding upon and enure to the benefit of the parties and their respective successors and permitted assigns.

(2) Neither this Agreement nor any of the rights or obligations under this Agreement will be assignable or transferable by any party except in accordance with the terms of this Agreement.

Section 15.11 Severability.

If any provision of this Agreement is determined by any court of competent jurisdiction to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect.

Section 15.12 Governing Law.

This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to conflict of law principles.

Section 15.13 Counterparts.

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

Section 15.14 No Personal Liability for Limited Partners.

No limited partner shall have any liability as a general partner of the Partnership.

Section 15.15 Submission to Jurisdiction.

Each of the parties hereto irrevocably attorns and submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement, 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 courts of the Province of Ontario are an inconvenient forum for the maintenance or hearing of such action or proceeding.

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IN WITNESS WHEREOF the parties have entered into this Limited Partnership Agreement as of the date first above written.

BMO COVERED BOND GP, INC.
Per:	/s/ Chris Hughes
	Name: Chris Hughes
	Title:   President and Secretary
8429065 CANADA INC.
Per:	/s/ Stuart Swartz
	Name: Stuart Swartz
	Title:   President
BANK OF MONTREAL
Per:	/s/ Cathy Cranston
	Name: Cathy Cranston
	Title:   Senior Vice President, Finance &               Treasurer
COMPUTERSHARE TRUST COMPANY OF CANADA
Per:	/s/ Sean Pigott
	Name: Sean Pigott
	Title:   Corporate Trust Officer
Per:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title:   Associate Trust Officer

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Schedule 1

Additional Representations and Warranties

(a) No encumbrance exists over or in respect of any of its assets.

(b) It has not engaged in any activities since its incorporation other than:

(i) those incidental to its registration under the Canada Business Corporations Act;

(ii) other appropriate corporate steps;

(iii) the authorisation and execution of the relevant Transaction Documents; and

(iv) the activities referred to or contemplated by the relevant Transaction Documents as being performed by it in the Prospectus.

(c) Since its date of incorporation there has been no material adverse change in its financial position or prospects.

(d) It is not the subject of any governmental or official investigation or inquiry and to its knowledge, none is progressing or pending or has been threatened in writing against it, which may have a material adverse effect on any of it, any relevant Transaction Document, and/or the issue and offering of Covered Bonds under the Program.

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

(f) It has at all times carried on and conducted its affairs and business in its own name as a separate entity and in accordance with its constating documents and all laws and regulations applicable to it and shall continue to do so throughout the continuation of the Partnership.

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

(h) All acts, conditions and things required to be done, fulfilled and performed in order:

(i) to enable it to lawfully enter into each relevant Transaction Document;

(ii) to enable it lawfully to exercise its rights under and perform and comply with the obligations expressed to be assumed by it in the relevant Transaction Documents;

(iii) to ensure that the obligations expressed to be assumed by it in the relevant Transaction Documents are legal, valid, binding and enforceable against it; and

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have been, fulfilled and performed and are in full force and effect or, as the case may be have been effected, and no steps have been taken to challenge, revoke or cancel any such authorization obtained or effected.

(i) It has duly executed the relevant Transaction Documents.

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

(i) its articles or by-laws;

(ii) any law applicable to it; or

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

(k) The obligations expressed to be assumed by it under the relevant Transaction Documents are legal and valid obligations, binding on it and enforceable against it in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity).

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

(m) It is not in breach of or default under any agreement, indenture, contract, mortgage, deed or other instrument to which it is a party or which is binding on it or any of its assets.

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

(o) It does not require the consent of any other party or the consent, licence, approval or authorisation of any Governmental Authority in connection with the entering into or performance of the relevant Transaction Documents.

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Schedule 2

Asset Coverage Test

The “Asset Coverage Test” is met if the ACT Asset Value (as defined below) shall be in an amount at least equal to the ACT Liability Value (as defined below). For greater certainty, references in this Schedule to “immediately preceding Calculation Date” and “previous Calculation Date” are to the Calculation Period ending on the Calculation Date and references to Loans are to Loans in the Portfolio.

Asset Coverage Test = ACT Asset Value – ACT Liability Value

“ACT Asset Value” = A + B + C + D + E - F

where:

A. the lower of (1) and (2) :

(1) the sum of the LTV Adjusted Loan Balance of each Loan in the Portfolio net of Adjustments; and

(2) the sum of the Asset Percentage Adjusted Loan Balance of each Loan in the Portfolio, net of Adjustments

B. Principal Receipts up to Calculation Date not otherwise applied

C. Cash Capital Contributions made by Partners of the Partnership (as recorded in capital account ledger for each Partner) or proceeds advanced under the Intercompany Loan Agreement or proceeds from any sale of Eligible Loans or other cash exclusive of Revenue Receipts up to the Calculation Date

D. Outstanding principal amount of any Substitution Assets

E. Reserve Fund balance and/or amount credited to the Pre-Maturity Liquidity Ledger, in either case if applicable

F. Product of:

(1) weighted average remaining maturity of all outstanding Covered Bonds (in years and, where less than a year, deemed to be a year);

(2) principal amount outstanding of all Covered Bonds; and

(3) Negative Carry Factor

“LTV Adjusted Loan Balance” = lower of (1) and (2), where:

(1) the True Loan Balance of the relevant Loan; and

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(2) if such Loan is a Performing Eligible Loan, 80% of the Market Value of the related Property, or if such Loan is not a Performing Eligible Loan, zero

“Asset Percentage Adjusted Loan Balance” = Asset Percentage x lower of (1) and (2):

(1) the True Loan Balance of the relevant Loan; and

(2) if such Loan is a Performing Eligible Loan, the Market Value of the related Property, or if such Loan is not a Performing Eligible Loan, zero

“Performing Eligible Loans” = Eligible Loans less than three months in arrears

“Adjustments” = sum of:

(1) LTV Adjusted Loan Balance or Asset Percentage Adjusted Loan Balance (as the case may be) of any Performing Eligible Loan in breach of the Loan Representations and Warranties or otherwise subject to the Seller’s repurchase obligation (but yet to be repurchased) under the Mortgage Sale Agreement; and

(2) financial losses (yet to be recompensed) resulting from any breach by the Seller of any other material warranty in the Mortgage Sale Agreement or from any breach by a Servicer of a material term of the Servicing Agreement

“True Loan Balance” = sum of:

(1) outstanding loan balance of the relevant Loan; and

(2) all Arrears of Interest and Accrued Interest with respect to the relevant Loan

“Asset Percentage” = As determined below

“Negative Carry Factor” =

(1) if the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is less than or equal to 0.1% per annum, then 0.5%; and

(2) if the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is greater than 0.1% per annum, then the sum of (x) 0.5% and (y) the weighted average margin of the interest rate payable on the outstanding Covered Bonds less 0.1 %,

unless the interest rate risk represented by the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is addressed or mitigated by the Interest Rate Swap and the “Effective Date” thereunder has occurred, whereupon the Negative Carry Factor shall be nil

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“ACT Liability Value” =       Nominal amount of Covered Bond liabilities in Canadian Dollars

                                         (with currency transaction undertaken using or at foreign exchange rates

                                         reflected in the related Covered Bond Swap Agreement)

The “Asset Percentage” shall be determined as follows:

(i) On or prior to the Guarantor Payment Date immediately following the Calculation Date falling in February, May, September and November of each year, and on such other date as the Limited Partner may request following the date on which the Limited Partner is required to assign the Interest Rate Swap Agreement to a third party (each such date a “Cash Flow Model Calculation Date”), the Managing GP (or the Cash Manager on its behalf) will determine the percentage figure selected by it as the Asset Percentage based on such methodologies as the Rating Agencies may prescribe from time to time (to ensure sufficient credit enhancement for the Covered Bond Guarantee will be maintained) for the Portfolio based on the value of the Loans and their Related Security in the Portfolio as at the Calculation Date immediately preceding the Cash Flow Model Calculation Date as a whole or on the basis of a sample of Randomly Selected Loans in the Portfolio, such calculations to be made on the same basis throughout unless the Rating Agency Condition has been satisfied in respect thereof.

(1) The Asset Percentage will from time to time be adjusted in accordance with the various methodologies of the Rating Agencies to ensure that sufficient credit enhancement for the Covered Bond Guarantee will be maintained.

(2) The Managing GP (or the Cash Manager on its behalf) will, or will use all reasonable efforts to cause the one or more Rating Agencies to, determine the Asset Percentage at least two days prior to the Guarantor Payment Date following the Cash Flow Model Calculation Date and the Asset Percentage so determined shall be the lowest percentage so determined by any of the Rating Agencies in accordance with this Schedule 2 and shall apply to any calculations in respect of the Calculation Period ending on such Cash Flow Model Calculation Date and each Calculation Period thereafter to but excluding the last day of the following Calculation Period ending on a Cash Flow Model Calculation Date. To the extent a Rating Agency does not respond to a request for a newly-determined Asset Percentage, the Asset Percentage last determined by such Rating Agency shall be applicable with respect to such Rating Agency.

(3) Notwithstanding anything to the contrary in this Schedule 2, the Asset Percentage shall at all times be less than or equal to 95%, as determined in accordance with this Schedule 2 and as provided by Section 15.1(y) of the Trust Deed, provided that the Asset Percentage shall not be less than 80% unless otherwise agreed by the Issuer (and following an Issuer Event of Default, the Partnership for the purposes of making certain determinations in respect of the Intercompany Loan).

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Schedule 3

Amortization Test

The “Amortization Test” is met if the Amortization Asset Value (as defined below) is in an amount at least equal to the Amortization Liability Value (as defined below). For greater certainty, references herein to “immediately preceding Calculation Date” and “previous Calculation Date” are to the Calculation Period ending on the Calculation Date and references to Loans are to Loans in the Portfolio.

Amortization Test = Amortization Asset Value – Amortization Liability Value

“Amortization Asset Value” = A + B + C - D

where:

A The aggregate Amortization True Loan Balance of each Loan in the Portfolio

B The amount of any cash standing to the GDA Account (exclusive of any Revenue Receipts up to the Calculation Date not otherwise applied)

C Outstanding principal amount of any Substitution Assets

D Product of:

(1) weighted average remaining maturity of all outstanding Covered Bonds (in years and, where less than a year, deemed to be a year);

(2) principal amount outstanding of all Covered Bonds; and

(3) Negative Carry Factor

“Amortization True Loan Balance”: = lower of (1) and (2):

(1) the True Loan Balance of the relevant Loan; and

(2) if such Loan is a Performing Eligible Loan, 80% of the Market Value of the related Property, or if such Loan is not a Performing Eligible Loan, zero

“True Loan Balance” = sum of:

(1) outstanding loan balance of the relevant Loan; and

(2) all Arrears of Interest and Accrued Interest with respect to the relevant Loan

“Performing Eligible Loans” = Eligible Loans less than three months in arrears

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“Negative Carry Factor” =

(1) if the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is less than or equal to 0.1% per annum, then 0.5%; and

(2) if the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is greater than 0.1% per annum, then the sum of (x) 0.5% and (y) the weighted average margin of the interest rate payable on the outstanding Covered Bonds less 0.1%,

unless the interest rate risk represented by the weighted average margin of the interest rate payable on the outstanding Covered Bonds relative to the interest rate receivable on the Portfolio is addressed or mitigated by the Interest Rate Swap and the “Effective Date” thereunder has occurred, whereupon the Negative Carry Factor shall be nil

“Amortization Liability Value” = Nominal amount of Covered Bond liabilities in Canadian Dollars (with currency translations undertaken using or at foregoing exchange rates reflected in the related Covered Bond Swap Agreement or, to the extent the foreign exchange risk of a non-CAD denominated Covered Bond liability is not or no longer the subject of (or otherwise addressed or mitigated by) a Covered Bond Swap Agreement (by reason of termination or otherwise) end of day spot foreign exchange rates)

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Schedule 4

Pre-Maturity Test

(a) On each Canadian Business Day that falls within the Pre-Maturity Test Interval (each, a “Pre-Maturity Test Date”) prior to the occurrence of an Issuer Event of Default or the occurrence of a Guarantor Event of Default, the Partnership or the Cash Manager on its behalf will determine if the Pre-Maturity Test has been breached.

(b) “Pre-Maturity Test Interval” means, with respect to a Canadian Business Day, such Canadian Business Day falls within 12 months of the Final Maturity Date of any Series of Hard Bullet Covered Bonds.

(c) If one or more Rating Agencies downgrades the Issuer’s unsecured, unsubordinated and unguaranteed debt obligations, or issuer default rating, as applicable, below the Pre-Maturity Required Ratings, then the Issuer will fail and be in breach of the “Pre-Maturity Test”.

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Schedule 5

Pre-Acceleration Revenue Priority Of Payments

(a) first, in or towards satisfaction of any amounts due and payable by the Partnership to third parties and incurred without breach by the Partnership of the Transaction Documents to which it is a party (and for which payment has not been provided for elsewhere in the relevant Priorities of Payments) and to provide for any such amounts expected to become due and payable by the Partnership in the immediately succeeding Guarantor Payment Period and to pay and discharge any liability of the Partnership for taxes;

(b) second, any amounts in respect of interest due to the Intercompany Loan Provider in respect of the Demand Loan pursuant to the terms of the Intercompany Loan;

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

(i) any remuneration then due and payable to the Servicer and any costs, charges, liabilities and expenses then due or to become due and payable to the Servicer under the provisions of the Servicing Agreement in the immediately succeeding Guarantor Payment Period, together with applicable GST (or other similar taxes) thereon to the extent provided therein;

(ii) any remuneration then due and payable to the Cash Manager and any costs, charges, liabilities and expenses then due or to become due and payable to the Cash Manager under the provisions of the Cash Management Agreement in the immediately succeeding Guarantor Payment Period, together with applicable GST (or other similar taxes) thereon to the extent provided therein;

(iii) amounts (if any) due and payable to the Account Bank (or, as applicable, the Standby Account Bank) (including costs) pursuant to the terms of the Bank Account Agreement (or, as applicable, the Standby Bank Account Agreement), together with applicable GST (or other similar taxes) thereon to the extent provided therein;

(iv) amounts due and payable to the Cover Pool Monitor pursuant to the terms of the Cover Pool Monitor Agreement (other than the amounts referred to in paragraph (j) below), together with applicable GST (or other similar taxes) thereon to the extent provided therein; and

(v) amounts due and payable to the Custodian pursuant to the terms of the Mortgage Sale Agreement, together with applicable GST (or other similar taxes) thereon to extent provided therein;

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

Limited Partnership Agreement

(i) payment due to the Interest Rate Swap Provider (including any termination payment due and payable by the Partnership under the Interest Rate Swap Agreement (but excluding any Excluded Swap Termination Amount)) pursuant to the terms of the Interest Rate Swap Agreement; and

(ii) payment due to the Covered Bond Swap Provider (including any termination payment due and payable by the Partnership under the Covered Bond Swap Agreement (but excluding any Excluded Swap Termination Amount)) pursuant to the terms of the Covered Bond Swap Agreement;

(e) fifth, in or towards payment on the Guarantor Payment Date of, or to provide for payment on such date in the future of such proportion of the relevant payment falling due in the future as the Cash Manager may reasonably determine (in the case of any such payment or provision, after taking into account any provisions previously made and any amounts receivable from the Interest Rate Swap Provider under the Interest Rate Swap Agreement) any amounts due or to become due and payable (excluding principal amounts) to the Intercompany Loan Provider in respect of the Guarantee Loan pursuant to the terms of the Intercompany Loan Agreement;

(f) sixth, if a Servicer Event of Default has occurred, all remaining Available Revenue Receipts to be credited to the GDA Account (with a corresponding credit to the Revenue Ledger maintained in respect of that account) until such Servicer Event of Default is either remedied by the Servicer or waived by the Bond Trustee or a new servicer is appointed to service the Portfolio (or the relevant part thereof);

(g) seventh, in or towards a credit to the GDA Account (with a corresponding credit to the Reserve Ledger) of an amount up to but not exceeding the amount by which the Reserve Fund Required Amount (if applicable) exceeds the existing balance on the Reserve Ledger as calculated on the immediately preceding Calculation Date;

(h) eighth, if the Partnership is required to make a deposit to the Pre-Maturity Liquidity Ledger due to a breach of the Pre-Maturity Test in respect of any Series of Hard Bullet Covered Bonds, towards a credit to the GDA Account (with a corresponding credit to the Pre-Maturity Liquidity Ledger) of an amount up to but not exceeding the difference between:

(i) the Pre-Maturity Liquidity Required Amount as calculated on the immediately preceding Calculation Date; and

(ii) any amounts standing to the credit of the Pre-Maturity Liquidity Ledger on the immediately preceding Calculation Date;

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

(i) payment of any Excluded Swap Termination Amounts due and payable by the Partnership under the Interest Rate Swap Agreement; and

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2

(ii) payment of any Excluded Swap Termination Amounts due and payable by the Partnership under the Covered Bond Swap Agreement;

(j) tenth, in or towards payment pro rata and pari passu in accordance with the respective amounts thereof of any indemnity amount due to the Cover Pool Monitor pursuant to the Cover Pool Monitor Agreement, and any indemnity amount due to any Partner pursuant to the terms of this Agreement;

(k) eleventh, in or towards payment of the fee due to the Corporate Services Provider by the Partnership pursuant to the terms of the Corporate Services Agreement; and

(l) twelfth, towards such distributions of profit to the Partners as may be payable in accordance with the terms of this Agreement.

Any amounts received by the Partnership under the Interest Rate Swap Agreement and the Covered Bond Swap Agreement (other than, in each case, amounts in respect of Swap Collateral Excluded Amounts) on or after the Guarantor Payment Date but prior to the next following Guarantor Payment Date will be applied, together with any provision for such payments made on any preceding Guarantor Payment Date, to make payments (other than in respect of principal) due and payable in respect of the Intercompany Loan Agreement and then the expenses of the Partnership unless an Asset Coverage Test Breach Notice is outstanding or otherwise to make provision for such payments on such date in the future of such proportion of the relevant payment falling due in the future as the Cash Manager may reasonably determine.

Any amounts received under the Interest Rate Swap Agreement and the Covered Bond Swap Agreement on the Guarantor Payment Date or on any date prior to the next succeeding Guarantor Payment Date which are not applied towards a payment or provision in accordance with paragraph (d) above or the preceding paragraph will be credited to the Revenue Ledger and applied as Available Revenue Receipts on the next succeeding Guarantor Payment Date.

Amounts (if any) held by the Cash Manager for and on behalf of the Partnership or standing to the credit of the Transaction Account which are not required to be applied in accordance with paragraphs (a) to (l) of Schedule 5 Pre-Acceleration Revenue Priority of Payments or paragraphs (a) to (g) of Schedule 6 Pre-Acceleration Principal Priority of Payments will, if applicable, be deposited by the Cash Manager and, in each case be credited to the appropriate ledger in the GDA Account on the Guarantor Payment Date.

If any Swap Collateral Available Amounts are received by the Partnership on a Guarantor Payment Date, such amounts shall be applied by the Partnership (or by the Cash Manager on its behalf) on that Guarantor Payment Date in the same manner as it would have applied the receipts which such Swap Collateral Available Amounts replace.

Each Partner acknowledges that the distribution paid pursuant to paragraph (l) above to such Partner represents a reasonable commercial return to the Partner from its involvement in the Partnership and also agrees that such profits will not be paid to the Partners at a time when they know or ought to know that there was no reasonable prospect of avoiding an insolvent liquidation of the Partnership as a result of such profit distribution.

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3

Schedule 6

Pre-Acceleration Principal Priority of Payments

(a) first, if the Pre-Maturity Test has been breached by the Issuer in respect of any Series of Hard Bullet Covered Bonds, towards a credit to the Pre-Maturity Liquidity Ledger in an amount up to but not exceeding the excess of:

(i) the Pre-Maturity Liquidity Required Amount calculated on the immediately preceding Calculation Date; over

(ii) the sum of any amounts standing to the credit of the Pre-Maturity Liquidity Ledger on the immediately preceding Calculation Date;

(b) second, to pay amounts in respect of principal outstanding on the Demand Loan pursuant to the terms of the Intercompany Loan Agreement;

(c) third, to acquire New Loans and their Related Security offered to the Partnership, if necessary or prudent to ensure that, taking into account the other resources available to the Partnership, the Asset Coverage Test is met and thereafter to acquire (in the discretion of the Managing GP or the Cash Manager on its behalf) Substitution Assets up to the prescribed limit under the CMHC Guide;

(d) fourth, to deposit in the GDA Account (with a corresponding credit to the Principal Ledger) an amount sufficient to ensure that, taking into account the other resources available to the Partnership, the Asset Coverage Test is met;

(e) fifth, in or towards repayment on the Guarantor Payment Date (or to provide for repayment on such date in the future of such proportion of the relevant payment falling due in the future as the Cash Manager may reasonably determine) of amounts (in respect of principal) due or to become due and payable to the Intercompany Loan Provider in respect of the Guarantee Loan;

(f) sixth, in or towards a credit to the GDA Account (with a corresponding credit to the Reserve Ledger) of an amount up to but not exceeding the amount by which the Reserve Fund Required Amount (if applicable) exceeds the existing balance on the Reserve Ledger as calculated on the immediately preceding Calculation Date; and

(g) seventh, subject to complying with the Asset Coverage Test, to make Capital Distributions in accordance with the terms of this Agreement.

Limited Partnership Agreement

Schedule 7

Guarantee Priority of Payments

PART I

(a) first, to pay any amounts in respect of principal and interest due to the Intercompany Loan Provider in respect of the Demand Loan pursuant to the terms of the Intercompany Loan Agreement;

(b) second, in or towards payment of all amounts due and payable or to become due and payable to the Bond Trustee with respect to the performance of its obligations under the Trust Deed and the Security Agreement in the immediately succeeding Guarantee Payment Period under the provisions of the Trust Deed and the Security Agreement, respectively, together with interest and applicable GST (or other similar taxes) thereon as provided therein;

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

(i) any remuneration then due and payable to the Agents under the provisions of the Agency Agreement together with applicable GST (or other similar taxes) thereon as provided therein, other than any Indemnity Amounts payable to the Agents in excess of $150,000; and

(ii) any amounts then due and payable by the Partnership to third parties, including the Corporate Services Provider, and incurred without breach by the Partnership of the Transaction Documents to which it is a party (and for which payment has not been provided for elsewhere) and to provide for any such amounts expected to become due and payable by the Partnership in the immediately succeeding Guarantor Payment Period and to pay or discharge any liability of the Partnership for taxes;

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

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

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

Limited Partnership Agreement

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

(iv) amounts due and payable to the Cover Pool Monitor (other than the amounts referred to in paragraph (k) below) pursuant to the terms of the Cover Pool Monitor Agreement, together with applicable GST (or other similar taxes) thereon as provided therein, other than any Indemnity Amounts payable to the Cover Pool Monitor in excess of $150,000; and

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

(e) fifth, to pay pro rata and pari passu according to the respective amounts thereof:

(i) the amounts due and payable to the Interest Rate Swap Provider pro rata and pari passu according to the respective amounts thereof (including any termination payment due and payable by the Partnership under the Interest Rate Swap Agreement but excluding any Excluded Swap Termination Amount) in accordance with the terms of the Interest Rate Swap Agreement;

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

(iii) to the Bond Trustee or (if so directed by the Bond Trustee) the Paying Agent on behalf of the holders of the Covered Bonds pro rata and pari passu Scheduled Interest that is Due for Payment (or will become Due for Payment in the immediately succeeding Guarantor Payment Period) under the Covered Bond Guarantee in respect of each Series of Covered Bonds,

provided that if the amount available for distribution under this paragraph (e) (excluding any amounts received from the Covered Bond Swap Provider) would be insufficient to pay the Canadian Dollar Equivalent of the Scheduled Interest that is Due for Payment in respect of each Series of Covered Bonds under (e)(iii) above, the shortfall will be divided amongst all such Series of Covered Bonds on a pro rata basis and the amount payable by

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the Partnership in respect of each relevant Series of Covered Bonds to the Covered Bond Swap Provider under (e)(ii) above will be reduced by the amount of the shortfall applicable to the Covered Bonds in respect of which such payment is to be made;

(f) sixth, to pay or provide for pro rata and pari passu according to the respective amounts thereof, of:

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

(ii) to the Bond Trustee or (if so directed by the Bond Trustee) the Issuing and Paying Agent on behalf of the holders of the Covered Bonds pro rata, and pari passu Scheduled Principal that is Due for Payment (or will become Due for Payment in the immediately succeeding Guarantor Payment Period) under the Covered Bond Guarantee in respect of each Series of Covered Bonds, provided that if the amount available for distribution under this paragraph (f) (excluding any amounts received from the Covered Bond Swap Provider) in respect of the amounts referred to in (f)(i) above would be insufficient to pay the Canadian Dollar Equivalent of the Scheduled Principal that is Due for Payment in respect of the relevant Series of Covered Bonds under this (f)(ii), the shortfall will be divided amongst all such Series of Covered Bonds on a pro rata basis and the amount payable by the Partnership in respect of each relevant Series of Covered Bonds under (f)(i) to the Covered Bond Swap Provider above will be reduced by the amount of the shortfall applicable to the Covered Bonds in respect of which such payment is to be made;

(g) seventh, to deposit the remaining monies into the GDA Account for application on the next following Guarantor Payment Date in accordance with the Priorities of Payment described in paragraphs (a) to (f) (inclusive) above, until the Covered Bonds have been fully repaid or provided for (such that the Required Redemption Amount has been accumulated in respect of each outstanding Series of Covered Bonds);

(h) eighth, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof of any Excluded Swap Termination Amount due and payable by the Partnership to the relevant Swap Provider under the relevant Swap Agreement;

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

(j) tenth, in and towards repayment in full of amounts outstanding under the Intercompany Loan Agreement;

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(k) eleventh, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof of any indemnity amount due to the Partners pursuant to this Agreement; and

(l) twelfth, thereafter any remaining monies will be applied in accordance with this Agreement.

PART II

Any amounts received by the Partnership under the Interest Rate Swap Agreement after the Guarantor Payment Date but prior to the next following Guarantor Payment Date will be applied, together with any provision for such payment made on any preceding Guarantor Payment Date, to make payments (other than in respect of principal) due and payable pro rata and pari passu in respect of the Covered Bond Swap Agreement or, as the case may be, in respect of interest due under the Covered Bond Guarantee pro rata and pari passu in respect of each relevant Series of Covered Bonds.

Any amounts received by the Partnership under the Covered Bond Swap Agreement (whether or not in respect of principal) after the Guarantor Payment Date but prior to the next following Guarantor Payment Date will be applied, together with any provision for such payment made on any preceding Guarantor Payment Date, to make payments of interest or principal, as the case may be, in respect of the Covered Bond Guarantee pro rata and pari passu in respect of each relevant Series of Covered Bonds.

Any amounts received under the Interest Rate Swap Agreement or any Covered Bond Swap Agreement on the Guarantor Payment Date or any date prior to the next succeeding Guarantor Payment Date which are not put towards a payment or provision in accordance with paragraphs (e) or (f) of Part I of this Schedule 7 or the preceding paragraphs of Part II of this Schedule 7 will be credited to the Revenue Ledger or the Principal Ledger on the GDA Account (as appropriate) and applied as Available Revenue Receipts or Available Principal Receipts, as the case may be, on the next succeeding Guarantor Payment Date.

If the Partnership requires any available funds to be exchanged into a currency other than Canadian Dollars, and such exchange would not be subject to or covered by the terms of the Covered Bond Swap Agreement, then the Partnership (or the Cash Manager on its behalf) shall perform all necessary currency conversions at the then prevailing spot rate of exchange.

If any Swap Collateral Available Amounts are received by the Partnership on a Guarantor Payment Date, such amounts shall be applied by the Partnership (or by the Cash Manager on its behalf) on that Guarantor Payment Date in the same manner as it would have applied the receipts which such Swap Collateral Available Amounts replace.

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Schedule 8

Priority of Payments when Covered Bonds Repaid

(a) first, to apply any such monies which constitute Available Revenue Receipts in or towards payment of the fee due to the Corporate Services Provider by the Partnership pursuant to the terms of the Corporate Services Agreement;

(b) second, to apply any such monies which constitute Available Revenue Receipts towards payment of any amount outstanding with respect to the Intercompany Loan;

(c) third, to apply any such monies which constitute Available Revenue Receipts towards payment pro rata and pari passu of distributions to the Partners in accordance with the terms of this Agreement; and

(d) fourth, to make Capital Distributions of all remaining monies to the Partners pro rata and pari passu to their respective Capital Contribution Balances as calculated on the immediately preceding Calculation Date in accordance with the terms of this Agreement.

Limited Partnership Agreement

Schedule 9

Method for Sale of Selected Loans

(1) Before offering Selected Loans for sale in accordance with this Schedule 9, the Partnership shall ensure that:

(a) Such Selected Loans are Randomly Selected Loans;

(b) the Selected Loans have an aggregate True Loan Balance in an amount (the “Required True Loan Balance Amount”) which is as close as possible to the amount calculated as follows:

(i) following a Demand Loan Repayment Event or the Demand Loan being demanded by the Intercompany Loan Provider but prior to the service of an Asset Coverage Test Breach Notice, such amount that would ensure that, if the Selected Loans were sold at their True Loan Balance, the Demand Loan as calculated on the date of the demand could be repaid, subject to the satisfaction of the Asset Coverage Test; or

(ii) following the service of an Asset Coverage Test Breach Notice (but prior to service of a Notice to Pay), such amount that would ensure that, if the Selected Loans were sold at their True Loan Balance, the Asset Coverage Test would be satisfied on the next Calculation Date taking into account the payment obligations of the Partnership on the Payment Date following that Calculation Date (assuming for this purpose that the Asset Coverage Test Breach Notice is not revoked on the next Calculation Date); or

(iii) following a breach of the Pre-Maturity Test or service of a Notice to Pay on the Partnership:

N x A/B

where:

“N” is an amount equal to:

(x) in respect of Selected Loans being sold following a breach of the Pre-Maturity Test, the Pre-Maturity Liquidity Required Amount less amounts standing to the credit of the Pre-Maturity Liquidity Ledger; or

(y) in respect of Selected Loans being sold following service of a Notice to Pay, the Canadian Dollar Equivalent of the Required Redemption Amount of the Earliest Maturing Covered Bonds less amounts standing to the credit of the Guarantor Accounts and the principal amount of any Substitution Assets (excluding all amounts to be applied on the next following Guarantor Payment Date to repay higher ranking amounts in the Guarantee Priority of Payments and those amounts that are required to repay any Series of Covered Bonds which mature prior to or on the same date as the relevant Series of Covered Bonds),

Limited Partnership Agreement

“A” is an amount equal to the True Loan Balance of all the Loans and their Related Security in the Portfolio; and

“B” is an amount equal to the Canadian Dollar Equivalent of the Required Redemption Amount in respect of each Series of Covered Bonds then outstanding less the Canadian Dollar Equivalent of the Required Redemption Amount in respect of each Series of Covered Bonds then outstanding which has been provided for in cash.

(2) The Partnership will offer the Selected Loans for sale to Purchasers for the best price reasonably available but in any event:

(a) following (i) a Demand Loan Repayment Event, the Demand Loan being demanded by the Intercompany Loan Provider or (ii) the service of an Asset Coverage Test Breach Notice (but prior to the service of a Notice to Pay), in each case, for an amount not less than the True Loan Balance of the Loans and their Related Security;

(b) following a breach of the Pre-Maturity Test or service of a Notice to Pay, for an amount not less than the Adjusted Required Redemption Amount; and

(c) if such sale is being conducted pursuant to Section 7.1(2), for an amount not less than the Fair Market Value of the Loans and their Related Security.

(3) For purposes of the foregoing:

“Adjusted Required Redemption Amount” means, the Canadian Dollar Equivalent of the Required Redemption Amount, plus or minus the Canadian Dollar Equivalent of any swap termination amounts payable under the Covered Bond Swap Agreement to or by the Partnership in respect of the relevant Series of Covered Bonds less (where applicable) amounts held by the Cash Manager for and on behalf of the Partnership and amounts standing to the credit of the Guarantor Accounts and the Canadian Dollar Equivalent of the principal balance of any Substitution Assets (excluding all amounts to be applied on the next following Guarantor Payment Date to repay higher ranking amounts in the Guarantee Priority of Payments and those amounts that are required to repay any Series of Covered Bonds which mature prior to or on the same date as the relevant Series of Covered Bonds) plus or minus any swap termination amounts payable to or by the Partnership under the Interest Rate Swap Agreement in respect of the relevant Series of Covered Bonds, determined on a pro rata basis amongst all Series of Covered Bonds according to the respective Principal Amount Outstanding thereof, minus amounts standing to the credit of the Pre-Maturity Liquidity Ledger that are not otherwise required to provide liquidity for any Series of Hard Bullet Covered Bonds which mature within 12 months of the date of such calculation; and

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“Required Redemption Amount” means, in respect of a Series of Covered Bonds, the amount calculated as follows:

the Principal Amount Outstanding of the relevant Series of Covered Bonds x (1+ Negative Carry Factor) x (days to maturity of the relevant Series of Covered Bonds/365)

(4) Following service of a Notice to Pay on the Partnership, if the Selected Loans have not been sold (in whole or in part) in an amount equal to the Adjusted Required Redemption Amount by the date which is six months prior to, as applicable:

(a) the Final Maturity Date (where the Covered Bonds are not subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee);

(b) the Extended Due for Payment Date in respect of the Earliest Maturing Covered Bonds (after taking into account all payments, provisions and credits to be made in priority thereto) (where the Covered Bonds are subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee); or

(c) the Final Maturity Date of the relevant Series of Hard Bullet Covered Bonds (where the sale is in connection with the Pre-Maturity Test),

then the Partnership will offer the Selected Loans for sale for the best price reasonably available notwithstanding that such amount may be less than the Adjusted Required Redemption Amount.

(5) In respect of any sale or refinancing (as applicable) of Selected Loans at any time an Asset Coverage Test Breach Notice is outstanding, there has been a breach of the Pre-Maturity Test, or a Notice to Pay has been served, the Partnership will instruct the portfolio manager to use all reasonable endeavours to procure that Selected Loans are sold or refinanced (as applicable) as quickly as reasonably practicable (in accordance with the recommendations of the portfolio manager), taking into account the market conditions at that time and the scheduled repayment dates of the Covered Bonds and the terms of this Agreement.

(6) Following the service of a Notice to Pay, if Purchasers accept the offer or offers from the Partnership so that some or all of the Selected Loans shall be sold prior to the next following Final Maturity Date or, if the Covered Bonds are subject to an Extended Due for Payment Date in respect of the Covered Bond Guarantee, the next following Extended Due for Payment Date in respect of the Earliest Maturing Covered Bonds, then the Partnership will, subject to paragraph (4) of this Schedule 9, enter into a sale and purchase agreement with the relevant Purchasers, which will require, inter alia, a cash payment from the relevant Purchasers.

Limited Partnership Agreement

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Schedule 10

Valuation Calculation

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

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

A+B+C+D+E+F

where,

A     =     the aggregate “LTV Adjusted Loan Present Value” of (i) each Loan that is a Performing Eligible Loan, which shall be the lower of (1) the Present Value of the relevant Loan on such Calculation Date, and (2) 80% multiplied by the Latest Valuation relating to that Loan, and (ii) each Loan that is not a Performing Eligible Loan, which shall be equal to zero

minus

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

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

(2) a Seller, in any preceding Calculation Period, was in breach of any other material warranty under the Mortgage Sale Agreement and/or the Servicer was, in any preceding Calculation Period, in breach of a material term of the Servicing Agreement. In this event, the aggregate LTV Adjusted Loan Present Value of the Loans in the Portfolio on such Calculation Date will be deemed to be reduced by an amount equal to the resulting financial loss incurred by the Partnership in the immediately preceding Calculation Period (such financial loss to be calculated by the Cash Manager without double counting and to be reduced by any amount paid (in cash or in kind) to the Partnership by the applicable Seller to indemnify the Partnership for such financial loss);

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

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

D     =     the Trading Value of any Substitution Assets;

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

and

F     =     the Trading Value of the Swap Collateral.

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EX-4.10

Exhibit 4.10

CORPORATE SERVICES AGREEMENT

by and among

BANK OF MONTREAL

as Client

and

BMO COVERED BOND GUARANTOR

LIMITED PARTNERSHIP

as Guarantor

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Trustee and Corporate Services Provider

and

8429065 CANADA INC.

as Corporation

September 30, 2013

Corporate Services Agreement

CONTENTS

Articles	Page
Article 1—Definitions		2
Article 2—Services to be Provided		2
Article 3—Confidentiality		4
Article 4—Indemnity		4
Article 5—Remuneration, Costs and Expenses		5
Article 6—Termination		6
Article 7—Notices		6
Article 8—Declaration of Trust		8
Article 9—Non-Petition		8
Article 10—General		8

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2

CORPORATE SERVICES AGREEMENT

THIS CORPORATE SERVICES AGREEMENT (this “Agreement”) is made as of this 30th day of August, 2013.

BY AND AMONG:

BANK OF MONTREAL, a bank named in Schedule I to the Bank Act (Canada), whose executive office is at 18^th Floor, 100 King Street West, Toronto, Ontario M5X 1A1, as Account Bank (hereinafter referred to as “Client”)

- and -

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership formed under the laws of the Province of Ontario, whose registered office is at Suite 6600, 100 King Street West, Toronto, Ontario, Canada, M5X 1B8, by its managing general partner BMO COVERED BOND GP, INC. (hereinafter referred to as the “Guarantor”)

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company formed under the laws of Canada whose registered office is at 100 University Avenue, 11^th Floor, Toronto, Ontario, Canada M5J 2Y1 (hereinafter referred to as the “Corporate Services Provider”)

- and -

8429065 CANADA INC., a corporation incorporated under the laws of Canada whose registered office is at Suite 6600, 100 King Street West, Toronto, Ontario, Canada, M5X 1B8 (hereinafter referred to as the “Corporation”)

WHEREAS

A. The shares of the Corporation are held by the Client and the Corporate Services Provider, in its capacity as trustee pursuant to a declaration of trust dated September 30, 2013 (the “Declaration of Trust”).

B. The Corporation is the liquidation general partner of the Guarantor.

C. The Corporate Services Provider has offered to provide the Client and the Corporation with, and the Corporation and the Client have agreed to engage the Corporate Services Provider to so provide, certain services with respect to the Corporation.

Corporate Services Agreement

NOW IT IS HEREBY AGREED as follows:

ARTICLE 1—DEFINITIONS

1.1 The Master Definitions and Construction Agreement made between the parties to the Transaction Documents on September 30, 2013 (as the same may be amended, restated or supplemented from time to time with the consent of the parties to the Master Definitions and Construction Agreement) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated or supplemented) 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.

ARTICLE 2—SERVICES TO BE PROVIDED

2.1 Subject to Section 2.2, the Corporate Services Provider is prepared to provide the following Corporate Services (the “Corporate Services”) for and in respect of the Corporation for so long as a majority of the Board of Directors of the Corporation is comprised of designated directors appointed pursuant to the Letter Agreement and agrees (subject, in each case, to the obligations of the Corporate Services Provider in its capacity as Trustee pursuant to the Declaration of Trust) to arrange on behalf of, and at the sole expense of the Corporation for the following services to be provided to and in respect of the Corporation:

(a) all general corporate secretarial, registrar and company administration services required by the Corporation;

(b) the preparation, keeping and auditing (if applicable) of the accounts of the Corporation and such books and records as are required by any applicable law or otherwise to be kept by the Corporation for the proper conduct of the affairs of the Corporation;

(c) providing all necessary staff and facilities for the Corporation, including the provision of the Company’s registered office (which shall be located at c/o Computershare Trust Company of Canada, 100 University Avenue, 9^th Floor, North Tower, Toronto, ON M5J 2Y1;

(d) keeping the register of shareholders, issuing share certificates, and effecting share transfers and filing (in compliance with the Trust Deed and insofar as the Board of Directors of the Corporation have duly approved, signed and delivered the same and moneys in respect of applicable fees are made available) any applicable corporate returns and filings, consents of directors, and tax returns and filings in Canada or any jurisdiction in which such consents, returns or filings are required by applicable law;

Corporate Services Agreement

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(e) the convening of shareholders’ and directors’ meetings of the Corporation as and when required in accordance with the requirements of the Canada Business Corporations Act (the “Act”) and when required providing facilities for holding such meetings and preparing and keeping minutes of such meetings;

(f) accepting service of process and any other documents or notices to be served on the Corporation;

(g) providing such other corporate administration services as may be required by the Corporation from time to time;

(h) as and when requested by a director, the secretary of the Corporation or the accountants or auditors of the Corporation, as the case may be, to deliver to such person such information in connection with the Corporation as may be in the possession of the Corporate Services Provider or as may be reasonably obtainable by it;

(i) as and when requested under the terms of any agreements to which the Corporation is party, the delivery to any person entitled to it under such terms of such information or documents which is (a) provided for under such agreements, and (b) in the possession of the Corporate Services Provider or is reasonably obtainable by it;

(j) at the request of the Board of Directors of the Corporation, prepare and forward to the shareholders all statements and notices which the Board of Directors of the Corporation is required to issue, send or serve in accordance with the Act;

(k) give, at the request of the Board of Directors of the Corporation, any directions and information to any providers of services (such as auditors, accountants, financial or management advisers or counsel, as applicable) or other agents appointed by the Board of Directors or the officers of the Corporation, as the case may be; and

(l) use its best efforts to cause the Corporation (to the extent that the Corporation has sufficient funds and other resources and is otherwise able to do so) to comply with its obligations under any agreement by which the Corporation is bound.

2.2 In providing the Corporate Services, the Corporate Services Provider shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of the Corporate Services or in the exercise of any of its rights or powers in connection therewith if there are reasonable grounds for believing that the reimbursement of such expenditure or indemnity satisfactory to it against such risk or liability is not assured to it, provided that the Corporate Services Provider shall, forthwith upon making such a determination, deliver notice of the same to the Guarantor and the Client, which notice shall indicate the grounds for such belief.

2.3 The Corporate Services Provider shall not be responsible for any misconduct or negligence on the part of any person or entity appointed with reasonable due care by it to provide any of the Corporate Services.

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ARTICLE 3—CONFIDENTIALITY

3.1 Notwithstanding any termination of this Agreement, the Corporate Services Provider shall not at any time disclose to any person, firm or company whatsoever and shall treat as confidential, any information relating to the business, finances or other matters of the Corporation, the Client or any of their affiliates as confidential and shall not (regardless of whether or not such person shall still be in office) at any time disclose to any person, firm or company whatsoever any information relating to the business, finances or other matters of the Corporation, the Client or the Guarantor or the managing general partner of the Guarantor which it may have obtained as a result of (in the case of the Corporate Services Provider) its role in providing the Corporate Services and fulfilling its obligations hereunder, provided however that the provisions of this Section 3.1 shall not apply:

(a) to the disclosure of any information already known to the recipient otherwise than as a result of a breach of this section or other unauthorised or improper conduct of such person;

(b) to the disclosure of any information which is or becomes public knowledge otherwise than as a result of a breach of this section or other unauthorised or improper conduct of such person;

(c) to the extent that the disclosure is required pursuant to the CMHC Guide, the Covered Bond Legislative Framework, any law or order of any court or other governmental authority pursuant to any direction, request or requirement (whether or not having the force of law);

(d) to the disclosure of any information to professional advisers who receive the same under a duty of confidentiality or from whom it obtained an undertaking substantially in the form of this section;

(e) to the disclosure of any information with the consent of the parties hereto; and

(f) to the disclosure on behalf of the Corporation (or on behalf of the Guarantor if applicable), in circumstances required by the terms of any contract or agreement, to which the Corporation (or on behalf of the Guarantor if applicable and if disclosure in accordance with the terms of the Guarantor Agreement) is now or hereinafter becomes a party, to the persons to whom such disclosure is required by the terms of the relevant contract or agreement.

ARTICLE 4—INDEMNITY

4.1 The Corporation agrees to defend, indemnify and hold harmless the Corporate Services Provider, its successors and assigns, and its and each of their respective directors, officers, employees and agents (the “Indemnified Parties”) against and from any demands, claims, assessments, proceedings, suits, actions, costs, judgments, penalties, interest, liabilities, losses, damages, debts, expenses and disbursements (including expert consultant and legal fees and disbursements on a solicitor and client basis) (collectively, “Claims”) that the

Corporate Services Agreement

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Indemnified Parties, or any of them, may suffer or incur, or that may be asserted against them, or any of them, in consequence of, arising from or in any way relating to this Agreement (as the same may be amended, modified or supplemented from time to time) or the Corporate Services Provider’s duties hereunder or any other services that the Corporate Services Provider may provide to the Corporation in connection with or pursuant to the terms of this Agreement or the Corporate Service Provider’s duties hereunder, except that no individual Indemnified Party shall be entitled to indemnification in the event such Indemnified Party is found to have acted in bad faith, engaged in wilful misconduct or been grossly negligent. For greater certainty, the Corporation agrees to indemnify and save harmless the Indemnified Parties against and from any present and future taxes (other than income, franchise or capital taxes), duties, assessments or other charges imposed or levied on behalf of any governmental authority having the power to tax in connection with the Corporate Services Provider’s duties hereunder.

4.2 The Corporation agrees that its liability hereunder shall be absolute and unconditional, regardless of the correctness of any representations of any third parties and regardless of any liability of third parties to the Indemnified Parties, and shall accrue and become enforceable without prior demand or any other precedent action or proceeding, and shall survive the termination of this Agreement.

ARTICLE 5—REMUNERATION, COSTS AND EXPENSES

5.1 The Corporation shall pay to the Corporate Services Provider as consideration for its services provided pursuant to this Agreement an annual fee of such amount as may be agreed to from time to time by the parties hereto payable on the date hereof and thereafter at least 30 days prior to each anniversary of the date hereof.

5.2 In addition to Section 5.1, the Corporation shall reimburse the Corporate Services Provider on demand for all reasonable travelling and other out of pocket expenses properly incurred by it, its agents, employees in the performance of its or their duties.

5.3 The Corporation shall further pay the Corporate Services Provider such additional remuneration, or meet the cost of such additional expenses (including legal and accounting advice) as shall be agreed between the Corporate Services Provider and the other parties hereto in the event that the Corporate Services Provider finds it expedient or necessary or it is requested by the other parties hereto to undertake duties which the Corporate Services Provider and the other parties hereto agree to be of an exceptional nature or otherwise outside the scope of the Corporate Services.

5.4 The Corporate Services Provider is hereby authorized, at its discretion and at the expense of the Corporation:

(a) to refer all documents or requests relating to the Corporate Services or any other matters to its legal department, the Client’s legal department, the Corporation’s solicitors, or the solicitors for the Corporate Services Provider for direction and advice, and the Corporate Services Provider, in so doing, shall be indemnified and

Corporate Services Agreement

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held harmless by the Corporation against and from any liability, cost and expense for any action taken by it in accordance with such instructions or advice. The Corporate Services Provider may, however, accept and act on any documents which appear to it to be in order and, in such cases, in the absence of gross negligence or wilful misconduct, shall be indemnified and held harmless by the Corporation against and from any liability, cost and expense; and

(b) to employ such counsel, consultants, experts, advisers, agents or agencies as it may reasonably require for the purpose of determining and discharging its duties hereunder and shall not be responsible for the negligent actions or misconduct of such parties.

ARTICLE 6—TERMINATION

6.1 If the Corporate Services Provider or any other party hereto, as the case may be, shall commit a breach of this Agreement which is not capable of remedy or shall commit a breach of this Agreement which is capable of remedy but which is not remedied within 30 days of receipt by the Corporate Services Provider or, as the case may be, such party, of notice from the Corporate Services Provider, or as the case may be, such party specifying such breach and requiring the same to be remedied, the Corporate Services Provider, or as the case may be, the other parties hereto (acting jointly) may terminate this Agreement forthwith by notice in writing to the Corporate Services Provider, or as the case may be to the other parties jointly hereto.

6.2 If not previously terminated, this Agreement may be terminated by either the Corporate Services Provider or the other parties hereto (acting jointly) serving three (3) months’ notice in writing to the other parties hereto (jointly), or as the case may be, the Corporate Services Provider.

6.3 The obligations of the parties pursuant to Sections 4 and 5 hereof shall survive the termination of this Agreement.

ARTICLE 7—NOTICES

7.1 Any Notice, consent or approval (hereinafter collectively referred to as a “Notices”) required or permitted to be given in connection with this letter agreement shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile:

(a) in the case of Notices to the Corporate Services Provider at:

Computershare Trust Company of Canada

100 University Avenue

8^th Floor, North Tower,

Toronto,     ON M5J 2Y1

Attention:   Manager, Corporate Trust

Fax:             (416) 981-9777

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(b) in the case of the Guarantor at:

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

18th Floor

100 King Street West

Toronto, ON M5X 1A1

Attention:  Senior Manager, Securitization Finance and Operations

Fax:           416-867-4166

in the case of Notices to the Corporation at:

8429065 Canada Inc.

c/o Computershare Trust Company of Canada

100 University Avenue

8^th Floor, North Tower,

Toronto, ON M5J 2Y1

Attention:   Manager, Corporate Trust

Fax:             (416) 981-9777

(c) in the case of Notices to the Client at:

Bank of Montreal

18th Floor

100 King Street West

Toronto, ON M5X 1A1

Attention:  Senior Manager, Securitization Finance and Operations

Fax:           416-867-4166

Notices delivered or transmitted to a party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Canadian Business Day prior to 4:00 p.m. local time in the place of delivery or receipt. If Notices are delivered or transmitted after 4:00 p.m. local time or if the day is not a Canadian Business Day, then the Notices shall be deemed to have been given and received on the next Canadian Business Day.

Any party hereto may, from time to time, change its address by giving written notice to the other parties in accordance with the provisions as set out herein.

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ARTICLE 8—DECLARATION OF TRUST

8.1 The Client and the Corporation agree for the benefit of the Corporate Services Provider, in its capacity as Trustee, to be bound by the terms of the Declaration of Trust.

ARTICLE 9—NON-PETITION

9.1 The Corporate Services Provider agrees that it shall not institute or join any other Person or entity in instituting against, or with respect to, the Corporation, the Guarantor, or any of the general partners of the Guarantor, any bankruptcy or insolvency event so long as any securities issued by the Corporation shall be outstanding or there shall not have elapsed one year plus one day since the last day on which any such securities shall have been outstanding. The foregoing provision shall survive the termination of this Agreement by either party.

ARTICLE 10—GENERAL

10.1 Except as otherwise expressly provided in this Agreement, the provisions of this Agreement may be amended, modified or waived only by written agreement of all of the parties, and if any such amendment, modification or waiver is determined to be material in the opinion of the Guarantor, satisfaction of the Rating Agency Condition shall be required in respect thereof. The Guarantor (or the Cash Manager on its behalf) shall deliver notice to the Rating Agencies of any amendment, modification or waiver with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement. This Agreement (and the benefits and obligations contained in it) may not be assigned by any party without the prior written consent of each of the other parties hereto and unless the Rating Agency Condition has been satisfied in respect of any such assignment.

10.2 This Agreement may be executed in one or more counterparts, including by facsimile transmission, each of which when executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement.

10.3 This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to conflict of law principles.

10.4 Each of the parties hereto irrevocably attorns and submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement, 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 courts of the Province of Ontario are an inconvenient forum for the maintenance or hearing of such action or proceeding.

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

[Remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above.

COMPUTERSHARE TRUST COMPANY OF CANADA
Per:	/s/ Sean Pigott
	Name: Sean Pigott
	Title:   Corporate Trust Officer
Per:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title:   Associate Trust Officer
BANK OF MONTREAL
Per:	/s/ Cathy Cranston
	Name: Cathy Cranston
	Title:   Senior Vice President, Finance &              Treasurer
8429065 CANADA INC.
Per:	/s/ Charles Eric Gauthier
	Name: Charles Eric Gauthier
	Title:   Assistant Secretary
BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner BMO COVERED BOND GP, INC.
Per:	/s/ Chris Hughes
	Name: Chris Hughes
	Title:   President and Secretary

Corporate Services Agreement

EX-4.11

Exhibit 4.11

CASH MANAGEMENT AGREEMENT

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP,

as Guarantor

- and -

BANK OF MONTREAL,

as Cash Manager, GDA Provider, Seller, Servicer and Issuer

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA,

as Bond Trustee

DATED AS OF SEPTEMBER 30, 2013

CONTENTS

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

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

- ii -

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

- iii -

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

BETWEEN:

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

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

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

WHEREAS:

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

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

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

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

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

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

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

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

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

1.2 Interpretation

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

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

1.3 Schedules

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

ARTICLE 2

APPOINTMENT OF CASH MANAGER

2.1 Appointment

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

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

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

2.2 Duties prescribed by Transaction Documents

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

ARTICLE 3

THE CASH MANAGEMENT SERVICES

3.1 General

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

3.2 Approvals and Authorizations

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

3.3 Compliance with Transaction Documents

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

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

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

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

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

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

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

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

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

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

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

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3.5 Indemnification

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

ARTICLE 4

PAYMENTS, ACCOUNTS, LEDGERS

4.1 Establishment of Bank Accounts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4.2 Ledgers

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

(i) the Revenue Ledger;

(ii) the Principal Ledger;

(iii) the Reserve Ledger, if applicable;

(iv) the Intercompany Loan Ledger;

(v) the Payment Ledger;

(vi) the Capital Account Ledgers; and

(vii) the Pre-Maturity Liquidity Ledger;

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

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

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

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

4.3 Cash Flows

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

(i) all Revenue Receipts;

(ii) all Principal Receipts;

(iii) all Cash Capital Contributions;

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

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

(c) The Cash Manager will procure that:

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

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

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

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

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

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

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

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

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

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

4.4 Withdrawals

The Cash Manager may make withdrawals:

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

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

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

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

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

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

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

4.5 Bank Account Statements

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

4.6 Payments to Paying Agents

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

4.7 Deposits

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

ARTICLE 5

THIRD PARTY AMOUNTS

5.1 Third Party Amounts

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

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ARTICLE 6

INTEREST RATE SWAP AGREEMENT

6.1 Computations

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

6.2 Termination of the Interest Rate Swap Agreement

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

ARTICLE 7

COVERED BOND SWAP AGREEMENT

7.1 Computations

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

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7.2 Termination of the Covered Bond Swap Agreement

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

ARTICLE 8

NO LIABILITY

8.1 No Liability

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

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

ARTICLE 9

INFORMATION

9.1 Use of I.T. Systems

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

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(b) The Cash Manager undertakes that it will for the duration of this Agreement, use commercially reasonable endeavours to:

(i) ensure that the licences and/or consents referred to in paragraph (a) are maintained in full force and effect; and

(ii) except in so far as it would breach any other of its legal obligations, grant to any Person to whom it may sub-contract or delegate the performance of all or any of its powers and obligations under this Agreement and/or to such Person as the Guarantor elects as a substitute cash manager (a “Substitute Cash Manager”) in accordance with the terms of this Agreement a licence to use any proprietary software together with any updates which may be made thereto from time to time.

(c) The Cash Manager will use all commercially reasonable efforts to maintain in working order the information technology systems used by the Cash Manager in providing the Cash Management Services.

(d) The Cash Manager will pass to any Person to whom it may sub-contract or delegate the performance of all or any of its powers and obligations under this Agreement and/or to such Person as the Guarantor and the Bond Trustee may select as a Substitute Cash Manager in accordance with the terms of this Agreement the benefit of any warranties in relation to the software insofar as the same are capable of assignment.

9.2 Access to Books and/or Records

Subject to all applicable laws, the Cash Manager will permit the Auditors, the Bond Trustee, the Custodian and any other Person nominated by the Bond Trustee or the Guarantor (in each case, to whom the Cash Manager has no reasonable objection) at any time during normal office hours upon reasonable notice to have access, or procure that such Person or Persons are granted access, to all books, records and accounts relating to the Cash Management Services provided by the Cash Manager and related matters in accordance with this Agreement.

9.3 Statutory Obligations

The Cash Manager will use commercially reasonable efforts, on behalf of the Guarantor, to prepare or cause to be prepared and filed all reports, annual returns, financial statements, statutory forms and other returns which the Guarantor is required by Law (including the CMHC Guide) or any regulatory authority having jurisdiction to prepare and file. If directed by the Guarantor, or requested by the Bond Trustee and consented to by the Guarantor (in its sole discretion), the Cash Manager will cause such accounts to be audited by the auditor appointed by the Guarantor in accordance with the terms of the Guarantor Agreement, and will procure so far as it is able so to do that the auditor will make a report thereon and copies of all such documents will be delivered to the Guarantor and the Bond Trustee as soon as practicable after the end of each accounting reference period of the Guarantor.

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9.4 Information Covenants

(a) With the assistance of the Issuer, the Cash Manager will establish and maintain a website for the Program (the “Program Website”) in accordance with, and the Cash Manager will post on the Program Website all information concerning the Program required by, the applicable requirements of the CMHC Guide.

(b) Within 15 Canadian Business Days after the end of each month following the later of (i) the Program Date, and (ii) the First Issue Date, with the assistance of the Servicer, the Cash Manager will, prior to the occurrence of an Issuer Event of Default, on behalf of the Issuer, and following the occurrence of an Issuer Event of Default, on behalf of the Guarantor, prepare and provide the Guarantor, the Bond Trustee, the Seller and the Rating Agencies with the Investor Report, the form of which is attached hereto as Schedule 3 (Form of Investor Report), and, in the case of each Investor Report other than the Investor Report prepared in respect of the First Issue Date, make available on the Program Website. The Investor Report prepared in respect of the First Issue Date may be prepared on a pro forma basis (assuming an offering size).

(c) The Cash Manager will provide, or cause to be provided, to the Guarantor and the Bond Trustee copies of any annual returns or financial statements referred to in Section 9.3 as soon as reasonably practicable after the preparation thereof.

(d) The Cash Manager will (i) notify the Rating Agencies, CMHC and the Bond Trustee in writing as soon as reasonably practicable of the details of any material amendment to the Transaction Documents, of which the Cash Manager has notice, and (ii) provide the Rating Agencies, CMHC and/or Bond Trustee, as applicable, any other information relating to the Cash Manager, solely in its capacity as Cash Manager and in connection with its obligations under this Agreement, as the Rating Agencies and/or the Bond Trustee may reasonably request, provided that the Bond Trustee will not make such a request more than once every three months unless, in the reasonable belief of the Bond Trustee, an Issuer Event of Default or Potential Issuer Event of Default or a Guarantor Event of Default or Potential Guarantor Event of Default or a Cash Manager Termination Event (as defined in Section 14.1 hereof) has occurred and is continuing, and provided further that such request does not adversely and unreasonably interfere with the Cash Manager’s day-to-day provision of the Cash Management Services under the terms of this Agreement.

(e) The Cash Manager will, at the request of the Bond Trustee, furnish the Bond Trustee and the Rating Agencies with such other information relating to its business and financial condition as it may be reasonable for the Bond Trustee to request in connection with this Agreement, provided that such request does not adversely interfere with the Cash Manager’s day-to-day provision of the Cash Management Services under the terms of this Agreement.

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9.5 Notice of Events of Default and Cash Manager Termination Event

The Cash Manager will deliver to the Guarantor, the Bond Trustee, CMHC and the Rating Agencies as soon as reasonably practicable thereafter, but in any event within three (3) Canadian Business Days of becoming aware thereof, notice of any:

(a) Cash Manager Termination Event or any event which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfilment of any similar condition, would constitute a Cash Manager Termination Event;

(b) Issuer Event of Default or Potential Issuer Event of Default; or

(c) Guarantor Event of Default or any Potential Guarantor Event of Default.

9.6 Notification under Mortgage Sale Agreement

The Cash Manager will notify the Guarantor and the Bond Trustee if it is aware that the purchase of any Loans and their Related Security on a Purchase Date would not satisfy the Rating Agency Condition.

ARTICLE 10

REMUNERATION

10.1 Fee Payable

(a) Subject to paragraph (b) below, the Cash Manager will perform the Cash Management Services at no additional cost to the Guarantor and will not be entitled to compensation or reimbursement for performance of the Cash Management Services.

(b) If the Cash Manager is replaced by a Substitute Cash Manager that is not a member of the BMO Group, such Substitute Cash Manager will be paid a cash management fee which will be agreed in writing between the Guarantor and such Substitute Cash Manager from time to time.

(c) Unless and until otherwise agreed by the Guarantor and the Substitute Cash Manager in writing, the Guarantor is solely responsible for paying the cash management fee to the Substitute Cash Manager which is referred to in paragraph (b) above.

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10.2 Payment of Fee

The cash management fee referred to in Article 10 (Remuneration) hereof, plus GST due thereon, will be paid to the Substitute Cash Manager, where applicable, in arrears on each Guarantor Payment Date in the manner contemplated by and in accordance with the provisions of the applicable Priorities of Payments.

ARTICLE 11

COSTS AND EXPENSES

11.1 General

Subject to and in accordance with the applicable Priorities of Payments and subject to Section 12.1(d), the Guarantor will on each Guarantor Payment Date reimburse the Cash Manager for all costs, expenses and charges (together with any applicable Taxes, due thereon) properly incurred by the Cash Manager in the performance of the Cash Management Services including any such costs, expenses or charges not reimbursed to the Cash Manager on any previous Guarantor Payment Date, and the Cash Manager will supply the Guarantor with an appropriate invoice with respect to such Taxes issued by it, or, if the Cash Manager has treated the relevant cost, expense or charge as a disbursement for GST purposes, by the Person making the supply.

11.2 Responsibility

Unless and until otherwise agreed by the Guarantor and the Cash Manager in writing, the Guarantor will be solely responsible for reimbursing the Cash Manager for the out-of-pocket costs, expenses and charges referred to in Article 11 (Costs and Expenses) hereof.

ARTICLE 12

REPRESENTATIONS, WARRANTIES AND COVENANTS OF CASH MANAGER

12.1 Representations, Warranties and Covenants

The Cash Manager hereby represents and warrants to, and covenants with, each of the Guarantor and the Bond Trustee that without prejudice to any of its specific obligations hereunder:

(a) it will exercise and carry out its powers and obligations under this Agreement solely in the best interests of the Guarantor and the Bond Trustee, and in connection therewith, it will devote the degree of care, diligence and skill that a reasonable and prudent person would exercise in comparable circumstances;

(b) it will comply with any proper directions, orders and instructions which the Guarantor or the Bond Trustee may from time to time give to it in accordance with the provisions of this Agreement and, in the event of any conflict, those of the Bond Trustee will prevail;

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(c) it will keep in force all licences, approvals, authorizations and consents which may be necessary in connection with the performance of the Cash Management Services and prepare and submit all necessary applications and requests for any further approval, authorization, consent or licence required in connection with the performance of the Cash Management Services;

(d) save as otherwise agreed with the Guarantor and the Bond Trustee, it will provide free of charge to the Guarantor during normal office hours space, facilities, equipment and staff sufficient to fulfil the obligations of the Guarantor under this Agreement;

(e) it will make all payments required to be made by it pursuant to this Agreement on the due date for payment thereof for value on such day without set-off (including, without limitation, in respect of any fees owed to it), abatement, deduction or counterclaim;

(f) it will not, in its capacity as Cash Manager, without the prior written consent of the Bond Trustee (such consent not to be unreasonably withheld or delayed) and subject to any restrictions under other Transaction Documents and the CMHC Guide, agree to any amendments to or termination of any of the Transaction Documents, to which it is a party in its capacity as Cash Manager, save in accordance with their terms;

(g) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(h) it is and will continue to be in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(i) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(j) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party;

(k) it will comply with the CMHC Guide and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations hereunder and the other Transaction Documents to which it is a party; and

(l) the unsecured, unsubordinated and unguaranteed debt obligations or the issuer default rating, as applicable, of the Cash Manager rated by each of the Rating Agencies are at or above each of the Cash Manager Required Ratings.

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12.2 Duration of Covenants

The covenants of the Cash Manager in Section 12.1 hereof will remain in force until this Agreement is terminated but without prejudice to any right or remedy of the Guarantor and/or the Bond Trustee arising from breach of any such covenant prior to the date of termination of this Agreement.

12.3 Undertaking

The Cash Manager undertakes to notify the Guarantor and the Bond Trustee immediately if, at any time during the term of this Agreement, any of the statements contained in Section 12.1 ceases to be true. The representations, warranties and covenants set out in Section 12.1 will survive the signing and delivery of this Agreement.

ARTICLE 13

SERVICES NON-EXCLUSIVE

13.1 Services Non-Exclusive

Nothing in this Agreement will prevent the Cash Manager from rendering or performing services similar to those provided for in this Agreement to or for itself or other Persons, or from carrying on business similar to or in competition with the activities of the Guarantor, or the business of the Bond Trustee or any other Person party to any Transaction Document to which the Cash Manager is a party.

ARTICLE 14

TERMINATION

14.1 Cash Manager Termination Events

(a) If any of the following events (each a “Cash Manager Termination Event”) occurs:

(i) the Cash Manager defaults in the payment on the due date of any payment due and payable by it under this Agreement or in the performance of its obligations under Sections 4.3 and 4.4 hereof and such default continues unremedied for a period of five (5) Canadian Business Days after the earlier of the Cash Manager becoming aware of such default and receipt by the Cash Manager of written notice from the Bond Trustee requiring the same to be remedied; or

(ii) the Cash Manager defaults in the performance or observance of any of its other covenants and obligations under this Agreement, or any representation or warranty of the Cash Manager is incorrect and such default continues unremedied for a period of thirty (30) days after the Cash Manager becoming aware of such default or misrepresentation; or

(iii) an Insolvency Event occurs in respect of the Cash Manager;

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(iv) a Rating Agency downgrading or withdrawing the issuer default rating or the ratings of the unsecured, unsubordinated and unguaranteed debt obligations of the Cash Manager, as applicable, below the Cash Manager Required Ratings (unless the Cash Manager obtains an unconditional and unlimited guarantee of its obligations under this Agreement from a credit support provider whose unsecured, unguaranteed and unsubordinated debt ratings and issuer default ratings, as applicable, meet the requirements of the relevant Rating Agencies (including the Cash Manager Required Ratings) within thirty (30) days of the first downgrade below any of the Cash Manager Required Ratings); or

(v) an Issuer Event of Default (A) occurs and is continuing, or (B) has previously occurred and is continuing, at any time that the Guarantor is Independently Controlled and Governed (provided that the Cash Manager is the Issuer or an Affiliate thereof),

then the Guarantor and/or the Bond Trustee (x) may at once or at any time thereafter while such default continues by notice in writing to the Cash Manager or (y) in the case of an occurrence of a Cash Manager Termination Event described in paragraph 14.1(a)(iv) above at any time that the Guarantor is not Independently Controlled and Governed, shall, terminate its appointment as Cash Manager under this Agreement with effect from a date (not earlier than the date of the notice) specified in the notice; provided that any termination resulting from the occurrence of a Cash Manager Termination Event described in paragraph 14.1(a)(ii) above in respect of the Cash Manager’s default in the performance or observance of any of its covenants and obligations under this Agreement shall be subject to the consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that such termination would be materially prejudicial to the interests of the Covered Bondholders.

(b) Upon the occurrence of a Cash Manager Termination Event described in paragraph 14.1(a)(iv) that is cured as provided for therein, the Guarantor shall forthwith notify CMHC of the identity of the guarantor of the Cash Manager’s obligations and the ratings by each of the Rating Agencies of the short-term, unsecured, unsubordinated and unguaranteed debt obligations of such guarantor or its issuer default rating, as applicable.

(c) Upon termination of the appointment of the Cash Manager pursuant to this Section 14.1, the Guarantor will use commercially reasonable efforts to appoint a Substitute Cash Manager (but will have no liability to any Person in the event that, having used commercially reasonable endeavours, it is unable to appoint a Substitute Cash Manager).

(d) Any Substitute Cash Manager:

(i) must agree to enter into an agreement substantially on the same terms as the relevant provisions of this Agreement or on such terms as are satisfactory to the Guarantor and the Bond Trustee;

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(ii) must have cash management experience and is subject to the prior written approval of the Guarantor and the Bond Trustee (such consent not to be unreasonably withheld, delayed or made subject to conditions); and

(iii) must be a party with respect to which the Rating Agency Condition has been satisfied.

14.2 Resignation of Cash Manager

The Cash Manager may resign and terminate its appointment as Cash Manager under this Agreement upon the expiry of not less than 12 months’ notice of termination given by the Cash Manager to the Guarantor and the Bond Trustee (or such shorter time as may be agreed between the Cash Manager, the Guarantor and the Bond Trustee) provided that:

(a) a Substitute Cash Manager will be appointed, such appointment to be effective not later than the date of such resignation;

(b) such Substitute Cash Manager has cash management experience and is approved by each of the Guarantor and the Bond Trustee, and has at least the Cash Manager Required Ratings;

(c) the Substitute Cash Manager enters into an agreement substantially on the same terms as the relevant provisions of this Agreement (or on such terms as are satisfactory to the Guarantor and the Bond Trustee) and the Cash Manager will not be released from its obligations under the relevant provisions of this Agreement until such Substitute Cash Manager has entered into such new agreement and the rights of the Guarantor under such agreement are charged in favour of the Bond Trustee on terms satisfactory to the Bond Trustee. Any such agreement shall comply with the CMHC Guide and shall include a covenant on the part of the Substitute Cash Manager to comply with the CMHC Guide in the performance of its duties and obligations thereunder; and

(d) the Rating Agency Condition has been satisfied with respect to such resignation and the appointment of the Substitute Cash Manager, unless otherwise agreed by an Extraordinary Resolution of the Covered Bondholders.

14.3 Effect of Termination or Resignation

(a) On and after termination of the appointment or resignation of the Cash Manager under this Agreement pursuant to this Article 14, all authority and power of the Cash Manager under this Agreement will be terminated and be of no further effect and the Cash Manager will not thereafter hold itself out in any way as the agent of the Guarantor pursuant to this Agreement.

(b) Upon termination of the appointment or resignation of the Cash Manager under this Agreement pursuant to this Article 14, the Cash Manager will:

(i) forthwith deliver (and in the meantime hold on trust for, and to the order of, the Guarantor or the Bond Trustee, as the case may be) to the Guarantor or the Bond Trustee, as the case may be, or as the Guarantor or the Bond Trustee will direct (and in the event of a conflict between directions from the Guarantor and directions from the Bond Trustee, the

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directions of the Bond Trustee will prevail), all books of account, papers, records, registers, correspondence and documents in its possession or under its control relating to the affairs of or belongings of the Guarantor or the Bond Trustee, as the case may be (if practicable, on the date of receipt), any funds then held by the Cash Manager on behalf of the Guarantor or the Bond Trustee and any other assets of the Guarantor and the Bond Trustee;

(ii) take such further action as the Guarantor or the Bond Trustee, as the case may be, may reasonably direct at the expense of the Cash Manager (including in relation to the appointment of a Substitute Cash Manager), provided that the Guarantor or the Bond Trustee, as the case may be, will not be required to take or direct to be taken such further action unless it has been indemnified to its satisfaction (and in the event of a conflict between the directions of the Guarantor and the directions of the Bond Trustee, the directions of the Bond Trustee will prevail);

(iii) provide all relevant information contained on computer records in the form of a flat file and/or upon electronic media (including, but not limited to, CD-ROM) together with details of the layout of the files set out in such flat file and/or such electronic media; and

(iv) co-operate and consult with and assist the Guarantor or the Bond Trustee or its nominee, as the case may be (which will, for the avoidance of doubt, include any Receiver appointed by it), for the purposes of explaining the file layouts and the format of the flat file/electronic media containing such computer records on the computer system of the Guarantor or the Bond Trustee or such nominee, as the case may be.

14.4 General Provisions Relating to Termination or Resignation

(a) Termination of this Agreement, the termination or resignation of the Cash Manager and/or the appointment of a Substitute Cash Manager under this Agreement will be without prejudice to the liabilities of the Guarantor and the Bond Trustee to the Cash Manager or vice versa incurred befofre the date of such termination. No Cash Manager will have any right of set-off or any lien in respect of such amounts against amounts held by it on behalf of the Guarantor or the Bond Trustee.

(b) This Agreement, except as otherwise agreed between the Guarantor and the Cash Manager and consented to by the Bond Trustee, will terminate automatically at such time as the Guarantor’s obligations under the Covered Bond Guarantee have been discharged and the Charged Property constituted by the Security Agreement has been released.

(c) On termination of the appointment of the Cash Manager or resignation of the Cash Manager under the provisions of this Article 14, the Cash Manager will be

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entitled to receive all fees and other funds accrued up to (but excluding) the date of termination or resignation but will not be entitled to any other or further compensation. Such funds so receivable by the Cash Manager solely in its capacity as cash manager, will be paid by the Guarantor, on the dates on which they would otherwise have fallen due hereunder and under the terms of the Guarantor Agreement and the Security Agreement. For the avoidance of doubt, such termination or resignation will not affect the BMO’s rights to receive payment of all amounts (if any) due to it from the Guarantor other than in its capacity as cash manager under this Agreement.

(d) Any provision of this Agreement which is stated to continue after termination of the Agreement will remain in full force and effect notwithstanding any termination of this Agreement.

(e) Upon any termination or resignation of the Cash Manager hereunder, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Cash Manager’s replacement contemporaneously with the earlier of (i) notice of such termination or resignation and replacement to a Rating Agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available to Covered Bondholders, and (iii) five (5) Canadian Business Days following such termination or resignation and replacement (unless the replacement Cash Manager has yet to be identified at that time, in which case notice of the replacement Cash Manager may be provided no later than 10 Canadian Business Days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Cash Manager, all information relating to the replacement Cash Manager required by the CMHC Guide and the new agreement or revised and amended copy of this Agreement to be entered into with the replacement Cash Manager.

ARTICLE 15

FURTHER ASSURANCE, NO SET-OFF

15.1 Co-operation, etc.

The parties hereto agree that they will co-operate fully to do all such further acts and things and execute any further documents as may be necessary or desirable to give full effect to the arrangements contemplated by this Agreement.

15.2 Powers of Attorney

Without prejudice to the generality of Section 15.1 above, the Guarantor will upon request by the Cash Manager forthwith give to the Cash Manager such further powers of attorney or other written authorizations, mandates or instruments as are necessary to enable the Cash Manager to perform the Cash Management Services.

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15.3 No Set-Off

BMO, as Cash Manager, as Seller, as Servicer and as GDA Provider agrees that it will not:

(a) set-off or purport to set-off any amount which the Guarantor is or will become obliged to pay to it under this Agreement or any other Transaction Document against any amount from time to time standing to the credit of or to be credited to any of the Guarantor Accounts or any replacement or additional bank account of the Guarantor; or

(b) make or exercise any claims or demands, any rights of counterclaim or any other equities against or withhold payment of any and all sums of money which may at any time and from time to time be standing to the credit of any of the Guarantor Accounts or any replacement of additional bank account of the Guarantor.

15.4 Acknowledgement of Servicer and Seller

Each of the Servicer and Seller acknowledge the Cash Management Services to be provided by the Cash Manager and agree to provide all information and assistance reasonably required by the Cash Manager in a timely fashion in order for the Cash Manager to comply with its obligations under this Agreement.

15.5 New Sellers, New Servicers and Successor Servicers

Each of the parties hereto agrees to make all changes that are reasonably necessary or desirable to this Agreement following the accession of a New Seller, New Servicer and/or Successor Servicer, as the case may be, to any one or more of the Transaction Documents.

ARTICLE 16

BOND TRUSTEE

16.1 Change of Bond Trustee

In the event that there is any change in the identity of the Bond Trustee or an additional Bond Trustee is appointed in accordance with the Security Agreement, as the case may be, the Cash Manager, solely in its capacity as cash manager, will execute such documents with any other parties to this Agreement and take such actions as such new Bond Trustee may reasonably require for the purposes of vesting in such new Bond Trustee the rights of the Bond Trustee under this Agreement and under the Security Agreement and while any of the Covered Bonds remain outstanding will give notice thereof to the Rating Agencies.

16.2 Limitation of Liability of Bond Trustee

(a) For the avoidance of doubt, the Bond Trustee will, without prejudice to the obligations of the Guarantor, as the case may be, or any Receiver appointed pursuant to the Security Agreement in respect of such amounts, not be liable to pay any amounts due under Article 10 (Remuneration) and Article 11 (Costs and Expenses) hereof.

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(b) It is hereby acknowledged and agreed that by its execution of this Agreement the Bond Trustee will not assume or have any obligations or liabilities to the Cash Manager or the Guarantor under this Agreement notwithstanding any provision herein and that the Bond Trustee has agreed to become a party to this Agreement for the purpose only of taking the benefit of this Agreement and agreeing to amendments to this Agreement pursuant to Article 20 (Amendments, Variation and Waiver). For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and obligations of the Bond Trustee are governed by the terms of the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion, without any obligation to give reasons therefor, and the Bond Trustee will not be responsible for any liability occasioned by so acting, except if acting in breach of the standard of care set out in Section 11.1 of the Security Agreement.

ARTICLE 17

LIMITATION OF LIABILITY

17.1 Limitation of Liability

BMO Covered Bond Guarantor Limited Partnership is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which is, except as expressly required by law, only liable for any of its liabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capital.

ARTICLE 18

CONFIDENTIALITY

18.1 Confidentiality

During the continuance of this Agreement or after its termination, each of the Guarantor, the Cash Manager, the Seller, the Servicer, the GDA Provider and the Bond Trustee (in their respective capacities) will use their best endeavours not to disclose to any Person, firm, or company whatsoever any information relating to the business, finances or other matters of a confidential nature of any other party hereto of which it may exclusively by virtue of being party to the Transaction Documents have become possessed and will use all reasonable endeavours to prevent any such disclosure as aforesaid, provided however that the provisions of this Article 18 will not apply:

(a) to any information already known to the recipient otherwise than as a result of entering into any of the Transaction Documents;

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(b) to any information subsequently received by the recipient which it would otherwise be free to disclose;

(c) to any information which is or becomes public knowledge otherwise than as a result of the conduct of the recipient;

(d) to any extent that the recipient is required to disclose the same pursuant to and in accordance with (i) the Transaction Documents, (ii) any law or order of any court of competent jurisdiction, (iii) any direction, request or requirement (whether or not having the force of law) of any central bank or any governmental or other authority (including, without limitation, any official bank examiners or regulators), or (iv) the CMHC Guide and the Covered Bond Legislative Framework;

(e) to the extent that the recipient needs to disclose the same for determining the existence of, or declaring, an Issuer Event of Default, a Guarantor Event of Default or a Cash Manager Termination Event, the protection or enforcement of any of its rights under any of the Transaction Documents or in connection herewith or therewith or for the purpose of discharging, in such manner as it thinks fit, its duties under or in connection with such agreements in each case to such Persons as require to be informed of such information for such purposes; or

(f) in relation to any information disclosed to the professional advisers of the recipient, a Purchaser of any Loans and their Related Security in accordance with the terms of the Transaction Documents, or (in connection with the review of current ratings of any Covered Bonds issued under the Program or with a prospective rating of any debt to be issued by the Issuer) to any Rating Agency or any prospective Substitute Cash Manager or prospective new Bond Trustee.

ARTICLE 19

NOTICES

19.1 Notices

Any notices to be given pursuant to this Agreement to any of the parties hereto will be in writing and will be sufficiently served if sent by prepaid first class mail, by hand or by e-mail or facsimile transmission and will be deemed to be given (if by facsimile transmission) when dispatched, (if by e-mail), when confirmation of receipt is received, (if delivered by hand) on the day of delivery if delivered before 5:00 p.m. (Eastern time) on a Canadian Business Day or on the next Canadian Business Day if delivered thereafter or on a day which is not a Canadian Business Day or (if by first class mail) when it would be received in the ordinary course of the post and will be sent:

(a) in the case of Bank of Montreal in its capacity as Cash Manager, a Seller and a Servicer, to Bank of Montreal, at 100 King Street West, 18^th Floor, Toronto, Ontario, M5X 1A1 (facsimile number 416-867-7193) for the attention of Senior Manager, Securitization Structuring;

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(b) in the case of the Guarantor, to BMO Covered Bond Guarantor Limited Partnership, c/o Bank of Montreal, at 100 King Street West, 18^th Floor, Toronto, Ontario, M5X 1A1 (facsimile number 416-867-4166) for the attention of Senior Manager, Securitization Finance and Operations; and

(c) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11^th Floor, Toronto, Ontario M5J 2Y1 (facsimile number 416-981-9777) for the attention of Manager, Corporate Trust, e-mail: corporatetrust.toronto@computershare.com;

or to such other physical or e-mail address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written notice in accordance with the provisions of this Article 19.

ARTICLE 20

AMENDMENTS, VARIATION AND WAIVER

20.1 Amendments, Variation and Waiver

(a) Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

(b) Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (i) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (ii) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be a material amendment. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variation or waiver which does not require satisfaction of the Rating Agency Condition, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

(c) The Guarantor (or the Cash Manager on its behalf) will deliver notice to CMHC from time to time of any amendment, restatement or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

(d) Notwithstanding the foregoing, any amendment to this Agreement for the purposes of addressing changes to the CMHC Guide referenced in the proviso to the definition of “Latest Valuation” shall not require the consent of any party nor shall it require satisfaction of the Rating Agency Condition.

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ARTICLE 21

NON-PETITION

21.1 Non-Petition

The Cash Manager, the GDA Provider, the Seller and the Servicer agree that they will not institute against, or join any other party in instituting against, the Guarantor, or any general partners of the Guarantor, any bankruptcy, reorganisation, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal, provincial or foreign bankruptcy, insolvency or similar law, for one year and one day after all Covered Bonds have been repaid in full. The foregoing provision will survive the termination of this Agreement by any party.

ARTICLE 22

NO AGENCY OR PARTNERSHIP

22.1 No Agency or Partnership

It is hereby acknowledged and agreed by the parties that nothing in this Agreement will be construed as giving rise to any relationship of agency, save as expressly provided herein, or partnership between the parties and that in fulfilling its obligations hereunder, each party will be acting entirely for its own account.

ARTICLE 23

ASSIGNMENT

23.1 Assignment

Subject always to the provisions of Section 23.2 herein, no party hereto will be entitled to assign all or any part of its rights or obligations hereunder to any other party without the prior written consent of each of the other parties hereto (which will not, if requested, be unreasonably withheld or delayed or made subject to conditions) save that the Guarantor will be entitled to assign whether by way of security or otherwise all or any of its rights under this Agreement and all or any of its interest in the Loans and their Related Security without such consent to the Bond Trustee pursuant to the Security Agreement and the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement and all or any of its interest in the Loans and their Related Security without such consent in exercise of its rights under the Security Agreement. If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS.

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23.2 Assignment under Security Agreement

The parties hereto, other than the Bond Trustee and the Guarantor, acknowledge that on the assignment pursuant to the Security Agreement by the Guarantor to the Bond Trustee of the Guarantor’s rights under this Agreement, the Bond Trustee may enforce such rights in the Bond Trustee’s own name without joining the Guarantor in any such action (which right such Parties hereby waive) and such Parties hereby waive as against the Bond Trustee any rights or equities in its favour arising from any course of dealing between one or more of such parties and the Guarantor.

ARTICLE 24

GOVERNING LAW

24.1 Governing Law

This Agreement will be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

24.2 Submission to Jurisdiction

Each party to this Agreement hereby irrevocably submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement.

ARTICLE 25

EXECUTION IN COUNTERPARTS

25.1 Execution in Counterparts

This Agreement may be executed in any number of counterparts (manually or by facsimile or pdf format), each of which when so executed will be deemed to be an original and all of which when taken together will constitute one and the same agreement.

[The remainder of this page left intentionally blank]

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IN WITNESS WHEREOF the parties hereto have executed on the day and year first before written.

BANK OF MONTREAL, as Cash Manager, GDA Provider, Seller, Servicer and Issuer
By:	/s/ Cathy Cranston
	Name:	Cathy Cranston
	Title:	Senior Vice President, Finance & Treasurer
BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP by its managing general partner BMO COVERED BOND GP, INC.
By:	/s/ Chris Hughes
	Name:	Chris Hughes
	Title:	President and Secretary
COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:	/s/ Sean Pigott
	Name:	Sean Pigott
	Title:	Corporate Trust Officer
By:	/s/ Stanley Kwan
	Name:	Stanley Kwan
	Title:	Associate Trust Officer

SCHEDULE 1

THE CASH MANAGEMENT SERVICES

The Cash Manager will:

(a) use amounts held for and on behalf of the Guarantor, and operate the Guarantor Accounts and ensure that payments are made into and from such accounts in accordance with this Agreement and any other applicable Transaction Document provided however that nothing herein will require the Cash Manager to make funds available to the Guarantor to enable such payments to be made other than as expressly required by the provisions of this Agreement and nothing herein will constitute a guarantee, indemnity or other similar obligation by or of the Cash Manager of or in relation to all or any of the obligations of the Guarantor under any of the Transaction Documents;

(b) keep any records necessary for all Taxation purposes;

(c) provide accounting services, including reviewing receipts and payments, supervising and assisting in the preparation of interim statements and final accounts and supervising and assisting in the preparation of Tax returns;

(d) on behalf of the Guarantor, provided that such funds are at the relevant time available to the Guarantor, pay all the out-of-pocket expenses of the Guarantor, properly incurred by the Cash Manager on behalf of the Guarantor in the performance of the Cash Manager’s duties hereunder, including without limitation:

(i) all Taxes which may be due or payable by the Guarantor;

(ii) all registration, transfer, filing and other fees and other charges payable in respect of the sale by the Seller of the Initial Portfolio and any Additional Loans and their Related Security to the Guarantor;

(iii) all necessary filing and other fees in compliance with regulatory requirements;

(iv) all legal and audit fees and other professional advisory fees;

(v) all communication expenses including postage, courier and telephone charges;

(vi) all premiums payable by the Guarantor in respect of any insurance policies relating to the Loans in the Portfolio; and

(vii) following the occurrence of an Issuer Event of Default and service of a Notice to Pay on the Guarantor, all fees payable to any stock exchange on which the Covered Bonds are listed but only if the Issuer has not otherwise paid those fees;

(e) at the written request of the Guarantor or with the prior written consent of the Bond Trustee, invest funds standing from time to time to the credit of the GDA Account (or, as applicable, the Stand-By GDA Account) in Substitution Assets up to the limit prescribed in the Guarantor Agreement (any such purchase to be at the sole discretion of the Cash Manager), subject to the following provisions:

(i) any such Substitution Assets will be purchased in the name of the Guarantor;

(ii) if required by the Bond Trustee on or prior to purchasing any Substitution Assets, the Guarantor has entered into appropriate hedging arrangements with a hedge provider that has the requisite ratings to hedge against the interest rate risk (if any) associated with such Substitution Assets, in each case on terms that are satisfactory to the Bond Trustee;

(iii) the Bond Trustee has at all times, a valid, perfected first priority Security Interest in any such Substitution Assets, including all hedge arrangements referred to in (ii) above;

(iv) any costs properly and reasonably incurred in investing in, holding or disposing of any Substitution Assets will be reimbursed to the Cash Manager and the Bond Trustee by the Guarantor;

(v) all income or other distributions arising on, or proceeds following the disposal or maturity of, any Substitution Assets will be credited to the GDA Account (or, as applicable, the Stand-By GDA Account);

(vi) the Cash Manager will not be responsible (save where any loss, liability, claim, expense or damage suffered or incurred results from the Cash Manager’s own dishonesty, bad faith, wilful misconduct, gross negligence or reckless disregard or that of its officers, employees or agents) for any loss, liability, claim, expense or damage suffered or incurred by reason of any such Substitution Assets whether by depreciation in value or otherwise provided that such Substitution Assets were made in accordance with the above provisions; and

(vii) following service of an Asset Coverage Test Breach Notice (until revoked) or a Notice to Pay on the Guarantor, the Cash Manager will take all commercially reasonable steps to sell the Substitution Assets then held in the name of the Guarantor and the Bond Trustee as quickly as reasonably practicable and for the best price then reasonably available and credit the proceeds thereof to the GDA Account (or, as applicable, the Stand-By GDA Account);

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(f) procure (so far as the Cash Manager, using all commercially reasonable endeavours, is able so to do) compliance by the Guarantor with all applicable legal requirements and with the terms of the Transaction Documents to which the Guarantor is a party, provided always that the Cash Manager will not lend or provide any sum to the Guarantor and the Cash Manager will have no liability whatsoever to the Guarantor, the Bond Trustee or any other Person for any failure by the Guarantor to make any payment due, or to perform its other obligations, under any of the Transaction Documents other than to the extent arising from the Cash Manager failing to perform any of its obligations under this Agreement (but without prejudice to the obligations of BMO in its separate capacities as a Servicer, a Seller, lender under the Intercompany Loan Agreement and as a Partner of the Guarantor);

(g)        (i) act as calculation agent pursuant to the terms of the Interest Rate Swap Agreement and make the calculations referred to therein and notify the Guarantor and the Bond Trustee of all amounts, balances and rates; and

            (ii) if on or prior to the repayment in full of the relevant Series of Covered Bonds, the Interest Rate Swap Agreement is terminated (other than as a result of an Event of Default (as defined in the Interest Rate Swap Agreement) where the Guarantor is the Defaulting Party (as defined in the Interest Rate Swap Agreement) or the service of an Guarantor Acceleration Notice on the Guarantor) or a partial termination of the Interest Rate Swap Agreement as a result of a sale of Loans and their Related Security by the Guarantor, purchase (on behalf of the Guarantor and the Bond Trustee) a new hedge against possible variances in the rate of interest payable on the Loans in the Portfolio (which may, for instance, include variable rates of interest or fixed rates of interest) and the amounts payable on the Intercompany Loan and (following the Covered Bond Swap Effective Date) the Covered Bond Swap Agreement (in each case, to the extent related to the Interest Rate Swap Agreement so terminated). The Cash Manager may apply any early termination payment received from the Interest Rate Swap Provider pursuant to the Interest Rate Swap Agreement for such purpose;

(h)        (i) act as calculation agent pursuant to the terms of the Covered Bond Swap Agreement and make the calculations referred to therein and notify the Guarantor and the Bond Trustee of all amounts, balances and rates, and

            (ii) if on or prior to the repayment in full of the relevant Series of Covered Bonds, the Covered Bond Swap Agreement is terminated (other than as a result of an Event of Default (as defined in the Covered Bond Swap Agreement) where the Guarantor is the Defaulting Party (as defined in the Covered Bond Swap Agreement) or the service of a Guarantor Acceleration Notice on the Guarantor), or a partial termination of the Covered Bond Swap Agreement as a result of a sale of Loans and their Related Security by the Guarantor, purchase (on behalf of the Guarantor

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and the Bond Trustee) a new swap to hedge against currency and/or other risks arising, following the Covered Bond Swap Effective Date, in respect of amounts received by the Guarantor under the Interest Rate Swap Agreement and amounts payable in respect of its obligations under the Covered Bond Guarantee. The Cash Manager may apply an early termination payment received from the Covered Bond Swap Provider pursuant to the relevant Covered Bond Swap Agreement for such purpose;

(i) if an Investor Put is specified in the Final Terms Document for a Covered Bond, then and if to the extent specified in the applicable Final Terms Document, upon the Covered Bondholder giving the required notice in accordance with the Terms and Conditions, prior to the expiry of such notice, notify the Bond Trustee in writing whether there are sufficient funds available to pay any termination payment due to the Covered Bond Swap Provider;

(j) assist the Auditors, if applicable, of the Guarantor and provide such information to the Auditors as the Auditors may reasonably request for the purpose of carrying out its duties as Auditors;

(k) make all filings, give all notices and make all registrations and other notifications required in the day-to-day operation of the Guarantor or required to be given by the Guarantor pursuant to the Transaction Documents;

(l) provide or procure the provision of secretarial and administration services to the Guarantor, including the keeping of all registers and the making of all returns and filings required by applicable law or regulatory authorities; and

(m) at any time the Guarantor makes a repayment on the Demand Loan, in whole or in part, calculate the Asset Coverage Test, as of the date of repayment to confirm the then outstanding balance on the Demand Loan and that the Asset Coverage Test will be met on the date of repayment after giving effect to such repayment.

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SCHEDULE 2

CASH MANAGEMENT AND MAINTENANCE OF LEDGERS

1. Determination

(a) The Managing GP (or the Cash Manager on its behalf) shall, on or before the Canadian Business Day that is at least two days prior to any Guarantor Payment Date, calculate the amount of Available Revenue Receipts and Available Principal Receipts available for distribution on the immediately following Guarantor Payment Date and the Reserve Fund Required Amount (if applicable).

(b) Without prejudice to the obligations of the Calculation Agent, the Cash Manager will, if necessary, perform all currency conversions free of charge, cost or expense at the relevant exchange rate (for the purposes of any calculations referred to above, (i) all percentages resulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (e.g. 9.876541% being rounded down to 9.87654% and (ii) any currency amounts used in or resulting from such calculations will be rounded in accordance with the relevant market practice).

(c) Each determination made in accordance with this paragraph 1 will (in the absence of demonstrable error) be final and binding on all Persons.

2. Notification of Determinations

(a) The Cash Manager may make all the determinations referred to in paragraph 1(a) on the basis that the amount of any Losses will not increase and on the basis of any other reasonable and proper assumptions as the Cash Manager considers appropriate (including without limitation as to the amount of any payments to be made or amounts received under the applicable Priorities of Payments during the period from and including the Guarantor Payment Date following the relevant Calculation Date to but excluding the next following Guarantor Payment Date).

The Cash Manager will notify the Guarantor and the Bond Trustee on request of any such other assumptions and will take account of any representations made by the Issuer and the Bond Trustee (as the case may be) in relation thereto.

(b) Each determination made in accordance with this paragraph 2 will (in the absence of demonstrable error) be final and binding on all Persons.

(c) The Cash Manager will procure that the determinations and notifications required to be made by the Guarantor pursuant to the Terms and Conditions of the Covered Bonds are made.

3. Pre-Acceleration Revenue and Principal Priority of Payments

(a) On each Guarantor Payment Date, the Guarantor or the Cash Manager on its behalf will transfer funds from the GDA Account (or, as applicable, the Stand-By GDA Account) to the Transaction Account (or, as applicable, the Stand-By Transaction Account) in accordance with Article 6 (Priorities of Payments) of the Guarantor Agreement.

(b) Subject to Section 4.4 of the Cash Management Agreement, prior to a Covered Bond Swap Effective Date, the Cash Manager will cause the Available Principal Receipts and Available Revenue Receipts held by it for and on behalf of the Guarantor and standing to the credit of the Transaction Account to be applied on each Guarantor Payment Date in accordance with the Pre-Acceleration Revenue Priority of Payments or Pre-Acceleration Principal Priority of Payments, as applicable.

4. Other Payments

Subject to Section 4.4 of the Cash Management Agreement, the Cash Manager agrees, and the Guarantor concurs, that (save as otherwise specified below) amounts may be transferred from the GDA Account (or, as applicable, the Stand-By GDA Account) to the Transaction Account (or, as applicable, the Stand-By Transaction Account), and the following payments may be made from the Transaction Account (or, as applicable, the Stand-By Transaction Account) (to the extent that withdrawal of those amounts would not cause the balance of the Transaction Account to become overdrawn) from amounts held by the Cash Manager for and on behalf of the Guarantor and used on any date:

(i) if any amount has been received from a Borrower for the express purpose of payment being made to a third party for the provision of a service (including giving insurance cover) to either that Borrower or the relevant Seller (in relation to Loans sold by that Seller) or the Guarantor, to pay such amount when due to such third party or, in the case of the payment of an insurance premium, where such third party and the Cash Manager have agreed that payment of commission should be made by deduction from such insurance premium, to pay such amount less such commissions when due to such third party and to pay such commission to the Cash Manager and to pay any premiums in respect of any insurance policies obtained or held by the Guarantor in accordance with the terms of the Guarantor Agreement or relating to any Loan comprised in the Covered Bond Collateral;

(ii) subject to Section 7.2 of the Mortgage Sale Agreement, to pay to any Person (including the Seller) any amounts due arising from any overpayment by any Person or arising from any reimbursement by any Person of any such overpayment (including, for the avoidance of doubt, where arising from the failure of a direct debit);

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(iii) subject to Section 7.2 of the Mortgage Sale Agreement, to pay when due (but subject to any right to refuse or withhold payment or of set-off that has arisen by reason of the Borrower’s breach of the terms of the relevant Mortgage or Loan) any amount payable to a Borrower under the terms of the Mortgage or the Loan to which that Borrower is a party;

(iv) to pay when due and payable any amounts due and payable by the Guarantor to third parties and incurred without breach by the Guarantor of the Guarantor Agreement where payment is not provided for elsewhere in the Pre-Acceleration Revenue Priority of Payments or the Pre-Acceleration Principal Priority of Payments;

(v) to refund any amounts due arising from the rejection of any payments in respect of a Loan and any other amounts which have not been received by the Guarantor as cleared funds; and

(vi) to pay to the relevant Seller any amounts owed to the Seller(s) pursuant to Article 5 (Trust of Funds) of the Mortgage Sale Agreement.

5. Use of Ledgers

(a) The Cash Manager shall forthwith record monies received or payments made by it on behalf of the Guarantor in the Ledgers in the manner set out in this Agreement and the Guarantor Agreement.

(b) A debit item shall only be made in respect of any of the Ledgers and the corresponding payment or transfer (if any) may only be made from amounts held for and on behalf of the Guarantor in the GDA Account (or, as applicable, the Stand-By GDA Account) or the Transaction Account (or, as applicable, the Stand-By Transaction Account), as the case may be, to the extent that such entry does not cause the relevant Ledger to have a debit balance.

(c) Following the service of a Notice to Pay on the Guarantor:

(i) the Cash Manager shall not be obliged to maintain the Ledgers other than the Capital Account Ledger and the Intercompany Loan Ledger; and

(ii) the Cash Manager shall establish any new Ledgers required by the Guarantor or the Bond Trustee to record payments in respect of obligations of the Guarantor under the Covered Bond Guarantee or otherwise.

6. Revenue Ledger

The Cash Manager shall ensure that:

(a) the following amounts shall be credited to the Revenue Ledger:

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(i) all Revenue Receipts;

(ii) all interest received by the Guarantor on the Guarantor Accounts;

(iii) all amounts received by the Guarantor representing income on any such Substitution Assets;

(iv) all amounts received by the Guarantor under any Interest Rate Swap Agreement on a Guarantor Payment Date (but excluding any early termination payments under the Swap Agreements and Swap Collateral Excluded Amounts); and

(v) any other revenue income of the Guarantor which is not referred to in paragraphs (i) to (iv) above and which is not referred to in the receipts to be credited to the Principal Ledger in paragraph 7 below; and

(b) any payment or provision made under the Pre-Acceleration Revenue Priority of Payments or made under paragraph 5 above (but only to the extent that such payment made under paragraph 5 has been recorded as a receipt on the Revenue Ledger), shall be debited to the Revenue Ledger.

7. Principal Ledger

The Cash Manager shall ensure that:

(a) all Principal Receipts shall be credited to the Principal Ledger; and

(b) any payment or provision made under the Pre-Acceleration Principal Priority of Payments or made under paragraph 3 above (but only to the extent that such payment made under paragraph 3 has been recorded as a receipt on the Principal Ledger), shall be debited to the Principal Ledger.

8. Capital Account Ledgers

(a) The Cash Manager shall ensure that each Capital Contribution made by a Partner shall be credited to that Partner’s Capital Account Ledger or, as applicable, debited from that Partner’s Capital Account Ledger where a Capital Distribution has been made pursuant to Section 3.6 of the Guarantor Agreement. The Cash Manager shall record on each Partner’s Capital Account Ledger whether the relevant Capital Contribution was a Cash Capital Contribution or a Capital Contribution in Kind.

(b) The Cash Manager shall ensure that each Capital Distribution to a Partner shall be debited to that Partner’s Capital Account Ledger.

9. Reserve Ledger

The Cash Manager shall ensure that:

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(a) any amounts (or part thereof) borrowed by the Guarantor under the Intercompany Loan Agreement that are specifically required to be credited to the Reserve Fund, shall be credited to the Reserve Ledger; and

(b) amounts shall be credited to the Reserve Ledger in accordance with the Pre-Acceleration Revenue Priority of Payments; and

(c) amounts shall be debited to the Reserve Ledger on each Guarantor Payment Date in order to be applied in accordance with the Pre-Acceleration Revenue Priority of Payments or, as applicable, the Guarantee Priority of Payments.

10. Intercompany Loan Ledger

The Cash Manager shall ensure that each Advance, each repayment, all payments of interest and repayments of principal on each Advance under the Intercompany Loan Agreement are recorded in the Intercompany Loan Ledger at the appropriate time.

11. Payment Ledger

The Cash Manager shall ensure that all payments, and the Person to whom such payments are made and the source of such payments are recorded in the Payment Ledger at the appropriate time.

12. Pre-Maturity Liquidity Ledger

The Cash Manager will ensure that all credits and debits of funds in respect of any Series of Hard Bullet Covered Bonds are recorded in the Pre-Maturity Liquidity Ledger at the appropriate time.

13. Payments to Principal Paying Agent

Each of the Bond Trustee and the Guarantor agree that all amounts payable by the Cash Manager in respect of the Intercompany Loan or under the Covered Bond Guarantee, in accordance with the applicable Priorities of Payments, may be paid directly to the Principal Paying Agent.

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SCHEDULE 3

FORM OF INVESTOR REPORT

EX-4.12

Exhibit 4.12

GENERAL SECURITY AGREEMENT

by and among

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

as Guarantor

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

and

ANY OTHER PERSON WHO FROM TIME TO TIME MAY BECOME A PARTY TO

THIS AGREEMENT

September 30, 2013

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS AND INTERPRETATION		1
Section 1.01	Definitions and Interpretation.	1
Section 1.02	Schedules.	2
Section 1.03	Terms Incorporated by Reference.	2
ARTICLE 2 SECURITY		3
Section 2.01	Grant of Security.	3
Section 2.02	Obligations Secured.	4
Section 2.03	Notice and Acknowledgement.	4
Section 2.04	Accession of New Secured Creditors.	5
Section 2.05	Declaration of Trust.	5
Section 2.06	Attachment.	5
Section 2.07	Scope of Security.	6
Section 2.08	Grant of Licence to Use Intellectual Property.	7
Section 2.09	Care and Custody of Collateral.	7
Section 2.10	Rights of the Guarantor in Respect of Pledged Securities.	7
Section 2.11	Care and Custody of Securities.	8
Section 2.12	Investments in Substitution Assets.	8
Section 2.13	Management and Application of Funds.	8
ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GUARANTOR		9
Section 3.01	Representations and Warranties of the Guarantor.	9
Section 3.02	Additional Representations and Warranties of the Guarantor.	10
Section 3.03	Covenants of the Guarantor.	10
Section 3.04	Additional Covenants of the Guarantor.	10
ARTICLE 4 ENFORCEMENT		10
Section 4.01	Enforcement.	10
Section 4.02	Knowledge of Bond Trustee of a Guarantor Event of Default.	12
Section 4.03	Discretionary Enforcement.	12
Section 4.04	Mandatory Enforcement.	12
Section 4.05	Mandatory Other Action.	13
Section 4.06	Disposal of Collateral.	13
Section 4.07	Payment of Monies After Service of a Guarantor Acceleration Notice.	13
Section 4.08	Remedies.	14
Section 4.09	Additional Rights.	14
Section 4.10	Enforcement When Not All Amounts Due and Payable.	16
Section 4.11	Concerning the Receiver.	17
Section 4.12	Appointment of Attorney.	17
Section 4.13	Dealing with the Collateral.	17

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Section 4.14	Indemnity.	18
Section 4.15	Standards of Sale.	18
Section 4.16	Set-Off.	19
Section 4.17	Dealings by Third Parties.	20
Section 4.18	Risk of Funds.	20
ARTICLE 5 CONFLICTS		20
Section 5.01	Secured Creditors.	20
Section 5.02	Acknowledgement.	21
ARTICLE 6 EXERCISE OF CERTAIN RIGHTS		21
Section 6.01	No Enforcement by Bond Trustee.	21
Section 6.02	Subordination.	22
ARTICLE 7 RELEASE		23
Section 7.01	Discharge.	23
Section 7.02	Sale of the Portfolio.	23
Section 7.03	Disposal of Substitution Assets.	23
Section 7.04	Withdrawals from Guarantor Accounts.	24
ARTICLE 8 SUPPLEMENTAL PROVISIONS REGARDING THE BOND TRUSTEE		24
Section 8.01	Consent of Bond Trustee.	24
Section 8.02	Interests of Secured Creditors.	24
Section 8.03	Modification to Transaction Documents.	25
ARTICLE 9 REMUNERATION OF THE BOND TRUSTEE		26
Section 9.01	Remuneration.	26
Section 9.02	Additional Remuneration.	26
Section 9.03	Disputes.	27
Section 9.04	Expenses.	27
ARTICLE 10 APPOINTMENT OF NEW BOND TRUSTEE AND REMOVAL OF BOND TRUSTEE		27
Section 10.01	Power of Guarantor.	27
Section 10.02	Power of Bond Trustee.	27
Section 10.03	Multiple Bond Trustees.	28
ARTICLE 11 RETIREMENT OF BOND TRUSTEE		28
ARTICLE 12 NON-PETITION		28

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ARTICLE 13 GENERAL		28
Section 13.01	Notices, etc.	28
Section 13.02	GST.	29
Section 13.03	No Merger.	29
Section 13.04	Further Assurances.	29
Section 13.05	Amendments.	30
Section 13.06	Supplemental Security.	30
Section 13.07	Successors and Assigns.	31
Section 13.08	Severability.	31
Section 13.09	Governing Law.	31
Section 13.10	Counterparts.	31

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GENERAL SECURITY AGREEMENT

THIS GENERAL SECURITY AGREEMENT (this “Agreement”) is made as of the 30th day of September, 2013.

BY AND AMONG:

(1) BMO Covered Bond Guarantor Limited Partnership, a limited partnership formed under the laws of the Province of Ontario, whose registered office is at Suite 6100, 100 King Street West, Toronto, Ontario, Canada M5X 1B8, by its managing general partner BMO Covered Bond GP, Inc. (hereinafter the “Guarantor”);

(2) Computershare Trust Company of Canada, a trust company formed under the laws of Canada, whose registered office is at 100 University Avenue, 11^th Floor, Toronto, Ontario, Canada M5J 2Y1 acting in its capacity as Bond Trustee (hereinafter the “Bond Trustee”); and

(3) Any other person who from time to time may become a party to this Agreement as a secured creditor (together with the Bond Trustee for and on its own behalf and on behalf of the Holders of the Covered Bonds, the “Secured Creditors”).

WHEREAS:

(A) Pursuant to the Trust Deed, the Guarantor has provided a guarantee covering all Guaranteed Amounts when the same become Due for Payment in respect of all Covered Bonds issued under the Program from time to time; and

(B) The Guarantor has agreed to execute and deliver this Agreement to and in favour of the Bond Trustee (on behalf of the Secured Creditors) as security for the payment and performance of the Guarantor’s obligations under the Transaction Documents to which the Guarantor is a party, including but not limited to the Trust Deed;

NOW THEREFORE, in consideration of the foregoing premises, the sum of $10.00 in lawful money of Canada now paid by the Bond Trustee to the Guarantor and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

Section 1.01 Definitions and Interpretation.

The master definitions and construction agreement made between the parties to the Transaction Documents on September 30, 2013 (as the same may be amended, restated, varied or supplemented from time to time with the consent of the parties thereto) (the “Master Definitions and Construction Agreement”) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated, varied or supplemented) shall, except where the context otherwise

1

requires and save where otherwise defined herein, have the same meanings in this Agreement, including the recitals hereto and this Agreement shall be construed in accordance with the interpretation provisions set out in Section 2 of the Master Definitions and Construction Agreement.

For the purposes hereof, “this Agreement” has the same meaning as Security Agreement in the Master Definitions and Construction Agreement.

Section 1.02 Schedules.

The following Schedules are attached to and form part of this Agreement:

Schedule 1—Additional Representations and Warranties of the Guarantor

Schedule 2—Additional Covenants of the Guarantor

Schedule 3—Post-Enforcement Priority of Payments

Schedule 4—Address for Notice

Section 1.03 Terms Incorporated by Reference.

(1) In this Agreement, “PPSA” shall mean the Personal Property Security Act as in effect from time to time in the Province of Ontario; provided that, if validity, perfection or the effect of perfection or non-perfection or the priority of the security interest granted by any Security in any collateral and the rights and remedies of the Bond Trustee are governed by the PPSA or other similar legislation as in effect in a jurisdiction other than Ontario, then “PPSA” shall mean the Personal Property Security Act or other similar legislation as in effect from time to time in such other jurisdiction, including for greater certainty the Québec Civil Code in respect of the Province of Québec, for purposes of the provisions hereof relating to such validity, perfection, effect of perfection or non-perfection or priority and to such rights and remedies.

(2) The terms “investment property”, “account”, “consumer goods”, “control”, “inventory” and “equipment” whenever used herein have the meanings given to those terms in the PPSA, as now enacted or as the same may from time to time be amended, re-enacted or replaced and the terms “entitlement holder”, “financial asset”, “security”, “securities account”, “securities intermediary”, “entitlement order” and “security entitlement” whenever used herein have the meanings given to those terms in the Securities Transfer Act (Ontario) (the “STA”), as now enacted or as the same may from time to time be amended, re-enacted or replaced.

(3) Other terms defined in the PPSA or the STA and used in this Agreement shall, unless otherwise defined herein, have the same meaning as ascribed to such terms in the PPSA or the STA, as applicable.

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ARTICLE 2

SECURITY

Section 2.01 Grant of Security.

Subject to Section 2.07 and the right of the Guarantor (provided that, if required pursuant to the Transaction Documents, the Asset Coverage Test or the Amortization Test, as applicable, is met) to sell such collateral, the Guarantor assigns by way of security, mortgages, charges, hypothecates and pledges to the Bond Trustee (on behalf of the Secured Creditors) and grants to the Bond Trustee (on behalf of the Secured Creditors) a security interest in all the Guarantor’s right, title and interest in and to all of the present and future personal property and undertaking of the Guarantor, wherever situate and all proceeds thereof (collectively, the “Collateral”). The Collateral shall include, without limitation, the Portfolio, Excess Proceeds received from the Bond Trustee pursuant to the Trust Deed, Substitution Assets and Transaction Documents that the Guarantor may acquire from time to time and all funds being held for the account of the Guarantor by its service providers and the amounts standing to the credit of the Guarantor in the Guarantor Accounts; and includes any and all of the Guarantor’s:

(a) inventory, including goods held for sale, lease or resale, goods furnished or to be furnished to third parties under contracts of lease, consignment or service, goods which are raw materials or work in process, goods used in or procured for packing and materials used or consumed in the business of the Guarantor;

(b) equipment, machinery, furniture, fixtures, plants, vehicles and other goods of every kind and description and all licences and other rights and all records, files, charts, plans, drawings, specifications, manuals and documents relating thereto;

(c) accounts due or accruing and all agreements, books, accounts, invoices, letters, documents and papers recording, evidencing or relating thereto;

(d) money, documents of title, chattel paper and instruments;

(e) investment property and Equity Interests in other Persons that do not constitute investment property, now or hereafter acquired or owned by or on behalf of the Guarantor or in which the Guarantor now or hereafter has an interest (collectively, “Pledged Securities”), together with all substitutions or exchanges from time to time in respect of any of the foregoing Pledged Securities, and all dividends, distributions and other income (whether in the form of money, Securities or any other property) derived in respect of the foregoing Pledged Securities or payable in connection therewith and all monies and property received or receivable in the nature of the return or repayment of capital in respect thereof;

(f) intangibles including all security interests, goodwill, choses in action and other contractual benefits and all trade marks, trade mark registrations and

3

pending trade mark applications, patents and pending patent applications and copyrights and other intellectual property (collectively, the “Intellectual Property”);

(g) to the fullest extent permitted by applicable law, all authorizations, permits, approvals, grants, licenses, consents, rights, franchises, privileges, orders, certificates, judgments, writs, injunctions, awards, determinations, directions, decrees, demands or the like issued or granted by law or by rule or regulation of any public body now or hereafter issued or granted to it;

(h) substitutions and replacements of and increases, additions and, where applicable, accessions to the property described in Section 2.01(a)-(g) inclusive; and

(i) proceeds in any form derived directly or indirectly from any dealing with all or any part of the property described in Section 2.01(a)-(h) inclusive or the proceeds of such proceeds.

Section 2.02 Obligations Secured.

(1) The assignment, mortgage, charge, hypothecation, pledge and security interest granted hereby (the “Security”) secures the payment and performance of all debts, liabilities and obligations of any and every kind, nature and description, whether, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time due or accruing due, owing by the Guarantor to the Bond Trustee and the other Secured Creditors under the Transaction Documents to which it is a party, however or wherever incurred, and in any currency, and whether incurred by the Guarantor alone or with another or others and whether as principal or surety (collectively, and together with the expenses, costs and charges set out in Section 2.02(2), the “Obligations”).

(2) All reasonable expenses, costs and charges incurred by or on behalf of the Bond Trustee in connection with this Agreement, the Security or the realization of the Collateral, including all reasonable legal fees, court costs, receiver’s or agent’s remuneration and other expenses of, or of taking or defending any action in connection with, taking possession of, repairing, protecting, insuring, preparing for disposition, realizing, collecting, selling, transferring, delivering or obtaining payment of the Collateral or other lawful exercises of the powers conferred by the Transaction Documents shall be added to and form a part of the Obligations.

Section 2.03 Notice and Acknowledgement.

The execution of this Agreement by each Secured Creditor shall constitute an express acknowledgement by each of them of such charges and assignments and other Security made or granted by the foregoing provisions of this Article 2 and each of the Secured Creditors covenants with the Bond Trustee not to do anything inconsistent with the Security given under or pursuant to this Agreement or knowingly to prejudice the Security constituted hereunder or pursuant hereto or under any Mortgage provided that, without prejudice to Article 4, nothing herein shall

4

be construed as limiting the rights or obligations of any of the Secured Creditors exercisable or to be prepared in accordance with and subject to the terms of any of the other Transaction Documents.

Section 2.04 Accession of New Secured Creditors.

As a condition precedent to any new Series or Tranche, as applicable, of Covered Bonds issued under the Program, any Person which becomes a Secured Creditor pursuant to and in accordance with this Agreement (each a “New Secured Creditor”) shall be bound by the terms of this Agreement and as evidence of such shall execute an instrument in a form acceptable to the Bond Trustee.

Section 2.05 Declaration of Trust.

The Bond Trustee hereby declares itself trustee of all the covenants, undertakings, charges, assignments, assignations and other security interests made or given to be made or given under or pursuant to this Agreement and the other Transaction Documents for itself and the other Secured Creditors in respect of the Obligations owed to each of them respectively upon and subject to the terms and conditions of this Agreement.

Section 2.06 Attachment.

(1) The Guarantor acknowledges that (i) value has been given, (ii) it has rights in the Collateral (other than after-acquired Collateral) or the power to transfer rights in the Collateral (other than after-acquired Collateral) to the Bond Trustee, (iii) it has not agreed to postpone the time of attachment of the Security, and (iv) it has received a duplicate original copy of this Agreement.

If the Guarantor acquires Collateral consisting of chattel paper, instruments, securities, investment property or negotiable documents of title (collectively, “Negotiable Collateral”), the Guarantor will, immediately upon receipt, deliver to the Bond Trustee the Negotiable Collateral and shall, (i) at the request of the Bond Trustee cause the transfer of the Negotiable Collateral to the Bond Trustee to be registered wherever, in the opinion of the Bond Trustee, such registration may be required or advisable, (ii) duly endorse the same for transfer in blank by an effective endorsement or deliver a stock transfer power in respect thereof or as the Bond Trustee may direct, (iii) immediately deliver to the Bond Trustee any and all consents or other documents which may be necessary to effect the transfer of the Negotiable Collateral to the Bond Trustee or any third party, and (iv) to the extent such Negotiable Collateral consists of investment property, cause the Bond Trustee to obtain control of such Negotiable Collateral as determined pursuant to the PPSA. If and to the extent that the Negotiable Collateral is uncertificated, the Guarantor shall enter into such custodial, control or other agreements at the request of the Bond Trustee.

(2) With respect to any Pledged Security that is a certificated security, until further notice by the Bond Trustee, any certificate representing such Pledged Security may remain registered in the name of the Guarantor, provided that the Guarantor shall promptly at the request and pursuant to the direction of the Bond Trustee (in the Bond Trustee’s sole discretion) either duly endorse such certificate in blank for transfer or execute a stock transfer power of attorney in

5

respect thereof; in either case with signatures guaranteed and with all documentation being in form and substance satisfactory to the Bond Trustee and any transfer agent appointed from time to time in respect of such Pledged Security. With respect to any Pledged Security that is an uncertificated security, the Guarantor shall enter into, and cause the issuer thereof to enter into, such custodial, control or other agreements as the Bond Trustee requires, including the taking of any steps to provide the Bond Trustee with control over such Pledged Security. Notwithstanding the foregoing, at any time and from time to time upon request by the Bond Trustee (in the Bond Trustee’s sole discretion), the Guarantor shall cause any or all of the Pledged Securities to be issued and registered in the name of the Bond Trustee or its nominee, and the Bond Trustee is hereby appointed the irrevocable attorney (coupled with an interest) of the Guarantor with full power of substitution to cause any or all of the Pledged Securities to be issued and registered in the name of the Bond Trustee or its nominee.

(3) The Guarantor shall hold its security entitlements in a securities account that (i) is maintained in the name of the Guarantor at an office of a securities intermediary located in Ontario, and (ii) together with all financial assets credited thereto and all related security entitlements, is subject to a Securities Account Control Agreement (as defined below) among the Guarantor, the Bond Trustee and such securities intermediary (“Controlled Securities Account”). The Guarantor shall, at the request of the Bond Trustee (in the Bond Trustee’s sole discretion), (i) enter into and cause any securities intermediary holding a securities account in respect of Pledged Securities to enter into a securities account control agreement in form and substance satisfactory to the Bond Trustee acting reasonably (a “Securities Account Control Agreement”) in respect of all Pledged Securities constituting security entitlements of the Guarantor, and (ii) deliver each such Securities Account Control Agreement to the Bond Trustee. The Guarantor shall cause all Pledged Securities underlying any security entitlements acquired by the Guarantor after the date hereof to be credited to a Controlled Securities Account.

(4) The Guarantor will promptly inform the Bond Trustee in writing of the acquisition by the Guarantor of any personal property which is not adequately described in this Agreement, and the Guarantor will execute and deliver, at its own expense, from time to time amendments to this Agreement or additional Agreements or schedules as may be required by the Bond Trustee in order that the Security shall attach to such personal property.

Section 2.07 Scope of Security.

(1) To the extent that the creation of the Security would constitute a breach or permit the acceleration or termination of any agreement, right, licence or permit of the Guarantor (each, a “Restricted Asset”), the Security shall not attach to the Restricted Asset but the Guarantor shall hold its interest in the Restricted Asset in trust for the Bond Trustee, and shall be deemed to have granted a Security in such Restricted Asset to the Bond Trustee or as it may direct immediately, and such Security shall attach to the Restricted Asset, upon obtaining the consent of the other party.

(2) Until the Security shall have become enforceable, the grant of the Security in the Intellectual Property shall not affect in any way the Guarantor’s rights to commercially exploit the Intellectual Property, defend it, enforce the Guarantor’s rights in it or with respect to it against third parties in any court or claim and be entitled to receive any damages with respect to any infringement of it.

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(3) The Security shall not extend to consumer goods.

(4) The Security shall not extend or apply to the last day of the term of any lease or sublease or any agreement for a lease or sublease, now held or hereafter acquired by the Guarantor in respect of real property, but the Guarantor shall stand possessed of any such last day upon trust to assign and dispose of it as the Bond Trustee may direct.

Section 2.08 Grant of Licence to Use Intellectual Property.

For purposes of enabling the Bond Trustee to exercise its rights and remedies pursuant to Article 4, at such time as the Bond Trustee shall be lawfully entitled to exercise its rights and remedies and for no other purpose, the Guarantor grants to the Bond Trustee an irrevocable, nonexclusive licence (exercisable without payment of royalty or other compensation to the Guarantor) to use, assign or sublicense any of the Intellectual Property wherever the same may be located, including in such licence access to (i) all media in which any of the licensed items may be recorded or stored, and (ii) all computer programs used for compilation or print-out.

Section 2.09 Care and Custody of Collateral.

(1) Subject to subsection (2) below, the Bond Trustee shall have no obligation to keep Collateral in its possession identifiable.

(2) Prior to the service of a Guarantor Acceleration Notice, the Bond Trustee shall be bound to exercise in the physical keeping of any Pledged Securities or Negotiable Collateral, only the same degree of care as it would exercise in respect of its own Securities, negotiable collateral or other investment property kept at the same place.

(3) The Bond Trustee may, after the Security shall have become enforceable, (i) notify any person obligated on an account or on chattel paper or any obligor on an instrument to make payments to the Bond Trustee whether or not the Guarantor was previously making collections on such accounts, chattel paper or instruments, and (ii) assume control of any proceeds arising from the Collateral.

Section 2.10 Rights of the Guarantor in Respect of Pledged Securities.

(1) Until the Security has become enforceable, the Guarantor shall be entitled to vote the Pledged Securities and to give consents, ratifications or waivers and to receive all cash dividends in respect of the Pledged Securities. Upon a Guarantor Acceleration Notice being served, all rights of the Guarantor to vote the Pledged Securities and to give consents, ratifications or waivers and to receive dividends in respect of the Pledged Securities shall cease and all such rights shall become vested solely and absolutely in the Bond Trustee.

(2) Any dividends received by the Guarantor contrary to Section 2.10(1) or any other money or property which may be received by the Guarantor at any time for, or in respect of, the Pledged Securities shall be received as trustee for the Bond Trustee and shall be immediately paid over to the Bond Trustee.

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Section 2.11 Care and Custody of Securities.

Unless a Guarantor Acceleration Notice has been served, the Bond Trustee shall not have any right to the collection of dividends on, or exercise any option or right (including any right to vote, give consents, ratifications or waivers) in connection with, any Pledged Securities. The Bond Trustee need not protect or preserve any Collateral from depreciating in value or becoming worthless and is released from all responsibility for any loss of value.

Section 2.12 Investments in Substitution Assets.

(1) Notwithstanding the Security created by or pursuant to this Agreement, the Cash Manager may, on behalf of the Guarantor and the Bond Trustee, invest in the name of the Guarantor and the Bond Trustee, monies standing from time to time to the credit of the Guarantor Accounts in Substitution Assets in accordance with the Cash Management Agreement and the Guarantor Agreement provided that:

(a) any costs properly incurred by the Bond Trustee in making and changing investments will be reimbursed to the Bond Trustee by the Guarantor; and

(b) all income from and proceeds following the disposal or maturity of Substitution Assets shall be credited to the relevant Guarantor Account.

(2) Notwithstanding the Security created by or pursuant to this Agreement, Substitution Assets may, on any Canadian Business Day, be sold, redeemed, realized or otherwise disposed of subject always to the other provisions of this Agreement.

Section 2.13 Management and Application of Funds.

The Guarantor shall take or cause to be taken such action as may from time to time be necessary on its part to ensure that the GDA Account (and/or, as applicable, the Standby GDA Account) shall from time to time be credited with all amounts received by the Guarantor and falling within any of the following categories:

(a) all Revenue Receipts and all Principal Receipts;

(b) all Cash Capital Contributions;

(c) amounts received by the Guarantor pursuant to the Interest Rate Swap Agreement;

(d) Excess Proceeds received from the Bond Trustee pursuant to the Trust Deed;

(e) any other amount whatsoever received by or on behalf of the Guarantor after the Program Date (including, without limitation, any proceeds

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advanced to the Guarantor under the Intercompany Loan Agreement where such proceeds have not been applied to acquire Loans and their Related Security, to refinance an existing Advance under the Intercompany Loan Agreement or invest in Substitution Assets);

(f) the proceeds arising from the disposal of any Substitution Assets and any and all income or other distributions received by the Guarantor in respect thereof or arising from the proceeds of any Substitution Assets; and

(g) such other payments received by the Guarantor as are, or ought in accordance with this Agreement to be, comprised in the Collateral.

ARTICLE 3

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GUARANTOR

Section 3.01 Representations and Warranties of the Guarantor.

(1) The Guarantor represents and warrants to the Secured Creditors, acknowledging and confirming that the Secured Creditors are relying thereon without independent inquiry, that as at the date hereof:

(a) this Agreement creates a valid first priority security interest in the Collateral;

(b) it is the registered, legal and beneficial owner of the Pledged Securities and is the legal and beneficial owner of all other Collateral;

(c) the Collateral is free and clear of all liens, mortgages, charges, security interests, claims, encumbrances or other similar rights or interests of any third parties other than those created in favour of the Bond Trustee and none of the Collateral is held by the Guarantor in a trust capacity;

(d) the Security in the Collateral has been perfected;

(e) the address of the Guarantor’s chief executive office is that given at the end of this Agreement;

(f) the Bond Trustee has obtained control pursuant to the PPSA of the Collateral that consists of investment property (“Controlled Assets”) and the Bond Trustee is a protected purchaser within the meaning of the PPSA;

(g) no Person other than the Bond Trustee has control or has the right to obtain control within the meaning of the PPSA of any Controlled Assets; and

(h) no authorizations, consents or approvals from, or notices to, any Governmental Authority or other Person is or was necessary in connection

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with the execution and delivery of this Agreement or the performance or enforcement of the Guarantor’s obligations hereunder, except as have been obtained, given or are in full force and effect unamended, at the date hereof.

Section 3.02 Additional Representations and Warranties of the Guarantor.

In addition to the representations and warranties of the Guarantor in Section 3.01, the Guarantor further represents and warrants to the Secured Creditors that the representations and warranties set out in Schedule 1 hereto are true as at the date hereof.

Section 3.03 Covenants of the Guarantor.

Subject to the provisions of the Guarantor Agreement, the Guarantor covenants and agrees with the Bond Trustee that it shall:

(a) duly and punctually pay and discharge all monies and liabilities whatsoever which now are or at any time hereafter may (whether before or after the Security has become enforceable pursuant to this Agreement) become due and payable to the Bond Trustee (whether for its own account or as trustee for the Secured Creditors) or any of the other Secured Creditors by the Guarantor, whether actually or contingently, solely or jointly with one or more Persons and whether as principal or guarantor under or pursuant to this Agreement or any other of the Transaction Documents;

(b) observe, perform and satisfy all of its other obligations and liabilities under or pursuant to this Agreement and/or any of the other Transaction Documents;

(c) not do anything inconsistent with the Security or knowingly to prejudice the Security or the Bond Trustee’s interest therein; and

(d) comply in all respects with the Priorities of Payments as set out in the Guarantor Agreement prior to and until service of a Guarantor Acceleration Notice on the Guarantor.

Section 3.04 Additional Covenants of the Guarantor.

In addition to the covenants of the Guarantor in Section 3.03, the Guarantor covenants and agrees with the Bond Trustee as set out on Schedule 2 hereto.

ARTICLE 4

ENFORCEMENT

Section 4.01 Enforcement.

(1) The Security shall be and become enforceable against the Guarantor;

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(a) upon a Guarantor Acceleration Notice being served on the Guarantor; or

(b) if there are no Covered Bonds outstanding following:

(i) the non-payment when due, whether by acceleration or otherwise, of any Obligations or the failure of the Guarantor to observe or perform any obligation, covenant, term, provision or condition contained in this Agreement or any other Transaction Document to which it is a party which is not remedied within thirty (30) days after notice has been given by the Bond Trustee to the Guarantor specifying such default and requiring the Guarantor to remedy same;

(ii) the occurrence of a bankruptcy or insolvency of the Guarantor or if the Guarantor is insolvent within the meaning of the Bankruptcy and Insolvency Act (Canada);

(iii) the filing against the Guarantor of an application for a bankruptcy order, the making of a compromise, arrangement or an assignment for the benefit of creditors by the Guarantor, the appointment of a receiver, interim receiver, trustee or similar official for the Guarantor or for any assets of the Guarantor or the institution by or against the Guarantor of any other type of insolvency proceeding under the Bankruptcy and Insolvency Act (Canada), Companies’ Creditors Arrangement Act (Canada), or similar statute in Canada or any other applicable law, and if involuntary, which is not contested in good faith and vacated, discharged or stayed within thirty (30) days, provided that no order is made granting relief;

(iv) the institution by or against the Guarantor of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up of affairs of the Guarantor and if involuntary, which is not contested in good faith and vacated, discharged or stayed within thirty (30) days, provided that no order is made granting relief;

(v) any Security Interest, ownership interest, right of set-off or other right of claim of any person (an “Encumbrance”) affecting the Collateral becomes enforceable against the Collateral; or

(vi) the Guarantor ceasing or threatening to cease to carry on business or agreeing to make a bulk sale of assets without complying with applicable law or committing or threatening to commit an act of bankruptcy.

(2) The Bond Trustee shall, if reasonably practicable, give prior notification to the Seller of the Bond Trustee’s intention to enforce the Security, provided always that the failure of the Bond Trustee to provide such notification shall not prejudice the ability of the Bond Trustee to enforce the Security.

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(3) Without prejudice to the effectiveness of any service of the Guarantor Acceleration Notice, as soon as is reasonable thereafter the Bond Trustee shall serve a copy of any Guarantor Acceleration Notice on each of the Secured Creditors, the Guarantor, the Rating Agencies and the Cover Pool Monitor.

Section 4.02 Knowledge of Bond Trustee of a Guarantor Event of Default.

The Bond Trustee will be deemed not to have knowledge of the occurrence of a Guarantor Event of Default or Potential Guarantor Event of Default unless the Bond Trustee has received written notice from the Guarantor (or on its behalf) or a Secured Creditor stating that a Guarantor Event of Default or Potential Guarantor Event of Default has occurred and describing that Guarantor Event of Default.

Section 4.03 Discretionary Enforcement.

Subject to the provisions of this Agreement, the Bond Trustee may at any time, at its discretion and without notice, take such proceedings and/or other action as it may think fit against, or in relation to, the Guarantor or any other person to enforce their respective obligations under or pursuant to this Agreement or any other Transaction Document. Subject to the provisions of this Agreement, at any time after the Security has become enforceable, the Bond Trustee may, at its discretion and without notice, take such steps as it may think fit to enforce such Security.

Section 4.04 Mandatory Enforcement.

The Bond Trustee shall not be bound to take any steps to enforce any provision of this Agreement or to institute any proceedings or to enforce the Security unless the Bond Trustee:

(a) shall have been directed to do so by an Extraordinary Resolution of all the Holders of the Covered Bonds of all Series (with the Covered Bonds of all Series taken together as a single Series as provided in Condition 7.03) or requested to do so in writing by the holders of not less than 25% in aggregate Principal Amount Outstanding of the Covered Bonds of all Series (taken together and converted into USD at the rate specified in the applicable Final Terms Document in accordance with Condition 7.03) then outstanding; and

(b) shall have been indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby render itself liable and all Liabilities which it may incur by so doing and the terms of such indemnity may include the provision of a fighting fund, non-recourse loan or other similar arrangement.

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Section 4.05 Mandatory Other Action.

The Bond Trustee shall not be bound to take any other steps (other than the steps referred to in Section 4.04 above) under or pursuant to this Agreement or any of the other Transaction Documents unless the Bond Trustee shall have been directed to do so by an Extraordinary Resolution of the Holders of Covered Bonds of the relevant one or more Series (with Covered Bonds of such Series taken together as a single Series (if more than one Series) and converted, if applicable, into USD at the rate specified in the applicable Final Terms Document) or requested to do so in writing by the holders of not less than 25% in aggregate Principal Amount Outstanding of the Covered Bonds then outstanding of the relevant one or more Series (taken together and converted in to USD as aforesaid); and shall have been indemnified and/or secured to its satisfaction as aforesaid.

Section 4.06 Disposal of Collateral.

Notwithstanding the other provisions of this Article 4, if the Security has become enforceable otherwise than by reason of a default in payment of any amount due on the Covered Bonds, the Bond Trustee will not be entitled to dispose of any of the Collateral unless either a sufficient amount would be realised to allow discharge in full of all amounts owing to the Holders of Covered Bonds or the Bond Trustee is of the sole opinion, which shall be binding on the Bond Trustee, reached after considering at any time and from time to time the advice of any financial adviser (or such other professional advisers reasonably selected by the Bond Trustee for the purpose of giving such advice), that the cash flow prospectively receivable by the Guarantor will not (or that there is a significant risk that it will not) be sufficient, having regard to any other relevant actual, contingent or prospective liabilities of the Guarantor, to discharge in full in due course all amounts owing to the Holders of Covered Bonds. The fees and expenses of the aforementioned financial adviser or other professional adviser selected by the Bond Trustee shall be paid by the Guarantor.

Section 4.07 Payment of Monies After Service of a Guarantor Acceleration Notice.

(1) From and including the time when the Bond Trustee serves a Guarantor Acceleration Notice on the Guarantor, no amount may be withdrawn from the Guarantor Accounts without the prior written consent of the Bond Trustee.

(2) Any and all moneys received or recovered (excluding all amounts due or to become due in respect of any Third Party Amounts) by the Bond Trustee (or a receiver appointed on its behalf in accordance with this Agreement) following the service of a Guarantor Acceleration Notice and enforcement of the Security, shall be held by it in the Guarantor Accounts in trust to be applied by the Bond Trustee (or a receiver appointed on its behalf in accordance with this Agreement) in accordance with Schedule 3 (the “Post-Enforcement Priority of Payments”) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full).

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Section 4.08 Remedies.

Whenever the Security has become enforceable, the Bond Trustee may realize upon the Collateral and enforce the rights of the Bond Trustee and the other Secured Creditors by:

(a) entry onto any premises where Collateral consisting of tangible personal property may be located;

(b) entry into possession of the Collateral by any method permitted by law;

(c) sale or lease of all or any part of the Collateral;

(d) collection of any proceeds arising in respect of the Collateral;

(e) collection, realization or sale of, or other dealing with, the accounts;

(f) appointment by instrument in writing of a receiver (which term as used in this Agreement includes a receiver and manager) or agent of all or any part of the Collateral and removal or replacement from time to time of any receiver or agent;

(g) institution of proceedings in any court of competent jurisdiction for the appointment of a receiver of all or any part of the Collateral;

(h) institution of proceedings in any court of competent jurisdiction for sale or foreclosure of all or any part of the Collateral;

(i) filing of proofs of claim and other documents to establish claims to the Collateral in any proceeding relating to the Guarantor; and

(j) any other remedy or proceeding authorized or permitted under the PPSA (or any other applicable statute) or otherwise by law or equity.

Such remedies may be exercised from time to time separately or in combination and are in addition to, and not in substitution for, any other rights of the Bond Trustee however created. The Bond Trustee shall not be bound to exercise any right or remedy, and the exercise of rights and remedies shall be without prejudice to any other rights of the Bond Trustee in respect of the Obligations including the right to claim for any deficiency. The taking of any action or proceeding or refraining from doing so, or any other dealings with any other security for the Obligations secured by this Agreement shall not release or affect the Collateral or the Security.

Section 4.09 Additional Rights.

(1) In addition to the remedies set forth in Section 4.08, the Bond Trustee may, whenever the Security has become enforceable:

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(a) require the Guarantor, at the Guarantor’s expense, to assemble the Collateral at a place or places designated by notice in writing and the Guarantor agrees to so assemble the Collateral;

(b) require the Guarantor, by notice in writing, to disclose to the Bond Trustee the location or locations of the Collateral and the Guarantor agrees to make such disclosure when so required;

(c) repair, process, modify, complete or otherwise deal with the Collateral and prepare for the disposition of the Collateral, whether on the premises of the Guarantor or otherwise;

(d) carry on all or any part of the business of the Guarantor and, to the exclusion of all others including the Guarantor, enter upon, occupy and use all or any of the premises, buildings, and other property of or used by the Guarantor for such time as the Bond Trustee sees fit, free of charge, and the Bond Trustee shall not be liable to the Guarantor for any act, omission or negligence in so doing or for any rent, charges, depreciation or damages incurred in connection with or resulting from such action;

(e) exercise all voting rights attached to the Pledged Securities (whether or not registered in the name of the Bond Trustee or its nominee) and give or withhold all consents, waivers and ratifications in respect thereof, collect and receive dividends and other distributions relating thereto and otherwise act with respect thereto as though it were the absolute owner thereof;

(f) deal with any security entitlements, securities accounts and securities intermediaries holding security entitlements as if it were the entitlement holder thereof including making such entitlement orders as it deems appropriate and instructing any such securities intermediary to transfer the securities accounts held in any Controlled Securities Accounts into an account in the name of the Bond Trustee or as it may direct;

(g) exercise any and all rights of redemption, conversion, exchange, sale, subscription or any other rights, privileges or options pertaining to any of the Pledged Securities as if it were the absolute owner thereof including, without limitation, the right to exchange at its discretion any and all of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization or other readjustment of any issuer thereof, or upon the exercise by any issuer of any right, privilege or option pertaining to any of the Pledged Securities, and in connection therewith, to deposit and deliver or direct the sale or other disposition of any of the Pledged Securities with any committee, depositary, Securities Intermediary, clearing house, transfer agent, registrar or other designated agency upon such terms and conditions as it may determine, all without liability except to account for property actually received by it;

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(h) borrow for the purpose of carrying on the business of the Guarantor or for the maintenance, preservation or protection of the Collateral and mortgage, grant or charge a security interest in the Collateral, whether or not in priority to the Security, to secure repayment; and

(i) commence, continue or defend any judicial or administrative proceedings for the purpose of protecting, seizing, collecting, realizing or obtaining possession or payment of the Collateral, and give good and valid receipts and discharges in respect of the Collateral and compromise or give time for the payment or performance of all or any part of the accounts or any other obligation of any third party to the Guarantor.

(2) The Bond Trustee shall have the power to insure against any liabilities or obligations arising:

(a) as a result of the Bond Trustee acting or failing to act in a certain way (other than which may arise from its negligence or wilful default or that of its officers or employees);

(b) as a result of any act or failure to act by any person or persons to whom the Bond Trustee has delegated any of its trusts, rights, powers, duties, authorities or discretions, or appointed as its agent (other than which may arise from such person’s negligence, fraud and/or wilful default);

(c) in connection with the Collateral; or

(d) in connection with or arising from the enforcement of the Security created by or pursuant to this Agreement.

The Bond Trustee shall not be under any obligation to insure in respect of such liabilities and/or obligations or to require any other person to maintain insurance, but to the extent that it does so, the Guarantor shall quarterly and on written request pay all insurance premiums and expenses which the Bond Trustee may properly incur in relation to such insurance. If the Guarantor fails to pay such premiums or expenses or to reimburse the Bond Trustee therefor, the Bond Trustee shall be entitled to be indemnified out of the Collateral in respect thereof and, where a Guarantor Acceleration Notice has been served, the indemnification of the Bond Trustee in respect of all such insurance premiums and expenses shall be payable in priority to payments to the Holders of the Covered Bonds and all other Secured Creditors and otherwise in accordance with this Agreement.

Section 4.10 Enforcement When Not All Amounts Due and Payable.

If the Bond Trustee enforces the Security at a time when either no amounts or not all amounts owing in respect of the Obligations have become due and payable, the Bond Trustee (or a receiver appointed by it in accordance with this Agreement) may, for so long as no such amounts or not all such amounts have become due and payable, pay any monies referred to in Section 4.07 into, and retain such monies in, an interest-bearing account (a “Retention Account”) to be held by it as security and applied by it in accordance with Section 4.07 as and when any of the amounts referred to therein become due and payable.

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Section 4.11 Concerning the Receiver.

(1) Any receiver appointed by the Bond Trustee shall be vested with the rights and remedies which could have been exercised by the Bond Trustee in respect of the Guarantor or the Collateral and such other powers and discretions as are granted in the instrument of appointment and any supplemental instruments. The identity of the receiver, its replacement and its remuneration shall be within the sole and unfettered discretion of the Bond Trustee.

(2) Any receiver appointed by the Bond Trustee shall act as agent for the Bond Trustee for the purposes of taking possession of the Collateral, but otherwise and for all other purposes (except as provided below), as agent for the Guarantor. The receiver may sell, lease, or otherwise dispose of Collateral as agent for the Guarantor or as agent for the Bond Trustee as the Bond Trustee may determine in its discretion. The Guarantor agrees to ratify and confirm all actions of the receiver acting as agent for the Guarantor, and to release and indemnify the receiver in respect of all such actions.

(3) The Bond Trustee, in appointing or refraining from appointing any receiver, shall not incur liability to the receiver, the Guarantor or otherwise and shall not be responsible for any misconduct or negligence of such receiver.

Section 4.12 Appointment of Attorney.

The Guarantor irrevocably appoints the Bond Trustee (and any of its officers) as attorney of the Guarantor (with full power of substitution) to do, make and execute, in the name of and on behalf of the Guarantor, all such further acts, documents, matters and things which the Bond Trustee may deem necessary or advisable to accomplish the purposes of this Agreement including the execution, endorsement and delivery of documents and any notices, receipts, assignments or verifications of the accounts and the delivery and transfer of any Collateral to the Bond Trustee or to its nominees or transferees. Whenever the Security has become enforceable, the Bond Trustee or its nominees and transferees are empowered to exercise all rights and powers and to perform all acts of ownership with respect to the Collateral that constitutes Pledged Securities to the same extent as the Guarantor might do. The power of attorney herein granted is in addition to, and not in substitution for any transfer power of attorney delivered by the Guarantor and such power of attorney may be relied upon by the Bond Trustee severally or in combination. All acts of the attorney are ratified and approved, and the attorney shall not be liable for any act, failure to act or any other matter or thing, except for its own gross negligence or wilful misconduct. This power of attorney is coupled with an interest and is irrevocable.

Section 4.13 Dealing with the Collateral.

(1) The Bond Trustee shall not be obliged to exhaust its recourse against the Guarantor or any other Person or against any other security it may hold in respect of the Obligations before realizing upon or otherwise dealing with the Collateral in such manner as the Bond Trustee may consider desirable. Neither the taking of any judgement nor the exercise of

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any power of seizure or sale shall extinguish the liability of the Guarantor to pay the Obligations, nor shall the same operate as a merger of any covenant contained in this Agreement or of any other liability, nor shall the acceptance of any payment or other security constitute or create a novation.

(2) The Bond Trustee may grant extensions or other indulgences, take and give up securities, accept compositions, grant releases and discharges and otherwise deal with the Guarantor and with other Persons, sureties or securities as it may see fit without prejudice to the Obligations, the liability of the Guarantor or the rights of the Bond Trustee in respect of the Collateral.

(3) The Bond Trustee shall not be (i) liable or accountable for any failure to collect, realize or obtain payment in respect of the Collateral, (ii) bound to institute proceedings for the purpose of collecting, enforcing, realizing or obtaining payment of the Collateral or for the purpose of preserving any rights of any Persons in respect of the Collateral, (iii) responsible for any loss occasioned by any sale or other dealing with the Collateral or by the retention of or failure to sell or otherwise deal with the Collateral, or (iv) bound to protect the Collateral from depreciating in value or becoming worthless.

(4) The Guarantor shall not assert and hereby waives (to the fullest extent permitted by applicable law), all of the rights, benefits and protections given by any present or future statute that imposes limitations on the rights, powers or remedies of a secured party or on the methods of, or procedures for, realization of security, including any “seize or sue” or “anti-deficiency” statute or any similar provision of any other statute.

Section 4.14 Indemnity.

The Guarantor agrees to indemnify in full (but only following service of an Issuer Acceleration Notice on the Issuer and service of a Notice to Pay on the Guarantor) the Bond Trustee and any receiver appointed in accordance with this Agreement from and against all losses, actions, claims, costs (including legal costs and travel expenses), charges and expenses (including insurance premiums), demands and liabilities whether in contract, tort or otherwise now or hereafter properly sustained or incurred by the Bond Trustee or such receiver and its respective officers and employees or by any person for whose liability, act or omission the Bond Trustee or such receiver may be answerable, in connection with anything done or omitted to be done under or pursuant to this Agreement or any other Transaction Document to which such entity is a party, or in the exercise or purported exercise of the powers herein contained, or occasioned by any breach by the Guarantor of any of its covenants or other obligations to the Bond Trustee, or in consequence of any payment in respect of the Obligations (whether made by the Guarantor or a third person) being declared void or impeached for any reason whatsoever.

Section 4.15 Standards of Sale.

Without prejudice to the ability of the Bond Trustee to dispose of the Collateral in any manner which is commercially reasonable, the Guarantor acknowledges that a disposition of Collateral by the Bond Trustee which takes place substantially in accordance with the following provisions shall be deemed to be commercially reasonable:

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(a) the Collateral may be disposed of in whole or in part;

(b) the Collateral may be disposed of by public auction, public tender, private contract or any other means, with or without advertising and without any other formality;

(c) any assignee of such Collateral may be the Bond Trustee or a customer of the Bond Trustee;

(d) any sale conducted by the Bond Trustee shall be at such time and place, on such notice and in accordance with such procedures as the Bond Trustee, in its sole discretion, may deem advantageous;

(e) Pledged Securities may be disposed of in any manner and on any terms necessary to avoid violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that the prospective bidders and purchasers have certain qualifications, and restrict the prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of the Pledged Securities) or in order to obtain any required approval of the disposition (or of the resulting purchase) of any Governmental Authority;

(f) a disposition of Collateral may be on such terms and conditions as to credit or otherwise as the Bond Trustee, in its sole discretion, may deem advantageous; and

(g) the Bond Trustee may establish an upset or reserve bid or price in respect of any Collateral.

Section 4.16 Set-Off.

The Bond Trustee may at any time after the Security shall have become enforceable (without notice and notwithstanding any settlement of account or other matter whatsoever) combine or consolidate all or any existing accounts of the Guarantor whether in its own name or jointly with others and held by it or any Secured Creditor and may set-off or transfer all or any part of any credit balance or any sum standing to the credit of any such account (whether or not the same is due to the Guarantor from the Bond Trustee or relevant Secured Creditor and whether or not the credit balance and the account in debit or the Obligations are expressed in the same currency in which case the Bond Trustee is hereby authorized to effect any necessary conversions at its prevailing rates of exchange) in or towards satisfaction of any of the Obligations and may in its absolute discretion estimate the amount of any liability of the Guarantor which is contingent or unascertained and thereafter set-off such estimated amount and no amount shall be payable by the Bond Trustee to the Guarantor unless and until all Obligations have been ascertained and fully repaid or discharged.

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Section 4.17 Dealings by Third Parties.

(1) No Person dealing with the Bond Trustee or an agent or receiver shall be required to determine (i) whether the Security has become enforceable, (ii) whether the powers which such Person is purporting to exercise have become exercisable, (iii) whether any money remains due to the Bond Trustee by the Guarantor, (iv) the necessity or expediency of the stipulations and conditions subject to which any sale or lease is made, (v) the propriety or regularity of any sale or other dealing by the Bond Trustee with the Collateral, or (vi) how any money paid to the Bond Trustee has been applied.

(2) Any purchaser of Pledged Securities from the Bond Trustee shall hold the Pledged Securities absolutely, free from any claim or right of whatever kind, including any equity of redemption, of the Guarantor, which it specifically waives (to the fullest extent permitted by law) as against any such purchaser, all rights of redemption, stay or appraisal which the Guarantor has or may have under any rule of law or statute now existing or hereafter adopted.

Section 4.18 Risk of Funds.

None of the provisions contained in this Agreement shall require the Bond Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it believes that repayment of such funds or adequate indemnity against such risk or liability is not assured to it, provided that the Bond Trustee shall, forthwith upon making such a determination, deliver notice of the same to the Secured Creditors and the Guarantor, which notice shall include the grounds for such belief .

Section 4.19 Fondé de Pouvoir and Power of Attorney

The Bond Trustee is hereby appointed and accepts its appointment as a holder of an irrevocable power of attorney (fondé de pouvoir) of the Secured Creditors as contemplated by Article 2692 of the Civil Code of Québec to enter into, to take and to hold, on behalf of and for the benefit of each of the Secured Creditors any hypothec granted pursuant to the laws of the Province of Québec to secure or evidence the Obligations, and to exercise such powers and duties that are conferred upon the Bond Trustee under any deed of hypothec, or under this Agreement or the other Transaction Documents. Any Person who becomes a Secured Creditor will be deemed to have consented to confirm the Bond Trustee as fondé de pouvoir and to have ratified as of the date such Person becomes a Secured Creditor all actions taken by the fondé de pouvoir. The execution by the Bond Trustee, acting as fondé de pouvoir and mandatary, prior to the execution of this Agreement or any deeds of hypothec, is hereby ratified and confirmed. Notwithstanding the provisions of Section 32 of An Act respecting the special powers of legal persons (Québec), the Bond Trustee may acquire and be the holder of any bond issued by the Guarantor (i.e., the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Guarantor).

ARTICLE 5

CONFLICTS

Section 5.01 Secured Creditors.

(1) The Bond Trustee, as regards the exercise and performance of all powers, rights, trusts, authorities, duties and discretions of the Bond Trustee in respect of the Collateral, under or pursuant to this Agreement or any other Transaction Document to which the Bond Trustee is a party or the rights or benefits in respect of which are comprised in the Collateral, shall have regard only to the interests of the Holders of the Covered Bonds while any of the Covered Bonds remain outstanding and shall not be required to have regard to the interests of any other Secured Creditor or any other person or to act upon or comply with any direction or request of any other Secured Creditor or any other person whilst any amount remains owing to any Holders of the Covered Bonds.

(2) In connection with the exercise by it of any of its trusts, powers, authorities or discretions hereunder (including, without limitation, any modification, waiver, authorization, determination or substitution), the Bond Trustee shall have regard to the general interests of the Covered Bondholders of each Series as a class (but shall not have regard to any interests arising from circumstances particular to individual Covered Bondholders, Receiptholders or Couponholders whatever their number) and, in particular but without limitation, shall not have regard to the consequences of such exercise for individual Covered Bondholders, Receiptholders

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and Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub division thereof and the Bond Trustee shall not be entitled to require, nor shall any Covered Bondholder, Receiptholder or Couponholder be entitled to claim, from the Issuer, either of the Guarantor, the Bond Trustee or any other person any indemnification or payment in respect of any tax consequences of any such exercise upon individual Covered Bondholders, Receiptholders and/or Couponholders, except to the extent already provided for in Condition 7 (Taxation) of the Trust Deed and/or in any undertaking or covenant given in addition thereto or in substitution therefor hereunder.

(3) If, in connection with the exercise of its powers, trusts, authorities or discretions, the Bond Trustee is of the opinion that the interests of the Holders of the Covered Bonds of any one or more Series would be materially prejudiced thereby, the Bond Trustee shall not exercise such power, trust, authority or discretion without the approval of such Holders of the Covered Bonds by Extraordinary Resolution or by a direction in writing of such Holders of the Covered Bonds of not less than 25% of the aggregate Principal Amount Outstanding of the Covered Bonds of all Series then outstanding (taken together and converted into USD at the rate specified in the applicable Final Terms Document).

Section 5.02 Acknowledgement.

Each of the Secured Creditors hereby acknowledges and concurs with the provisions of Section 5.01 and each of them agrees that it shall have no claim against the Bond Trustee as a result of the application thereof.

ARTICLE 6

EXERCISE OF CERTAIN RIGHTS

Section 6.01 No Enforcement by Bond Trustee.

Each of the Secured Creditors (other than the Holders of the Covered Bonds (which holders will be subject to the applicable provisions of the Trust Deed) and the Bond Trustee and, in relation to subparagraph (b) below, the Bond Trustee) hereby agrees with the Guarantor and the Bond Trustee that:

(a) only the Bond Trustee may enforce the security created in favour of the Bond Trustee by this Agreement in accordance with the provisions hereof; and

(b) it shall not take any steps for the purpose of (i) recovering any of the Obligations (including, without limitation, by exercising any rights of set-off); or (ii) enforcing any rights arising out of the Transaction Documents against the Guarantor or procuring the winding up, administration or liquidation of the Guarantor or any of its General Partners in respect of any of its liabilities whatsoever,

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unless the Bond Trustee, having become bound to take any steps or proceedings to enforce the said security under or pursuant to this Agreement, fails to do so within 30 days of having become bound to do so (in which case each of such Secured Creditors shall be entitled to take any such steps and proceedings as it shall deem necessary other than the presentation of a petition for the winding up of, or for an administration order or liquidation in respect of, the Guarantor or any of its General Partners).

Section 6.02 Subordination.

(1) Each of the Secured Creditors hereby acknowledges that it has received a copy of the Guarantor Agreement and hereby agrees to be bound by the terms of the Priorities of Payments set out in the Guarantor Agreement and this Agreement. Without prejudice to Section 6.01, each of the Secured Creditors further agrees with each other party to this Agreement that, notwithstanding any other provision contained herein or in any other Transaction Document:

(a) it will not demand or receive payment of, or any distribution in respect of or on account of, any amounts payable by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to that Secured Creditor under the Transaction Documents, in cash or in kind, and will not apply any money or assets in discharge of any such amounts payable to it (whether by set off or by any other method), unless all amounts then due and payable by the Guarantor to all other Secured Creditors ranking higher in the relevant Priorities of Payments have been paid in full;

(b) without prejudice to the foregoing, whether in the liquidation of the Guarantor or any other party to the Transaction Documents or otherwise, if any payment or distribution (or the proceeds of any enforcement of any security) is received by a Secured Creditor in respect of any amount payable by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee, as applicable, to that Secured Creditor under the relevant Transaction Document at a time when, by virtue of the provisions of the relevant Transaction Document, the Guarantor Agreement and this Agreement, no payment or distribution should have been made, the amount so received shall be held by the Secured Creditor upon trust for the entity from which such payment was received and shall be paid over to such entity forthwith upon receipt (whereupon the relevant payment or distribution shall be deemed not to have been made or received); and

(c) without prejudice to Section 4.01 above, it shall not claim, rank, prove or vote as creditor of the Guarantor or its estate in competition with any prior ranking Secured Creditors in the relevant Priorities of Payments or, the Bond Trustee, as applicable, or claim a right of set-off until all amounts then due and payable to Secured Creditors who rank higher in the relevant Priorities of Payments have been paid in full.

(2) Neither the Guarantor nor the Bond Trustee shall pay or repay, or make any distribution in respect of, any amount owing to a Secured Creditor under the relevant Transaction

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Documents (in cash or in kind) unless and until all amounts then due and payable by the Guarantor or the Bond Trustee to all other Secured Creditors ranking higher in the relevant Priorities of Payments have been paid in full.

(3) The trusts in this Article 6 shall terminate on the date which is the day before the last day of the period that is twenty-one years after the death of the last to die of the descendants of Her Majesty, Queen Elizabeth II, alive at the date of this Agreement.

(4) Each of the Secured Creditors acknowledges that this Article 6 is without prejudice to the provisions set out in Section 7.3 of the Intercompany Loan Agreement.

ARTICLE 7

RELEASE

Section 7.01 Discharge.

The Security shall be discharged upon, but only upon, full payment and performance of the Obligations and at the request and expense of the Guarantor, and thereafter the Bond Trustee shall execute and deliver to the Guarantor such other releases and discharges as the Guarantor may reasonably require.

Section 7.02 Sale of the Portfolio.

(1) In the event of any sale of Loans and their Related Security included in the Portfolio by or on behalf of the Guarantor pursuant to and in accordance with the Transaction Documents, such Loans and their Related Security shall no longer form part of the Portfolio and the Bond Trustee shall, while any Covered Bonds are outstanding and if so requested in writing by the Guarantor, release, reassign or discharge those Loans and their Related Security from the Security on or prior to the date of any such sale provided that:

(a) the Bond Trustee provides its prior written consent to the terms of such sale in accordance with the Guarantor Agreement; and

(b) in the case of the sale of Loans and their Related Security, the Guarantor provides to the Bond Trustee a certificate confirming that the Loans and their Related Security being sold are Randomly Selected Loans.

(2) In the event of the repurchase of a Loan and its Related Security by the Seller pursuant to and in accordance with the Transaction Documents, the Bond Trustee shall release such Loan and its Related Security from the Security on the date of the repurchase.

Section 7.03 Disposal of Substitution Assets.

Upon the Cash Manager, on behalf of the Guarantor, making a disposal of any Substitution Asset secured pursuant to the Security, the Bond Trustee shall, if so requested in writing by the Cash Manager (but at the sole cost and expense (on an indemnity basis) of the Guarantor), but without being responsible for any loss, costs, claims or liabilities whatsoever

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occasioned and howsoever arising by so acting upon such request, release, reassign or discharge from the encumbrances constituted by this Agreement the relevant Substitution Assets, provided that the proceeds of such disposal are paid into the Guarantor Accounts from which the monies to make such Substitution Assets were originally drawn, subject to and in accordance with the provisions of the Guaranteed Deposit Account Contract, the Standby Guaranteed Deposit Account Contract (if applicable), the Cash Management Agreement and this Agreement.

Section 7.04 Withdrawals from Guarantor Accounts.

From time to time, and for greater certainty, there shall be deemed to be released from the Security all amounts which the Cash Manager, on behalf of the Guarantor and the Bond Trustee, is permitted to withdraw from the Guarantor Accounts pursuant to the relevant Priorities of Payments and otherwise in accordance with the Cash Management Agreement and this Agreement, any such release to take effect immediately upon the relevant withdrawal being made provided that where the relevant amount is transferred to another Guarantor Account, it shall thereupon become subject to the Security constituted by this Agreement in respect of such other Guarantor Account.

ARTICLE 8

SUPPLEMENTAL PROVISIONS REGARDING THE BOND TRUSTEE

Section 8.01 Consent of Bond Trustee.

If a request in writing is made to the Bond Trustee by the Guarantor or any other person to give its consent to any event, matter or thing, then:

(a) if the Transaction Document specifies that the Bond Trustee is required to give its consent to that event, matter or thing if certain specified conditions are satisfied in relation to that event, matter or thing, then the Bond Trustee shall give its consent to that event, matter or thing upon being satisfied acting reasonably that those specified conditions have been satisfied; and

(b) in any other case, the Bond Trustee may give its consent if to do so would not, in its opinion, be materially prejudicial to the interests of any of the Holders of the Covered Bonds.

Section 8.02 Interests of Secured Creditors.

Where the Bond Trustee is required to have regard to the interests of any Secured Creditor (which requirement shall only apply at any time during which no Covered Bonds are outstanding), the Bond Trustee may consult with such Secured Creditor and may rely on the written opinion of such Secured Creditor as to whether any act, matter or thing is or is not materially prejudicial to the interests of such Secured Creditor.

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Section 8.03 Modification to Transaction Documents.

(1) Subject to Section 8.03(2) and Section 8.03(3) below, the Bond Trustee may from time to time and at any time without any consent or sanction of the Secured Creditors (other than any Secured Creditor who is a party to the relevant document) concur with any person in making or sanctioning any modification (subject to any modification relating to a Series Reserved Matter):

(a) to the Covered Bonds of any one or more Series, the related Receipts and/or Coupons or any of the Transaction Documents provided that the Bond Trustee is of the opinion that such modification will not be materially prejudicial to the interests of the Holders of Covered Bonds of any series and notice of such modification is given to the Rating Agencies prior to such modification becoming effective; or

(b) to the Covered Bonds of any one or more Series, the related Receipts and/or Coupons or any of the Transaction Documents which in the Bond Trustee’s opinion is of a formal, minor or technical nature or is made to correct a manifest error or an error established as such to the satisfaction of the Bond Trustee, or to comply with mandatory provisions of law. In establishing whether an error is established as such, the Bond Trustee may have regard to any evidence which the Bond Trustee considers reasonable to rely upon and may, but shall not be obliged to, have regard to all or any of the following:

(i) a certificate from any of the Arrangers:

(1) stating the intention of the parties to the relevant Transaction Document;

(2) confirming nothing has been said to or by investors or any other parties which is in any way inconsistent with the stated intention; and

(3) stating the modification to the relevant Transaction Document is required to reflect such intention; or

(ii) Rating Agency Confirmation in respect of such modification.

(2) The prior consent of the Bond Trustee and the other Secured Creditors (other than the Bond Trustee) will not be required or obtained in relation to the accession of any New Seller to the Program provided that the relevant conditions precedent set out in the Dealership Agreement and the Mortgage Sale Agreement are satisfied at the time of the intended accession.

(3) The Bond Trustee shall be obliged to concur in and to effect any modifications to the Transaction Documents that are requested by the Guarantor or the Cash Manager to accommodate the accession of a New Seller to the Program subject to the provisions of Section

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8.03(1) being satisfied and, provided that (i) the Guarantor or the Cash Manager, as the case may be, has certified to the Bond Trustee in writing that such modifications are required in order to accommodate the addition of New Sellers to the Program and (ii) all other conditions precedent to the accession of a New Seller to the Program set out in the Dealership Agreement, the Mortgage Sale Agreement, the Servicing Agreement, the Guarantor Agreement and any other Transaction Documents have been satisfied at the time of the accession.

(4) Each Secured Creditor agrees that any such modifications effected pursuant to this Section 8.03 shall be binding on it and unless the Bond Trustee otherwise agrees, notice thereof shall be given by the Servicer to the Secured Creditors as soon as practicable after the modifications have been made.

(5) Each of the Secured Creditors and the Bond Trustee, on behalf of the holders of the Covered Bonds, agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other documents and instruments as may be required by law or requested by the other party at the other party’s expense to establish, maintain and protect the rights and remedies of the other party and carry out and effect the intent and purpose of this Section 8.03.

ARTICLE 9

REMUNERATION OF THE BOND TRUSTEE

Section 9.01 Remuneration.

(1) Subject to the terms of the Trust Deed (and subject also as hereinafter provided), the Issuer (or, following an Issuer Event of Default and service of a Notice to Pay on the Guarantor, the Guarantor) shall (subject as hereinafter provided) pay to the Bond Trustee an annual fee of such amount and payable on such dates as shall from time to time be agreed in writing by the Issuer and the Bond Trustee. All such remuneration shall be payable in accordance with the Guarantee Priority of Payments or the Post-Enforcement Priority of Payments, as applicable. Such remuneration shall accrue from day to day and shall be payable up to and including the date when all of the Obligations have been paid and/or discharged and the Bond Trustee has released, reassigned and/or discharged the Collateral as provided in Article 7.

(2) The Issuer (or, following an Issuer Event of Default and service of a Notice to Pay on the Guarantor, the Guarantor) shall in addition pay to the Bond Trustee an amount equal to the amount of any GST chargeable in respect of its remuneration hereunder subject to the Bond Trustee issuing to the Issuer or (as the case may be) the Guarantor a proper GST invoice in respect thereof.

Section 9.02 Additional Remuneration.

In the event of an Issuer Event of Default, a Guarantor Event of Default, Potential Issuer Event of Default or Potential Guarantor Event of Default occurring or in the event of the Bond Trustee finding it expedient or necessary or being required by the Issuer or (as the case may be) the Guarantor to undertake any duties which the Bond Trustee and the Issuer or the Guarantor

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agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Bond Trustee under or pursuant to this Agreement, the Issuer or the Guarantor shall pay to the Bond Trustee such additional remuneration as shall be agreed between the Bond Trustee and the Guarantor.

Section 9.03 Disputes.

In the event of the Bond Trustee and the Issuer (or, following an Issuer Event of Default and service of a Notice to Pay on the Guarantor, the Guarantor) failing to agree upon the amount of any remuneration from time to time pursuant to Section 9.01 or to agree in a case to which Section 9.02 above applies, upon whether such duties are of an exceptional nature or otherwise outside the scope of the normal duties of the Bond Trustee hereunder or upon the amount of such additional remuneration, such matters shall be determined by a merchant or investment bank (acting as an expert and not as an arbitrator) selected by the Bond Trustee and approved by the Issuer or the Guarantor or, failing such approval, nominated by a sole arbitrator in accordance with the (screened) appointment procedure provided in the Simplified Arbitration Rules of the ADR Institute of Canada Inc. then currently in effect, the expenses being involved in such nomination and the fees of such investment bank being payable by the Issuer or the Guarantor, and the decision of any such merchant or investment bank shall be final and binding on the Issuer or the Guarantor and the Bond Trustee.

Section 9.04 Expenses.

In addition to remuneration hereunder, the Issuer (or, following an Issuer Event of Default and service of a Notice to Pay on the Guarantor, the Guarantor) shall on written request, pay all Liabilities which the Bond Trustee may properly incur in relation to the negotiation, preparation and execution of, the exercise of its powers and the performance of its duties under or pursuant to this Agreement and any of the other Transaction Documents to which the Bond Trustee is a party including but not limited to travelling and legal expenses and any stamp, issue, registration, documentary and other similar taxes or duties paid or payable by the Bond Trustee in connection with any action taken or contemplated by or on behalf of the Bond Trustee for enforcing this Agreement or any of the other Transaction Documents to which it is party.

ARTICLE 10

APPOINTMENT OF NEW BOND TRUSTEE AND REMOVAL OF BOND TRUSTEE

Section 10.01 Power of Guarantor.

The power to appoint or remove the Bond Trustee or any new Bond Trustee shall be governed in accordance with the terms of the Trust Deed.

Section 10.02 Power of Bond Trustee.

Other than as specified herein, the powers and obligations of the Bond Trustee shall be governed in accordance with the terms of the Trust Deed.

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Section 10.03 Multiple Bond Trustees.

The determination of procedures, powers and obligations of a Bond Trustee where there is more than one bond trustee shall be governed in accordance with the terms of the Trust Deed.

ARTICLE 11

RETIREMENT OF BOND TRUSTEE

The retirement of the Bond Trustee shall be governed in accordance with the terms of the Trust Deed.

ARTICLE 12

NON-PETITION

The Bond Trustee agrees that, other than pursuant to the exercise of its rights and remedies on behalf of the Secured Creditors in accordance with this Agreement or any of the other Transaction Documents, and each Secured Creditor agrees that by taking the benefit of this Agreement and the Security, shall not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor, or any of the general partners of the Guarantor, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer shall be outstanding or there shall not have elapsed one year plus one day since the last day on which any such Covered Bonds shall have been outstanding. The foregoing provision shall survive the termination of this Agreement by any of the parties hereto.

ARTICLE 13

GENERAL

Section 13.01 Notices, etc.

(1) Any notice, direction or other communication given under this Agreement shall be in writing and given by delivering it or sending it by prepaid first class mail to, in the case of the Guarantor and the Bond Trustee, the address provided below and in the case of the Secured Creditors other than the Bond Trustee, to the address provided for such Person in Schedule 4 hereto, or by facsimile transmission to facsimile number set forth below, as applicable:

(a) in the case of the Guarantor to:

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

18^th Floor, First Canadian Place

100 King Street West

Toronto, Ontario M5X 1A1

Attention: Senior Manager, Securitization Finance and Operations

Fax: (416) 867-4166

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(b) in the case of the Bond Trustee to:

Computershare Trust Company of Canada

100 University Avenue

9^th Floor, North Tower

Toronto, Ontario

Canada M5J 2Y1

Attention:      Manager, Corporate Trust

Fax:                 (416) 981-9777

(2) Any such communication will be deemed to have been validly and effectively given (i) if personally delivered, on the date of such delivery if such date is a Canadian Business Day and such delivery was made prior to 4:00 p.m. (Toronto time) and otherwise on the next Canadian Business Day, (ii) in the case of first class post, when it would be received in the ordinary course of the post, or (iii) if transmitted by facsimile transmission on the Canadian Business Day following the date of transmission provided the transmitter receives a confirmation of successful transmission.

(3) Any party may change its address for notice, or facsimile contact information for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to such party at its changed address, or facsimile contact information, as applicable.

Section 13.02 GST.

If any sums which are payable by the Guarantor under Section 3.04 or Section 4.07 of this Agreement are subject to GST, the Guarantor shall make payment of the amount in respect of GST, where the payment is not already inclusive of GST to the relevant person in accordance with the order of priorities set out in those Sections.

Section 13.03 No Merger.

This Agreement shall not operate by way of merger of any of the Obligations and no judgment recovered by the Bond Trustee shall operate by way of merger of, or in any way affect, the Security, which is in addition to, and not in substitution for, any other security now or hereafter held by the Bond Trustee in respect of the Obligations.

Section 13.04 Further Assurances.

(1) The Guarantor shall from time to time, whether before or after the Security shall have become enforceable (i) do, or cause to be done, all acts and things and execute and deliver, or cause to be executed and delivered, all transfers, assignments and instruments, (ii) give, or

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cause to be given, any notices to any Governmental Authority or Person, and (iii) obtain, or cause to be obtained, any approvals from any Governmental Authority or Person, in each case, as the Bond Trustee may reasonably require:

(a) for protecting the Collateral;

(b) for perfecting the Security;

(c) to obtain control, as determined pursuant to the PPSA, of any Collateral that consists of investment property;

(d) for exercising all powers, authorities and discretions conferred upon the Bond Trustee; and

(e) for otherwise enabling the Bond Trustee to obtain a first priority perfected security interest in the Collateral (subject only to Permitted Security Interests) and to exercise the rights and powers herein granted.

(2) The Guarantor shall, from time to time after the Security has become enforceable (i) give, or cause to be given, any notices to any Governmental Authority or Person, (ii) obtain, or cause to be obtained, any approvals from any Governmental Authority or Person, and (iii) do, or cause to be done, all other acts and things and execute and deliver, or cause to be executed and delivered, all such transfers, assignments and instruments, in each case, as the Bond Trustee may require to effect the sale, transfer or other disposition of the Collateral in connection with its realization.

Section 13.05 Amendments.

Subject to Section 21.2 of the Trust Deed, and except as otherwise expressly provided in this Agreement, the provisions in this Agreement may be amended or modified only by written agreement of all of the parties hereto, and each proposed amendment or waiver of this Agreement that is considered by the Guarantor to be a material amendment or waiver shall be subject to Rating Agency Confirmation. The Guarantor (or the Cash Manager on its behalf) shall deliver notice to the Rating Agencies of any amendment or waiver which does not require Rating Agency Confirmation provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement. The Guarantor (or the Cash Manager on its behalf) shall deliver notice to CMHC of any material amendment to this Agreement, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

Section 13.06 Supplemental Security.

This Agreement is in addition to and without prejudice to all other security now held or which may hereafter be held by the Bond Trustee.

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Section 13.07 Successors and Assigns.

None of the parties hereto may assign or transfer any of their rights or obligations under this Agreement without the prior written consent of the other party and the Guarantor having obtained Rating Agency Confirmation in respect of such assignment.

Section 13.08 Severability.

If any provision of this Agreement shall be deemed by any court of competent jurisdiction to be invalid or void, the remaining provisions shall remain in full force and effect.

Section 13.09 Governing Law.

(1) This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario (other than certain other provisions relating to real property located outside of the Province of Ontario which will be governed by the law of the jurisdiction in which such property is located) and the laws of Canada applicable therein.

(2) The Guarantor hereby (i) irrevocably submits to the non-exclusive jurisdiction of any court sitting in the Province of Ontario over any suit, action or proceeding arising out of or relating to this Agreement; (ii) irrevocably agrees that all claims in respect of any suit, action or proceeding may be heard and determined in such court; and (iii) irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. The Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in any other manner provided by law. Nothing in this section shall affect the right of the Bond Trustee to serve process in any manner permitted by law or limit the rights of the Bond Trustee to bring proceedings against the Guarantor in the courts of any other jurisdiction.

(3) The Guarantor hereby consents generally in respect of any legal action or proceedings arising out of or in connection with this Agreement to the giving of any relief or the issue of any process in connection with such action or proceedings, including, without limitation, the making, enforcement or execution against the Guarantor of any order or judgment which may be made or given in such action or proceedings.

(4) To the extent that the Guarantor has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process (whether service of notice, attachment prior to judgment, attachment in the aid of execution, execution or otherwise) with respect to itself or its assets, the Guarantor hereby irrevocably waives, to the fullest extent permitted by law, such immunity in respect of its obligations under this Agreement.

Section 13.10 Counterparts.

This Agreement may be executed in counterparts (including by way of facsimile) and all such counterparts taken together shall be deemed to constitute one and the same instrument.

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IN WITNESS WHEREOF the parties have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its general partner BMO COVERED BOND GP, INC.
Per:	/s/ Chris Hughes
	Name: Chris Hughes Title:   President and Secretary

COMPUTERSHARE TRUST COMPANY OF CANADA
Per:	/s/ Sean Pigott
	Name: Sean Pigott Title:   Corporate Trust Officer
Per:	/s/ Stanley Kwan
	Name: Stanley Kwan Title:   Associate Trust Officer

ADDRESS OF DEBTOR

Location of Chief Executive Office:

Suite 6100

1 First Canadian Place

100 King Street West

Toronto, ON M5X 1B8

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SCHEDULE 1

Additional Representations and Warranties of Guarantor

(a) No encumbrance exists over or in respect of any of its assets except for encumbrances created by this Agreement and Permitted Security Interests.

(b) It is validly formed and existing as a limited partnership under the LP Act pursuant to a declaration of limited partnership filed under the LP Act.

(c) Since the date of registration of its limited partnership declaration there has been no material adverse change in its financial position or prospects.

(d) It is not the subject of any governmental or official investigation or inquiry and to its knowledge, none is progressing or pending or has been threatened in writing against it, which may have a material adverse effect on any of it, any relevant Transaction Document (for greater certainty, the term “relevant Transaction Documents” in this Schedule “A” does not include the Guarantor Agreement), and/or the issue and offering of Covered Bonds under the Program.

(e) No litigation, arbitration or administrative proceedings of or before any court, tribunal or governmental body has been commenced or, so far as it is aware are pending or threatened against it or any of its assets or revenues which may have a material adverse effect on it, any relevant Transaction Document and/or the issuance and offering of Covered Bonds under the Program.

(f) The Managing GP has at all times carried on and conducted the affairs and business of the Guarantor in the name of the Guarantor as a separate entity and in accordance with the Guarantor Agreement and all laws and regulations applicable to it and shall continue to do so throughout the continuation of the Partnership.

(g) The Managing GP has at all times kept or procured the keeping of proper books of account and records for the Guarantor separate from any person or entity.

(h) The Managing GP for and on behalf of the Guarantor has duly executed the relevant Transaction Documents.

(i) Its entry into and the execution (and, where appropriate, delivery) of the relevant Transaction Documents and the performance by it of its obligations under the relevant Transaction Documents do not and will not conflict with or constitute a breach or infringement of:

(i) the Declaration;

(ii) any law applicable to it; or

(iii) any agreement, indenture, contract, mortgage, deed or other instrument to which it is a party or which is binding on it or any of its assets.

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(j) The obligations expressed to be assumed by it under the relevant Transaction Documents are legal and valid obligations, binding on it and enforceable against it in accordance with their terms.

(k) The Transaction Documents to which it is a party have been entered into in good faith for its own benefit and on arm’s length commercial terms.

(l) It is not in breach of or default under any agreement, indenture, contract, mortgage, deed or other instrument to which it is a party or which is binding on it or any of its assets which would be reasonably likely to have a material adverse effect on the ability of the Guarantor to perform its obligations under the Transaction Documents, or have a material adverse effect on the Collateral.

(m) It is not necessary that any relevant Transaction Document in relation to it be filed, recorded or enrolled with any court or other authority in any jurisdiction in which the assets of the Partnership are located.

(n) It does not require the consent of any other party except for such consents as have been obtained by it prior to the date hereof or the consent, licence, approval or authorisation of any Governmental Authority in connection with the entering into or performance of the relevant Transaction Documents.

(o) This Agreement and the other Transaction Documents have been properly authorized by all necessary action on the part of the Guarantor and its partners in accordance with the term of the Guarantor Agreement and constitutes a legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms except as may be limited by applicable bankruptcy, insolvency, moratorium, and other similar laws affecting creditors’ rights generally and except that orders for specific performance, injunctions and other equitable remedies are discretionary remedies which may be granted only in the discretion of the court; the making and performance of this Agreement will not result in the breach of, constitute a default under, contravene any provision of, or result in the creation of, any lien upon the Collateral other than a Permitted Security Interest.

(p) There are no futures accounts currently in existence. In the event that any futures accounts were to come into existence, it will take all necessary actions in connection therewith.

(q) Consumer goods held by the Guarantor are not material in value.

(r) The Guarantor and/or the Bond Trustee have control over all investment property.

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SCHEDULE 2

Additional Covenants of Guarantor

The Guarantor covenants and agrees with the Bond Trustee (for and on behalf of itself and the Secured Creditors) that:

(a) It will, at all times, carry on and conduct its affairs and business in its own name (or if necessary in the name of the Managing GP) as a separate entity and in accordance with the Guarantor Agreement and applicable laws.

(b) It will not, without the Bond Trustee’s prior written consent, sell, lease or otherwise dispose of any of the Collateral, except in accordance with the other Transaction Documents.

(c) It will not incur any indebtedness in respect of borrowed money or give any guarantee or indemnity in respect of any indebtedness, except pursuant to the terms of the Transaction Documents or in connection with a Permitted Security Interest.

(d) It will, at its own expense, promptly and duly authorize, execute and deliver any further instruments and documents, and take any further action, that the Bond Trustee may request for the purpose of obtaining or preserving the full benefits of, and the rights and powers granted by, this Agreement and any of the other Transaction Documents (including the filing of any financing statements or financing change statements under any applicable legislation with respect to the Security Interest created by this Agreement).

(e) It will give notice in writing to the Bond Trustee of the occurrence of any Guarantor Event of Default, Potential Guarantor Event of Default and/or service of a Guarantor Acceleration Notice (such notice to be effected by the delivery of a copy of the Guarantor Acceleration Notice to the Bond Trustee) immediately upon becoming aware thereof and without waiting for the Bond Trustee to take any further action.

(f) It will, at all times, comply with the obligations and provisions binding upon it under and pursuant to this Agreement and the other relevant Transaction Documents.

(g) It will provide prior written notice to each Rating Agency if the location of the chief executive office of the Guarantor or the Managing GP is to be other than in the Province of Ontario;

(h) It will notify the Bond Trustee promptly upon becoming aware of (1) any change in the issuer’s jurisdiction in respect of any uncertificated securities that are Collateral or any change in a securities intermediary’s jurisdiction in respect of any security entitlements or securities accounts that are Collateral, or (2) any change in the futures intermediary’s jurisdiction if the collateral is a futures contract or a futures account;

(i) It will not, after the date of this Agreement, establish and maintain any securities accounts with any securities intermediary unless (1) it gives the Bond Trustee 30 days’

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prior written notice of its intention to establish such new securities account, (2) such securities intermediary is reasonably acceptable to the Bond Trustee and (3) the Bond Trustee, the securities intermediary and the Guarantor (i) execute and deliver a control agreement with respect to such securities account that is in form and substance reasonably acceptable to the Bond Trustee or (ii) transfer the security entitlements in such securities account into a securities account in the name of the Guarantor, all in accordance with the terms of this Agreement.

(j) It will not, after the date of this Agreement, establish and maintain any futures accounts with any futures intermediary unless (1) it gives the Bond Trustee 30 days’ prior written notice of its intention to establish such new futures account, (2) such futures intermediary is reasonably acceptable to the Bond Trustee and (3) the Bond Trustee, the futures intermediary and the Guarantor execute and deliver an agreement with respect to such futures account in accordance with Section 1(2)(d)(ii) of the PPSA that is in form and substance reasonably acceptable to the Bond Trustee; provided that such agreement shall not be required where the Bond Trustee is the futures intermediary with which the futures contract is carried.

(k) It will not create or permit to subsist any Adverse Claim whatsoever (unless arising by operation of law and not within the control of the Guarantor pursuant to the Transaction Documents, including this Agreement) upon the whole or any part of its assets, including the Collateral, or its undertaking, present or future.

(l) It will not change its name or amalgamate with any other corporation without first giving notice to the Bond Trustee of its new name and the names of all amalgamating corporations and the date when such new name or amalgamation is to become effective.

(m) It will not change its chief executive office, or the jurisdiction of its incorporation or formation, or establish a new location for any of its Collateral unless (i) it shall have given to the Bond Trustee not less than 30 days’ prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Bond Trustee may reasonably request, and (ii) all filings have been made and all other actions taken that are required in order for the Bond Trustee to continue at all times following such change to have a valid and perfected first priority Security Interest in respect of all of the Collateral.

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SCHEDULE 3

Post-Enforcement Priority of Payments

(a) first, in or towards satisfaction of pro rata and pari passu according to the respective amounts thereof of:

(i) all amounts due and payable or to become due and payable to the Bond Trustee under the provisions of the Trust Deed with respect to the performance of its obligations hereunder and under the Trust Deed together with interest and applicable GST (or other similar taxes) chargeable on the supply in respect of which the payment is made as provided therein; and

(ii) all amounts due and payable or to become due and payable to the Bond Trustee or any Receiver under the provisions of this Agreement together with interest and applicable GST (or other similar taxes) chargeable on the supply in respect of which the payment is made as provided therein; and

(b) second, in or towards satisfaction pro rata and pari passu according to respective amounts thereof of any remuneration then due and payable to the Agents under or pursuant to the Agency Agreement together with applicable GST (or other similar taxes) thereon to the extent provided therein;

(c) third, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof, of:

(i) any remuneration then due and payable to the Servicer and any costs, charges, liabilities and expenses then due or to become due and payable to the Servicer under the provisions of the Servicing Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Servicer in excess of $150,000;

(ii) any remuneration then due and payable to the Cash Manager and any costs, charges, liabilities and expenses then due or to become due and payable to the Cash Manager under the provisions of the Cash Management Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Cash Manager in excess of $150,000;

(iii) amounts due to the Account Bank or, as applicable, the Standby Account Bank (including costs) pursuant to the terms of the Bank Account Agreement or, as applicable, the Standby Bank Account Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Account Bank or, as applicable, the Standby Account Bank in excess of $150,000; and

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(iv) amounts due to the Custodian pursuant to the terms of the Mortgage Sale Agreement, together with applicable GST (or other similar taxes) thereon to the extent provided therein, other than any Indemnity Amounts payable to the Custodian in excess of $150,000;

(d) fourth, to pay pro rata and pari passu according to the respective amounts thereof, of:

(i) any amounts due and payable to the Interest Rate Swap Provider pro rata and pari passu according to the respective amounts thereof (including any termination payment (but excluding any Excluded Swap Termination Amounts)) pursuant to the terms of the Interest Rate Swap Agreement;

(ii) the amounts due and payable to the Covered Bond Swap Provider pro rata and pari passu in respect of each relevant Series of Covered Bonds to the Covered Bond Swap Agreement (including any termination payment due and payable by the Guarantor under the Covered Bond Swap Agreement (but excluding any Excluded Swap Termination Amount)) in accordance with the terms of the Covered Bond Swap Agreement; and

(iii) the amounts due and payable under the Covered Bond Guarantee, to the Bond Trustee on behalf of the holders of the Covered Bonds pro rata and pari passu in respect of interest and principal due and payable on each Series of Covered Bonds,

provided that if the amount available for distribution under this paragraph (d) (excluding any amounts received from the Covered Bond Swap Provider in respect of amounts referred to in (d)(ii) above) would be insufficient to pay the Canadian Dollar Equivalent of the amounts due and payable under the Covered Bond Guarantee in respect of each Series of Covered Bonds under (d)(iii) above, the shortfall will be divided amongst all such Series of Covered Bonds on a pro rata basis and the amount payable by the Guarantor in respect of each relevant Series of Covered Bonds under (d)(ii) above to the Covered Bond Swap Provider will be reduced by the amount of the shortfall applicable to the Covered Bonds in respect of which such payment is to be made;

(e) fifth, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof, of any Excluded Swap Termination Amounts due and payable by the Guarantor to the relevant Swap Provider under the relevant Swap Agreement;

(f) sixth, to pay or provide for pro rata and pari passu according to the respective amounts thereof, any Indemnity Amounts payable to the Servicer, the Cash Manager, the Account Bank (or the Standby Account Bank, as applicable) and the Custodian, to the extent not paid pursuant to paragraph (c) above;

(g) seventh, in or towards repayment in full of all amounts outstanding under the Intercompany Loan Agreement;

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(h) eighth, towards payment of any indemnity amount due to the Partners pursuant to the Guarantor Agreement;

(i) ninth, in or towards payment of the fee due to the Corporate Services Provider; and

(j) tenth, thereafter any remaining moneys will be applied in or towards payment to the Partners pursuant to the Guarantor Agreement.

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SCHEDULE 4

Address For Notice

(a) in the case of the Guarantor to:

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

18^th Floor, 1 First Canadian Place

100 King Street West

Toronto, Ontario

Canada M5X 1A1

Attention:          Senior Manager, Securitization Finance and

                           Operations

Fax:                   416-867-4166

(b) in the case of the Bond Trustee to:

Computershare Trust Company of Canada

100 University Avenue

11^th Floor

Toronto, Ontario

Canada M5J 2Y1

Attention:            Manager, Corporate Trust

Fax:                      (416) 981-9777

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EX-4.13

Exhibit 4.13

BANK ACCOUNT AGREEMENT

September 30, 2013

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

as Guarantor

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

BANK OF MONTREAL

as Account Bank, GDA Provider and Cash Manager

TABLE OF CONTENTS

		Page
1.	DEFINITIONS AND INTERPRETATION		1
2.	THE TRANSACTION ACCOUNT AND THE GDA ACCOUNT		2
3.	MANDATES		2
4.	ACKNOWLEDGEMENT BY THE ACCOUNT BANK		3
5.	CERTIFICATION, INDEMNITY AND GUARANTOR ACCELERATION NOTICE		4
6.	CHANGE OF BOND TRUSTEE OR ACCOUNT BANK		5
7.	TERMINATION		6
8.	ACCOUNT BANK REPRESENTATIONS, WARRANTIES AND COVENANTS		9
9.	FURTHER ASSURANCE		10
10.	CONFIDENTIALITY		10
11.	NOTICES		10
12.	INTEREST		11
13.	WITHHOLDING		11
14.	ENTIRE AGREEMENT		12
15.	SEVERABILITY		12
16.	ASSIGNMENT		12
17.	AMENDMENTS, VARIATION AND WAIVER		13
18.	NON-PETITION		13
19.	LIMITATION OF LIABILITY		13
20.	ENUREMENT		13
21.	COUNTERPARTS		13
22.	GOVERNING LAW		14

THIS AGREEMENT is made on September 30, 2013

BETWEEN:

(1) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. (in its capacity as the Guarantor);

(2) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada) (in its capacity as Account Bank, in its capacity as Cash Manager and in its capacity as GDA Provider);

(3) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada, in its capacity as the Bond Trustee.

WHEREAS:

(A) As part of the transactions contemplated in the Program, the Cash Manager has agreed, pursuant to the Cash Management Agreement, to provide Cash Management Services in connection with the business of the Guarantor.

(B) The Cash Management Agreement provides that the Cash Manager shall establish certain accounts with the Account Bank for and on behalf of the Guarantor.

IT IS HEREBY AGREED as follows:

1. Definitions and Interpretation

1.1 Definitions

The master definitions and construction agreement made between, inter alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the Master Definitions and Construction Agreement) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) 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 that Master Definitions and Construction Agreement. For the purposes of this Agreement, this Agreement has the same meaning as Bank Account Agreement in the Master Definitions and Construction Agreement.

1.2 Schedules

The Schedules attached to this Agreement shall, for all purposes of this Agreement, form an integral part of it.

Schedule 1 – Form of Mandate

Schedule 2 – Form of Notice

2. The Transaction Account and the GDA Account

2.1 Instructions from the Cash Manager

Subject to Sections 2.4 and 5.3, the Account Bank shall comply with any direction of the Cash Manager given on a Canadian Business Day to effect a payment by debiting any one of the Guarantor Accounts held with the Account Bank if such direction (i) is in writing, is given by telephone and confirmed in writing not later than close of business on the day on which such direction is given, or is given by the internet banking service provided by the Account Bank and (ii) complies with the Transaction Account and GDA Account Mandate as appropriate (such direction shall constitute an irrevocable payment instruction).

2.2 Timing of Payment

The Account Bank agrees that, in the case of the Guarantor Accounts, if directed pursuant to Section 2.1 to make any payment then, subject to Sections 2.4 and 5.3, it will effect the payment specified in such direction not later than the day specified for payment therein and for value on the day specified therein provided that, if any direction specifying that payment be made on the same day as the direction is given is received later than 12:00 p.m. (Eastern Standard Time) on any Canadian Business Day, the Account Bank shall make such payment at the commencement of business on the following Canadian Business Day for value that day.

2.3 Account Bank Charges

The charges of the Account Bank for the operation of each of the Guarantor Accounts held with the Account Bank shall be debited to the GDA Account only on each Guarantor Payment Date in accordance with the relevant Priorities of Payments, and the Guarantor by its execution hereof irrevocably agrees that this shall be done. The charges shall be payable at the same rates as are generally applicable to the business customers of the Account Bank provided that, subject to Section 7.5, if there are insufficient funds standing to the credit of the GDA Account to pay such charges, the Account Bank shall not be relieved of its obligations in respect of any of the Guarantor Accounts held with it.

2.4 No Negative Balance

Notwithstanding the provisions of Section 2.1, amounts shall only be withdrawn from any Guarantor Account held with the Account Bank to the extent that such withdrawal does not cause the relevant Guarantor Account to have a negative balance.

3. Mandates

3.1 Signing and Delivery of Mandate

The Guarantor has delivered to the Account Bank prior to the Program Date the duly executed Transaction Account and GDA Account Mandate, and the Account Bank hereby confirms to the Bond Trustee that the Transaction Account and GDA Account Mandate has been provided to it, that the Transaction Account and GDA Account are open and that the Mandate is operative. The Account Bank acknowledges that the Mandate and any other mandates delivered from time to time pursuant to the terms hereof shall be subject to the terms of the Security Agreement and this Agreement.

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3.2 Amendment or Revocation

The Account Bank agrees that it shall notify the Bond Trustee as soon as is reasonably practicable and in accordance with Section 11 if it receives any amendment to or revocation of any Mandate relating to the Guarantor Accounts held with that Account Bank (other than a change of Authorized Signatory) and shall require the prior written consent of the Bond Trustee to any such amendment or revocation (other than a change of Authorized Signatory) but, unless such Mandate is revoked, the Account Bank may continue to comply with such Mandate (as it may from time to time be amended in accordance with the provisions of this Section 3.2) unless it receives notice in writing from the Bond Trustee to the effect that an Guarantor Acceleration Notice has been served on the Guarantor or that the appointment of Bank of Montreal as Cash Manager under the Cash Management Agreement has been terminated and shall, thereafter, act solely in accordance with the terms of those instructions as provided in Section 5.3 of this Agreement.

4. Acknowledgement by the Account Bank

4.1 Restriction on Account Bank’s Rights

Notwithstanding anything to the contrary in the Mandate or this Agreement, the Account Bank hereby:

(a) waives any right it has or may hereafter acquire to combine, consolidate or merge any of the Guarantor Accounts held with it with any other account of the Cash Manager, the Guarantor, the Issuer, the Seller, the Bond Trustee or any other person or any liabilities of the Cash Manager, the Guarantor, the Issuer, the Seller, the Bond Trustee or any other person to it;

(b) agrees that it may not exercise any lien or, to the extent permitted by law, any set-off or transfer any sum standing to the credit of or to be credited to any of the Guarantor Accounts held with it in or towards satisfaction of any liabilities to it of the Cash Manager, the Guarantor, the Issuer, the Seller, the Bond Trustee or any other person owing to it;

(c) in addition to and without prejudice to its rights and obligations as a Secured Creditor, agrees that it will not take, and shall not take, any steps whatsoever to recover any amount due or owing to it pursuant to this Agreement or any other debts whatsoever owing to it by the Guarantor, or commence any Insolvency Proceeding in relation to the Guarantor, or any general partners of the Guarantor, in respect of any of the liabilities of the Guarantor whatsoever, other than to the extent permitted under the Security Agreement;

(d) agrees that it shall have recourse only to sums paid to or received by (or on behalf of) the Guarantor pursuant to the Transaction Documents;

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(e) agrees that it will notify the Cash Manager, the Guarantor and the Bond Trustee if compliance with any instruction would cause the Guarantor Account(s) held with it to which such instruction relates to have a negative balance, such notification to be given on the same Canadian Business Day that it determines that compliance with such instruction would cause any such account to have a negative balance; and

(f) acknowledges that the Guarantor has, pursuant to the Security Agreement, inter alia, assigned by way of security all its rights, title, interest and benefit, present and future, in and to, all sums from time to time standing to the credit of the Guarantor Accounts held with it and all of its rights under this Agreement to the Bond Trustee and that the Bond Trustee may enforce such rights in the Bond Trustee’s own name without joining the Guarantor in any such action (which right the Account Bank hereby waives) and the Account Bank hereby waives as against the Bond Trustee any rights or equities in its favour arising from any course of dealing between the Account Bank and the Guarantor.

4.2 Notice of Assignment and Acknowledgement

The Account Bank agrees that promptly upon receipt of a notice of assignment signed by the Guarantor, in (or substantially in) the form of notice set out in Part 1 of Schedule 2 hereto, it shall sign and duly return to the Guarantor, with a copy to the Bond Trustee, an acknowledgement in (or substantially in) the form of acknowledgement set out in Part 2 of Schedule 2 hereto.

4.3 Account Statement

Unless and until directed otherwise by the Bond Trustee in accordance with Section 11, the Account Bank shall provide each of the Cash Manager, the Guarantor and the Bond Trustee with a written statement in respect of each Guarantor Account held with it as soon as reasonably practicable after receipt of a request for a statement. The Account Bank is hereby authorized by the Guarantor to provide statements in respect of each Guarantor Account held with it to the Cash Manager and the Bond Trustee.

5. Certification, Indemnity and Guarantor Acceleration Notice

5.1 Account Bank to Comply with Cash Manager’s Instructions

Unless otherwise directed in writing by the Bond Trustee pursuant to Section 5.3 below, in making any transfer or payment from any Guarantor Account held with the Account Bank in accordance with this Agreement, the Account Bank shall be entitled to act as directed by the Cash Manager pursuant to Sections 2.1 and 2.2 above and to rely as to the amount of any such transfer or payment on the Cash Manager’s instructions in accordance with the Mandate, and the Account Bank shall have no liability to the Cash Manager, the Guarantor, the Seller or the Bond Trustee for having acted on such instructions except in the case of its wilful default, fraud or negligence.

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5.2 Guarantor’s Indemnity

Subject to the Priorities of Payments and the Security Agreement, the Guarantor shall indemnify the Account Bank or, pursuant to Section 5.3, the Bond Trustee, as the case may be, to the extent of available funds then standing to the credit of the Guarantor Accounts held with the Account Bank against any loss, cost, damage, charge or expense properly incurred by the Account Bank or the Bond Trustee, as the case may be, in complying with any instruction delivered pursuant to and in accordance with this Agreement, save that this indemnity shall not extend to:

(a) the charges of the Account Bank (if any) for the operation of the Guarantor Accounts held with the Account Bank other than as provided in this Agreement; and

(b) any loss, cost, damage, charge or expense arising from any breach by the Account Bank of its obligations under this Agreement.

5.3 Consequences of a Guarantor Acceleration Notice

The Account Bank acknowledges that, if it receives notice in writing from the Bond Trustee to the effect that (a) the Bond Trustee has served a Guarantor Acceleration Notice on the Guarantor or (b) that the appointment of Bank of Montreal as Cash Manager under the Cash Management Agreement has been terminated, all right, authority and power of the Cash Manager in respect of each of the Guarantor Accounts held with it shall be terminated and be of no further effect and the Account Bank agrees that it shall, upon receipt of such notice from the Bond Trustee, comply with the directions of the Bond Trustee or any successor cash manager appointed by the Bond Trustee (subject to such successor cash manager having entered into an agreement with it on substantially the same terms as this Agreement) in relation to the operation of each of the Guarantor Accounts held with it, and the Account Bank will have no liability hereunder to the Cash Manager, the Guarantor or the Bond Trustee for having acted on such instructions.

6. Change of Bond Trustee or Account Bank

6.1 Change of Bond Trustee

(a) If there is any change in the identity of the Bond Trustee in accordance with the Security Agreement, the Account Bank, the Cash Manager and the Guarantor 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 powers of the outgoing Bond Trustee under this Agreement.

(b) It is hereby acknowledged and agreed that by its execution of this Agreement, the Bond Trustee shall not assume or have any obligations or liabilities to the Account Bank, the Cash Manager or the Guarantor under this Agreement notwithstanding any provision herein and that the Bond Trustee has agreed to become a party to this Agreement for the purpose only of taking the benefit of this Agreement and agreeing to amendments to this Agreement pursuant to Section 17. For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed by the

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Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion without any obligation to give reasons therefor and the Bond Trustee shall not be responsible for any liability occasioned by so acting but subject always to the provisions of Section 11.1 of the Security Agreement.

6.2 Change of an Account Bank

If there is any change in the identity of the Account Bank, the Cash Manager, the Guarantor and the Bond Trustee shall execute such documents and take such actions as each new Account Bank and the outgoing Account Bank and the Bond Trustee may require for the purpose of vesting in each new Account Bank the rights and obligations of the outgoing Account Bank and releasing the outgoing Account Bank from its future obligations under this Agreement.

7. Termination

7.1 Termination Events

The Cash Manager or the Guarantor:

(a) may (with the prior written consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that the termination of this Agreement would be materially prejudicial to the interests of the Covered Bondholders) terminate this Agreement with respect to the Account Bank in the event that the matters specified in paragraph (i), (vi), (vii), or (viii) below occur;

(b) shall (with the prior written consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that the termination of this Agreement would be materially prejudicial to the interests of the Covered Bondholders) terminate this Agreement with respect to the Account Bank in the event that any of the matters specified in paragraphs (iii) to (v) (inclusive) below occurs,

(c) in the event that any of the matters specified in paragraph (ii) or (ix) below occur, will take the actions described in Section 4.1(f) of the Cash Management Agreement and the Guarantor will terminate this Agreement,

in each case by serving a written notice of termination on the Account Bank (such termination to be effective three Canadian Business Days following service of such notice and, in the case of (c), no later than five Canadian Business Days following the occurrence of any of the matters specified therein) directing the Account Bank to transfer all funds standing in the Guarantor Accounts maintained by the Account Bank to a third party selected by the Guarantor (or the Cash Manager on its behalf) and, on the same day, serving (if applicable) a Stand-By Account Bank Notice on the Stand-By Account Bank, in any of the following circumstances:

(i) if a deduction or withholding for or on account of any Tax is imposed, or it appears likely that such a deduction or withholding will be imposed, in respect of the interest payable on any Guarantor Account held with the Account Bank;

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(ii) if one or more Rating Agencies downgrades the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating, as applicable, of the Account Bank below the Account Bank Required Ratings;

(iii) if the Account Bank, otherwise than for the purposes of such amalgamation, merger or reorganization as is referred to in paragraph (iv) below, ceases or, through an authorized action of the board of directors of the Account Bank, threatens to cease to carry on all or substantially all of its business or the Account Bank;

(iv) if an order is made or an effective resolution is passed for the winding-up of the Account Bank except a winding-up for the purposes of or pursuant to a solvent amalgamation, merger or reorganization the terms of which have previously been approved in writing by the Guarantor and the Bond Trustee (such approval not to be unreasonably withheld or delayed);

(v) an Insolvency Proceeding occurs in respect of the Account Bank; or

(vi) default is made by the Account Bank in the performance or observance of its covenants and obligations, or a breach by the Account is made of any of its representations and warranties under Sections 8.1(d), 8.1(e), 8.1(f), 8.1(g) and 8.1(h);

(vii) default is made by the Account Bank in the performance or observance of any of its other covenants and obligations under this Agreement and such default continues unremedied for a period of thirty (30) days after the earlier of the Account Bank becoming aware of such default and receipt by the Account Bank of written notice from the Bond Trustee requiring the same to be remedied;

(viii) if the Account Bank materially breaches its obligations under this Agreement, the Guaranteed Deposit Account Contract and/or the Security Agreement, or any of the representations and warranties of the Account Bank hereunder (other than the representations, warranties and covenants under Sections 8.1(d), 8.1(e), 8.1(f), 8.1(g) and 8.1(h)) or thereunder is incorrect in any material respect, provided that Rating Agency Condition is satisfied for the termination of this Agreement following such breach or misrepresentation; or

(ix) an Issuer Event of Default occurs (provided that the Account Bank is the Issuer or an Affiliate thereof).

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7.2 Notification of Termination Event

Each of the Guarantor, the Cash Manager and the Account Bank undertake and agree to notify the Bond Trustee and each Rating Agency in accordance with Section 11 promptly upon becoming aware thereof of any event that would or could entitle the Bond Trustee to serve a notice of termination pursuant to Section 7.3.

7.3 Termination by Bond Trustee

In addition, prior to the service of a Guarantor Acceleration Notice on the Guarantor, the Bond Trustee may terminate this Agreement and close any of the Guarantor Accounts held with the Account Bank by serving a notice of termination on the Account Bank (such termination to be effective three Canadian Business Days following service of such notice) (copied to the Rating Agencies) and, on the same day, serving (if applicable) a Stand-By Account Bank Notice on the Stand-By Account Bank if any of the events specified in Section 7.1(c)(i) to (viii) (inclusive) of this Agreement occurs in relation to the Account Bank. Following the service of a Guarantor Acceleration Notice on the Guarantor, the Bond Trustee may serve a notice of termination (copied to the Rating Agencies) at any time.

7.4 Automatic Termination

(a) This Agreement shall automatically terminate (if not terminated earlier pursuant to this Article 7) on the date falling 90 days after the termination of the Guarantor Agreement.

(b) This Agreement shall automatically terminate (if not terminated earlier pursuant to this Article 7) upon the termination of the Guaranteed Deposit Account Contract pursuant to Article 5 therein.

7.5 Termination by Account Bank

The Account Bank may terminate this Agreement and cease to operate the Guarantor Accounts at any time on giving not less than three months’ prior written notice thereof ending on any Canadian Business Day which does not fall on a Guarantor Payment Date or less than 10 Canadian Business Days before a Guarantor Payment Date to each of the other parties hereto, provided that such termination will not take effect (i) until a replacement Account Bank that is a chartered bank under the Bank Act with ratings required by the relevant Rating Agencies accedes to this Agreement or has entered into an agreement in form and substance similar to this Agreement, and (ii) the Rating Agency Condition has been satisfied in respect thereof. For greater certainty, the Account Bank will not be responsible for any costs or expenses occasioned by such termination and cessation. In the event of such termination and cessation the Account Bank will assist the other parties hereto to effect an orderly transition of the banking arrangements documented hereby.

7.6 Notice of Termination/Resignation to CMHC

Upon any termination or resignation of the Account Bank hereunder, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Account Bank’s replacement contemporaneously with the earlier of (i) notice of such termination or resignation and

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replacement to a Rating Agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available to Covered Bondholders, and (iii) five (5) Canadian Business Days following such termination or resignation and replacement (unless the replacement Account Bank has yet to be identified at that time, in which case notice of the replacement Account Bank may be provided no later than ten (10) Canadian Business Days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Account Bank, all information relating to the replacement Account Bank required by the CMHC Guide and the new agreement or revised and amended copy of this Agreement to be entered into with the replacement Account Bank.

8. ACCOUNT BANK REPRESENTATIONS, WARRANTIES and covenants

8.1 Account Bank Representations, Warranties and Covenants

The Account Bank represents and warrants to, and covenants with, each of the Cash Manager, the Guarantor and the Bond Trustee at the date hereof, on each date on which an amount is credited to the Guarantor Accounts and on each Guarantor Payment Date, that:

(a) it 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 execution, delivery and performance by the Account Bank of this Agreement (i) are within the Account Bank’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 Account Bank, (2) any law, rule or regulation applicable to the Account Bank, or (3) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting the Account Bank or its property;

(c) it is not a Non-Resident;

(d) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations hereunder;

(e) it is and will continue to be in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(f) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(g) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party;

(h) it will comply with the CMHC Guide and all Transaction Documents to which it is a party and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations hereunder and the other Transaction Documents to which it is a party; and

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(i) the unsecured, unsubordinated and unguaranteed debt obligations or issuer default rating, as applicable, of the Account Bank rated by each of the Rating Agencies are at or above the Account Bank Required Ratings.

8.2 Undertaking

The Account Bank undertakes to notify the Cash Manager, the Guarantor and the Bond Trustee immediately if, at any time during the term of this Agreement, either of the statements contained in Section 8.1 (Account Bank Representations, Warranties and Covenants) ceases to be true. The representations, warranties and covenants set out in Section 8.1 (Account Bank Representations, Warranties and Covenants) will survive the signing and delivery of this Agreement.

9. Further Assurance

The parties hereto agree that they will co-operate fully to do all such further acts and things and execute any further documents as may be necessary or reasonably desirable to give full effect to the arrangements contemplated by this Agreement.

10. Confidentiality

None of the parties hereto shall during the term of this Agreement or after its termination disclose to any person whatsoever (except as provided herein, in accordance with the CMHC Guide, the Covered Bond Legislative Framework or in any of the Transaction Documents to which it is a party or with the authority of the other parties hereto or so far as may be necessary for the proper performance of its obligations hereunder or unless required by law or any applicable stock exchange requirement or any governmental or regulatory authority or ordered to do so by a court of competent jurisdiction or by the Canada Revenue Agency) any information relating to the business, finances or other matters of a confidential nature of any other party hereto of which it may in the course of its duties hereunder have become possessed and each of the parties hereto shall use all reasonable endeavours to prevent any such disclosure.

11. Notices

Any notices to be given pursuant to this Agreement to any of the parties hereto (or to the Stand-By Account Bank or the Stand-By GDA Provider) shall be sufficiently served if sent by prepaid first class post, by hand or electronic or facsimile transmission and shall be deemed to be given (in the case of electronic or facsimile transmission) when despatched, (where delivered by hand) on the day of delivery if delivered before 5.00 p.m. on a Canadian Business Day or on the next Canadian Business Day if delivered thereafter or on a day which is not a Canadian Business Day or (in the case of first class post) when it would be received in the ordinary course of the post and shall be sent:

(a) in the case of the Cash Manager, the GDA Provider and the Account Bank to Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-4166) for the attention of Senior Manager, Securitization Finance and Operations;

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(b) in the case of the Guarantor, to BMO Covered Bond Guarantor Limited Partnership, c/o Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, ON M5X 1A1 (facsimile number 416-867-4166) for the attention of Senior Manager, Securitization Finance and Operations;

(c) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11^th Floor, Toronto, ON M5J 2Y1, (facsimile number (416) 981-9777) for the attention of Manager, Corporate Trust; and

(d) in the case of the Stand-By Account Bank and the Stand-By GDA Provider, to Royal Bank of Canada, Royal Bank Plaza, South Tower, 14^th Floor, 200 Bay Street, Toronto, Ontario M5J 2J5, (facsimile number (416) 974-6056) for the attention of Ann Milne, Senior Manager;

or to such other address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party (or the Stand-By Account Bank or the Stand-By GDA Provider) to the others by written notice in accordance with the provisions of this Section 11.

12. Interest

12.1 Interest shall be paid on the GDA Account in accordance with the terms of the Guaranteed Deposit Account Contract.

12.2 In respect of each period from (and including) the first day of each month (or, in respect of the first such period, the first applicable day) to (but excluding) the last day of each month, the Account Bank will pay, on the last Canadian Business Day of each month, interest in arrears on any cleared credit balances on the Transaction Account and any other accounts opened by the Guarantor with the Account Bank, other than the GDA Account, at the same rates as are generally applicable to accounts of the same type held by business customers of the Account Bank.

13. Withholding

All payments by the Account Bank under this Agreement shall be made in full without any deduction or withholding (whether in respect of set-off, counterclaim, duties, Taxes, charges or otherwise whatsoever) unless the deduction or withholding is required by law, in which event each Account Bank shall:

(a) ensure that the deduction or withholding does not exceed the minimum amount legally required;

(b) pay to the relevant taxation or other authorities within the period for payment permitted by applicable law the full amount of the deduction or withholding;

(c) furnish to the Guarantor or the Bond Trustee (as the case may be) within the period for payment permitted by the relevant law, either:

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(i) an official receipt of the relevant taxation authorities involved in respect of all amounts so deducted or withheld; or

(ii) if such receipts are not issued by the taxation authorities concerned on payment to them of amounts so deducted or withheld, a certificate of deduction or equivalent evidence of the relevant deduction or withholding; and

(d) account to the Guarantor in full by credit to the GDA Account (as the case may be) for an amount equal to the amount of any rebate, repayment or reimbursement of any deduction or withholding which the Account Bank has made pursuant to this Section 13 and which is subsequently received by the Account Bank.

14. Entire Agreement

This Agreement, the schedules hereto, the Cash Management Agreement, the Guaranteed Deposit Account Contract and the Security Agreement together constitute the entire agreement and understanding between the parties in relation to the subject matter hereof and cancel and replace any other agreement or understanding in relation thereto.

15. Severability

If a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect:

(a) the validity or enforceability in that jurisdiction of any other provision of this Agreement; or

(b) the validity or enforceability in other jurisdictions of that or any other provision of this Agreement.

16. Assignment

Subject as provided in or contemplated by Sections 4.1(f), 6.2 and 7.5:

(a) the Account Bank may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Guarantor and the Bond Trustee;

(b) the Guarantor may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Account Bank and the Bond Trustee; and

(c) the Bond Trustee may at its sole discretion assign all or any of its rights under or in respect of this Agreement and all or any of its interest in the Loans and their Related Security without such consent in exercise of its rights under the Security Agreement.

If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS.

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17. Amendments, Variation and Waiver

17.1 Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

17.2 Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (i) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (ii) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be a material amendment. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers with respect to which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

17.3 The Guarantor (or the Cash Manager on its behalf) will deliver notice to CMHC from time to time of any amendment, restatement or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

18. NON-PETITION

Each of the parties (other than the Bond Trustee) hereto agrees that it shall not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor, or any of the general partners of the Guarantor, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer under the Program 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.

19. LIMITATION OF LIABILITY

BMO Covered Bond Guarantor Limited Partnership is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which is, except as expressly required by law, only liable for any of its liabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capital.

20. ENUREMENT

This Agreement enures to the benefit of and is binding upon each of the parties to this Agreement and their respective successors (including any successor by reason of amalgamation of any party) and assigns.

21. Counterparts

This Agreement may be signed (manually, electronically or by facsimile) and delivered in one or more counterparts, all of which, taken together, shall constitute one and the same document.

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22. Governing Law

22.1 This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

22.2 Each party to this Agreement hereby irrevocably submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement.

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IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day and year first before written.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Chris Hughes
	Name:	Chris Hughes
	Title:	President and Secretary
BANK OF MONTREAL, in its capacity as Cash Manager, GDA Provider, Account Bank and Seller
By:	/s/ Cathy Cranston
	Name:	Cathy Cranston
	Title:	Senior Vice President, Finance & Treasurer
COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:	/s/ Sean Pigott
	Name:	Sean Pigott
	Title:	Corporate Trust Officer
By:	/s/ Stanley Kwan
	Name:	Stanley Kwan
	Title:	Associate Trust Officer

Bank Account Agreement

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SCHEDULE 1

FORM OF MANDATE

BANK MANDATE—TRANSACTION ACCOUNT AND GDA ACCOUNT

2. Reference is made to the Bank Account Agreement (the Bank Account Agreement) dated September 30, 2013 between BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. (in its capacity as the Guarantor), BANK OF MONTREAL, a chartered bank under the Bank Act (Canada) (in its capacity as Account Bank, in its capacity as Cash Manager and in its capacity as GDA Provider) and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada, in its capacity as the Bond Trustee. Capitalized terms used herein but not otherwise defined shall have the meaning assigned to them in the Bank Account Agreement.

3. The account number [—] transit number [—] in the name of the Guarantor held with Bank of Montreal (the Account Bank) (the GDA Account) will be used as an account for the benefit of the Guarantor. The account number [—] transit number [—] in the name of the Guarantor held with the Account Bank (the Transaction Account) will be used as an account for the benefit of the Guarantor.

4. The mandate given to the Account Bank by virtue of this document (the Mandate) is given on the basis that the Account Bank complies with the procedure set out in, and the terms of, this document.

5. Prior to receipt of a notice in writing from the Bond Trustee to the contrary, in relation to the Transaction Account and the GDA Account, the Account Bank is hereby authorized to honour and comply with all cheques, drafts, bills, payments by way of the Clearing House Automated Payment System, promissory notes, acceptances, negotiable instruments and orders expressed to be drawn, accepted, made or given and all directions given in writing or by way of electronic impulses in respect of the Transaction Account and GDA Account to the extent that compliance with the same should not result in a debit balance; provided that (and subject to the provisions of the Bank Account Agreement) any such cheques, drafts, bills, promissory notes, acceptances, negotiable instruments, directions, orders, instructions and/or endorsements are signed by two people from Annex 1. The Account Bank is hereby authorized to act on any information given by authorized signatories of the Cash Manager regarding any changes to Annex 1.

6. This Mandate is given on the basis that the Account Bank:

(a) acknowledges that, pursuant to a security agreement to be entered into between inter alios, the Guarantor and Computershare Trust Company of Canada (in its capacity as the Bond Trustee) on or about September 30, 2013 (the Security Agreement), the Guarantor has assigned its interest in the Guarantor Accounts to the Bond Trustee by way of security;

(b) prior to receipt of a Guarantor Acceleration Notice from the Bond Trustee, agrees to comply with the directions of the Guarantor (or, pursuant to paragraph 8, Bank of Montreal (the Cash Manager) as its agent) in respect of the operation of the Guarantor Accounts and the Account Bank shall be entitled to rely on any such written direction reasonably purporting to have been given by or on behalf of the Guarantor or the Cash Manager without enquiry; and

(c) upon receipt of a Guarantor Acceleration Notice from the Bond Trustee:

(i) agrees to comply with the provisions of Section 5.3 of the Bank Account Agreement and with the directions of the Bond Trustee expressed to be given by the Bond Trustee pursuant to the Security Agreement in respect of the operation of the Guarantor Accounts and the Account Bank shall be entitled to rely on any such written direction reasonably purporting to have been given on behalf of the Bond Trustee without enquiry; and

(ii) agrees that all right, authority and power of the Guarantor in respect of the operation of the Guarantor Accounts shall be deemed terminated and of no further effect and the Account Bank agrees that it shall, upon receipt of the Guarantor Acceleration Notice from the Bond Trustee comply with the directions of the Bond Trustee or any receiver appointed under the Security Agreement in relation to the operation of the Guarantor Accounts unless otherwise required by operation of law or by the order or direction of a competent court or tribunal.

7. Unless and until the Account Bank receives notice in writing from or purporting to be from the Bond Trustee to the contrary, the Account Bank is authorized to continue to operate the Guarantor Accounts without regard to the security interests pursuant to the Security Agreement.

8. At any time prior to the release by the Bond Trustee of the Security Agreement, the mandate given to the Account Bank by virtue of the Bank Account Agreement and this Mandate shall remain in force, unless and until the Account Bank has received a notice of amendment hereto from the Guarantor.

9. The Guarantor authorizes the Cash Manager to instruct the Account Bank in relation to the Guarantor Accounts and authorizes the Account Bank to act on those instructions in the manner set forth in the Bank Account Agreement.

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Annex 1

To the Bank Mandate—Transaction Account and GDA Account

The following sets out the signatories for the Guarantor Accounts, in accordance with Paragraph 4 of the “Bank Mandate—Transaction Account and GDA Account”.

Bank of Montreal personnel authorized to sign any cheques, drafts bills, promissory notes, acceptances, negotiable instruments, directions, orders or instructions, and/or endorsements in respect of accounts in the name of BMO Covered Bond Guarantor Limited Partnership held at Bank of Montreal.

Name Title Specimen Signature

FORM OF NOTICES

PART 1

NOTICE OF CHARGE—GUARANTOR ACCOUNTS

To:
	[Bank of Montreal] (as an Account Bank)
For the attention of:	[—]
and to:	Computershare Trust Company of Canada (as Bond Trustee)
For the attention of:	[—]
[—]

Dear Sirs,

Re: BMO Covered Bond Guarantor Limited Partnership:

—GDA Account Number [—] (transit number [—])

—Transaction Account Number [—] (transit number [—]

We hereby give you notice that, by a trust security agreement dated as of September 30, 2013 and made between, inter alios, ourselves, Bank of Montreal and Computershare Trust Company of Canada (the Bond Trustee), a copy of which is enclosed (the Security Agreement), we:

(a) have granted a first priority security interest in all of our right, title, benefit and interest present and future in, to and under the Guarantor Accounts held with the Account Bank and all sums of money standing to the credit thereof and all interest accruing thereon from time to time; and

(b) assigned by way of security to the Bond Trustee all of our right, title, benefit and interest present and future in, to and under the bank account agreement of even date herewith between ourselves, yourselves, the Bond Trustee and Bank of Montreal in its capacity as Cash Manager and Account Bank.

Accordingly, amounts may and shall be withdrawn from time to time from the Guarantor Accounts held with the Account Bank in accordance with the provisions of the Security Agreement or the other Transaction Documents only until such time as you receive notice in writing from the Bond Trustee in which case you shall thereafter comply with all directions of the Bond Trustee.

Please note that the foregoing authorizations and instructions may not be revoked or restated by ourselves without the prior written consent of the Bond Trustee.

Please acknowledge receipt of this notice and your acceptance of the instructions herein contained by signing two copies of the attached form of acknowledgement, returning one copy to ourselves and sending the other copy direct to the Bond Trustee at 100 University Avenue, 11^th Floor, Toronto, ON M5J 2Y1, (facsimile number (416) 981-9777) for the attention of Manager, Corporate Trust.

This notice of charge and assignment is governed by, and construed in accordance with, the laws of Province of Ontario and Canadian federal laws applicable therein. Words defined in the Master Definitions and Construction Agreement referred to in Section 1 of the Security Agreement shall have the same meaning in this notice.

Yours faithfully,

for and on behalf of

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

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PART 2

ACKNOWLEDGEMENT—GUARANTOR ACCOUNTS

To:	BMO Covered Bond Guarantor Limited Partnership [—]
For the attention of:	[—]
and to:	Computershare Trust Company of Canada (as Bond Trustee)
For the attention of:	[—]
[—]

Dear Sirs,

Re: BMO Covered Bond Guarantor Limited Partnership:

—GDA Account Number [—] (transit number [—])

—Transaction Account Number [—] (transit number [—])

We acknowledge receipt of your letter dated [—], a copy of which is attached. Words and expressions defined in that letter have the same meanings herein.

In consideration of your agreeing to maintain the relevant Guarantor Accounts held with us, we now agree and confirm to the Bond Trustee that we accept and will comply with the authorizations and instructions contained in that letter and will not accept or act upon any instructions contrary thereto unless the same shall be in writing signed by the Bond Trustee.

This acknowledgement is governed by, and construed in accordance with, the laws of the Province of Ontario and federal laws of Canada applicable therein.

Yours faithfully,

for and on behalf of

BANK OF MONTREAL

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EX-4.14

Exhibit 4.14

STAND-BY BANK ACCOUNT AGREEMENT

BMO Covered Bond Guarantor Limited Partnership

as Guarantor

and

BANK OF MONTREAL

as Cash Manager

and

ROYAL BANK OF CANADA

as Stand-By Account Bank and Stand-By GDA Provider

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

SEPTEMBER 30, 2013

TABLE OF CONTENTS

Section		Page
1.	DEFINITIONS AND INTERPRETATION		1
2.	STAND-BY TRANSACTION ACCOUNT AND STAND-BY GDA ACCOUNT		2
3.	OPENING OF ACCOUNTS AND MANDATES		3
4.	ACKNOWLEDGEMENT BY THE STAND-BY ACCOUNT BANK		4
5.	INDEMNITY AND GUARANTOR ACCELERATION NOTICE		4
6.	CHANGE OF BOND TRUSTEE OR STAND-BY ACCOUNT BANK		5
7.	TERMINATION		6
8.	REPRESENTATIONS, WARRANTIES AND COVENANTS		9
9.	NON-PETITION		10
10.	FURTHER ASSURANCE		11
11.	CONFIDENTIALITY		11
12.	NOTICES		11
13.	INTEREST		12
14.	PAYMENTS AND WITHHOLDING		12
15.	ENTIRE AGREEMENT		13
16.	ASSIGNMENT		13
17.	AMENDMENTS, VARIATION AND WAIVER		13
18.	SCOPE OF DUTY		14
19.	WAIVER OF FORMALITIES		14
20.	LIMITATION OF LIABILITY		14
21.	COUNTERPARTS		15
22.	GOVERNING LAW AND SUBMISSION TO JURISDICTION		15
Schedule
Schedule 1 – Form of Mandate

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STAND-BY BANK ACCOUNT AGREEMENT

THIS STAND-BY BANK ACCOUNT AGREEMENT (this “Agreement”) is made on September 30, 2013.

BY AND AMONG:

(1) BMO Covered Bond Guarantor Limited Partnership, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO Covered Bond GP, Inc. (hereinafter the “Guarantor”);

(2) Bank of Montreal (the “Bank”), a bank named in Schedule I to the Bank Act (Canada), as Cash Manager (hereinafter the “Cash Manager”);

(3) Royal Bank of Canada, a bank named in Schedule I to the Bank Act (Canada), acting through its Toronto Branch at Royal Bank Plaza, South Tower, 8^th Floor, 200 Bay Street, Toronto, Ontario, Canada M5J 2J5, as Stand-By Account Bank (the “Stand-By Account Bank”) and as Stand-By GDA Provider (the “Stand-By GDA Provider”); and

(4) Computershare Trust Company of Canada, a trust company existing under the laws of Canada, acting in its capacity as Bond Trustee (hereinafter the “Bond Trustee”).

WHEREAS:

(A) As part of the transactions contemplated in the Bank’s global registered covered bond program (the “Program”), the Cash Manager has agreed, pursuant to the cash management agreement dated September 30, 2013 (the “Cash Management Agreement”) by and among the Cash Manager, the Guarantor and the Bond Trustee to provide cash management services in connection with the activities of the Guarantor.

(B) The Stand-By Account Bank has agreed following service of a Stand-By Account Bank Notice by the Guarantor (or the Cash Manager on its behalf) the Stand-By Account Bank will open and maintain the Stand-By Transaction Account and the Stand-By GDA Account as interest bearing accounts in the name of the Guarantor in accordance with the terms of this Agreement.

(C) Following service of a Stand-By Account Bank Notice by the Guarantor (or the Cash Manager on its behalf) the Stand-By GDA Provider has agreed pursuant to the terms of the Stand-By GDA Agreement to pay interest on the funds standing to the credit of the Guarantor in the Stand-By GDA Account at specified rates determined in accordance with and pursuant to the terms of the Stand-By GDA 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 alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the “Master Definitions and Construction Agreement”) is expressly and

1

specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) 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 that Master Definitions and Construction Agreement. For the purposes of this Agreement, this Agreement has the same meaning as Stand-By Bank Account Agreement in the Master Definitions and Construction Agreement.

2. STAND-BY TRANSACTION ACCOUNT AND STAND-BY GDA ACCOUNT

2.1 Instructions from the Cash Manager

Following delivery of a Stand-By Account Bank Notice and opening of the Stand-By Transaction Account and Stand-By GDA Account in accordance with Section 3.1, the Stand-By Account Bank shall, subject to Sections 2.4 and 5.3, comply with any direction of the Guarantor (or the Cash Manager on its behalf) given on a Canadian Business Day to effect a payment by debiting any one of the Stand-By Transaction Account or the Stand-By GDA Account and any additional or replacement bank accounts opened in the name of the Guarantor from time to time with the prior written consent of the Bond Trustee, if such direction (i) is in writing, is given by telephone and confirmed in writing not later than close of business on the day on which such direction is given, or is given by the internet banking service provided by the Stand-By Account Bank, and (ii) complies with the Stand-By Transaction Account Mandate or the Stand-By GDA Account Mandate as appropriate (such direction shall constitute an irrevocable payment instruction).

2.2 Timing of Payment

The Stand-By Account Bank agrees that if directed pursuant to Section 2.1 to make any payment then, subject to Sections 2.4 and 5.3 below, it will effect the payment specified in such direction not later than the day specified for payment therein and for value on the day specified therein provided that, if any direction specifying that payment be made on the same day as the direction is given is received later than 12:00 p.m. (Eastern Standard Time) on any Canadian Business Day, the Stand-By Account Bank shall make such payment at the commencement of business on the following Canadian Business Day for value that day.

2.3 Stand-By Account Bank Charges

The charges of the Stand-By Account Bank for the operation of each of the Guarantor Accounts maintained with the Stand-By Account Bank shall be debited to the Stand-By GDA Account only on each Guarantor Payment Date, and the Guarantor by its execution hereof irrevocably agrees that this shall be done. The charges shall be payable in accordance with the relevant Priorities of Payments at the same rates and for the same items as are generally applicable to the business customers of the Stand-By Account Bank provided that, subject to Section 7.4, if there are insufficient funds standing to the credit of the Stand-By GDA Account to pay such charges after payment by or on behalf of the Guarantor of any higher ranking obligations in the Priorities of Payment the Stand-By Account Bank shall not be relieved of its obligations in respect of any of the Guarantor Accounts. For greater certainty (i) charges that may be made by the Stand-By Account Bank hereunder may include any and all fees and service charges relating to the Guarantor Accounts and chargebacks for any cheques, drafts and other payments items dishonoured or otherwise returned to the Stand-By Account Bank in respect of the Guarantor Accounts, and (ii) payments to the Stand-By Account Bank rank pro rata and pari passu with payments to the Cover Pool Monitor, among others in the Priorities of Payments.

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2.4 No Negative Balance

Notwithstanding the provisions of Section 2.1, amounts shall only be withdrawn from any Guarantor Account to the extent that such withdrawal does not cause the relevant Guarantor Account to have a negative balance.

3. OPENING OF ACCOUNTS AND MANDATES

3.1 Opening of Stand-By Transaction Account and Stand-By GDA Account, Signing and Delivery of Mandates

(a) Upon delivery by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee to the Stand-By Account Bank of a Stand-By Account Bank Notice, the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee shall procure that the Guarantor (or the Cash Manager on its behalf) shall include with such Stand-By Account Bank Notice a completed Stand-By GDA Account Mandate and Stand-By Transaction Account Mandate in the form attached hereto as Schedule 1 or such other form as the Stand-By Account Bank may from time to time deliver to the Guarantor (or the Cash Manager on its behalf) prior to delivery of a Stand-By Account Bank Notice, provided such additional form is acceptable to the Guarantor (or the Cash Manager on its behalf), acting reasonably.

(b) Promptly upon receipt by the Stand-By Account Bank of a Stand-By Bank Account Notice from the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee together with the completed Stand-By GDA Account Mandate and Stand-By Transaction Account Mandate, the Stand-By Account Bank shall confirm receipt of same and that such mandates are operative to the Guarantor, the Cash Manager and the Bond Trustee and shall open and hold the Stand-By Transaction Account and the Stand-By GDA Account for the Guarantor in accordance with the terms of this Agreement.

(c) For greater certainty, the Stand-By Account Bank acknowledges that such mandates and any other mandates delivered from time to time pursuant to the terms hereof shall be subject to the terms of the Security Agreement, this Agreement and the Stand-By GDA Agreement and to the extent of any inconsistency between the terms of such agreements and such mandates, the terms of such agreements shall govern.

3.2 Amendment or Revocation

The Stand-By Account Bank agrees that it shall notify the Bond Trustee as soon as is reasonably practicable and in accordance with Section 12 if it receives any amendment to or revocation of the Stand-By GDA Mandate or the Stand-By Transaction Account Mandate relating to the Guarantor Accounts (other than a change of Authorized Signatory, which may be made from time to time by the Guarantor (or the Cash Manager on its behalf)) and shall require the prior written consent of the Bond Trustee to any such amendment or revocation (other than a change of Authorized Signatory, which may be made from time to time by the Guarantor (or the Cash Manager on its behalf)) but, unless such Mandate is revoked, the Stand-By Account Bank may continue to comply with such Mandate (as it may from time to time be amended in accordance

3

with the provisions of this Section 3.2) unless it receives notice in writing from the Bond Trustee to the effect that a Guarantor Acceleration Notice has been served on the Guarantor and shall, thereafter, act solely on the instructions of the Bond Trustee or such person as the Bond Trustee may designate and in accordance with the terms of those instructions as provided in Section 5.3 of this Agreement.

4. ACKNOWLEDGEMENT BY THE STAND-BY ACCOUNT BANK

4.1 Restriction on Stand-By Account Bank’s Rights

Notwithstanding anything to the contrary in the Mandates or this Agreement, the Stand-By Account Bank hereby:

(a) agrees that, in its capacity as Stand-By Account Bank, it will not exercise any lien or, to the extent permitted by law, any set-off or transfer any sum standing to the credit of or to be credited to any of the Guarantor Accounts in or towards satisfaction of any liabilities owing to it by any person (including, without limitation, any liabilities owing to it by the Guarantor or the Bond Trustee);

(b) in addition to and without prejudice to any rights and obligations it may have at any time as a Secured Creditor, agrees that it will not take, and shall not take, any steps whatsoever to recover any amount due or owing to it pursuant to this Agreement or any other debts owing to it by the Guarantor that could result in any Insolvency Proceeding in relation to the Guarantor, or any general partners of the Guarantor, in respect of any of the liabilities of the Guarantor whatsoever;

(c) agrees that it will promptly notify the Guarantor, the Bond Trustee and the Cash Manager if compliance with any instruction would cause the relevant Guarantor Account(s) to which such instruction relates to have a negative balance; and

(d) acknowledges that the Guarantor has, pursuant to the Security Agreement, inter alia, assigned by way of security all its rights, title, interest and benefit, present and future, in and to, all sums from time to time standing to the credit of the Guarantor Accounts and all of its rights under this Agreement to the Bond Trustee (for itself and on behalf of the Secured Creditors).

4.2 Monthly Statement

Unless and until directed otherwise by the Bond Trustee, the Stand-By Account Bank shall and is hereby authorized to provide each of the Cash Manager, the Guarantor and the Bond Trustee with a written statement in respect of each Guarantor Account on a monthly basis and also as soon as reasonably practicable after receipt of a request for a statement.

5. INDEMNITY AND GUARANTOR ACCELERATION NOTICE

5.1 Stand-By Account Bank to Comply with Cash Manager’s Instructions

Unless otherwise directed in writing by the Bond Trustee pursuant to Section 5.3, in making any transfer or payment from any Guarantor Account in accordance with this Agreement, the Stand-By Account Bank shall be entitled to act, without further inquiry, as directed by the Cash

4

Manager pursuant to Sections 2.1 and 2.2 and to rely as to the amount of any such transfer or payment on the Cash Manager’s instructions in accordance with the relevant Mandate, and the Stand-By Account Bank shall have no liability hereunder to the Cash Manager, the Guarantor or the Bond Trustee for having acted on such instructions except in the case of its wilful default, fraud or negligence.

5.2 Guarantor’s Indemnity

Subject to the prior ranking obligations set out in the Priorities of Payments, the Stand-By Account Bank and the Stand-By GDA Provider shall each be indemnified to the extent of funds then standing to the credit of the Guarantor Accounts against any loss, cost, damage, charge or expense incurred by the Stand-By Account Bank or the Stand-By GDA Provider in complying with any instruction delivered pursuant to and in accordance with this Agreement or the Stand-By Guaranteed Deposit Account Contract, respectively, save that this indemnity shall not extend to (i) the charges of the Stand-By Account Bank or the Stand-By GDA Provider (if any) for the operation of such accounts other than as provided in Section 2.3 of this Agreement; and (ii) any loss, cost, damage, charge or expense arising from any breach by the Stand-By Account Bank of its obligations under this Agreement or any material breach by the Stand-By GDA Provider of its obligations under the Stand-By Guaranteed Deposit Account Contract, and if necessary, as determined by a court of competent jurisdiction in a final non-appealable decision. For greater certainty, payments to the Stand-By Account Bank and the Stand-By GDA Provider rank pro rata and pari passu with each other and with payments to the Cover Pool Monitor, among others in the relevant Priorities of Payments. The Guarantor will not amend the Priorities of Payments if such amendment negatively affects any payments (including the priority thereof) to the Stand-By Account Bank or the Stand-By GDA Provider without the consent of the Stand-By Account Bank or the Stand-By GDA Provider, as the case may be.

5.3 Consequences of a Guarantor Acceleration Notice

The Stand-By Account Bank acknowledges that, if it receives notice in writing from the Bond Trustee to the effect that the Bond Trustee has served a Guarantor Acceleration Notice on the Guarantor all right, authority and power of the Cash Manager in respect of the each of the Guarantor Accounts shall be terminated and be of no further effect and the Stand-By Account Bank agrees that it shall, upon receipt of such notice from the Bond Trustee, comply with the directions of the Bond Trustee in relation to the operation of each of the Guarantor Accounts. Following receipt of such notice, the Stand-By Account Bank shall be entitled to act, without further inquiry, on any direction received by the Bond Trustee or any successor cash manager appointed by the Bond Trustee (subject to such successor cash manager having entered into an agreement with it on substantially the same terms as this Agreement) pursuant to this Sections 5.3 and to rely as to the amount of any such transfer or payment on the Bond Trustee’s instructions in accordance with the relevant Mandate, and the Stand-By Account Bank shall have no liability hereunder to the Cash Manager, the Guarantor or the Bond Trustee for having acted on such instructions.

6. CHANGE OF BOND TRUSTEE OR STAND-BY ACCOUNT BANK

6.1 Change of Bond Trustee

(a) If there is any change in the identity of the Bond Trustee in accordance with the Security Agreement, the Stand-By Account Bank, the Cash Manager and the Guarantor shall

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execute such documents and take such action as the successor Bond Trustee and the outgoing Bond Trustee may reasonably require for the purpose of vesting in the successor Bond Trustee the rights and obligations of the outgoing Bond Trustee under this Agreement and releasing the outgoing Bond Trustee from its future obligations under this Agreement.

(b) It is hereby acknowledged and agreed that by its execution of this Agreement, the Bond Trustee shall not assume or have any obligations or liabilities to the Stand-By Account Bank, the Cash Manager or the Guarantor under this Agreement notwithstanding any provision herein and that the Bond Trustee has agreed to become a party to this Agreement for the purpose only of taking the benefit of this Agreement and agreeing to amendments to this Agreement pursuant to Section 17. For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed by the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion without any obligation to give reasons therefor and the Bond Trustee shall not be responsible for any liability occasioned by so acting but subject always to the provisions of Section 11.1 (Liability) of the Security Agreement.

6.2 Change of Stand-By Account Bank

If the identity of the Stand-By Account Bank changes, the Cash Manager, the Guarantor and the Bond Trustee shall execute such documents and take such actions as the new Stand-By Account Bank and the outgoing Stand-By Account Bank and the Bond Trustee may require for the purpose of vesting in the new Stand-By Account Bank the rights and obligations of the outgoing Stand-By Account Bank and releasing the outgoing Stand-By Account Bank from its future obligations under this Agreement.

7. TERMINATION

7.1 Termination Events

The Guarantor (or the Cash Manager on its behalf):

(a) may (with the prior written consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that the termination of this Agreement would be materially prejudicial to the interests of the holders of the Covered Bonds) terminate this Agreement in the event that the matters specified in paragraph (i), (vi) or (vii) below occur;

(b) shall (with the prior written consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that the termination of this Agreement would be materially prejudicial to the interests of the holders of the Covered Bonds), and the Bond Trustee may in such circumstances, terminate this Agreement in the event that any of the matters specified in paragraphs (iii) to (v) (inclusive) below occur; and

(c) in the event that any of the matters specified in paragraph (ii) below occur, will take the actions described in Section 7.6 and the Guarantor will terminate this Agreement,

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in each case by serving a written notice of termination on the Stand-By Account Bank in accordance with Section 12 (Notices) (such termination to be effective three Canadian Business Days following service of such notice and, in the case of (c), no later than five Canadian Business Days following the occurrence of any of the matters specified therein) which will direct the Stand-By Account Bank to transfer all funds held in the Guarantor Accounts to replacement accounts under the terms of a new bank account agreement (the “New Stand-By Bank Account Agreement”) and a new guaranteed deposit account contract (the “New Stand-By GDA Agreement”) to be entered into by the parties hereto (excluding the Stand-By Account Bank) substantially on the same terms as this Agreement and the Stand-By GDA Agreement, respectively, in any of the following circumstances:

(i) if a deduction or withholding for or on account of any taxes is imposed, or it appears likely that such a deduction or withholding will be imposed, in respect of the interest payable on any Guarantor Account;

(ii) if one or more Rating Agencies downgrades the rating of the unsecured, unsubordinated and unguaranteed debt obligation of the Stand-By Account Bank or the Stand-By Account Bank’s issuer default rating, as applicable, below the Stand-By Account Bank Required Ratings. The term “Stand-By Account Bank Required Ratings” means the threshold ratings of: (A) P-1 with respect to the short-term, unsecured, unsubordinated and unguaranteed debt obligation of the Stand-By Account Bank by Moody’s, (B) F1 with respect to the short-term issuer default rating of the Stand-By Account Bank by Fitch, (C) A with respect to the long-term issuer default rating of the Stand-By Account Bank by Fitch, (D) either (i) R-1(middle) with respect to the short-term, unsecured, unsubordinated and unguaranteed debt obligation of the Stand-By Account Bank by DBRS, or (ii) AA(low) with respect to the long-term, unsecured, unsubordinated and unguaranteed debt obligation of the Stand-By Account Bank by DBRS;

(iii) if the Stand-By Account Bank, otherwise than for the purposes of such amalgamation, merger or reorganization as is referred to in paragraph (iv) below, ceases or, through an authorized action of the board of directors of the Stand-By Account Bank, threatens to cease to carry on all or substantially all of its business or the Stand-By Account Bank;

(iv) if an order is made or an effective resolution is passed for the winding-up of the Stand-By Account Bank except a winding-up for the purposes of or pursuant to a solvent amalgamation, merger or reorganization the terms of which have previously been approved in writing by the Guarantor and the Bond Trustee (such approval not to be unreasonably withheld or delayed);

(v) an Insolvency Proceeding occurs with respect to the Stand-By Account Bank; or

(vi) default is made by the Stand-By Account Bank in the performance or observance of any of its covenants and obligations, or a breach by the Stand-By Account Bank is made of any of its representations and warranties, respectively, under Sections 8.1(d), 8.1(e), 8.1(f), 8.1(g), 8.1(h) or 8.1(i); or

(vii) if the Stand-By Account Bank materially breaches its other obligations under this Agreement or the Stand-By Guaranteed Deposit Account Contract, provided that Rating Agency Condition has been satisfied with respect to the termination of this Agreement following such breach.

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7.2 Notification of Termination Event

Each of the Guarantor and the Stand-By Account Bank undertakes and agrees to notify the Bond Trustee in accordance with Section 12 (copied to the Rating Agencies) promptly upon becoming aware thereof of any event which would or could entitle the Bond Trustee to serve a notice of termination pursuant to Section 7.1.

7.3 Automatic Termination

(a) This Agreement shall automatically terminate (if not terminated earlier pursuant to this Section 7) on the date falling 90 days after the termination of the Guarantor Agreement and a notice thereof to the parties to this Agreement, provided all amounts payable under Section 2.3 and Section 5.2 have been paid in accordance with the terms of this Agreement.

(b) This Agreement shall automatically terminate (if not terminated earlier pursuant to this Section 7) upon the termination of the Stand-By Guaranteed Deposit Account Contract pursuant to Article 5 therein.

7.4 Termination by Stand-By Account Bank

The Stand-By Account Bank may terminate this Agreement and cease to operate the Guarantor Accounts at any time on giving not less than three months’ prior written notice thereof ending on any Canadian Business Day which does not fall on a Guarantor Payment Date or less than 10 Canadian Business Days before a Guarantor Payment Date to each of the other parties hereto (copied to the Rating Agencies) provided that such termination shall not take effect (i) until a replacement Stand-By Account Bank with ratings by the Rating Agencies equal to or greater than each of the Stand-By Account Bank Required Ratings has entered into an agreement in form and substance similar to this Agreement; and (ii) the Rating Agency Condition has been satisfied in respect thereof. For greater certainty, the Stand-By Account Bank shall not be responsible for any costs or expenses occasioned by such termination and cessation. In the event of such termination and cessation the Stand-By Account Bank shall assist the other parties hereto to effect an orderly transition of the banking arrangements documented hereby.

7.5 Notice of Termination/Resignation to CMHC

Upon any termination or resignation of the Stand-By Account Bank hereunder, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Stand-By Account Bank’s replacement contemporaneously with the earlier of (i) notice of such termination or resignation and replacement to a Rating Agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available to Covered Bondholders, and (iii) five (5) Canadian Business Days following such termination or resignation and replacement (unless the replacement Stand-By Account Bank has yet to be identified at that time, in which case notice of the replacement Stand-By Account Bank may be provided no later than ten (10) Canadian Business Days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Stand-By Account Bank, all information relating to the replacement Stand-By Account Bank required by the CMHC Guide and the new agreement or revised and amended copy of this Agreement to be entered into with the replacement Stand-By Account Bank.

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7.6 Replacement of Stand-By Account Bank Under Certain Circumstances

If one or more Rating Agencies downgrades the rating of the unsecured, unsubordinated and unguaranteed debt obligations of the Stand-By Account Bank or the Stand-By Account Bank’s issuer default rating, as applicable, below the Stand-By Account Bank Required Rating, no later than five (5) Canadian Business Days following such occurrence, the Guarantor (or the Cash Manager on its behalf) will do the following:

(a) engage a replacement Stand-By Account Bank with ratings by the Rating Agencies equal to or greater than each of the Stand-By Account Bank Required Ratings and enter into the New Stand-By Bank Account Agreement and the New Stand-By GDA Agreement; and

(b) direct the Stand-By Account Bank to transfer all funds held in the Guarantor Accounts to replacement accounts under the terms of the New Stand-By Bank Account Agreement and the New Stand-By GDA Agreement (it being understood that all such funds must be transferred within the five (5) Canadian Business Day period to such replacement accounts.

8. REPRESENTATIONS, WARRANTIES AND COVENANTS

8.1 Stand-By Account Bank Representations, Warranties and Covenants

The Stand-By Account Bank represents and warrants to, and covenants with, each of the Guarantor and the Bond Trustee at the date hereof, on each date on which an amount is credited to any Guarantor Account held with the Stand-By Account Bank and on each Guarantor Payment Date, that:

(a) it 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 materially adversely affect its ability to perform its duties and obligations hereunder ;

(b) the execution, delivery and performance by the Stand-By Account Bank of this Agreement (i) are within the Stand-By Account Bank’s corporate powers, (ii) have been duly authorized by all necessary corporate action, and (iii) do not contravene or result in a

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default under or conflict with (1) the charter or by-laws of the Stand-By Account Bank, (2) any law, rule or regulation applicable to the Stand-By Account Bank, or (3) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting the Stand-By Account Bank or its property;

(c) it is not a Non-Resident;

(d) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(e) it will comply with the provisions of, and perform its obligations under, this Agreement and the other Transaction Documents to which it is a party and the CMHC Guide;

(f) it is in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(g) it is in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(h) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party;

(i) it will comply with the CMHC Guide and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations hereunder and the other Transaction Documents to which it is a party; and

(j) the unsecured, unsubordinated and unguaranteed debt obligations or the issuer default rating, as applicable, of the Stand-By Account Bank rated by each of the Rating Agencies are at or above the Stand-By Account Bank Required Ratings.

8.2 Notification and Survival

The Stand-By Account Bank undertakes to notify the Guarantor and the Bond Trustee immediately if, at any time during the term of this Agreement, any of the statements contained Section 8.1 ceases to be true. The representations, warranties and covenants set out in Section 8.1 shall survive the signing and delivery of this Agreement.

9. NON-PETITION

Each of the parties (other than the Bond Trustee) hereto agrees that it shall not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor, or any general partner of the Guarantor, any bankruptcy or insolvency event so long as any Covered Bonds shall be outstanding or there shall not have elapsed one year plus one day since the last day on which any Covered Bonds shall have been outstanding. The foregoing provision shall survive the termination of this Agreement by any of the parties hereto.

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10. FURTHER ASSURANCE

The parties hereto agree that they will co-operate fully to do all such further acts and things and execute any further documents as may be necessary or reasonably desirable to give full effect to the arrangements contemplated by this Agreement.

11. CONFIDENTIALITY

None of the parties hereto shall during the term of this Agreement or after its termination disclose to any person whatsoever (except as provided herein, in accordance with the CMHC Guide, the Covered Bond Legislative Framework or in any of the Transaction Documents to which it is a party or with the authority of the other parties hereto or so far as may be necessary for the proper performance of its obligations hereunder or unless required by law or any applicable stock exchange requirement or any governmental, regulatory or other taxation authority or ordered to do so by a court of competent jurisdiction) any information relating to the business, finances or other matters of a confidential nature of any other party hereto of which it may in the course of its duties hereunder have become possessed and each of the parties hereto shall use all reasonable endeavours to prevent any such disclosure.

12. NOTICES

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 Cash Manager to:

Bank of Montreal 18^th Floor, First Canadian Place

100 King Street West

Toronto, Ontario M5X 1A1

Attention: Senior Manager, Securitization Finance and Operations

Facsimile number: (416) 867-4166

(b) in the case of the Guarantor to:

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

18^th Floor, First Canadian Place

100 King Street West

Toronto, Ontario M5X 1A1

Attention: Senior Manager, Securitization Finance and Operations

Facsimile number: (416) 867-4166

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(c) in the case of the Stand-By GDA Provider or the Stand-By Account Bank, to:

Royal Bank of Canada

Royal Bank of Canada

RBC Centre, 14^th Floor

155 Wellington Street West

Toronto, Ontario

M5V 3K7

Attention: Senior Manager, Securitization

Facsimile number: (416) 974-6056

(d) in the case of the Bond Trustee to:

Computershare Trust Company of Canada

100 University Avenue, 11^th Floor

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 Canadian Business Day and such delivery was made prior to 4:00 p.m. (Toronto time) and otherwise on the next Canadian Business Day, (ii) in the case of first class post, when it would be received in the ordinary course of the post, or (ii) if transmitted by electronic or facsimile transmission on the Canadian 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.

13. INTEREST

13.1 In respect of each period from (and including) the first day of each month (or, in respect of the first such period, the first applicable day) to (but excluding) the last day of each month, the Stand-By Account Bank shall pay, on the 10^th Canadian Business Day after month end, interest in arrears on any cleared credit balances on the Stand-By Transaction Account and any other accounts opened by the Guarantor with the Stand-By Account Bank other than the Stand-By GDA Account at the same rates as are generally applicable to accounts of the same type held by business customers of the Stand-By Account Bank.

13.2 Notwithstanding Section 13.1 above, interest shall be paid on the Stand-By GDA Account in accordance with the terms of the Stand-By Guaranteed Deposit Account Contract.

14. PAYMENTS AND WITHHOLDING

The parties agree that payments required to be made hereunder shall be made in accordance with Section 2 and that all payments by the Stand-By Account Bank under this Agreement shall be

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made in full without any deduction or withholding (whether in respect of set-off, counterclaim, duties, taxes, charges or otherwise whatsoever) unless the deduction or withholding is required by law, in which event the Stand-By Account Bank shall:

(a) ensure that the deduction or withholding does not exceed the minimum amount legally required;

(b) pay to the relevant taxation or other authorities within the period for payment permitted by applicable law the full amount of the deduction or withholding;

(c) furnish to the Guarantor or the Bond Trustee (as the case may be) within the period for payment permitted by the relevant law, either:

(i) an official receipt of the relevant taxation authorities involved in respect of all amounts so deducted or withheld; or

(ii) if such receipts are not issued by the taxation authorities concerned on payment to them of amounts so deducted or withheld, a certificate of deduction or equivalent evidence of the relevant deduction or withholding; and

(d) account to the Guarantor in full by credit to the Stand-By GDA Account for an amount equal to the amount of any rebate, repayment or reimbursement of any deduction or withholding which the Stand-By Account Bank has made pursuant to this Section 14 and which is subsequently received by the Stand-By Account Bank.

15. ENTIRE AGREEMENT

This Agreement, the schedules hereto, the Cash Management Agreement and the Stand-By Guaranteed Deposit Account Contract together constitute the entire agreement and understanding between the parties in relation to the subject matter hereof and cancel and replace any other agreement or understanding in relation thereto.

16. ASSIGNMENT

(a) Subject as provided in or contemplated by Sections 4.1(d), 6.2 and 7.4 herein, no party hereto (other than the Bond Trustee) may assign or transfer any of its rights or obligations hereunder, and the Stand-By Account Bank may not act through any other branch other than the branch specified in the preamble hereto, without the prior written consent of the other parties hereto and Rating Agency Condition having been satisfied by the Guarantor (or the Cash Manager on its behalf) in respect of any such assignment or transfer. If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS.

(b) Notwithstanding the provisions of paragraph (a) above, the parties hereto acknowledge that the Guarantor may assign all its rights, title and interest in this Agreement to the Bond Trustee, for the benefit of the Secured Creditors, in accordance with and pursuant to the terms of the Security Agreement and confirm that the Rating Agency Condition shall not be required to be satisfied in respect thereof.

17. AMENDMENTS, VARIATION AND WAIVER

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(a) Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

(b) Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (i) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (ii) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be a material amendment. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers in respect of which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

(c) The Guarantor (or the Cash Manager on its behalf) will deliver notice to CMHC from time to time of any amendment, restatement or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

18. SCOPE OF DUTY

The Stand-By Account Bank undertakes to perform only such duties as are expressly set forth in this Agreement and to deal with the Guarantor Accounts with the degree of skill and care that the Stand-By Account Bank accords to all accounts and funds maintained and held by it on behalf of its customers. Notwithstanding any other provision of this Agreement, the parties agree that the Stand-By Account Bank shall not be liable for any action taken by it or any of its directors, officers or employees in accordance with this Agreement except for its or their own gross negligence or willful misconduct. In no event shall the Stand-By Account Bank be liable for (i) losses or delays resulting from force majeure, computer malfunctions, interruption of communication facilities or other causes beyond the Stand-By Account Bank’s control or for indirect or consequential damages, or (ii) any loss due to any altered, forged, fraudulent or unauthorized financial instruments.

19. WAIVER OF FORMALITIES

The Guarantor hereby waives in favour of the Stand-By Account Bank certain statutory or other customary formalities of the Bills of Exchange Act (Canada) which include, for greater certainty, formalities relating specifically to presentment, protest, noting and notice, with respect to all Financial Instruments prepared, signed or endorsed and delivered to the Stand-By Account Bank hereunder; and the Stand-By Account Bank shall no, in any circumstances, be liable for failure or omission to carry out any such formalities in connection with any Financial Instrument.

20. LIMITATION OF LIABILITY

BMO Covered Bond Guarantor Limited Partnership is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which is, except as expressly required by law, only liable for any of its liabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capital.

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21. COUNTERPARTS

This Agreement may be signed (manually, electronically or by facsimile) and delivered in one or more counterparty, all of which, taken together, shall constitute one and the same document.

22. GOVERNING LAW AND SUBMISSION TO JURISDICTION

This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to conflict of law principles. Each of the parties hereto irrevocably attorns and submits to the non-exclusive jurisdiction of the courts of Ontario.

[The remainder of this page is intentionally left blank]

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IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year first before written.

BANK OF MONTREAL, as Cash Manager
Per:	/s/ Cathy Cranston
	Name: Cathy Cranston
	Title: Senior Vice President, Finance &
	Treasurer

COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
Per:	/s/ Sean Pigott
	Name: Sean Pigott
	Title: Corporate Trust Officer
Per:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title: Associate Trust Officer

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
Per:	/s/ Chris Hughes
	Name: Chris Hughes
	Title: President and Secretary

ROYAL BANK OF CANADA, as Stand-by Account Bank and Stand-by GDA Provider
Per:	/s/ David Power
	Name: David Power
	Title: Vice-President, Market Strategy &
	Execution
Per:	/s/ Saqib Nazir
	Name: Saqib Nazir
	Title: Vice President Risk Measurement and
	Funds Transfer Pricing Analytics

Stand-By Bank Account Agreement

SCHEDULE 1

FORM OF MANDATE

In the form attached

Stand-By Bank Account Agreement

EX-4.15

Exhibit 4.15

GUARANTEED DEPOSIT ACCOUNT CONTRACT

SEPTEMBER 30, 2013

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

as Guarantor

and

BANK OF MONTREAL

as Cash Manager and GDA Provider

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

CONTENTS

Section		Page
1.	DEFINITIONS AND INTERPRETATION		1
2.	THE GDA ACCOUNT		1
3.	INTEREST		1
4.	WITHDRAWALS AND DEPOSITS		2
6.	REPRESENTATIONS, WARRANTIES AND COVENANTS		3
7.	ASSIGNMENT		4
8.	AGENCY		4
9.	INFORMATION		4
10.	PAYMENTS		4
11.	NOTICES		4
12.	COUNTERPARTS		5
13.	THE BOND TRUSTEE		6
14.	AMENDMENTS, VARIATION AND WAIVER		6
15.	LIMITATION OF LIABILITY		6
16.	NON-PETITION		7
17.	GOVERNING LAW		7

THIS AGREEMENT is made on September 30, 2013

BETWEEN:

(1) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, a limited partnership established under the laws of Province of Ontario, by its managing general partner, BMO COVERED BOND GP, INC. (in its capacity as the Guarantor);

(2) BANK OF MONTREAL, a chartered bank under the Bank Act (Canada) (in its capacity as Cash Manager and in its capacity as GDA Provider); and

(3) COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada (in its capacity as Bond Trustee).

WHEREAS:

(A) As part of the transactions contemplated in the Program, the Cash Manager has agreed, pursuant to the Cash Management Agreement, to provide Cash Management Services in connection with the business of the Guarantor.

(B) The Cash Management Agreement provides that the Guarantor (or the Cash Manager on its behalf) may invest funds from time to time in interest bearing accounts with the Bank, as Account Bank pursuant to and on the terms of the Bank Account Agreement and the GDA Provider has agreed to pay interest on the funds standing to the credit of the Guarantor at specified rates determined in accordance with and pursuant to the terms of this Agreement.

IT IS HEREBY AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

The master definitions and construction agreement made between, inter alia, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time, the “Master Definitions and Construction Agreement”) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, restated and/or supplemented) 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. For the purposes of this Agreement, this Agreement has the same meaning as Guaranteed Deposit Account Contract in the Master Definitions and Construction Agreement.

2. THE GDA ACCOUNT

The GDA Provider confirms that (on the instructions of the Guarantor) the GDA Account has been opened in its books in the name of the Guarantor, and it agrees to accept on deposit in the GDA Account all monies transferred, from time to time, to the GDA Account, subject to and upon the terms of this Agreement, the Bank Account Agreement, the Cash Management Agreement, the Security Agreement and the Guarantor Agreement.

3. INTEREST

3.1 Interest shall accrue daily on the GDA Balance and shall be paid monthly in arrears on the 10^th Canadian Business Day of the following month at a rate of interest equal to the GDA Rate (calculated on the basis of the actual number of days elapsed and a 365 day year) by payment for value on the same day to the GDA Account or such other accounts as the Guarantor shall specify.

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3.2 On any day on which interest is payable by the GDA Provider under this Agreement, the GDA Provider shall pay the amount of interest then due in immediately available, freely transferable, cleared funds by no later than the close of business (Eastern Standard Time) on that day (or if such day is not a Canadian Business Day, the next succeeding Canadian Business Day).

3.3 In the event that a Guarantor Acceleration Notice is served on the Guarantor, then, on the date of such Guarantor Acceleration Notice, the GDA Provider shall pay to the Bond Trustee the aggregate of all interest accrued on the GDA Account on each day during the month in which such Guarantor Acceleration Notice is served up to (but excluding) the date of such Guarantor Acceleration Notice. As and from the date of such Guarantor Acceleration Notice, the GDA Provider shall comply with the directions of the Bond Trustee in relation to the GDA Account given in accordance with this Agreement.

4. WITHDRAWALS AND DEPOSITS

4.1 Subject always to the provisions of the Cash Management Agreement, the Bank Account Agreement, the Security Agreement and the Guarantor Agreement, the Guarantor, or the Cash Manager on behalf of the Guarantor, may on any Canadian Business Day give notice to the GDA Provider that it wishes to withdraw on such date all or part of the GDA Balance from the GDA Account and the GDA Provider shall comply with such notice and pay the amount specified in such notice to the account specified therein, provided that if any such notice is received after 12 noon (Eastern Standard Time) on any day it shall be deemed to have been received at the opening of business on the next following Canadian Business Day.

4.2 The Guarantor may deposit, or procure the deposit of, sums in the GDA Account, to the extent permitted by the terms of the Cash Management Agreement, the Bank Account Agreement, the Security Agreement and the Guarantor Agreement, and the GDA Provider agrees to accept and credit to the GDA Account such sums in accordance with the terms hereof.

5. TERMINATION

5.1 Following termination of the Bank Account Agreement and/or closing of the GDA Account in accordance with Section 7 of the Bank Account Agreement, this Agreement will be automatically terminated. Upon the direction of the Bond Trustee pursuant to Section 3.3, the Bond Trustee may terminate this Agreement by serving a written notice of termination on the GDA Provider.

5.2 The Guarantor (or the Cash Manager or the Bond Trustee on its behalf) may (with the prior written consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that the termination of this Agreement would be materially prejudicial to the interests of the Covered Bondholders) terminate this Agreement in the event that default is made by the GDA Provider in the performance or observance of its covenants and obligations, or a breach by the GDA Provider is made of any of its representations and warranties, respectively, under Sections 6.1(c), 6.1(d), 6.1(e), 6.1(g) and 6.1(h).

5.3 The Guarantor will (or will cause the Cash Manager to) terminate this Agreement if an Issuer Event of Default occurs and is continuing (provided that the GDA Provider is the Issuer or an Affiliate thereof).

5.4 Upon any termination or resignation of the Account Bank hereunder or the Bank Account Agreement, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Account Bank’s replacement contemporaneously with the earlier of (i) notice of such termination

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or resignation and replacement to a Rating Agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available to Covered Bondholders, and (iii) five (5) Canadian Business Days following such termination or resignation and replacement (unless the replacement Account Bank has yet to be identified at that time, in which case notice of the replacement Account Bank may be provided no later than 10 Canadian Business Days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Account Bank, all information relating to the replacement Account Bank required by the CMHC Guide and the new agreement or revised and amended copy of this Agreement to be entered into with the replacement Account Bank.

6. REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1 The GDA Provider represents warrants to, and covenants with, each of the Guarantor and the Bond Trustee at the date hereof, on each date on which an amount is credited to the GDA Account and on each Guarantor Payment Date, that:

(a) it 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 execution, delivery and performance by the GDA Provider of this Agreement (i) are within the GDA Provider’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 GDA Provider, (2) any law, rule or regulation applicable to the GDA Provider, or (3) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting the GDA Provider or its property;

(c) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(d) it is and will continue to be in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(e) it is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(f) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party;

(g) it will comply with the CMHC Guide and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations hereunder and the other Transaction Documents to which it is a party;

(h) the unsecured, unsubordinated and unguaranteed debt obligations and issuer default ratings of the GDA Provider rated by each of the Rating Agencies are at or above the Account Bank Required Ratings; and

(i) it is not a Non-Resident.

6.2 The GDA Provider undertakes to notify the Guarantor and the Bond Trustee immediately if, at any time during the term of this Agreement, the statement contained in Section 6.1 ceases to be true. The representations, warranties and covenants set out in Section 6.1 shall survive the signing and delivery of this Agreement.

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7. ASSIGNMENT

7.1 Save as otherwise contemplated in this Agreement or the Cash Management Agreement, no party hereto (other than the Bond Trustee) may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Bond Trustee and unless Rating Agency Condition has been satisfied with respect thereto. In any event any assignee of the GDA Provider must be a bank chartered under the Bank Act and its unsecured, unguaranteed and unsubordinated short-term debt obligations must have a rating of at least F1 by Fitch and the long-term issuer default rating of at least A by Fitch. If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS.

7.2 Notwithstanding the provisions of Section 7.1 above, the parties hereto acknowledge that the Guarantor may assign all its rights, title and interest in this Agreement to the Bond Trustee, for the benefit of the Secured Creditors, under the Security Agreement and the GDA Provider acknowledges that pursuant to the terms of the Security Agreement, the Guarantor has, inter alia, authorized the Bond Trustee to exercise, or refrain from exercising, all rights, powers, authorities, discretions and remedies under or in respect of the Transaction Documents, including this Agreement, in such manner as in its absolute discretion it shall determine to be appropriate.

8. AGENCY

The GDA Provider agrees and confirms that, unless otherwise notified by the Guarantor or the Bond Trustee, the Cash Manager, as agent of the Guarantor, may act on behalf of the Guarantor under this Agreement.

9. INFORMATION

The GDA Provider shall provide to the Bond Trustee, or procure the provision to the Bond Trustee of, such information and evidence in respect of any dealing between the Guarantor and the GDA Provider or otherwise under or in relation to this Agreement as the Bond Trustee may reasonably request and the Guarantor hereby waives any right or duty of confidentiality which it may have or which may be owed to it by the GDA Provider in respect of the disclosure of such information and evidence pursuant to this Section 9.

10. PAYMENTS

The parties agree that payments required to be made hereunder shall be made in accordance with Section 2 of the Bank Account Agreement.

11. NOTICES

Any notices to be given pursuant to this Agreement to any of the parties hereto shall be sufficiently served if sent by prepaid first class post, by hand or electronic or facsimile transmission and shall be deemed to be given (in the case of electronic or facsimile transmission) when despatched (where delivered by hand) on the day of delivery if delivered before 5.00 p.m. on a Canadian Business Day or on the next Canadian Business Day if delivered thereafter or on a day which is not a Canadian Business Day or (in the case of first class post) when it would be received in the ordinary course of the post and shall be sent:

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(a) in the case of the Guarantor, to BMO Covered Bond Guarantor Limited Partnership, c/o Bank of Montreal, 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, Ontario M5X 1A1 (facsimile number (416) 867-4166) for the attention of Senior Manager, Securitization Finance and Operations;

(b) in the case of the GDA Provider and the Cash Manager, to Bank of Montreal at 18^th Floor, 1 First Canadian Place, 100 King Street West, Toronto, Ontario M5X 1A1 (facsimile number (416) 867-4166) for the attention of Senior Manager, Securitization Finance and Operations; and

(c) in the case of the Bond Trustee, to Computershare Trust Company of Canada, 100 University Avenue, 11^th Floor, Toronto, ON M5J 2Y1, (facsimile number (416) 981-9777) for the attention of Manager, Corporate Trust;

or to such other address or facsimile number or for the attention of such other person or entity as may from time to time be notified by any party to the others by written notice in accordance with the provisions of this Section 11.

12. COUNTERPARTS

This Agreement may be executed in any number of counterparts (manually or by electronic or 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.

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13. THE BOND TRUSTEE

13.1 If there is any change in the identity of the Bond Trustee, the Guarantor, the Cash Manager and the GDA Provider 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.

13.2 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 Guarantor, the Cash Manager or the GDA Provider 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 14. 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 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.

14. AMENDMENTS, VARIATION AND WAIVER

14.1 Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

14.2 Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (i) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (ii) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be a material amendment. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers in respect of which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

14.3 The Guarantor (or the Cash Manager on its behalf) will deliver notice to CMHC from time to time of any amendment, restatement or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

15. LIMITATION OF LIABILITY

BMO Covered Bond Guarantor Limited Partnership is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which is, except as expressly required by law, only liable for any of its liabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capital.

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16. NON-PETITION

The Cash Manager and GDA Provider agree that they shall not institute or join any other Person or entity in instituting against, or with respect to, the Guarantor, or any general partner of the Guarantor, any bankruptcy or insolvency event so long as any Covered Bonds issued by the Issuer under the Program 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.

17. GOVERNING LAW

17.1 This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

17.2 Each party to this Agreement hereby irrevocably submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement.

[Signature page follows.]

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IN WITNESS WHEREOF the parties hereto have executed on the day and year first before written.

BANK OF MONTREAL, as Cash Manager and GDA Provider   BMO COVERED BOND GUARANTOR   LIMITED PARTNERSHIP, by its   managing general partner, BMO COVERED   BOND GP, INC.

By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary
COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
By:	/s/ Sean Pigott
	Name: Sean Pigott
	Title: Corporate Trust Officer
By:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title: Associate Trust Officer

Guaranteed Deposit Account Contract

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EX-4.16

Exhibit 4.16

STAND-BY GUARANTEED DEPOSIT ACCOUNT CONTRACT

by and among

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

as Guarantor

and

BANK OF MONTREAL

as Cash Manager

and

ROYAL BANK OF CANADA

as Stand-By GDA Provider and Stand-By Account Bank

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Bond Trustee

SEPTEMBER 30, 2013

TABLE OF CONTENTS

Section		Page
1.	DEFINITIONS AND INTERPRETATION		3
2.	THE STAND-BY GDA ACCOUNT		4
3.	INTEREST		4
4.	WITHDRAWALS AND DEPOSITS		5
5.	TERMINATION		5
6.	REPRESENTATION, WARRANTIES AND COVENANTS		6
7.	ASSIGNMENT		7
8.	AGENCY		7
9.	INFORMATION		7
10.	PAYMENTS AND WITHHOLDING		8
11.	NOTICES		8
12.	COUNTERPARTS		10
13.	THE BOND TRUSTEE		10
14.	AMENDMENTS, VARIATION AND WAIVER		10
15.	NON-PETITION		11
16.	LIMITATION OF LIABILITY		11
17.	GOVERNING LAW		11
18.	SUBMISSION TO JURISDICTION		11

STAND-BY GUARANTEED DEPOSIT ACCOUNT CONTRACT

THIS STAND-BY GUARANTEED DEPOSIT ACCOUNT CONTRACT AGREEMENT (this “Agreement”) is made on September 30, 2013.

BY AND AMONG:

(1) BMO Covered Bond Guarantor Limited Partnership, a limited partnership established under the laws of the Province of Ontario, by its managing general partner, BMO Covered Bond GP, Inc. (the “Guarantor”);

(2) Bank of Montreal, a bank named in Schedule I to the Bank Act (Canada), as Cash Manager (the “Cash Manager”);

(3) Royal Bank of Canada, a bank named in Schedule I to the Bank Act (Canada), as Stand-By GDA Provider (the “Stand-By GDA Provider”), and as Stand-By Account Bank (the “Stand-By Account Bank”); and

(4) Computershare Trust Company of Canada, a trust company existing under the laws of Canada, acting in its capacity as Bond Trustee (hereinafter the “Bond Trustee”).

WHEREAS:

(A) As part of the transactions contemplated by the Program, the Cash Manager has agreed, pursuant to the cash management agreement dated September 30, 2013 (the “Cash Management Agreement”) by and among the Cash Manager, the Guarantor and the Bond Trustee to provide cash management services in connection with the activities of the Guarantor.

(B) The Stand-By Account Bank has agreed, pursuant to the terms of the Stand-By Bank Account Agreement, that following service of a Stand-By Account Bank Notice by the Guarantor (or the Cash Manager on its behalf) the Stand-By Account Bank will activate the Stand-By Transaction Account and the Stand-By GDA Account as interest bearing accounts in the name of the Guarantor or the Bond Trustee, as applicable.

(C) Following service of a Stand-By Account Bank Notice by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee, the Stand-By GDA Provider has agreed pursuant to the terms of this Agreement to pay interest on the funds standing to the credit of the GDA Account at specified rates determined in accordance with and pursuant to 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 alios, the parties to this Agreement on September 30, 2013 (as the same may be amended, restated and/or

supplemented from time to time, the “Master Definitions and Construction Agreement”) is expressly and specifically incorporated into this Agreement and, accordingly, the expressions defined in the Master Definitions and Construction Agreement (as so amended, varied and/or supplemented) 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. For the purposes of this Agreement, this Agreement has the same meaning as Stand-By Guaranteed Deposit Account Contract in the Master Definitions and Construction Agreement.

2. THE STAND-BY GDA ACCOUNT

The Stand-By GDA Provider confirms that on receipt by the Stand-By GDA Provider of a Stand-By Account Bank Notice the Stand-By GDA Account will be opened in its books pursuant to the terms of the Stand-By Bank Account Agreement in the name of the Guarantor, and it agrees to accept on deposit in the Stand-By GDA Account, once the Stand-By GDA Account has been opened, all monies transferred, from time to time, to the Stand-By GDA Account, subject to and upon the terms of this Agreement, the Stand-By Bank Account Agreement, the Cash Management Agreement and the Security Agreement.

3. INTEREST

3.1 Interest shall accrue daily on the Stand-By GDA Balance and shall be paid monthly in arrears on the 10^th Canadian Business Day of each month (or, if such day is not a Canadian Business Day, on the next succeeding Canadian Business Day) at the Stand-By GDA Rate (calculated on the basis of the number of days elapsed and a 365 day year) by payment for value on the same day to the Stand-By GDA Account or such other accounts as the Guarantor (or the Cash Manager on its behalf) shall specify.

3.2 On any day on which interest is payable by the Stand-By GDA Provider under this Agreement, the Stand-By GDA Provider shall pay the amount of interest then due in immediately available, freely transferable, cleared funds by no later than the close of business (Toronto Time) on that day (or, if such day is not a Canadian Business Day, on the next succeeding Canadian Business Day).

3.3 In the event that a Guarantor Acceleration Notice is served on the Guarantor, then, on the date of such Guarantor Acceleration Notice, the Stand-By GDA Provider shall pay to the Bond Trustee the aggregate of all interest accrued on the Stand-By GDA Account on each day during the month in which such Guarantor Acceleration Notice is served up to (but excluding) the date of such Guarantor Acceleration Notice. As and from the date of such Guarantor Acceleration Notice, the Stand-By GDA Provider shall comply with the directions of the Bond Trustee in relation to the Stand-By GDA Account.

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4. WITHDRAWALS AND DEPOSITS

4.1 Subject always to the provisions of the Cash Management Agreement, the Stand-By Bank Account Agreement and the Security Agreement, the Guarantor (or the Cash Manager on its behalf) may on any Canadian Business Day give notice to the Stand-By GDA Provider that it wishes to withdraw on such date all or part of the Stand-By GDA Balance from the Stand-By GDA Account and the Stand-By GDA Provider shall comply with such notice and pay the amount specified in such notice to the account specified therein, provided that if any such notice is received after 12 noon (Toronto Time) on any day it shall be deemed to have been received at the opening of business on the next following Canadian Business Day.

4.2 The Guarantor (or the Cash Manager on its behalf) may deposit, or procure the deposit of, sums in the Stand-By GDA Account, to the extent permitted by the terms of the Cash Management Agreement, the Stand-By Bank Account Agreement and the Security Agreement, and the Stand-By GDA Provider agrees to accept and credit to the Stand-By GDA Account such sums in accordance with the other terms hereof.

5. TERMINATION

5.1 Following termination of the Stand-By Bank Account Agreement and/or closing of the Stand-By GDA Account in accordance with the Stand-By Bank Account Agreement, this Agreement will be automatically terminated.

5.2 The Guarantor (or the Cash Manager or the Bond Trustee on its behalf) may (with the prior written consent of the Bond Trustee, which consent shall not be withheld unless the Bond Trustee determines that the termination of this Agreement would be materially prejudicial to the interests of the Covered Bondholders) terminate this Agreement in the event that default is made by the Stand-By GDA Provider in the performance or observance of its covenants and obligations, or a breach by the Stand-By GDA Provider is made of any of its representations, warranties or covenants under Sections 6.1(d), 6.1(e), 6.1(f), 6.1(g), 6.1(i) and 6.1(j).

5.3 Upon any termination or resignation of the Stand-By GDA Provider hereunder or the Stand-By Bank Account Agreement, the Guarantor shall provide notice to CMHC of such termination or resignation and of the Stand-By GDA Provider’s replacement contemporaneously with the earlier of (i) notice of such termination or resignation and replacement to a Rating Agency, (ii) notice of such termination or resignation and replacement being provided to or otherwise made available to Covered Bondholders, and (iii) five (5) Canadian Business Days following such termination or resignation and replacement (unless the replacement Stand-By GDA Provider has yet to be identified at that time, in which case notice of the replacement Stand-By GDA Provider may be provided no later than 10 Canadian Business Days thereafter). Any such notice shall include (if known) the reasons for the termination or resignation of the Stand-By GDA Provider, all information relating to the replacement Stand-By GDA Provider required by the CMHC Guide and the new agreement or a revised and amended copy of this Agreement with the replacement Stand-By GDA Provider.

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6. REPRESENTATION, WARRANTIES AND COVENANTS

6.1 The Stand-By GDA Provider represents and warrants to, and covenants with, each of the Guarantor and the Bond Trustee at the date hereof, on each date on which an amount is credited to the Stand-By GDA Account and on each Guarantor Payment Date, that:

(a) it 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 have a material adverse effect on its ability to perform its duties and obligations hereunder;

(b) the execution, delivery and performance by the Stand-By GDA Provider of this Agreement (i) are within the Stand-By GDA Provider’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 GDA Provider, (2) any law, rule or regulation applicable to the Stand-By GDA Provider, or (3) any order, writ, judgment, award, injunction, decree or contractual obligation binding on or affecting the Stand-By GDA Provider or its property;

(c) it is not a Non-Resident;

(d) it possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(e) it will comply with the provisions of, and perform its obligations under, this Agreement and the other Transaction Documents to which it is a party;

(f) it is in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(g) it is in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party;

(h) it will exercise reasonable skill and care in the performance of its obligations hereunder and the other Transaction Documents to which it is a party;

(i) it will comply with the CMHC Guide and all material legal and regulatory requirements applicable to the conduct of its business so that it can lawfully attend to the performance of its obligations hereunder and the other Transaction Documents to which it is a party; and

(j) the unsecured, unsubordinated and unguaranteed debt obligations or the issuer default rating, as applicable, of the Stand-By GDA Provider rated by each of the Rating Agencies are at or above the Stand-By Account Bank Required Ratings.

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6.2 The Stand-By GDA Provider undertakes to notify the Guarantor and the Bond Trustee immediately if, at any time during the term of this Agreement, any of the statements contained in Section 6.1 ceases to be true. The representations, warranties and covenants set out in Section 6.1 shall survive the signing and delivery of this Agreement.

7. ASSIGNMENT

7.1 Save as otherwise contemplated in this Agreement or the Cash Management Agreement, no party hereto (other than the Bond Trustee) may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Bond Trustee and unless the Rating Agency Condition has been satisfied with respect thereto. In any event any assignee of the Stand-By GDA Provider must be a bank chartered under the Bank Act and its issuer default rating by Fitch must be at least F1.

7.2 Notwithstanding the provisions of Section 7.1 above, the parties hereto acknowledge that the Guarantor may assign all its rights, title and interest in this Agreement to the Bond Trustee, for the benefit of the Secured Creditors, in accordance with and pursuant to the terms of the Security Agreement and the Stand-By GDA Provider acknowledges that pursuant to the terms of the Security Agreement, the Guarantor has, inter alia, authorized the Bond Trustee to exercise, or refrain from exercising, all rights, powers, authorities, discretions and remedies under or in respect of the Transaction Documents, including this Agreement, in such manner as in its absolute discretion it shall determine to be appropriate.

7.3 If any party assigns any of its obligations under this Agreement as permitted by this Agreement, such party will provide at least 10 Canadian Business Days’ prior written notice of such assignment to DBRS.

8. AGENCY

The Stand-By GDA Provider agrees and confirms that, unless the Stand-By GDA Provider is otherwise notified by the Guarantor (or the Cash Manager on its behalf) or the Bond Trustee in accordance with the terms of this Agreement, the Cash Manager, as agent of the Guarantor, may act on behalf of the Guarantor under this Agreement.

9. INFORMATION

The Stand-By GDA Provider shall provide to the Bond Trustee or the Guarantor (or the Cash Manager on its behalf), or procure the provision to the Bond Trustee of, such information and evidence in respect of any dealing between the Guarantor and the Stand-By GDA Provider or otherwise under or in relation to this Agreement as the Bond Trustee may reasonably request and the Guarantor hereby waives any right or duty of confidentiality which it may have or which may be owed to it by the Stand-By GDA Provider in respect of the disclosure of such information and evidence pursuant to this Section 9.

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10. PAYMENTS AND WITHHOLDING

The parties agree that payments required to be made hereunder shall be made in accordance with Section 2 of the Stand-By Bank Account Agreement and that all payments by the Stand-By GDA Provider under this Agreement shall be made in full without any deduction or withholding (whether in respect of set-off, counterclaim, duties, taxes, charges or otherwise whatsoever) unless the deduction or withholding is required by law, in which event the Stand-By GDA Provider shall:

(a) ensure that the deduction or withholding does not exceed the minimum amount legally required;

(b) pay to the relevant taxation or other authorities within the period for payment permitted by applicable law the full amount of the deduction or withholding;

(c) furnish to the Guarantor or the Bond Trustee (as the case may be) within the period for payment permitted by the relevant law, either:

(i) an official receipt of the relevant taxation authorities involved in respect of all amounts so deducted or withheld; or

(ii) if such receipts are not issued by the taxation authorities concerned on payment to them of amounts so deducted or withheld, a certificate of deduction or equivalent evidence of the relevant deduction or withholding; and

(d) account to the Guarantor in full by credit to the Stand-By GDA Account (as the case may be) for an amount equal to the amount of any rebate, repayment or reimbursement of any deduction or withholding which the Stand-By GDA Provider has made pursuant to this Section 10 and which is subsequently received by the Stand-By GDA Provider.

11. NOTICES

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, electronically or by facsimile transmission to the facsimile number set forth below, as applicable:

(a) in the case of the Guarantor, to:

c/o Bank of Montreal

18^th Floor, 1 First Canadian Place

100 King Street West

Toronto, Canada M5X 1A1

Attention: Senior Manager, Securitization Finance and Operations

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Facsimile number: (416) 867-4166;

in the case of the Cash Manager, to:

Bank of Montreal

18^th Floor, 1 First Canadian Place

100 King Street West

Toronto, Canada M5X 1A1

Attention: Senior Manager, Securitization Finance and Operations

Facsimile number: (416) 867-4166;

(b) in the case of the Stand-By GDA Provider or the Stand-By Account Bank, to:

Royal Bank of Canada

RBC Centre, 14^th Floor

155 Wellington Street West

Toronto, Ontario M5V 3K7

Attention: Senior Manager, Securitization

Facsimile number: (416) 974-6056;

(c) in the case of the Bond Trustee, to:

Computershare Trust Company of Canada

100 University Avenue

11^th Floor, North Tower

Toronto, Ontario M5J 2Y1

Canada

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 Canadian Business Day and such delivery was made prior to 5:00 p.m. (Toronto time) and otherwise on the next Canadian Business Day, (ii) in the case of first class post, when it would be received in the ordinary course of the post or (iii) if transmitted by electronic or facsimile transmission, on the Canadian 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.

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12. COUNTERPARTS

This Agreement may be executed in any number of counterparts (manually, electronically 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.

13. THE BOND TRUSTEE

13.1 If there is any change in the identity of the Bond Trustee, the Guarantor, the Cash Manager and the Stand-By GDA Provider 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.

13.2 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 Guarantor, the Cash Manager or the Stand-By GDA Provider 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 14. For the avoidance of doubt, the parties to this Agreement acknowledge that the rights and powers of the Bond Trustee are governed by the Security Agreement. Any liberty or right which may be exercised or determination which may be made under this Agreement by the Bond Trustee may be exercised or made in the Bond Trustee’s absolute discretion without any obligation to give reasons therefor and the Bond Trustee shall not be responsible for any liability occasioned by so acting but subject always to the provisions of Section 11.1 of the Security Agreement.

14. AMENDMENTS, VARIATION AND WAIVER

14.1 Subject to the terms of the Security Agreement, any amendments to this Agreement will be made only with the prior written consent of each party to this Agreement. No waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorized by) each of the parties. No single or partial exercise of, or failure or delay in exercising, any right under this Agreement shall constitute a waiver or preclude any other or further exercise of that or any other right.

14.2 Each proposed amendment, variation or waiver of rights under this Agreement that is considered by the Guarantor to be a material amendment, variation or waiver, shall be subject to satisfaction of the Rating Agency Condition. For certainty, any amendment to (i) a Ratings Trigger provided for in this Agreement that lowers the ratings specified therein, or (ii) the consequences of breaching a Ratings Trigger provided for in this Agreement that makes such consequences less onerous, shall be deemed to be a material amendment. The Guarantor shall deliver notice to the Rating Agencies from time to time of any amendment, variations or waivers in respect of which satisfaction of the Rating Agency Condition is not required, provided that failure to deliver such notice shall not constitute a breach of the obligations of the Guarantor under this Agreement.

10

14.3 The Guarantor (or the Cash Manager on its behalf) will deliver notice to CMHC from time to time of any amendment, restatement or waiver with respect to which notice to CMHC is required by the CMHC Guide, provided that failure to deliver such notice will not constitute a breach of the obligations of the Guarantor under this Agreement.

15. NON-PETITION

Each of the parties (other than the Bond Trustee) hereto agrees that it shall not institute against, or join any other party in instituting against, the Guarantor, or any general partner of the Guarantor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal, provincial or foreign bankruptcy, insolvency or similar law, for one year and one day after all Covered Bonds have been repaid in full. The foregoing provision will survive the termination of this Agreement by any party hereto.

16. LIMITATION OF LIABILITY

BMO Covered Bond Guarantor Limited Partnership is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which is, except as expressly required by law, only liable for any of its liabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capital.

17. GOVERNING LAW

This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

18. SUBMISSION TO JURISDICTION

Each party to this Agreement hereby irrevocably submits to the non-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]

11

IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day and year first before written.

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC., as Guarantor
Per:	/s/ Chris Hughes
	Name: Chris Hughes
	Title: President and Secretary

BANK OF MONTREAL, as Cash Manager
Per:	/s/ Cathy Cranston
	Name: Cathy Cranston
	Title: Senior Vice President, Finance &
	Treasurer

ROYAL BANK OF CANADA, as Stand-By GDA Provider and Stand-By Account Bank
Per:	/s/ David Power
	Name: David Power
	Title: Vice-President, Market Strategy &
	Execution
Per:	/s/ Saqib Nazir
	Name: Saqib Nazir
	Title: Vice President Risk Measurement
	and Funds Transfer Pricing Analytics

COMPUTERSHARE TRUST COMPANY OF CANADA, as Bond Trustee
Per:	/s/ Sean Pigott
	Name: Sean Pigott
	Title: Corporate Trust Officer
Per:	/s/ Stanley Kwan
	Name: Stanley Kwan
	Title: Associate Trust Officer

Stand-By Guaranteed Deposit Account Contract

EX-4.17

Exhibit 4.17

(Multicurrency—Cross Border)

International Swap Dealers Association, Inc.

INTEREST RATE SWAP

MASTER AGREEMENT

dated as of September 30, 2013

BANK OF MONTREAL (“Party A”) and BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP (“Party B”)

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those Transactions.

Accordingly, the parties agree as follows:—

1. Interpretation

(a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this “Agreement”), and the parties would not otherwise enter into any Transactions.

2. Obligations

(a) General Conditions.

(i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement.

(ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is

Copyright ^© 1992 by International Swap Dealers Association, Inc.

continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement.

(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change.

(c) Netting. If on any date amounts would otherwise be payable:—

(i) in the same currency; and

(ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries.

(d) Deduction or Withholding for Tax.

(i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party (“X”) will:—

(1) promptly notify the other party (“Y”) of such requirement;

(2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

(3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and

(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:—

(A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

2 ISDÁ^® 1992

(B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law.

(ii) Liability. If:—

(1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

(2) X does not so deduct or withhold; and

(3) a liability resulting from such Tax is assessed directly against X,

then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement.

3. Representations

Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:—

(a) Basic Representations.

(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing;

(ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance;

(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets;

(iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and

3 ISDÁ^® 1992

(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, 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)).

(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true.

4. Agreements

Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:—

(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:—

(i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;

(ii) any other documents specified in the Schedule or any Confirmation; and

(iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.

4 ISDÁ^® 1992

(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.

5. Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an “Event of Default”) with respect to such party:—

(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party;

(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party;

(iii) Credit Support Default.

(1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;

(2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or

(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document;

(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated;

(v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last

5 ISDÁ^® 1992

payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf);

(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period);

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:—

(1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or

(2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement.

6 ISDÁ^® 1992

(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:—

(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):—

(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or

(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction;

(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii);

(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as applying to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or

(v) Additional Termination Event. If any “Additional Termination Event” is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default.

7 ISDÁ^® 1992

6. Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic Early Termination” is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require.

(ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist.

If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party’s policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed.

(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event.

(iv) Right to Terminate. If:—

(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party,

either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions.

8 ISDÁ^® 1992

(c) Effect of Designation.

(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing.

(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

(d) Calculations.

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation.

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall apply based on the parties’ election in the Schedule of a payment measure, either “Market Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off.

(i) Events of Default. If the Early Termination Date results from an Event of Default:—

(1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party.

(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in respect of this Agreement.

(3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

9 ISDÁ^® 1992

(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(ii) Termination Events. If the Early Termination Date results from a Termination Event:—

(1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Part will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions.

(2) Two Affected Parties. If there are two Affected Parties:—

(A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount (“X”) and the Settlement Amount of the party with the lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and

(B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because “Automatic Early Termination” applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses.

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7. Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:—

(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8. Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term “rate of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency.

(c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made.

9. Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.

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(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.

(e) Counterparts and Confirmations.

(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

10. Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation.

11. Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection.

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12. Notices

(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:—

(i) if in writing and delivered in person or by courier, on the date it is delivered;

(ii) if sent by telex, on the date the recipient’s answerback is received;

(iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine);

(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or

(v) if sent by electronic messaging system, on the date that electronic message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it.

13. Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement (“Proceedings”), each party irrevocably:—

(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and

(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in a inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law.

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(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.

14. Definitions

As used in this Agreement:—

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, “control” of any entity or person means ownership of a majority of the voting power of the entity or person.

“Applicable Rate” means:—

(a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and

(d) in all other cases, the Termination Rate.

“Burdened Party” has the meaning specified in Section 5(b).

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into.

“consent” includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as such in this Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.

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“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

“Illegality” has the meaning specified in Section 5(b).

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the “Replacement Transaction”) that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming

15 ISDÁ^® 1992

satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount.

“Non-defaulting Party” has the meaning specified in Section 6(a).

“Office” means a branch or office of a party, which may be such party’s head or home office.

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction.

“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and

(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result.

“Specified Entity” has the meanings specified in the Schedule.

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

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“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

“Stamp Tax” means any stamp, registration, documentation or similar tax.

“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax.

“Tax Event” has the meaning specified in Section 5(b).

“Tax Event Upon Merger” has the meaning specified in Section 5(b).

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately before that Early Termination Date).

“Termination Currency” has the meaning specified in the Schedule.

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties.

“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual

17 ISDÁ^® 1992

number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties.

[Signature page follows.]

18 ISDÁ^® 1992

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document.

BANK OF MONTREAL		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
Name: Cathy Cranston		Name: Chris Hughes
Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary
Date: September 30, 2013		Date: September 30, 2013

19 ISDÁ^® 1992

Interest Rate Swap Agreement

SCHEDULE

to the

ISDA Master Agreement

dated as of September 30, 2013

between

(1) BANK OF MONTREAL (“Party A”); and

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP (“Party B”).

Part 1. Termination Provisions

(a) “Specified Entity” means in relation to Party A for the purpose of:

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(iv), none

and in relation to Party B for the purpose of:-

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(iv), none

(b) “Specified Transaction” will have the meaning specified in Section 14.

(c) The “Cross-Default” provisions of Section 5(a)(vi) will apply to Party A where Party A is the Issuer, and will not apply to Party B.

If such provisions apply:

Clauses (1) and (2) of Section 5(vi) of the Agreement shall be deleted and replaced with “an Issuer Event of Default in respect of Party A which has resulted in Covered Bonds becoming due and payable under their respective terms.”

(d) The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to Party A and will not apply to Party B.

(e) The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A and will not apply to Party B.

(f) Payments on Early Termination. For the purposes of Section 6(e) of this Agreement:

(i) Market Quotation will apply.

(ii) The Second Method will apply.

(g) “Termination Currency” means Canadian Dollars.

(h) Additional Termination Event will apply as set forth in Part 5(h) of this Schedule.

(i) Right of Party B to Terminate. Notwithstanding any other provision of this Agreement to the contrary:

(a) if, at any time, Party B is Independently Controlled and Governed (as such term is defined in the CMHC Guide) but, subject to Part 1(i)(b) below, without prejudice to any other rights Party B may have hereunder, Party B shall have the discretion, but not be required, to:

(A) waive the requirement of Party A to provide credit support, obtain an Eligible Guarantee or replace itself as a party hereunder, in each case, pursuant to the terms of Part 5(h) of this Schedule, and

(B) refrain from forthwith terminating this Agreement or finding a replacement counterparty, in each case, upon the occurrence of an Event of Default or Additional Termination Event hereunder where Party A is the sole Defaulting Party or the sole Affected Party, as applicable; and

(b) if, at any time, Party B is not Independently Controlled and Governed (as such term is defined in the CMHC Guide), Party B shall not:

(A) waive the requirement of Party A to provide credit support, obtain an Eligible Guarantee or replace itself as a party hereunder, in each case, pursuant to the terms of Part 5(h) of this Schedule, or

(B) refrain from forthwith terminating this Agreement or finding a replacement counterparty, in each case, upon the occurrence of an Event of Default or Additional Termination Event hereunder where Party A is the sole Defaulting Party or the sole Affected Party, as applicable.

(j) Failure to Pay or Deliver. Section 5(a)(i) does not apply to Party B in the case of a failure to pay or deliver caused by the assets then available to Party B being insufficient to make the related payment or delivery in full on the relevant payment or delivery date or the first Local Business Day or Local Delivery Day, as the case may be, after notice of such failure is given to Party B.

Part 2. Tax Representations

(a) Payer Representations. For the purpose of Section 3(e) of this Agreement, Party A and Party B will each make the following representation:

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of this Agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party

2

pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of this Agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(b) Payee Representations.

(i) For the purposes of Section 3(f) of this Agreement, Party A makes the representation specified below:

(A) It is not a non- resident of Canada for the purposes of the Income Tax Act (Canada).

(B) It is a bank organized under the laws of Canada.

(ii) For the purposes of Section 3(f) of this Agreement, Party A makes the representation specified below:

(A) It is a “Canadian partnership” as defined in the Income Tax Act (Canada).

(B) It is a limited partnership organized under the laws of the Province of Ontario.

3

Part 3. Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the following documents, as applicable:-

(a) Tax forms, documents or certificates to be delivered are:-

Party required to deliver document	Form/Document/Certificate	Date by which to be delivered
	None

(b) Other documents to be delivered are:-

Party required to deliver document	Form/Document/Certificate	Date by which to be delivered	Covered by Section 3(d) Representation
Party A and Party B	Appropriate evidence of its signatory’s authority	On signing of this Agreement	Yes
Party B	Copy of the Guarantor Agreement of Party B certified as at the date hereof as true and in full force and effect	On signing of this Agreement	No

Part 4. Miscellaneous

(a) Addresses for Notices. For the purpose of Section 12(a) of this Agreement:-

Address for notices or communications to Party A:

With respect to Transactions:

Address:	Bank of Montreal, 250 Yonge Street, 10th Floor, Toronto, Ontario M5B 2L7, Canada
	Attention: Head, Derivative Operations
	Facsimile No.: (416) 552-7905
	Telephone No.: (416) 552-7809

4

Any other notice sent to Party A (including, without limitation, any notice in connection with Section 5, 6 or 9(b)) of this Agreement shall be copied to the following address:

Address:	Bank of Montreal, 55th Floor, 100 King Street West, Toronto, Ontario M5X 1H3
	Attention:	Managing Director, Documentation
	Facsimile No.:	(416) 956-2318
	Telephone No:	(416) 867-4710

Address for notices or communications to Party B:-

Address:	c/o Bank of Montreal, 18th Floor, 1 First Canadian Place, 100 King Street West, Toronto, Ontario M5X 1A1
	Attention:	Senior Manager, Securitization Finance and Operations
	Facsimile No.:	(416) 867-4166

With a copy to the Bond Trustee:-

Name:	Computershare Trust Company of Canada
Address:	100 University Avenue, 9th Floor, North Tower, Toronto, Ontario M5J 2YI
	Attention:	Manager, Corporate Trust
	Facsimile No.:	(416) 981-9777

(b) Process Agent. For the purpose of Section 13(c) of this Agreement:-

Party A appoints as its Process Agent: Not applicable.

Party B appoints as its Process Agent: Not applicable.

(c) Offices. The provisions of Section 10(a) will apply to this Agreement.

(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e) Credit Support Document. Details of any Credit Support Document:-

In respect of Party A, any Eligible Guarantee.

In respect of Party B, none.

(f) Credit Support Provider.

Credit Support Provider means in relation to Party A, any guarantor under any Eligible Guarantee.

Credit Support Provider means in relation to Party B, none.

(g) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

5

(h) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will apply to Transactions entered into under this Agreement unless otherwise specified in a Confirmation.

(i) “Affiliate” will have the meaning specified in Section 14 of this Agreement.

(j) Additional Agreements. Party A agrees to (i) comply with and perform all of its agreements and obligations hereunder and each other Transaction Document to which it is a party in any capacity, and (ii) comply with the CMHC Guide.

Part 5. Other Provisions

(a) No Set-Off

(i) All payments under this Agreement shall be made without set-off or counterclaim, except as expressly provided for in Section 6.

(ii) Section 6(e) shall be amended by the deletion of the following sentence:

“The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off.”

(b) Security Interest

Notwithstanding Section 7, Party A hereby agrees and consents to the assignment by way of security by Party B of its interests under this Agreement (without prejudice to, and after giving effect to, any contractual netting provision contained in this Agreement) to the Bond Trustee (or any successor thereto) pursuant to and in accordance with the Security Agreement and acknowledges notice of such assignment. Each of the parties hereby confirms and agrees that the Bond Trustee shall not be liable for any of the obligations of Party B hereunder.

(c) Disapplication of Certain Events of Default

Sections 5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(vii)(2), (7) and (9), and 5(a)(viii) will not apply in respect of Party B. 5(a)(v) will not apply to Party A or to Party B.

Section 5(a)(vii)(3) will not apply to Party B to the extent that it refers to any assignment, arrangement or composition that is effected by or pursuant to the Transaction Documents.

Section 5(a)(vii)(4) will not apply to Party B to the extent that it refers to any proceedings or petitions instituted or presented by Party A or any of its Affiliates.

Section 5(a)(vii)(6) will not apply in respect of Party B to the extent that it refers to (i) any appointment that is effected by or pursuant to the Transaction Documents, or (ii) any appointment that Party B has not become subject to.

Section 5(a)(vii)(8) will apply to Party B only to the extent that it applies to Section 5(a)(vii)(1), (3), (4), (5) and (6), as amended above as applicable.

(d) Disapplication of Certain Termination Events

The “Tax Event” and “Tax Event Upon Merger” provisions of Section 5(b)(ii) and 5(b)(iii) will not apply to Party A or to Party B.

6

(e) Amendments

(i) Section 9(b) is amended by adding “(i)” after “unless” in the first line of that Section, and by adding “, (ii) in respect of any material amendment, modification or waiver, the Rating Agency Condition has been satisfied with respect thereto; provided that any amendment to (1) a ratings trigger provided for in this Agreement that lowers the threshold ratings, or (2) the consequences of breaching any such ratings trigger that makes such consequences less onerous, shall, with respect to each affected Rating Agency only, be deemed to be a material amendment and shall be subject to satisfaction of the Rating Agency Condition with respect to each affected Rating Agency, and (iii) such amendment, modification or waiver shall be in compliance with the CMHC Guide” after “system” and before the “.” in the third line of that Section;

(ii) Party B shall notify Moody’s, Fitch and DBRS of all non-material amendments, modifications and waivers in respect of this Agreement, provided that failure to deliver such notice shall not constitute a breach of the obligations of Party B under this Agreement; and

(iii) Notwithstanding anything in this Agreement, if at any time the Issuer determines that any one of DBRS, Fitch or Moody’s shall no longer be a Rating Agency in respect of the Program, then, so long as (a) the Program is in compliance with the terms of the CMHC Guide with respect to the ratings of the Covered Bonds, and (b) each outstanding Series of Covered Bonds is rated by at least two Rating Agencies, the ratings triggers for such rating agency as set out in this Agreement will no longer be applicable without any further action or formality, including for greater certainty any requirement for satisfaction of the Rating Agency Condition with respect to the remaining Rating Agencies or consent or approval of the Bond Trustee or the holders of the Covered Bonds. Any amendments to this Agreement to reflect the foregoing shall be deemed not to be a material amendment and may be made by the parties thereto without the requirement for satisfaction of the Rating Agency Condition with respect to the remaining Rating Agencies or consent or approval of the Bond Trustee or the holders of the Covered Bonds.

7

(f) Failure to Pay and Deliver

Section 5(a)(i) does not apply to Party B in the case of a failure to pay or deliver caused by the assets then available to Party B being insufficient to make the related payment or delivery in full on the relevant payment or delivery date or the first Local Business Day or Local Delivery Day, as the case may be, after notice of such failure is given to Party B.

(g) Transfers

Section 7 of this Agreement is replaced in its entirety with the following:

“(a) General. Save as provided in Parts 5(b), (g) and (h) of the Schedule to this Agreement and this Section 7, neither party may transfer its interest hereunder or under any Transaction to another party.

(b) Transfers by Party A. Without prejudice to Section 6(b)(ii), Party A may transfer all but not part of its interest and obligations in and under this Agreement upon providing five Local Business Days’ prior written notice to Party B and the Bond Trustee, to any entity (the “Transferee”) provided that:

(i) the Transferee is a party that satisfies the Minimum Ratings requirement for all Rating Agencies or the Transferee’s obligations under this Agreement are guaranteed by a party that satisfies the Minimum Ratings requirement for all Rating Agencies;

(ii) as of the date of such transfer, the Transferee will not, as a result of such transfer, be required to withhold or deduct on account of any Tax under this Agreement;

(iii) a Termination Event or an Event of Default will not occur under this Agreement as a direct result of such transfer;

(iv) no additional amount will be payable by Party B to Party A or the Transferee on the next succeeding Scheduled Payment Date as a result of such transfer;

(v) the Transferee enters into documentation identical or substantially identical to this Agreement and the documents executed in connection with this Agreement; and

(vi) the Rating Agency Condition has been satisfied with respect to such transfer.

(c) Transfers by Party B. Neither this Agreement nor any interest in or under this Agreement or any Transaction may be transferred by Party B to any other entity save with Party A’s prior written consent; except that such consent is not required in the case of a transfer, charge or assignment to the Bond Trustee as contemplated in the Security Agreement.”

(h) Additional termination provisions.

(i) If (1) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any Credit Support Provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively, “Prime-1” or “A2” or, if Party A, such Credit Support Provider or guarantor does not have a short-term rating assigned by Moody’s, the long-term unsecured, unsubordinated and unguaranteed debt obligations of Party A or any credit support provider or guarantor cease to be rated at least as high as “A1” (the “Minimum Moody’s Rating”) by Moody’s Investors Service Inc. (“Moody’s”), (2) the short-term issuer default rating or the long-term issuer default rating of Party A or any credit support provider or guarantor from time to time in respect of Party A

8

ceases to be at least as high as, respectively, “F1” and “A” (the “Minimum Fitch Rating”) by Fitch Ratings, Inc. (“Fitch”), or (3) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any Credit Support Provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively, “R-1 (middle)” or “A” (the “Minimum DBRS Rating” and, together with the Minimum Moody’s Rating and Minimum Fitch Rating, the “Minimum Ratings” and each a “Minimum Rating”) by DBRS Limited (“DBRS” and, together with Moody’s and Fitch and each of their respective successors, the “Rating Agencies” and each a “Rating Agency”), (each such cessation being an “Initial Rating Event”), then Party A will, at its own cost, either:

(A) transfer credit support in accordance with the provisions of the Annex within 10 Business Days of the occurrence of the first such Initial Rating Event;

(B) subject to Part 5(g), transfer all of its rights and obligations with respect to this Agreement to a replacement third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the replacement third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto) within (x) 30 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Moody’s or DBRS or (y) 14 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Fitch, provided that Party A transfers credit support in accordance with the provisions of the Annex within 10 Business Days of the occurrence of the first such Initial Rating Event; or

(C) obtain a guarantee (an “Eligible Guarantee”) of its rights and obligations with respect to this Agreement from a third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto) within (x) 30 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Moody’s or DBRS or (y) 14 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Fitch, provided that Party A transfers credit support in accordance with the provisions of the Annex within 10 Business Days of the occurrence of the first such Initial Rating Event.

If any of sub-paragraphs (i)(B) or (i)(C) above are satisfied at any time, Party A will not be required to transfer any additional credit support in respect of such Initial Rating Event.

(ii) If, (1) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any Credit Support Provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively “Prime-2” or “A3” by Moody’s, (2) the short-term issuer default rating or the long-term issuer default rating of Party A or any credit support provider or guarantor from time to time in respect of Party A ceases to be at least as high as, respectively, “F3” and “BBB-” by Fitch, or (3) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any credit support provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively, “R-2 (high)” or “BBB (high)” by DBRS (each such event, a “Subsequent Rating Event”) with respect to Party A, then Party A will:

9

(A) immediately and in any event no later than 15 calendar days after such Subsequent Rating Event at its own cost and expense, shall (i) transfer all of its rights and obligations with respect to this Agreement to a replacement third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto), or (ii) obtain an Eligible Guarantee of its rights and obligations with respect to this Agreement from a third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto); and

(B) transfer credit support pursuant to the Annex in no event later than 10 Business Days following the occurrence of a Subsequent Rating Event and until such time as the action set out in sub-paragraph (ii)(A) above has been taken.

If the action set out in sub-paragraph (ii)(A) above is taken at any time following a Subsequent Rating Event, Party A will not be required to transfer any additional credit support in respect of such Subsequent Rating Event.

(iii)

(A) Without prejudice to the consequences of Party A breaching any provision of this Agreement (other than sub-paragraph (i) above) or failing to transfer credit support under the Annex, if Party A does not take any of the measures described in sub-paragraph (i) above, such failure shall not be or give rise to an Event of Default but shall constitute an Additional Termination Event with respect to Party A which shall be deemed to have occurred on (x) the tenth Business Day following the applicable Initial Rating Event with respect to the measures set out in sub-paragraph (i)(A) and (y) with respect to the measures set out in sub-paragraphs (i)(B) and (i)(C), the last day of the remedy period specified in such sub-paragraph, and in each case Party A shall be the sole Affected Party and all Transactions as Affected Transactions.

(B) Without prejudice to the consequences of Party A breaching any provision of this Agreement (other than sub-paragraph (ii) above) or failing to transfer credit support under the Annex, if, at the time a Subsequent Rating Event occurs, Party A fails to transfer credit support as required by the Annex, such failure will not be or give rise to an Event of Default but will constitute an Additional Termination Event with respect to Party A and will be deemed to have occurred on the tenth Business Day following such Subsequent Rating Event with Party A as the sole Affected Party and all Transactions as Affected Transactions. Further, an Additional Termination Event with respect to Party A shall be deemed to have occurred if, even if Party A continues to transfer credit support as required by sub-paragraph (ii)(B) above and notwithstanding Section 5(h)(ii), Party A does not take any measure specified in sub-paragraph (ii)(A) above. Such Additional Termination Event will be deemed to have occurred on the fifteenth day following the Subsequent Rating Event, with Party A as the sole Affected Party and all Transactions as Affected Transactions.

10

(C) If any of the Covered Bonds then outstanding have been assigned a rating by Moody’s, Party B were to designate an Early Termination Date and there would be a payment due to Party A, then Party B may only designate such an Early Termination Date in respect of an Additional Termination Event under this Part 5(h)(iii) if Party B has found a replacement counterparty willing to enter into a new transaction on terms that reflect as closely as reasonably possible, as determined by Party B in its sole and absolute discretion, the economic, legal and credit terms of the Terminated Transactions, and Party B has acquired the Bond Trustee’s prior written consent.

Each of Party B and the Bond Trustee (at the expense of Party A) shall use their reasonable endeavours to co-operate with Party A in connection with any of the measures which Party A may take under this Part 5(h) following the rating events described herein.

(i) Constitution of Partnership. Party B 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. Without prejudice to any rights of Party A against any former or departing partner of Party B, upon any reconstitution of BMO Covered Bond Guarantor Limited Partnership, the rights and obligations of Party B under this Agreement and any Transaction thereunder shall become the rights and obligations of the partnership as newly constituted and, for greater certainty, Party A has the rights under Section 6 with respect to any and all Transactions entered into by Party B however constituted.

(j) Security, Enforcement and Limited Recourse. Party A agrees with Party B to be bound by the terms of the Trust Deed and the Security Agreement and, in particular, confirms and agrees that:

(i) all obligations of Party B are limited in recourse to the Charged Property and no sum shall be payable by or on behalf of Party B to it except in accordance with the provisions of the Trust Deed and Security Agreement; and

(ii) it shall not institute or join any other person or entity in instituting against, or with respect to, Party B or any of its general partners any bankruptcy or insolvency event so long as any Covered Bonds issued by Bank of Montreal under the Program 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 either party.

(k) Additional Representations

(i) Section 3 of this Agreement is amended by the addition at the end thereof of the following additional representations:

“(g) No Agency. It is entering into this Agreement and each Transaction as principal and not as agent of any person.”

(ii) The following additional representations shall be given by Party A only:

“(h) Pari Passu. Party A’s obligations under this Agreement rank pari passu with all of its other unsecured, unsubordinated obligations except those obligations preferred by operation of law.

11

(i) Qualifications. Party A possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations under this Agreement.

(j) Compliance with Laws. Party A is in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations under this Agreement. Party A is in good standing with OSFI.

(k) Compliance with Internal Policies. Party A is in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations under this Agreement.

(l) Minimum Ratings. The rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any credit support provider or guarantor from time to time in respect of Party A satisfies the respective Minimum Ratings of each Rating Agency.

(m) Compliance with Laws. It is and will continue to be in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party; and

(n) Compliance with Policies and Procedures. It is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party.”

(l) Recording of Conversations

Each party to this Agreement acknowledges and agrees to the tape recording of conversations between the parties to this Agreement whether by one or the other or both of the parties.

(m) Relationship between the Parties

This Agreement is amended by the insertion after Section 14 of an additional Section 15, reading in its entirety as follows:

“15. Relationship between the Parties

Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

(a) Non Reliance. It is acting for its own account, and it has made its own decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. It has not received from the other party any assurance or guarantee as to the expected results of that Transaction.

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(b) Assessment and Understanding. It is capable of assessing the merits of and understanding (through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the financial and other risks of that Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary or an adviser for it in respect of that Transaction.”

(n) Tax

This Agreement is amended by deleting Section 2(d) in its entirety and replacing it with the following:

“(d) Deduction or Withholding for Tax

(i) Requirement to Withhold

All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required (including, for the avoidance of doubt, if such deduction or withholding is required in order for the payer to obtain relief from Tax) by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party (“X”) is so required to deduct or withhold, then that party (the “Deducting Party”):

(1) will promptly notify the other party (“Y”) of such requirement;

(2) will pay or procure payment to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any Gross Up Amount (as defined below) paid by the Deducting Party to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

(3) will promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and

(4) if X is Party A, X will promptly pay in addition to the payment to which Party B is otherwise entitled under this Agreement, such additional amount (the “Gross Up Amount”) as is necessary to ensure that the net amount actually received by Party B will equal the full amount which Party B would have received had no such deduction or withholding been required.

(ii) Liability

If:

(1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding for or on account of any Tax in respect of payments under this Agreement; and

(2) X does not so deduct or withhold; and

(3) a liability resulting from such Tax is assessed directly against X,

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then, except to the extent that Y has satisfied or then satisfies the liability resulting from such Tax, (A) where X is Party B, Party A will promptly pay to Party B the amount of such liability (the “Liability Amount”) (including any related liability for interest and together with an amount equal to the Tax payable by Party B on receipt of such amount but including any related liability for penalties only if Party A has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)) and Party B will promptly pay to the relevant government revenue authority the amount of such liability (including any related liability for interest and penalties) and (B) where X is Party A and Party A would have been required to pay a Gross Up Amount to Party B, Party A will promptly pay to the relevant government revenue authority the amount of such liability (including any related liability for interest and penalties).

(o) Condition Precedent

Section 2(a)(iii) shall be amended by the deletion of the words “or Potential Event of Default” in respect of obligations of Party A only.

(p) Representations

Section 3(b) shall be amended by the deletion of the words “or Potential Event of Default” in respect of the representation given by Party B only.

(q) Additional Definitions

Words and expressions defined in the Master Definitions and Construction Agreement made between the parties to the Transaction Documents (as defined therein) on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time) (the “Master Definitions and Construction Agreement”) shall, except so far as the context otherwise requires, have the same meaning in this Agreement. In the event of any inconsistency between the definitions in this Agreement and in the Master Definitions and Construction Agreement the definitions in this Agreement shall prevail. The rules of interpretation set out in the Master Definitions and Construction Agreement shall apply to this Agreement.

(r) Notice of Termination/Novation to CMHC

Upon any termination or novation of this Agreement, Party B shall provide notice to CMHC of such termination or novation contemporaneously with the earlier of (i) notice of such termination or novation being provided to a Rating Agency, (ii) notice of such termination or novation being provided to or otherwise made available to Covered Bondholders, and (iii) five Toronto Business Days following such termination or novation. Any such notice shall include the reasons for the termination or novation, and if this Agreement has been novated, all information relating to the replacement counterparty to this Agreement required by the CMHC Guide to be provided to CMHC in relation to such counterparty, together with all applicable documents governing such contractual relationship.

(s) Ontario Jurisdiction.

Section 13(b) is restated as follows:

“(b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement (“Proceedings”), each party irrevocably:

i) submits to the non-exclusive jurisdiction of the courts of the Province of Ontario;

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ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object with respect to such Proceeding, that such court does not have any jurisdiction over such party; and

iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.”

(t) Payments on Early Termination. For the purposes of Section 6(e) of this Agreement, in determining a party’s Close-out Amount under this Agreement, all outstanding Transactions shall be deemed to be in effect at the time of such determination notwithstanding the Effective Date thereof as set out in the relevant Confirmation.

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BANK OF MONTREAL		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary

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Interest Rate Swap Confirmation

From:	Bank of Montreal
To:	BMO Covered Bond Guarantor Limited Partnership c/o Bank of Montreal
Attention:	Senior Manager, Securitization Finance and Operations

—, 2013

Dear Sirs,

Confirmation—Interest Rate Swap

This confirmation constitutes a “Confirmation” as referred to in the 1992 ISDA Master Agreement (Multicurrency-Cross Border) dated —, 2013 by us and you as amended and supplemented from time to time (the “Agreement”). The purpose of this letter (the “Confirmation”) is to confirm the terms and conditions of the Swap Transaction entered into between us on the Trade Date specified below.

The definitions and provisions contained in the 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc. (the “Definitions”) are incorporated into this Confirmation. In the event of any inconsistency between any of the following, the first listed shall govern (i) this Confirmation; (ii) the Master Definitions and Construction Agreement; and (iii) the Definitions. The following expressions shall, for the purpose of this confirmation, have the following meanings:

The term “Transaction” as used herein shall, for the purposes of the Definitions, have the same meaning as “Swap Transaction”.

Average Fixed Rate Loan Balance means, in respect of a Calculation Period, the daily average of the aggregate Outstanding Principal Balance of the Fixed Rate Loans in respect of the Portfolio during such Calculation Period as notified by the Cash Manager in accordance with the Cash Management Agreement.

Average Loan Balance means, in respect of a Calculation Period, the sum of the Average Fixed Rate Loan Balance and the Average Variable Rate Loan Balance.

Average Variable Rate Loan Balance means, in respect of a Calculation Period, the daily average of the aggregate Outstanding Principal Balance of the Variable Rate Loans in respect of the Portfolio during such Calculation Period as notified by the Cash Manager in accordance with the provisions of the Cash Management Agreement.

Blended Rate means, in respect of a Calculation Period, a rate of interest equal to the sum of (i) the Weighted Average Fixed Rate for such Calculation Period multiplied by the Fixed Rate Ratio for such Calculation Period; and (ii) the Weighted Average Variable Rate for such Calculation Period multiplied by the Variable Rate Ratio for such Calculation Period.

Blended Spread means, in respect of a Calculation Period, a per cent. per annum notified to the parties by the Calculation Agent on the Effective Date, provided that, if during a Calculation Period Party B has acquired New Loans either (i) in conjunction with the issuance of a new Series of Covered Bonds by Party A; or (ii) which cause the ACT Asset Value to increase by more than 10%, then the Blended Spread in respect of that and subsequent Calculation Periods shall be reset to be the greater of: (A) that spread, expressed as a percentage per annum, as determined by the Calculation Agent such that the net present value of the expected future payments under the Transaction on the Calculation Date ending that Calculation Period is the same when calculated prior to and after taking into account the New Loans (or comparable calculation as determined by the Calculation Agent to determine market pricing in respect of the addition of New Loans based upon the model of future cash flows under the Portfolio and prevailing market conditions, including as to interest rates, yield curve and credit spreads) and (B) the minimum spread with respect to which Rating Agency Confirmation has been obtained.

Calculation Date means the last day of each calendar month, commencing on and including the last day of the calendar month immediately following the month in which the Effective Date occurs.

Calculation Period means, in respect of a Calculation Date, each period from, and including, the first day of the month in which the Calculation Date occurs to, and including, the last day of such month; provided, however, that the initial Calculation Period shall commence on and include the Effective Date and end on and exclude the Calculation Date occurring in the month immediately following the Effective Date.

Fixed Rate Loans means each Loan the interest rate on which is fixed at a specified rate at the time of its origination, and the initial term of up to ten years.

Fixed Rate Ratio means, in respect of a Calculation Period, the Average Fixed Rate Loan Balance divided by the Average Loan Balance.

Guarantor Amount means, in respect of a Calculation Period, an amount in Canadian Dollars equal to the greater of: (a) zero; and (b) the sum of (i) aggregate of the amount produced by applying the Blended Rate for such Calculation Period to the Notional Amount for such Calculation Period, such amount to be calculated by the Calculation Agent on the basis of the actual number of days in such Calculation Period, divided by 365, (ii) the amount of payments received by Party B in respect of investment income or interest on Substitution Assets; (iii) the amount of interest received by Party B on the GDA Account; and (iv) the Spread Adjustment Amount, if any, in each case in respect of such Calculation Period, less expenses of the Guarantor for such Calculation Period which are payable in priority to payments by Party B pursuant to the Transaction in accordance with the Priorities of Payments.

Notional Amount means, in respect of a Calculation Period, an amount in Canadian Dollars equal to the Average Loan Balance.

One Month CDOR means, in respect of a Calculation Period, CAD-BA-CDOR with a Designated Maturity of one month and Reset Date of the day which is the first day of that Calculation Period (or, if such day is not a Business Day, the immediately preceding Business Day); provided, however, that in respect of the initial Calculation Period, Linear Interpolation of between one and two months will apply and the relevant Reset Date for purposes of such Calculation Period shall be deemed to be the Effective Date.

Spread Adjustment Amount means, in respect of a Calculation Period in respect of which Party B has acquired New Loans and the Blended Spread has been determined pursuant to clause (B) of the definition of Blended Spread, the amount in Canadian Dollars determined by the Calculation Agent to be the increase in the net present value of expected future payments to Party B under the Transaction.

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Swap Provider Amount means, in respect of a Calculation Period, an amount in Canadian Dollars which is equal to the amount produced by applying a rate equal to One Month CDOR for such Calculation Period plus the Blended Spread to the sum of (i) the Notional Amount for such Calculation Period, (ii) the average balance of the GDA Account during such Calculation Period, and (iii) without double counting, the average principal balance of the Substitution Assets during such Calculation Period, such amount to be calculated by the Calculation Agent on the basis of the actual number of days in such Calculation Period, divided by 365.

Variable Rate Loans means those Loans which are subject to a rate of interest which may at any time be varied in accordance with the relevant Mortgage Terms (and shall, for the avoidance of doubt, exclude Fixed Rate Loans).

Variable Rate Ratio means, in respect of a Calculation Period, the Average Variable Rate Loan Balance divided by the Average Loan Balance.

Weighted Average Fixed Rate means, in respect of a Calculation Period, the weighted average (by Outstanding Principal Balance) of the fixed rates of interest charged to borrowers of Fixed Rate Loans during the relevant Calculation Period as notified by the Cash Manager in accordance with the provisions of the Cash Management Agreement.

Weighted Average Variable Rate means, in respect of a Calculation Period, the daily weighted average (by Outstanding Principal Balance) of the variable rates of interest charged to borrowers of Variable Rate Loans during the relevant Calculation Period as notified by the Cash Manager in accordance with the provisions of the Cash Management Agreement.

1. This Confirmation supplements, forms part of, and is subject to, the Agreement. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

2. The terms of the Transactions to which this Confirmation relates are as follows:

Party A:	Bank of Montreal
Party B:	BMO Covered Bond Guarantor Limited Partnership
Trade Date:	The First Purchase Date
Effective Date:	The First Purchase Date
Termination Date:	The last day of the Calculation Period during which the outstanding principal balance of both the Fixed Rate Loans and the Variable Rate Loans is reduced to zero.
Business Day centres for all Payments:	Toronto
Calculation of Amounts:	As of the Calculation Date immediately preceding each Guarantor Payment Date, the Calculation Agent shall calculate the Swap Provider Amount and the Guarantor Amount for the Calculation Period ending on such Calculation Date, and forthwith notify Party A, Party B and the Cash Manager of the amounts so determined and of the net amount determined as set out below.

3

Payments:	If in relation to any Guarantor Payment Date:
	(i)     the Swap Provider Amount for the relevant Calculation Period exceeds the Guarantor Amount for the relevant Calculation Period, Party A shall pay the amount of such excess to Party B on such Guarantor Payment Date;
	(ii)    the Guarantor Amount for the relevant Calculation Period exceeds the Swap Provider Amount for the relevant Calculation Period, Party B shall pay the amount of such excess to Party A on such Guarantor Payment Date;
	(iii)  the Swap Provider Amount for the relevant Calculation Period is equal to the Guarantor Amount for the relevant Calculation Period, no amount shall be due and payable by either party hereunder in relation to such Guarantor Payment Date.
Calculation Agent:	Bank of Montreal acting in its capacity as Servicer pursuant to the Servicing Agreement or as Cash Manager pursuant to the Cash Management Agreement, as the case may be.

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3.      Account Details:
Payments to Party A:	Bank: Bank of Montreal (BOFMCAM2)
	Transit Number: 3169
	Account Number: 3169 1051481
	Favour: Bank of Montreal, Toronto
Payments to Party B:	Bank: Bank of Montreal
	Transit Number: 0002
	Account Number: 1552728

4.      Notice Details:
Party A:	Bank of Montreal
Address:	250 Yonge Street, 10th Floor, Toronto, Ontario M5B 2L7
Facsimile Number:	(416) 552-7905/7926
Telephone Number:	(416) 552-7442
Attention:	Senior Manager, Confirmations
Party B:	BMO Covered Bond Guarantor Limited Partnership
Address:	c/o Bank of Montreal, 18th Floor, 1 First Canadian Place, 100 King Street West, Toronto, Ontario, M5X 1A1 Canada
Facsimile Number:	(416) 867-4166
Attention:	Senior Manager, Securitization Finance and Operations

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Yours faithfully,

BANK OF MONTREAL	BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	By:
Name:	Name:
Title:	Title:

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International Swaps and Derivatives Association, Inc.

CREDIT SUPPORT ANNEX

to the Schedule to the

Interest Rate Swap

1997 ISDA Master Agreement

dated as of September 30, 2013

between

Bank of Montreal (“Party A”) and BMO Covered Bond Guarantor Limited Partnership (“Party B”)

This Annex supplements, forms part of, and is subject to, the ISDA Master Agreement referred to above and is part of its Schedule. For the purposes of this Agreement, including, without limitation, Sections 1(c), 2(a), 5 and 6, the credit support arrangements set out in this Annex constitute a Transaction (for which this Annex constitutes the Confirmation).

Paragraph 1. Interpretation

Capitalised terms not otherwise defined in this Annex or elsewhere in this Agreement have the meanings specified pursuant to Paragraph 10, and all references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any inconsistency between this Annex and the other provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency between Paragraph 11 and the other provisions of this Annex, Paragraph 11 will prevail. For the avoidance of doubt, references to “transfer” in this Annex mean, in relation to cash, payment, and in relation to the assets, delivery.

Paragraph 2. Credit Support Obligations

(a) Delivery Amount. Subject to Paragraphs 3 and 4, upon a demand made by the Transferee on or promptly following a Valuation Date, if the Delivery Amount for that Valuation Date equals or exceeds the Transferor’s Minimum Transfer Amount, then the Transferor will transfer to the Transferee Eligible Credit Support having a Value as of the date of transfer at least equal to the applicable Delivery Amount (rounded pursuant to Paragraph 11(b)(iii)(D)). Unless otherwise specified in Paragraph 11(b), the “Delivery Amount” applicable to the Transferor for any Valuation Date will equal the amount by which:

(i) the Credit Support Amount

exceeds

(ii) the Value as of that Valuation Date of the Transferor’s Credit Support Balance (adjusted to include any prior Delivery Amount and to exclude any prior Return Amount, the transfer of which, in each case, has not yet been completed and for which the relevant Settlement Day falls on or after such Valuation Date).

(b) Return Amount. Subject to Paragraphs 3 and 4, upon a demand made by the Transferor on or promptly following a Valuation Date, if the Return Amount for that Valuation Date equals or exceeds the Transferee’s Minimum Transfer Amount, then the Transferee will transfer to the Transferor Equivalent Credit Support specified by the Transferor in that demand having a Value as of the date of transfer as close as practicable to the applicable Return

Amount (rounded pursuant to Paragraph 11(b)(iii)(D)) and the Credit Support Balance will, upon such transfer, be reduced accordingly. Unless otherwise specified in Paragraph 11(b), the “Return Amount” applicable to the Transferee for any Valuation Date will equal the amount by which:

(i) the Value as of that Valuation Date of the Transferor’s Credit Support Balance (adjusted to include any prior Delivery Amount and to exclude any prior Return Amount, the transfer of which, in each case, has not yet been completed and for which the relevant Settlement Day falls on or after such Valuation Date).

exceeds

(ii) the Credit Support Amount.

Paragraph 3. Transfers, Calculations and Exchanges

(a) Transfers. All transfers under this Annex of any Eligible Credit Support, Equivalent Credit Support, Interest Amount or Equivalent Distributions shall be made in accordance with the instructions of the Transferee or Transferor, as applicable, and shall be made:

(i) in the case of cash, by transfer into one or more bank accounts specified by the recipient;

(ii) in the case of certificated securities which cannot or which the parties have agreed will not be delivered by book-entry, by delivery in appropriate physical form to the recipient or its account accompanied by any duly executed instruments of transfer, transfer tax stamps and any other documents necessary to constitute a legally valid transfer of the transferring party’s legal and beneficial title to the recipient; and

(iii) in the case of securities which the parties have agreed will be delivered by book-entry, by the giving of written instructions (including, for the avoidance of doubt, instructions given by telex, facsimile transmission or electronic messaging system) to the relevant depository institution or other entity specified by the recipient, together with a written copy of the instructions to the recipient, sufficient, if complied with, to result in a legally effective transfer of the transferring party’s legal and beneficial title to the recipient.

Subject to Paragraph 4 and unless otherwise specified, if a demand for the transfer of Eligible Credit Support or Equivalent Credit Support is received by the Notification Time, then the relevant transfer will be made not later than the close of business on the Settlement Day relating to the date such demand is received; if a demand is received after the Notification Time, then the relevant transfer will be made not later than the close of business on the Settlement Day relating to the day after the date such demand is received.

(b) Calculations. All calculations of Value and Exposure for purposes of Paragraphs 2 and 4(a) will be made by the relevant Valuation Agent as of the relevant Valuation Time. The Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) of its calculations not later than the Notification Time on the Local Business Day following the applicable Valuation Date (or, in the case of Paragraph 4(a), following the date of calculation).

(c) Exchanges.

(i) Unless otherwise specified in Paragraph 11, the Transferor may on any Local Business Day by notice inform the Transferee that it wishes to transfer to the Transferee Eligible Credit Support specified in that notice (the “New Credit Support”) in exchange for certain Eligible Credit Support (the “Original Credit Support”) specified in that notice comprised in the Transferor’s Credit Support Balance.

(ii) If the Transferee notifies the Transferor that it has consented to the proposed exchange, (A) the Transferor will be obliged to transfer the New Credit Support to the Transferee on the first Settlement Day following the date on which it receives notice (which may be oral telephonic notice) from the Transferee of its consent and (B) the Transferee will be obliged to transfer to the Transferor Equivalent Credit Support in respect of the Original Credit Support not later than the Settlement Day following the date on which the Transferee receives the New Credit Support, unless otherwise specified in Paragraph 11(d) (the “Exchange Date”);

provided that the Transferee will only be obliged to transfer Equivalent Credit Support with a Value as of the date of transfer as close as practicable to, but in any event not more than, the Value of the New Credit Support as of that date.

Paragraph 4. Dispute Resolution

(a) Disputed Calculations or Valuations. If a party (a “Disputing Party”) reasonably disputes (I) the Valuation Agent’s calculation of a Delivery Amount or a Return Amount or (II) the Value of any transfer of Eligible Credit Support or Equivalent Credit Support, then:

(1) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party) not later than the close of business on the Local Business Day following, in the case of (I) above, the date that the demand is received under Paragraph 2 or, in the case of (II) above, the date of transfer;

(2) in the case of (I) above, the appropriate party will transfer the undisputed amount to the other party not later than the close of business on the Settlement Day following the date that the demand is received under Paragraph 2;

(3) the parties will consult with each other in an attempt to resolve the dispute; and

(4) if they fail to resolve the dispute by the Resolution Time then:

(i) in the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise specified in Paragraph 11(c), the Valuation Agent will recalculate the Exposure and the Value as of the Recalculation Date by:

(A) utilising any calculations of that part of the Exposure attributable to the Transactions that the parties have agreed are not in dispute;

(B) calculating that part of the Exposure attributable to the Transactions in dispute by seeking four actual quotations at mid-market from Reference Market-makers for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available for a particular Transaction, then fewer than four quotations may be used for that Transaction, and if no quotations are available for a particular Transaction, then the Valuation Agent’s original calculations will be used for the Transaction; and

(C) utilising the procedures specified in Paragraph 11(e)(ii) for calculating the Value, if disputed, of the outstanding Credit Support Balance;

(ii) in the case of a dispute involving the Value of any transfer of Eligible Credit Support or Equivalent Credit Support, the Valuation Agent will recalculate the Value as of the date of transfer pursuant to Paragraph 11(e)(ii).

Following a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) as soon as possible but in any event not later than the Notification Time on the Local Business Day following the Resolution Time. The appropriate party will, upon demand following such notice given the Valuation Agent or resolution pursuant to (3) above and subject to Paragraph 3(a), make the appropriate transfer.

(b) No Event of Default. The failure by a party to make a transfer of any amount which is the subject of a dispute to which Paragraph 4(a) applies will not constitute an Event of Default for as long as the procedures set out in this Paragraph 4 are being carried out. For the avoidance of doubt, upon completion of those procedures, Section 5(a)(i) of this Agreement will apply to any failure by a party to make a transfer required under the final sentence of Paragraph 4(a) on the relevant due date.

Paragraph 5. Transfer of Title, No Security Interest, Distributions and Interest Amount

(a) Transfer of Title. Each party agrees that all right, title and interest in and to any Eligible Credit Support, Equivalent Credit Support, Equivalent Distributions or Interest Amount which it transfers to the other party under the terms of this Annex shall vest in the recipient free and clear of any liens, claims, charges or encumbrances or any other interest of the transferring party or of any third person (other than a lien routinely imposed on all securities in a relevant clearance system).

(b) No Security Interest. Nothing in this Annex is intended to create or does create in favour of either party any mortgage, charge, lien, pledge, encumbrance or other security interest in any cash or other property transferred by one party to the other party under the terms of this Annex.

(c) Distributions and Interest Amount.

(i) Distributions. The Transferee will transfer to the Transferor not later than the Settlement Day following each Distributions Date cash, securities or other property of the same type, nominal value, description and amount as the relevant Distributions (“Equivalent Distributions”) to the extent that a Delivery Amount would not be created or increased by the transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed a Valuation Date for this purpose).

(ii) Interest Amount. Unless otherwise specified in Paragraph 11(f)(iii), the Transferee will transfer to the Transferor at the times specified in Paragraph 11(f)(ii) the relevant Interest Amount to the extent that a Delivery Amount would not be created or increased by the transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed a Valuation Date for this purpose).

Paragraph 6. Default

If any Early Termination Date is designated or deemed to occur as a result of an Event of Default in relation to a party, an amount equal to the Value of the Credit Support Balance, determined as though the Early Termination Date were a Valuation Date, will be deemed to be an Unpaid Amount due to the Transferor (which may or may not be the Defaulting Party) for purposes of Section 6(e). For the avoidance of doubt, if Market Quotation is the applicable payment measure for purposes of Section 6(e), then the Market Quotation determined under Section 6(e) in relation to the Transaction constituted by this Annex will be deemed to be zero, and if Loss is the applicable payment measure for purposes of Section 6(e), then the Loss determined under Section 6(e) in relation to the Transaction will be limited to the Unpaid Amount representing the Value of the Credit Support Balance.

Paragraph 7. Representation

Each party represents to the other party (which representation will be deemed to be repeated as of each date on which it transfers Eligible Credit Support, Equivalent Credit Support or Equivalent Distributions) that is the sole owner of or otherwise has the right to transfer all Eligible Credit Support, Equivalent Credit Support or Equivalent Distributions it transfers to the other party under this Annex, free and clear of any security interest, lien encumbrance or other restriction (other than lien routinely imposed on all securities in a relevant clearance system).

Paragraph 8. Expenses

Each party will pay its own costs and expenses (including any stamp, transfer, or similar transaction tax or duty payable on any transfer it is required to make under this Annex) in connection with performing its obligations under this Annex, and neither party will be liable for any such costs and expenses incurred by the other party.

Paragraph 9. Miscellaneous

(a) Default Interest. Other than in the case of an amount which is the subject of dispute under Paragraph 4(a), if a Transferee fails to make, when due, any transfer of Equivalent Credit Support, Equivalent Distributions or the Interest Amount, it will be obliged to pay the Transferor (to the extent permitted under applicable law) an amount equal to

interest at the Default Rate multiplied by the Value on the relevant Valuation Date of the items of property that were required to be transferred, from (and including) the date that the Equivalent Credit Support, Equivalent Distributions or Interest Amount were required to be transferred to (but excluding) the date of transfer of the Equivalent Credit Support, Equivalent Distributions or Interest Amount. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(b) Good Faith and Commercially Reasonable Manner. Performance of all obligations under this Annex, including, but not limited to, all calculations, valuations and determinations made by either party, will be made in good faith and in a commercially reasonable manner.

(c) Demands and Notices. All demands and notices given by a party under this Annex will be given as specified in Section 12 of this Agreement.

(d) Specifications of Certain Matters. Anything referred to in this Annex as being specified in Paragraph 11 also may be specified in one or more Confirmations or other documents and this Annex will be construed accordingly.

Paragraph 10. Definitions

As used in this Annex:

“Base Currency” means the currency specified as such in Paragraph 11(a)(i).

“Base Currency Equivalent” means, with respect to an amount on a Valuation Date, in the case of an amount denominated in the Base Currency, such Base Currency and, in the case of an amount denominated in a currency other than the Base Currency (the “Other Currency”), the amount of Base Currency required to purchase such amount of the Other Currency at the spot exchange rate determined by the Valuation Agent for value on such Valuation Date.

“Credit Support Amount” means, with respect to a Transferor on a Valuation Date, (i) the Transferee’s Exposure plus (ii) all Independent Amounts applicable to the Transferor, if any, minus (iii) all Independent Amounts applicable to the Transferee, if any, minus (iv) the Transferor’s Threshold; provided, however, that the Credit Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields a number less than zero.

“Credit Support Balance” means, with respect to a Transferor on a Valuation Date, the aggregate of all Eligible Credit Support that has been transferred to or received by the Transferee under this Annex, together with any Distributions and all proceeds of any such Eligible Credit Support or Distributions, as reduced pursuant to Paragraph 2(b), 3(c)(ii) or 6. Any Equivalent Distributions or Interest Amount (or portion of either) not transferred pursuant to Paragraph 5(c)(i) or (ii) will form part of the Credit Support Balance.

“Delivery Amount” has the meaning specified in Paragraph 2(a).

“Disputing Party” has the meaning specified in Paragraph 4.

“Distributions” means, with respect to any Eligible Credit Support comprised in the Credit Support Balance consisting of securities, all principal, interest and other payments and distributions of cash or other property to which a holder of securities of the same type, nominal value, description and amount as such Eligible Credit Support would be entitled from time to time.

“Distribution Date” means, with respect to any Eligible Credit Support comprised in the Credit Support Balance other than cash, each date on which a holder of such Eligible Credit Support is entitled to receive Distributions or, if that date is not a Local Business Day, the next following Local Business Day.

“Eligible Credit Support” means, with respect to a party, the items, if any, specified as such for that party in Paragraph 11(b)(ii) including, in relation to any securities, if applicable, the proceeds of any redemption in whole or in party of such securities by the relevant issuer.

“Eligible Currency” means each currency specified as such in Paragraph 11(a)(ii), if such currency is freely available.

“Equivalent Credit Support” means, in relation to any Eligible Credit Support comprised in the Credit Support Balance, Eligible Credit Support of the same type, nominal value, description and amount as that Eligible Credit Support.

“Equivalent Distributions” has the meaning specified in Paragraph 5(c)(i).

“Exchange Date” has the meaning specified in Paragraph 11(d).

“Exposure” means, with respect to a party on a Valuation Date and subject to Paragraph 4 in the case of a dispute, the amount, if any, that would be payable to that party by the other party (expressed as a positive number) or by that party to the other party (expressed as a negative number) pursuant to Section 6(e)(ii)(1) of this Agreement if all Transactions (other than the Transaction constituted by this Annex) were being terminated as of the relevant Valuation Time, on the basis that (i) that party is not the Affected Party and (ii) the Base Currency is the Termination Currency; provided that Market Quotations will be determined by the Valuation Agent on behalf of that party using its estimates at mid-market of the amounts that would be paid for Replacement Transactions (as that term is defined in the definition of “Market Quotation”).

“Independent Amount” means, with respect to a party, the Base Currency Equivalent of the amount specified as such for that party in Paragraph 11(b)(iii)(A); if not amount is specified, zero.

“Interest Amount” means, with respect to an Interest Period, the aggregate sum of the Base Currency Equivalents of the amounts of interest determined for each relevant currency and calculated for each day in that Interest Period on the principal amount of the portion of the Credit Support Balance comprised of cash in such currency, determined by the Valuation Agent for each such day as follows:

(x) the amount of cash in such currency on that day; multiplied by

(y) the relevant Interest Rate in effect for that day; divided by

(z) 360 (or, in the case of pounds sterling, 365).

“Interest Period” means the period from (and including) the last Local Business Day on which an Interest Amount was transferred (or, if no Interest Amount has yet been transferred, the Local Business Day on which Eligible Credit Support or Equivalent Credit Support in the form of cash was transferred to or received by the Transferee) to (but excluding) the Local Business Day on which the current Interest Amount is transferred.

“Interest Rate” means with respect to an Eligible Currency, the rate specified in Paragraph 11(f)(i) for that currency.

“Local Business Day”, unless otherwise specified in Paragraph 11(h), means:

(i) in relation to a transfer of cash or other property (other than securities) under this Annex, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment;

(ii) in relation to a transfer of securities under this Annex, a day on which the clearance system agreed between the parties for delivery of the securities is open for the acceptance and execution of settlement instructions or, if delivery of the securities is contemplated by other means, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place(s) agreed between the parties for this purpose.

(iii) in relation to a valuation under this Annex, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place of location of the Valuation Agent and in the place(s) agreed between the parties for this purpose; and

(iv) in relation to any notice or other communication under this Annex, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place specified in the address for notice most recently provided by the recipient.

“Minimum Transfer Amount” means, with respect to a party, the amount specified as such for that party in Paragraph 11(b)(iii)(C); if no amount is specified, zero.

“New Credit Support” has the meaning specified in Paragraph 3(c)(i).

“Notification Time” has the meaning specified in Paragraph 11(c)(iv).

“Recalculation Date” means the Valuation Date that gives rise to the dispute under Paragraph 4; provided, however, that if a subsequent Valuation Date occurs under Paragraph 2 prior to the resolution of the dispute, then the “Recalculation Date” means the most recent Valuation Date under Paragraph 2.

“Resolution Time” has the meaning specified in Paragraph 11(c)(i).

“Return Amount” has the meaning specified in Paragraph 2(b).

“Settlement Day” means, in relation to a date, (i) with respect to a transfer of cash or other property (other than securities), the next Local Business Day and (ii) with respect to a transfer of securities, the first Local Business Day after such date on which settlement of a trade in the relevant securities, if effected on such date, would have been settled in accordance with customary practice when settling through the clearance system agreed between the parties for delivery of such securities or, otherwise, on the market in which such securities are principally traded (or, in either case, if there is no such customary practice, on the first Local Business Day after such date on which it is reasonably practicable to deliver such securities).

“Threshold” means, with respect to a party, the Base Currency Equivalent of the amount specified as such for that party in Paragraph 11(b)(iii)(B); if no amount is specified, zero.

“Transferee” means, in relation to each Valuation Date, the party in respect of which Exposure is a positive number and, in relation to a Credit Support Balance, the party which, subject to this Annex, owes such Credit Support Balance or, as the case may be, the Value of such Credit Support Balance to the other party.

“Transferor” means, in relation to a Transferee, the other party.

“Valuation Agent” has the meaning specified in Paragraph 11(c)(i).

“Valuation Date” means each date specified in or otherwise determined pursuant to Paragraph 11(c)(ii).

“Valuation Percentage” means, for any item of Eligible Credit Support, the percentage specified in Paragraph 11(b)(ii).

“Valuation Time” has the meaning specified in Paragraph 11(c)(iii).

“Value” means, for any Valuation Date or other date for which Value is calculated, and subject to Paragraph 4 in the case of a dispute, with respect to:

(i) Eligible Credit Support comprised in a Credit Support Balance that is:

(A) an amount of cash, the Base Currency Equivalent of such amount multiplied by the applicable Valuation Percentage, if any; and

(B) a security, the Base Currency Equivalent of the bid price obtained by the Valuation Agent multiplied by the applicable Valuation Percentage, if any; and

(ii) items that are comprised in a Credit Support Balance and are not Eligible Credit Support, zero.

Paragraph 11. Elections and Variables

(a) Base Currency and Eligible Currency.

(i) “Base Currency” means Canadian Dollars.

(ii) “Eligible Currency” means the Base Currency and each other currency specified here: US Dollars.

It is agreed by the parties that where the Credit Support Amount is denominated in a currency other than the Base Currency, the Valuation Percentage specified in Paragraph 11(b)(ii) shall be reduced by a percentage agreed by the parties and approved by the relevant rating agency (“Additional Valuation Percentage”). For the purpose of this Annex, references to the “relevant rating agency” shall mean the rating agency whose Ratings Agency Requirement will be used to determine the amount of Eligible Credit Support that Party A is required to transfer to Party B following a credit ratings downgrade of Party A.

(b) Credit Support Obligations.

(i) Delivery Amount, Return Amount and Credit Support Amount.

(A) “Delivery Amount”: Paragraph 2(a) shall apply, except that the words, “upon a demand made by the Transferee” shall be deleted and the word “that” on the second line of Paragraph 2(a) shall be replaced with the Word “a”.

(B) “Return Amount” has the meaning as specified in Paragraph 2(b).

(C) “Credit Support Amount” has the meaning specified under the relevant definition of Ratings Agency Requirement. In circumstances where more than one of the Ratings Agency Requirements apply to Party A, the Credit Support Amount shall be calculated by reference to the Ratings Agency Requirement of the rating agency which has triggered the requirement by Party A to post collateral under this Annex. Where there is more than one rating agency whose requirements under Part 5 of the Schedule to this Agreement requires Party A to post collateral, the Ratings Agency Requirement shall be used which would result in Party A transferring the greatest amount of Eligible Credit Support. Subject to Paragraph 11(b)(iii)(D), under no circumstances will Party A be required to transfer more Eligible Credit Support than the greatest amount calculated in accordance with the Ratings Agency Requirement set out below.

(c) Eligible Credit Support. The following items will qualify as “Eligible Credit Support” for Party A:

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch	Valuation Percentages in respect of DBRS
(A)	Provided Party B will not exceed the Prescribed Cash Limitation and subject to the provision immediately following this Eligible Credit Support chart, cash in the Base Currency	100%	100%	100% if cash is in the Base Currency

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch		Valuation Percentages in respect of DBRS
(B)	Negotiable debt obligations denominated in an Eligible Currency issued by: the U.S. Treasury Department, (with local and foreign currency issuer ratings equal to or greater than AA- by Fitch and Aa3 by Moody’s) having a remaining time to maturity of:	In relation to residual maturity as set out in the corresponding order under Collateral Type:	In relation to residual maturity as set out in the corresponding order under Collateral Type:		In relation to residual maturity as set out in the corresponding order under Collateral Type:
			Highest Covered Bond Rated AA- or higher	Highest Covered Bond Rated A+ or below
(i)	35 days or less	99%	83.9%	88.7%	100% if collateral is in the Base Currency, otherwise, as agreed between Party A and DBRS
(ii)	more than 35 days but not more than one year;	99%	83.9%	88.7%	98% if collateral is in the Base Currency, otherwise, to be agreed between Party A and DBRS
(iii)	more than one year but not more than 3 years	To be agreed between Party A and Moody’s	82.6%	87.3%	To be agreed between Party A and DBRS
(iv)	more than 3 years but not more than 5 years;	To be agreed between Party A and Moody’s	80.4%	85.5%	To be agreed between Party A and DBRS
(v)	more than 5 years but not more than 7 years;	To be agreed between Party A and Moody’s	80.0%	85.1%	To be agreed between Party A and DBRS
(vi)	more than 7 years but not more than 10 years;	To be agreed between Party A and Moody’s	78.3%	83.7%	To be agreed between Party A and DBRS
(vii)	more than 10 years but less than 30 years	To be agreed between Party A and Moody’s	74.8%	80.5%	To be agreed between Party A and DBRS
(C)	Negotiable debt obligations denominated in the Base Currency issued by: the Government of Canada; or any Province of Canada;

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch		Valuation Percentages in respect of DBRS
	(with local and foreign currency issuer ratings equal to or greater than AA- by Fitch, Aa3 by Moody’s and AA(low) or R-1 (middle) by DBRS) having a remaining time to maturity of:
			Highest Covered Bond Rated AA- or higher	Highest Covered Bond Rated A+ or below
(i)	35 days or less	99%	97.5%	98.0%	100% if collateral is in the Base Currency and issued by the Government of Canada, 98% if collateral is in the Base Currency and issued by any Province of Canada, otherwise, as agreed between Party A and DBRS
(ii)	more than 35 days but not more than one year;	99%	97.5%	98.0%	98% if collateral is in the Base Currency and issued by the Government of Canada, 97.5% if collateral is in the Base Currency and issued by any Province of Canada, otherwise, to be agreed between Party A and DBRS
(iii)	More than one year but not more than 3 years	To be agreed between Party A and Moody’s	96.0%	96.5%	To be agreed between Party A and DBRS
(iv)	more than 3 years but not more than 5 years;	To be agreed between Party A and Moody’s	93.5%	94.5%	To be agreed between Party A and DBRS
(v)	more than 5 years but not more than 7 years; or	To be agreed between Party A and Moody’s	93.0%	94.0%	To be agreed between Party A and DBRS
(vi)	More than 7 years but not more than 10 years	To be agreed between Party A and Moody’s	91.0%	92.5%	To be agreed between Party A and DBRS

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch		Valuation Percentages in respect of DBRS
(vii)	more than 10 years but not more than 30 years	To be agreed between Party A and Moody’s	87.0%	89.0%	To be agreed between Party A and DBRS
(D)	Commercial Paper denominated in an Eligible Currency (with a rating equal to or greater than Prime-1 and Aa3 by Moody’s, F1+ by Fitch and AA(low) or R-1(middle) by DBRS) with a remaining time to maturity of less than 3 months (or less than one year for DBRS), provided that if such Commercial Paper comprises asset-backed commercial paper (“ABCP”), (i) in the case of DBRS, it must be denominated in the Base Currency, have the benefit of global-style liquidity and a rating of at least R-1(high) by DBRS. and, (ii) in the case of Moody’s, the Valuation Percentage will be 0%.	To be agreed between Party A and Moody’s	To be agreed between Party A and Fitch		For commercial paper issued or guaranteed by a bank in the Base Currency, (i) 100% if the remaining time to maturity is 35 days or less (ii) 97.5% if the remaining time to maturity is more than 35 days but less than one year, and (iii) otherwise, to be agreed between Party A and DBRS; and for ABCP in the Base Currency, (i) 100% if the remaining time to maturity is 35 days or less (ii) 97% if the remaining time to maturity is more than 35 days but less than one year and (iii) otherwise, to be agreed between Party A and DBRS
(E)	Such other items as agreed between Party A and the Rating Agencies, from time to time, which Party B can lawfully receive from, and transfer back to, Party A as required, that will qualify as Eligible Credit Support.	To be agreed between Party A and Moody’s	To be agreed between Party A and Fitch		To be agreed between Party A and DBRS

In order to ensure that the amount of cash held by Party B on any day, including the amount of cash transferred to Party B hereunder, does not in the aggregate exceed Party B’s Prescribed Cash Limitation, upon providing notice to Party A, Party B shall exchange all or a portion of cash originally transferred as Eligible Credit Support hereunder (such amount of cash to be exchanged, the “Original Cash Amount”) for non-cash Eligible Credit Support having a Value at least equal to the Original Cash Amount.

For the avoidance of doubt, where negotiable debt obligations are rated by only one of the above relevant rating agencies, the rating applied will be based on the rating of that agency.

Where the ratings and/or the Valuation Percentages of the relevant rating agencies differ with respect to the same negotiable debt obligation, for the purposes of B to E above the lower of the ratings and/or the Valuation Percentages, as the case maybe, shall apply.

For the purpose of this Annex, references to the “relevant rating agency” shall mean the rating agency whose Ratings Agency Requirement will be used to determine the amount of Eligible Credit Support that Party A is required to transfer to Party B following a credit ratings downgrade of Party A.

(i) Thresholds.

(A) “Independent Amount” means, for Party A and for Party B, for each Transaction, zero.

(B) “Threshold” means, for Party A:

infinity, unless (A) (i) an Initial Rating Event has occurred and is continuing for 10 Business Days AND (ii) Party A has not otherwise complied with Part 5(h)(i) of the Agreement, OR (B) (i) a Subsequent Rating Event has occurred and is continuing for 10 Business Days AND (ii) Party A has not otherwise complied with Part 5(h)(ii) of the Agreement, then its Threshold shall be zero.

“Threshold” means, for Party B: infinity

(C) “Minimum Transfer Amount” means, with respect to Party A and Party B, CAD50,000; provided, that if (1) an Event of Default has occurred and is continuing with respect to Party A, or (2) an Additional Termination Event has occurred in respect of which Party A is an Affected Party, the Minimum Transfer Amount with respect to such party shall be zero. Notwithstanding the above, if the long-term, unsecured and unsubordinated debt obligations of Party A (or its successor) or any Credit Support Provider in respect of Party A cease to be rated at least as high as A3 (or its equivalent) by Moody’s, the Minimum Transfer Amount with respect to Party A shall be zero.

(D) “Rounding” The Delivery Amount and the Return Amount will be rounded up and down to the nearest integral multiple of CAD10,000 respectively, subject to the maximum Return Amount being equal to the Credit Support Balance.

(d) Valuation and Timing.

(i) “Valuation Agent” means, Party A.

(ii) “Valuation Date” means each Local Business Day.

(iii) “Valuation Time” means the close of business in the relevant market, as determined by the Valuation Agent, on the Local Business Day immediately preceding the Valuation Date or date of calculation, as applicable; provided that the calculations of Value and Exposure, as far as practicable, will be made at approximately the same time on the same date.

(iv) “Notification time” means by 3:00 p.m., Toronto time, on a Local Business Day.

(e) Exchange Date. “Exchange Date” has the meaning specified in paragraph 3(c)(ii).

(f) Dispute Resolution.

(i) “Resolution Time”, means 2:00 p.m., Toronto time, on the Local Business Day following the date on which notice of the dispute is given under Paragraph 4.

(ii) “Value”. For the purpose of Paragraph 4(a)(4)(i)(C) and 4(a)(4)(ii), the Value of the outstanding Credit Support Balance or of any transfer of Eligible Credit Support or Equivalent Credit Support, as the case may be, will be calculated as follows:

with respect to any Cash, the Base Currency Equivalent of the amount thereof.

(iii) “Alternative”. The provisions of Paragraph 4 will apply.

(g) Distribution and Interest Amount.

(i) “Interest Rate”. The “Interest Rate” in relation to any Eligible Currency will be the weighted average of interest earned by the Transferee or such rate as may be agreed between the parties from time to time.

(ii) “Transfer of Interest Amount”. The transfer of the Interest Amount will be made on the second Local Business Day in respect of which the “Interest Period” means the preceding calendar month to the extent that Party B has earned and received such amount of interest and that the Valuation Agent has confirmed in writing that a Delivery Amount would not be created or increased by that transfer, and on any other Local Business Day on which Equivalent Credit Support is transferred to the Transferor pursuant to Paragraph 2(b), provided, that Party B shall only be obliged to transfer any Interest Amount to Party A to the extent that it has received such amount.

(iii) “Alternative to Interest Amount”. The provisions of Paragraph 5(c)(ii) will apply.

(iv) “Interest Amount”. The definition of “Interest Amount” shall be deleted and replaced with the following:

“Interest Amount” means, with respect to an Interest Period and each portion of the Credit Support Balance comprised of cash in an Eligible Currency, the sum of the amounts of interest determined for each day in that Interest Period by the Valuation Agent as follows:

(x) the amount of such currency comprised in the Credit Support Balance at the close of business for general dealings in the relevant currency on such day (or, if such day is not a Local Business Day, on the immediately preceding Local Business Day); multiplied by

(y) the relevant Interest Rate; divided by

(z) 365.

(v) “Credit Support Balance”. The definition of “Credit Support Balance” in paragraph 10 shall be amended by the deletion of the last sentence and, for the avoidance of doubt, it is agreed and acknowledged that Equivalent Distributions or Interest Amount (or any portion of either) not transferred pursuant to Paragraph 5(c)(i) or (ii) will not form part of the Credit Support Balance.

(h) Addresses for Transfers.

Party A:

CAD CASH
Account With:	To be advised.

Beneficiary:	To be advised.
Account No:	To be advised.
Reference:	To be advised.
USD CASH
Account With:	To be advised.
Beneficiary:	To be advised.
Account No:	To be advised.
Reference:	To be advised.

Party B:

Details to be obtained from:

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

c/o BANK OF MONTREAL

Attention:	Senior Manager, Securitization Finance and Operations
Facsimile No:	(416) 867-4166

(i) Other Provisions.

(i) Transfer Timing.

(A) The final paragraph of Paragraph 3(a) shall be deleted and replaced with the following:

“Subject to Paragraph 4, and unless otherwise specified, any transfer of Eligible Credit Support or Equivalent Credit Support (whether by the Transferor pursuant to Paragraph 2(a) or by the Transferee pursuant to Paragraph 2(b)) shall be made not later than the close of business on the Settlement Day.”

(B) The definition of Settlement Day shall be deleted and replaced with the following:

““Settlement Day” means the next Local Business Day after the Demand Date”.

(C) For the purposes of this Paragraph 11(h)(i):

“Demand Date” means, with respect to a transfer by a party:

(i) in the case of a transfer pursuant to Paragraph 2, Paragraph 3 or Paragraph 4(a)(2), the relevant Valuation Date. For the avoidance of doubt, for the purposes of Paragraph 2(b) and Paragraph 4(a)(2), the Transferor will be deemed to receive notice of the demand by the Transferee to make a transfer of Eligible Credit Support on the Demand Date; and

(ii) in the case of a transfer pursuant to Paragraph 3(c)(ii)(A), the date on which the Transferee has given its consent to the proposed exchange.

For the avoidance of doubt, on each Demand Date the Transferor shall deliver to the Transferee and the Security Trustee a statement showing the amount of Eligible Credit Support to be delivered.

(ii) Early Termination.

The heading for Paragraph 6 shall be deleted and replaced with “Early Termination” and the following shall be added after the word “Default” in the first line of Paragraph 6, “or a Termination Event in relation to all (but not less than all) Transactions”.

(iii) Costs of Transfer on Exchange.

Notwithstanding Paragraph 8, the Transferor will be responsible for, and will reimburse the Transferee for, all transfer and other taxes and other costs involved in the transfer of Eligible Credit Support either from the Transferor to the Transferee or from the Transferee to the Transferor hereto.

(iv) Cumulative Rights.

The rights, power and remedies of the Transferee under this Annex shall be in addition to all rights, powers and remedies given to the Transferee by the Agreement or by virtue of any statute or rule of law, all of which rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing the rights of the Transferee in the Credit Support Balance created pursuant to this Annex.

(v) Single Transferor and Single Transferee.

Party A and Party B agree that, notwithstanding anything to the contrary in this Annex, (including, without limitation, the recital hereto, Paragraph 2 or the definitions in Paragraph 10), (a) the term “Transferee” as used in this Annex means only Party B; (b) the term “Transferor” as used in this Annex means only Party A; (c) only Party A will be required to make Transfers of Eligible Credit Support hereunder, and (d) in the calculation of any Credit Support Amount, where the Transferee’s Exposure would be expressed as a negative number, such Exposure shall be deemed to be zero.

(vi) Ratings Agency Requirement.

“Rating Agency Requirement” means the Moody’s Requirements, the DBRS Requirements and the Fitch Requirements, as defined below.

(i) Moody’s Requirements.

“Credit Support Amount” shall equal, with respect to a Transferor on a Valuation Date, (A) the greatest of:

(i) zero;

(ii) the aggregate amount of the Next Payments for all Next Payment Dates, provided that, to the extent that any Next Payment (or portion thereof) cannot be determined with certainty on such Valuation Date due to variables that are to be determined on a date following such Valuation Date, it shall be calculated by reference to the Valuation Agent’s prediction of what such variables will be and such prediction shall be made by the Valuation Agent in a commercially reasonable manner using the information then available to it; and

(iii) the sum of (x) the Transferee’s Exposure and (y) the aggregate of the Moody’s Additional Amounts for all Transactions,

less (B) the Threshold for Party A.

“Moody’s Additional Amount” means:

(A) in respect of any Transaction that is both a cross-currency hedge and an Optionality Hedge, the lesser of (x) the sum of (1) the product of Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date and the Moody’s Cross Currency Notional Amount Lower Multiplier and (2) the product of the Moody’s Cross Currency DV01 Multiplier (Optionalilty) and the Transaction Cross Currency DV01 for such Transaction and (y) the product of the Moody’s Cross Currency Notional Amount Higher Multiplier (Optionality) and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date;

(B) in respect of any Transaction that is a cross-currency hedge and is not an Optionality Hedge, the lesser of (x) the sum of (1) the product of Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date and the Moody’s Cross Currency Notional Amount Lower Multiplier and (2) the Moody’s Cross Currency DV01 Multiplier and the Transaction Cross Currency DV01 for such Transaction and (y) the product of the Moody’s Cross Currency Notional Amount Higher Multiplier and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date;

(C) in respect of any Transaction that is not a cross-currency hedge and is an Optionality Hedge, the lesser of (x) the product of the Moody’s Single Currency DV01 Multiplier (Optionality) and the Transaction Single Currency DV01 for such Transaction and (y) the product of the Moody’s Single Currency Notional Amount Multiplier (Optionality) and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date; and

(D) in respect of any Transaction that is neither a cross-currency hedge nor an Optionality Hedge, the lesser of (x) the product of the Moody’s Single Currency DV01 Multiplier and the Transaction Single Currency DV01 for such Transaction and (y) the product of the Moody’s Single Currency Notional Amount Multiplier and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date.

“Moody’s Cross Currency DV01 Multiplier” means, (A) if each Local Business Day is a Valuation Date, 15 and (B) otherwise, 25.

“Moody’s Cross Currency DV01 Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 30 and (B) otherwise, 40.

“Moody’s Cross Currency Notional Amount Higher Multiplier” means, (A) if each Local Business Day is a Valuation Date, 0.09 and (B) otherwise, 0.1.

“Moody’s Cross Currency Notional Amount Higher Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 0.11 and (B) otherwise, 0.12.

“Moody’s Cross Currency Notional Amount Lower Multiplier” means, (A) if each Local Business Day is a Valuation Date, 0.06 and (B) otherwise, 0.07.

“Moody’s Single Currency DV01 Multiplier” means, (A) if each Local Business Day is a Valuation Date, 50 and (B) otherwise, 60.

“Moody’s Single Currency DV01 Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 65 and (B) otherwise, 75.

“Moody’s Single Currency Notional Amount Multiplier” means, (A) if each Local Business Day is a Valuation Date, 0.08 and (B) otherwise, 0.09.

“Moody’s Single Currency Notional Amount Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 0.10 and (B) otherwise, 0.11.

“Next Payment” means, in respect of each Next Payment Date, the Base Currency Equivalent of any payments due to be made by Party A under Section 2(a) (after taking account of any applicable netting under Section 2(c)) on such Next Payment Date.

“Next Payment Date” means each date on which the next scheduled payment under any Transaction (other than the Transaction constituted by this Annex) is due to be paid or would be due to be paid but for the application of netting.

“Optionality Hedge” means any Transaction that is a cap, floor, swaption, or a Transaction-Specific Hedge.

“Transaction Cross Currency DV01” means, with respect to a Transaction and any date of determination, the greater of (i) the estimated absolute change in the Base Currency Equivalent in the mid-market value with respect to such Transaction that would result from a one basis point change in the relevant swap curve (denominated in the currency of Party A’s payment obligations under such Transaction) on such date and (ii) the estimated absolute change in the Base Currency Equivalent of the mid-market value with respect to such Transaction that would result from a one basis point change in the relevant swap curve (denominated in the currency of Party B’s payment obligations under such Transaction) on such date, in each case as determined by the Valuation Agent in good faith and in a commercially reasonable manner in accordance with the relevant methodology customarily used by the Valuation Agent.

“Transaction Notional Amount” means (A) in respect of any Transaction that is a cross currency hedge, the Base Currency Equivalent of the Currency Amount applicable to Party A’s payment obligations and (B) in respect of any other Transaction, the Base Currency Equivalent of the Notional Amount.

“Transaction Single Currency DV01” means, with respect to a Transaction and any date of determination, the estimated absolute change in the Base Currency Equivalent of the mid-market value with respect to such Transaction that would result from a one basis point change in the relevant swap curve on such date, as determined by the Valuation Agent in good faith and in a commercially reasonable manner in accordance with the relevant methodology customarily used by the Valuation Agent.

“Transaction-Specific Hedge” means any Transaction in respect of which the Transaction Notional Amount for each Calculation Period is “balance guaranteed” or otherwise not an amount that is fixed at the inception of the Transaction.

(ii) Fitch Requirements.

“Credit Support Amount” shall mean, with respect to a Transferor on the Valuation Date:

(a) if the long-term issuer default rating of Party A or its Credit Support Provider is below the Minimum Fitch Rating (as defined in Part 5(k) of the Schedule to the Agreement) but the short-term issuer default rating of Party A or its Credit Support Provider is at least as high as “F2” (or its equivalent) and the long-term issuer default rating of Party A or its Credit Support Provider is at least as high as “A-” (or its equivalent) by Fitch, the result of the following formula:

max [0; MV plus (Liquidity Adjustment multiplied by VC multiplied by 70% multiplied by N)]; and

(b) if the long-term issuer default rating of Party A or its Credit Support Provider ceases to be at least as high as “A-” (or its equivalent) by Fitch, but the short-term issuer default rating of Party A or its Credit Support Provider is at least as high as “F2” (or its equivalent) and the long-term issuer default rating of Party A or its Credit Support Provider is at least as high as “BBB+” (or its equivalent) by Fitch, the result of the following formula:

max [0; MV plus (Liquidity Adjustment multiplied by VC multiplied by N)]; and

(c) if the short-term issuer default rating of Party A or its Credit Support Provider ceases to be at least “F2” (or its equivalent) or the long-term issuer default rating of Party A or its Credit Support Provider ceases to be at least as high as “BBB+” (or its equivalent) by Fitch, the result of the following formula:

max [0; MV plus (Liquidity Adjustment multiplied by VC multiplied by N multiplied by 1.25)];

where:

“BLA” means basic liquidity adjustment which is 0% or 25% as determined by Fitch in accordance with the Fitch Criteria;

“Liquidity Adjustment” means (1 + BLA) multiplied by (1 plus max (0%; 5% multiplied by (WAL - 20));

“max” means maximum;

“MV” means the Transferee’s Exposure;

“VC” means the applicable volatility cushion at that time as determined by reference to percentages set out in the relevant table under the section headed “Volatility Cushions” in the addendum entitled “Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum” published by Fitch and dated May 13, 2013 as amended and supplemented from time to time;

“N” means the sum of the Transaction Notional Amount(s) for each outstanding Transaction under this Agreement (other than the Transaction constituted by this Annex) at that time. Where the Transaction Notional Amounts differ under this Agreement, the higher of the Transaction Notional Amounts is expected to be used; and

“WAL” means the weighted average life of the Transaction determined in the manner described in “Volatility Cushions” appearing in the Fitch Criteria;

“Fitch Criteria” means the criteria used by Fitch as set out in the reports by Fitch Ratings dated May 13, 2013 and headed “Counterparty Criteria for Structured Finance and Covered Bonds” and “Counterparty Criteria for Structured Finance Transactions: Derivative Addendum”, each as amended and supplemented from time to time.

(iii) DBRS Requirements.

“Credit Support Amount” shall mean on any day before a Subsequent Rating Event has occurred, the greater of (i) zero and (ii) an amount equal to the Base Currency Equivalent of the payment due to be made by Party A under Section 2(a) (after taking account of any applicable netting under Section 2(c)) on the next scheduled Payment Date under all Transactions (other than the Transaction constituted by this Annex) and shall mean on any day after a Subsequent Rating Event has occurred, the greater of (i) zero and (ii) an amount equal to the aggregate of the Base Currency Equivalent of all remaining scheduled payments due to be made by Party A under Section 2(a) (after taking account of any applicable netting under Section 2(c)) in respect of all Transactions (other than the Transaction constituted by this Annex).

(vii) Demands and Notices.

All demands, specifications and notices under this Annex will be made pursuant to Section 12 of this Agreement.

(viii) Exposure. For purposes of this Agreement and any other Transaction Document, in determining a party’s Exposure under this Agreement, all outstanding Transactions shall be deemed to be in effect at the time of such determination notwithstanding the Effective Date thereof as set out in the relevant Confirmation.

(ix) Definitions.

As used in this Annex, the following terms shall mean:

“Cross-Currency Swap” means any cross-currency swap rate transaction between Party A and Party B entered into pursuant to the Agreement as evidenced by a Confirmation;

“DBRS” means DBRS Limited and includes any successors thereto;

“Fitch” means Fitch Ratings Inc. and includes any successors thereto;

“Interest Rate Cap” means any interest rate cap transaction entered into pursuant to the Agreement between Party A and Party B as evidenced by a Confirmation;

“Interest Rate Swap” means any interest rate swap transaction entered into pursuant to the Agreement between Party A and Party B as evidenced by a Confirmation;

“Libor Basis Swap” means any libor basis swap transaction between Party A and Party B entered into pursuant to the Agreement as evidenced by a Confirmation.

“Moody’s” means Moody’s Investors Service Limited and includes any successors thereto;

“Rating Agencies” means Moody’s, DBRS and Fitch;

“Transaction” means a Transaction entered into pursuant to this Agreement; and

“Transaction Notional Amount” means in respect of a Valuation Date, the Currency Amount applicable to Party A in respect of a Cross Currency Swap Transaction, or in respect of an Interest Rate Swap Transaction, the Notional Amount of such Interest Rate Swap Transaction, each as at such Valuation Date.

BANK OF MONTREAL BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, acting by its managing general partner, BMO COVERED BOND GP, INC.

By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title: Senior Vice President, Finance & Treasurer		Title: President and Secretary
	Date: September 30, 2013		Date: September 30, 2013

[Signature page to ISDA Credit Support Annex to the Schedule to the Interest Rate Swap 1997 ISDA Master Agreement]

EX-4.18

Exhibit 4.18

(Multicurrency—Cross Border)

International Swap Dealers Association, Inc.

COVERED BOND SWAP

MASTER AGREEMENT

dated as of September 30, 2013

BANK OF MONTREAL (“Party A”) and BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP (“Party B”)

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those Transactions.

Accordingly, the parties agree as follows:—

1. Interpretation

(a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this “Agreement”), and the parties would not otherwise enter into any Transactions.

2. Obligations

(a) General Conditions.

(i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement.

(ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is

Copyright ^© 1992 by International Swap Dealers Association, Inc.

continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement.

(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change.

(c) Netting. If on any date amounts would otherwise be payable:—

(i) in the same currency; and

(ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries.

(d) Deduction or Withholding for Tax.

(i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party (“X”) will:—

(1) promptly notify the other party (“Y”) of such requirement;

(2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

(3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and

(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:—

(A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

2 ISDA^® 1992

(B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law.

(ii) Liability. If:—

(1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

(2) X does not so deduct or withhold; and

(3) a liability resulting from such Tax is assessed directly against X,

then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement.

3. Representations

Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:—

(a) Basic Representations.

(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing;

(ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance;

(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets;

(iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and

3 ISDA^® 1992

(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, 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)).

(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true.

4. Agreements

Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:—

(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:—

(i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;

(ii) any other documents specified in the Schedule or any Confirmation; and

(iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.

4 ISDA^® 1992

(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.

5. Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an “Event of Default”) with respect to such party:—

(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party;

(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party;

(iii) Credit Support Default.

(1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;

(2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or

(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document;

(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated;

(v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last

5 ISDA^® 1992

payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf);

(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period);

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:—

(1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or

(2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement.

6 ISDA^® 1992

(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:—

(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):—

(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or

(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction;

(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii);

(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as applying to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or

(v) Additional Termination Event. If any “Additional Termination Event” is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default.

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6. Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic Early Termination” is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require.

(ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist.

If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party’s policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed.

(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event.

(iv) Right to Terminate. If:—

(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party,

either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions.

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(c) Effect of Designation.

(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing.

(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

(d) Calculations.

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation.

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall apply based on the parties’ election in the Schedule of a payment measure, either “Market Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off.

(i) Events of Default. If the Early Termination Date results from an Event of Default:—

(1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party.

(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in respect of this Agreement.

(3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

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(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(ii) Termination Events. If the Early Termination Date results from a Termination Event:—

(1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Part will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions.

(2) Two Affected Parties. If there are two Affected Parties:—

(A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount (“X”) and the Settlement Amount of the party with the lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and

(B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because “Automatic Early Termination” applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses.

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7. Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:—

(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8. Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term “rate of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency.

(c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made.

9. Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.

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(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.

(e) Counterparts and Confirmations.

(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

10. Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation.

11. Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection.

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12. Notices

(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:—

(i) if in writing and delivered in person or by courier, on the date it is delivered;

(ii) if sent by telex, on the date the recipient’s answerback is received;

(iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine);

(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or

(v) if sent by electronic messaging system, on the date that electronic message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it.

13. Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement (“Proceedings”), each party irrevocably:—

(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and

(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in a inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law.

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(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.

14. Definitions

As used in this Agreement:—

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, “control” of any entity or person means ownership of a majority of the voting power of the entity or person.

“Applicable Rate” means:—

(a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and

(d) in all other cases, the Termination Rate.

“Burdened Party” has the meaning specified in Section 5(b).

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into.

“consent” includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as such in this Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.

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“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

“Illegality” has the meaning specified in Section 5(b).

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the “Replacement Transaction”) that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming

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satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount.

“Non-defaulting Party” has the meaning specified in Section 6(a).

“Office” means a branch or office of a party, which may be such party’s head or home office.

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction.

“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and

(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result.

“Specified Entity” has the meanings specified in the Schedule.

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

16 ISDA^® 1992

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

“Stamp Tax” means any stamp, registration, documentation or similar tax.

“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax.

“Tax Event” has the meaning specified in Section 5(b).

“Tax Event Upon Merger” has the meaning specified in Section 5(b).

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately before that Early Termination Date).

“Termination Currency” has the meaning specified in the Schedule.

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties.

“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual

17 ISDA^® 1992

number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties.

[Signature page follows.]

18 ISDA^® 1992

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document.

BANK OF MONTREAL		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
Name: Cathy Cranston		Name: Chris Hughes
Title:   Senior Vice President, Finance & Treasurer		Title:   President and Secretary
Date: September 30, 2013		Date: September 30, 2013

19 ISDA^® 1992

Covered Bond Swap Agreement

SCHEDULE

to the

ISDA Master Agreement

dated as of September 30, 2013

between

(1) BANK OF MONTREAL (“Party A”); and

(2) BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP (“Party B”).

Part 1. Termination Provisions

(a) “Specified Entity” means in relation to Party A for the purpose of:

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(iv), none

and in relation to Party B for the purpose of:-

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(iv), none

(b) “Specified Transaction” will have the meaning specified in Section 14.

(c) The “Cross-Default” provisions of Section 5(a)(vi) will apply to Party A where Party A is the Issuer, and will not apply to Party B.

If such provisions apply:

Clauses (1) and (2) of Section 5(vi) of the Agreement shall be deleted and replaced with “an Issuer Event of Default in respect of Party A which has resulted in Covered Bonds becoming due and payable under their respective terms.”

(d) The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to Party A and will not apply to Party B.

(e) The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A and will not apply to Party B.

(f) Payments on Early Termination. For the purposes of Section 6(e) of this Agreement:

(i) Market Quotation will apply.

(ii) The Second Method will apply.

(g) “Termination Currency” means Canadian Dollars.

(h) Additional Termination Event will apply as set forth in Part 5(h) of this Schedule.

(i) Right of Party B to Terminate. Notwithstanding any other provision of this Agreement to the contrary:

(a) if, at any time, Party B is Independently Controlled and Governed (as such term is defined in the CMHC Guide) but, subject to Part 1(i)(b) below, without prejudice to any other rights Party B may have hereunder, Party B shall have the discretion, but not be required, to:

(A) waive the requirement of Party A to provide credit support, obtain an Eligible Guarantee or replace itself as a party hereunder, in each case, pursuant to the terms of Part 5(h) of this Schedule, and

(B) refrain from forthwith terminating this Agreement or finding a replacement counterparty, in each case, upon the occurrence of an Event of Default or Additional Termination Event hereunder where Party A is the sole Defaulting Party or the sole Affected Party, as applicable; and

(b) if, at any time, Party B is not Independently Controlled and Governed (as such term is defined in the CMHC Guide), Party B shall not:

(A) waive the requirement of Party A to provide credit support, obtain an Eligible Guarantee or replace itself as a party hereunder, in each case, pursuant to the terms of Part 5(h) of this Schedule, or

(B) refrain from forthwith terminating this Agreement or finding a replacement counterparty, in each case, upon the occurrence of an Event of Default or Additional Termination Event hereunder where Party A is the sole Defaulting Party or the sole Affected Party, as applicable.

(j) Failure to Pay or Deliver. Section 5(a)(i) does not apply to Party B in the case of a failure to pay or deliver caused by the assets then available to Party B being insufficient to make the related payment or delivery in full on the relevant payment or delivery date or the first Local Business Day or Local Delivery Day, as the case may be, after notice of such failure is given to Party B.

Part 2. Tax Representations

(a) Payer Representations. For the purpose of Section 3(e) of this Agreement, Party A and Party B will each make the following representation:

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of this Agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party

2

pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of this Agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(b) Payee Representations.

(i) For the purposes of Section 3(f) of this Agreement, Party A makes the representation specified below:

(A) It is not a non- resident of Canada for the purposes of the Income Tax Act (Canada).

(B) It is a bank organized under the laws of Canada.

(ii) For the purposes of Section 3(f) of this Agreement, Party A makes the representation specified below:

(A) It is a “Canadian partnership” as defined in the Income Tax Act (Canada).

(B) It is a limited partnership organized under the laws of the Province of Ontario.

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Part 3. Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the following documents, as applicable:-

(a) Tax forms, documents or certificates to be delivered are:-

Party required to deliver document	Form/Document/ Certificate	Date by which to be delivered
	None

(b) Other documents to be delivered are:-

Party required to deliver document	Form/Document/ Certificate	Date by which to be delivered	Covered by Section 3(d) Representation
Party A and Party B	Appropriate evidence of its signatory’s authority	On signing of this Agreement	Yes
Party B	Copy of the Guarantor Agreement of Party B certified as at the date hereof as true and in full force and effect	On signing of this Agreement	No

Part 4. Miscellaneous

(a) Addresses for Notices. For the purpose of Section 12(a) of this Agreement:-

Address for notices or communications to Party A:

With respect to Transactions:

Address:	Bank of Montreal, 250 Yonge Street, 10th Floor, Toronto, Ontario M5B 2L7, Canada
	Attention:    Head, Derivative Operations
	Facsimile No.:    (416) 552-7905
	Telephone No.:    (416) 552-7809

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Any other notice sent to Party A (including, without limitation, any notice in connection with Section 5, 6 or 9(b)) of this Agreement shall be copied to the following address:

Address:	Bank of Montreal, 55th Floor, 100 King Street West, Toronto, Ontario M5X 1H3
	Attention:    Managing Director, Documentation
	Facsimile No.:    (416) 956-2318
	Telephone No:    (416) 867-4710

Address for notices or communications to Party B:-

Address:	c/o Bank of Montreal, 18th Floor, 1 First Canadian Place, 100 King Street West, Toronto, Ontario M5X 1A1
	Attention:    Senior Manager, Securitization Finance and Operations
	Facsimile No.:    (416) 867-4166

With a copy to the Bond Trustee:-

Name:	Computershare Trust Company of Canada
Address:	100 University Avenue, 9th Floor, North Tower, Toronto, Ontario M5J 2YI
	Attention:    Manager, Corporate Trust
	Facsimile No.:    (416) 981-9777

(b) Process Agent. For the purpose of Section 13(c) of this Agreement:-

Party A appoints as its Process Agent: Not applicable.

Party B appoints as its Process Agent: Not applicable.

(c) Offices. The provisions of Section 10(a) will apply to this Agreement.

(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e) Credit Support Document. Details of any Credit Support Document:-

In respect of Party A, any Eligible Guarantee.

In respect of Party B, none.

(f) Credit Support Provider.

Credit Support Provider means in relation to Party A, any guarantor under any Eligible Guarantee.

Credit Support Provider means in relation to Party B, none.

(g) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

5

(h) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will apply to Transactions entered into under this Agreement unless otherwise specified in a Confirmation.

(i) “Affiliate” will have the meaning specified in Section 14 of this Agreement.

(j) Additional Agreements. Party A agrees to (i) comply with and perform all of its agreements and obligations hereunder and each other Transaction Document to which it is a party in any capacity, and (ii) comply with the CMHC Guide.

Part 5. Other Provisions

(a) No Set-Off

(i) All payments under this Agreement shall be made without set-off or counterclaim, except as expressly provided for in Section 6.

(ii) Section 6(e) shall be amended by the deletion of the following sentence:

“The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off.”

(b) Security Interest

Notwithstanding Section 7, Party A hereby agrees and consents to the assignment by way of security by Party B of its interests under this Agreement (without prejudice to, and after giving effect to, any contractual netting provision contained in this Agreement) to the Bond Trustee (or any successor thereto) pursuant to and in accordance with the Security Agreement and acknowledges notice of such assignment. Each of the parties hereby confirms and agrees that the Bond Trustee shall not be liable for any of the obligations of Party B hereunder.

(c) Disapplication of Certain Events of Default

Sections 5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(vii)(2), (7) and (9), and 5(a)(viii) will not apply in respect of Party B. 5(a)(v) will not apply to Party A or to Party B.

Section 5(a)(vii)(3) will not apply to Party B to the extent that it refers to any assignment, arrangement or composition that is effected by or pursuant to the Transaction Documents.

Section 5(a)(vii)(4) will not apply to Party B to the extent that it refers to any proceedings or petitions instituted or presented by Party A or any of its Affiliates.

Section 5(a)(vii)(6) will not apply in respect of Party B to the extent that it refers to (i) any appointment that is effected by or pursuant to the Transaction Documents, or (ii) any appointment that Party B has not become subject to.

Section 5(a)(vii)(8) will apply to Party B only to the extent that it applies to Section 5(a)(vii)(1), (3), (4), (5) and (6), as amended above as applicable.

(d) Disapplication of Certain Termination Events

The “Tax Event” and “Tax Event Upon Merger” provisions of Section 5(b)(ii) and 5(b)(iii) will not apply to Party A or to Party B.

6

(e) Amendments

(i) Section 9(b) is amended by adding “(i)” after “unless” in the first line of that Section, and by adding “, (ii) in respect of any material amendment, modification or waiver, the Rating Agency Condition has been satisfied with respect thereto; provided that any amendment to (1) a ratings trigger provided for in this Agreement that lowers the threshold ratings, or (2) the consequences of breaching any such ratings trigger that makes such consequences less onerous, shall, with respect to each affected Rating Agency only, be deemed to be a material amendment and shall be subject to satisfaction of the Rating Agency Condition with respect to each affected Rating Agency, and (iii) such amendment, modification or waiver shall be in compliance with the CMHC Guide” after “system” and before the “.” in the third line of that Section;

(ii) Party B shall notify Moody’s, Fitch and DBRS of all non-material amendments, modifications and waivers in respect of this Agreement, provided that failure to deliver such notice shall not constitute a breach of the obligations of Party B under this Agreement; and

(iii) Notwithstanding anything in this Agreement, if at any time the Issuer determines that any one of DBRS, Fitch or Moody’s shall no longer be a Rating Agency in respect of the Program, then, so long as (a) the Program is in compliance with the terms of the CMHC Guide with respect to the ratings of the Covered Bonds, and (b) each outstanding Series of Covered Bonds is rated by at least two Rating Agencies, the ratings triggers for such rating agency as set out in this Agreement will no longer be applicable without any further action or formality, including for greater certainty any requirement for satisfaction of the Rating Agency Condition with respect to the remaining Rating Agencies or consent or approval of the Bond Trustee or the holders of the Covered Bonds. Any amendments to this Agreement to reflect the foregoing shall be deemed not to be a material amendment and may be made by the parties thereto without the requirement for satisfaction of the Rating Agency Condition with respect to the remaining Rating Agencies or consent or approval of the Bond Trustee or the holders of the Covered Bonds.

7

(f) Failure to Pay and Deliver

Section 5(a)(i) does not apply to Party B in the case of a failure to pay or deliver caused by the assets then available to Party B being insufficient to make the related payment or delivery in full on the relevant payment or delivery date or the first Local Business Day or Local Delivery Day, as the case may be, after notice of such failure is given to Party B.

(g) Transfers

Section 7 of this Agreement is replaced in its entirety with the following:

“(a) General. Save as provided in Parts 5(b), (g) and (h) of the Schedule to this Agreement and this Section 7, neither party may transfer its interest hereunder or under any Transaction to another party.

(b) Transfers by Party A. Without prejudice to Section 6(b)(ii), Party A may transfer all but not part of its interest and obligations in and under this Agreement upon providing five Local Business Days’ prior written notice to Party B and the Bond Trustee, to any entity (the “Transferee”) provided that:

(i) the Transferee is a party that satisfies the Minimum Ratings requirement for all Rating Agencies or the Transferee’s obligations under this Agreement are guaranteed by a party that satisfies the Minimum Ratings requirement for all Rating Agencies;

(ii) as of the date of such transfer, the Transferee will not, as a result of such transfer, be required to withhold or deduct on account of any Tax under this Agreement;

(iii) a Termination Event or an Event of Default will not occur under this Agreement as a direct result of such transfer;

(iv) no additional amount will be payable by Party B to Party A or the Transferee on the next succeeding Scheduled Payment Date as a result of such transfer;

(v) the Transferee enters into documentation identical or substantially identical to this Agreement and the documents executed in connection with this Agreement; and

(vi) the Rating Agency Condition has been satisfied with respect to such transfer.

(c) Transfers by Party B. Neither this Agreement nor any interest in or under this Agreement or any Transaction may be transferred by Party B to any other entity save with Party A’s prior written consent; except that such consent is not required in the case of a transfer, charge or assignment to the Bond Trustee as contemplated in the Security Agreement.”

(h) Additional termination provisions.

(i) If (1) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any Credit Support Provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively, “Prime-1” or “A2” or, if Party A, such Credit Support Provider or guarantor does not have a short-term rating assigned by Moody’s, the long-term unsecured, unsubordinated and unguaranteed debt obligations of Party A or any credit support provider or guarantor cease to be rated at least as high as “A1” (the “Minimum Moody’s Rating”) by Moody’s Investors Service Inc. (“Moody’s”), (2) the short-term issuer default rating or the long-term issuer default rating of Party A or any credit support provider or guarantor from time to time in respect of Party A

8

ceases to be at least as high as, respectively, “F1” and “A” (the “Minimum Fitch Rating”) by Fitch Ratings, Inc. (“Fitch”), or (3) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any Credit Support Provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively, “R-1 (middle)” or “A” (the “Minimum DBRS Rating” and, together with the Minimum Moody’s Rating and Minimum Fitch Rating, the “Minimum Ratings” and each a “Minimum Rating”) by DBRS Limited (“DBRS” and, together with Moody’s and Fitch and each of their respective successors, the “Rating Agencies” and each a “Rating Agency”), (each such cessation being an “Initial Rating Event”), then Party A will, at its own cost, either:

(A) transfer credit support in accordance with the provisions of the Annex within 10 Business Days of the occurrence of the first such Initial Rating Event;

(B) subject to Part 5(g), transfer all of its rights and obligations with respect to this Agreement to a replacement third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the replacement third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto) within (x) 30 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Moody’s or DBRS or (y) 14 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Fitch, provided that Party A transfers credit support in accordance with the provisions of the Annex within 10 Business Days of the occurrence of the first such Initial Rating Event; or

(C) obtain a guarantee (an “Eligible Guarantee”) of its rights and obligations with respect to this Agreement from a third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto) within (x) 30 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Moody’s or DBRS or (y) 14 calendar days of the occurrence of the first such Initial Rating Event caused by a failure to maintain the ratings specified by Fitch, provided that Party A transfers credit support in accordance with the provisions of the Annex within 10 Business Days of the occurrence of the first such Initial Rating Event.

If any of sub-paragraphs (i)(B) or (i)(C) above are satisfied at any time, Party A will not be required to transfer any additional credit support in respect of such Initial Rating Event.

(ii) If, (1) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any Credit Support Provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively “Prime-2” or “A3” by Moody’s, (2) the short-term issuer default rating or the long-term issuer default rating of Party A or any credit support provider or guarantor from time to time in respect of Party A ceases to be at least as high as, respectively, “F3” and “BBB-” by Fitch, or (3) the rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any credit support provider or guarantor from time to time in respect of Party A cease to be rated at least as high as, respectively, “R-2 (high)” or “BBB (high)” by DBRS (each such event, a “Subsequent Rating Event”) with respect to Party A, then Party A will:

9

(A) immediately and in any event no later than 15 calendar days after such Subsequent Rating Event at its own cost and expense, shall (i) transfer all of its rights and obligations with respect to this Agreement to a replacement third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto), or (ii) obtain an Eligible Guarantee of its rights and obligations with respect to this Agreement from a third party that satisfies the Minimum Ratings requirement of all Rating Agencies, in respect of which the Rating Agency Condition has been satisfied, and that is satisfactory to the Bond Trustee (whose consent shall be given if the third party has the relevant Minimum Rating and the Rating Agency Condition has been satisfied with respect thereto); and

(B) transfer credit support pursuant to the Annex in no event later than 10 Business Days following the occurrence of a Subsequent Rating Event and until such time as the action set out in sub-paragraph (ii)(A) above has been taken.

If the action set out in sub-paragraph (ii)(A) above is taken at any time following a Subsequent Rating Event, Party A will not be required to transfer any additional credit support in respect of such Subsequent Rating Event.

(iii)

(A) Without prejudice to the consequences of Party A breaching any provision of this Agreement (other than sub-paragraph (i) above) or failing to transfer credit support under the Annex, if Party A does not take any of the measures described in sub-paragraph (i) above, such failure shall not be or give rise to an Event of Default but shall constitute an Additional Termination Event with respect to Party A which shall be deemed to have occurred on (x) the tenth Business Day following the applicable Initial Rating Event with respect to the measures set out in sub-paragraph (i)(A) and (y) with respect to the measures set out in sub-paragraphs (i)(B) and (i)(C), the last day of the remedy period specified in such sub-paragraph, and in each case Party A shall be the sole Affected Party and all Transactions as Affected Transactions.

(B) Without prejudice to the consequences of Party A breaching any provision of this Agreement (other than sub-paragraph (ii) above) or failing to transfer credit support under the Annex, if, at the time a Subsequent Rating Event occurs, Party A fails to transfer credit support as required by the Annex, such failure will not be or give rise to an Event of Default but will constitute an Additional Termination Event with respect to Party A and will be deemed to have occurred on the tenth Business Day following such Subsequent Rating Event with Party A as the sole Affected Party and all Transactions as Affected Transactions. Further, an Additional Termination Event with respect to Party A shall be deemed to have occurred if, even if Party A continues to transfer credit support as required by sub-paragraph (ii)(B) above and notwithstanding Section 5(h)(ii), Party A does not take any measure specified in sub-paragraph (ii)(A) above. Such Additional Termination Event will be deemed to have occurred on the fifteenth day following the Subsequent Rating Event, with Party A as the sole Affected Party and all Transactions as Affected Transactions.

10

(C) If any of the Covered Bonds then outstanding have been assigned a rating by Moody’s, Party B were to designate an Early Termination Date and there would be a payment due to Party A, then Party B may only designate such an Early Termination Date in respect of an Additional Termination Event under this Part 5(h)(iii) if Party B has found a replacement counterparty willing to enter into a new transaction on terms that reflect as closely as reasonably possible, as determined by Party B in its sole and absolute discretion, the economic, legal and credit terms of the Terminated Transactions, and Party B has acquired the Bond Trustee’s prior written consent.

Each of Party B and the Bond Trustee (at the expense of Party A) shall use their reasonable endeavours to co-operate with Party A in connection with any of the measures which Party A may take under this Part 5(h) following the rating events described herein.

(i) Constitution of Partnership. Party B 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. Without prejudice to any rights of Party A against any former or departing partner of Party B, upon any reconstitution of BMO Covered Bond Guarantor Limited Partnership, the rights and obligations of Party B under this Agreement and any Transaction thereunder shall become the rights and obligations of the partnership as newly constituted and, for greater certainty, Party A has the rights under Section 6 with respect to any and all Transactions entered into by Party B however constituted.

(j) Security, Enforcement and Limited Recourse. Party A agrees with Party B to be bound by the terms of the Trust Deed and the Security Agreement and, in particular, confirms and agrees that:

(i) all obligations of Party B are limited in recourse to the Charged Property and no sum shall be payable by or on behalf of Party B to it except in accordance with the provisions of the Trust Deed and Security Agreement; and

(ii) it shall not institute or join any other person or entity in instituting against, or with respect to, Party B or any of its general partners any bankruptcy or insolvency event so long as any Covered Bonds issued by Bank of Montreal under the Program 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 either party.

(k) Additional Representations

(i) Section 3 of this Agreement is amended by the addition at the end thereof of the following additional representations:

“(g) No Agency. It is entering into this Agreement and each Transaction as principal and not as agent of any person.”

(ii) The following additional representations shall be given by Party A only:

“(h) Pari Passu. Party A’s obligations under this Agreement rank pari passu with all of its other unsecured, unsubordinated obligations except those obligations preferred by operation of law.

11

(i) Qualifications. Party A possesses the necessary experience, qualifications, facilities and other resources to perform its responsibilities in relation to its duties and obligations under this Agreement.

(j) Compliance with Laws. Party A is in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations under this Agreement. Party A is in good standing with OSFI.

(k) Compliance with Internal Policies. Party A is in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations under this Agreement.

(l) Minimum Ratings. The rating of the short-term, unsecured, unsubordinated and unguaranteed debt obligations or, respectively, the long-term, unsecured, unsubordinated and unguaranteed debt obligations of Party A or any credit support provider or guarantor from time to time in respect of Party A satisfies the respective Minimum Ratings of each Rating Agency.

(m) Compliance with Laws. It is and will continue to be in regulatory good standing and in material compliance with and under all Laws applicable to its duties and obligations hereunder and the other Transaction Documents to which it is a party; and

(n) Compliance with Policies and Procedures. It is and will continue to be in material compliance with its internal policies and procedures (including risk management policies) relevant to its duties and obligations hereunder and the other Transaction Documents to which it is a party.”

(l) Recording of Conversations

Each party to this Agreement acknowledges and agrees to the tape recording of conversations between the parties to this Agreement whether by one or the other or both of the parties.

(m) Relationship between the Parties

This Agreement is amended by the insertion after Section 14 of an additional Section 15, reading in its entirety as follows:

“15. Relationship between the Parties

Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

(a) Non Reliance. It is acting for its own account, and it has made its own decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. It has not received from the other party any assurance or guarantee as to the expected results of that Transaction.

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(b) Assessment and Understanding. It is capable of assessing the merits of and understanding (through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the financial and other risks of that Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary or an adviser for it in respect of that Transaction.”

(n) Tax

This Agreement is amended by deleting Section 2(d) in its entirety and replacing it with the following:

“(d) Deduction or Withholding for Tax

(i) Requirement to Withhold

All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required (including, for the avoidance of doubt, if such deduction or withholding is required in order for the payer to obtain relief from Tax) by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party (“X”) is so required to deduct or withhold, then that party (the “Deducting Party”):

(1) will promptly notify the other party (“Y”) of such requirement;

(2) will pay or procure payment to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any Gross Up Amount (as defined below) paid by the Deducting Party to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

(3) will promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and

(4) if X is Party A, X will promptly pay in addition to the payment to which Party B is otherwise entitled under this Agreement, such additional amount (the “Gross Up Amount”) as is necessary to ensure that the net amount actually received by Party B will equal the full amount which Party B would have received had no such deduction or withholding been required.

(ii) Liability

If:

(1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding for or on account of any Tax in respect of payments under this Agreement; and

(2) X does not so deduct or withhold; and

(3) a liability resulting from such Tax is assessed directly against X,

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then, except to the extent that Y has satisfied or then satisfies the liability resulting from such Tax, (A) where X is Party B, Party A will promptly pay to Party B the amount of such liability (the “Liability Amount”) (including any related liability for interest and together with an amount equal to the Tax payable by Party B on receipt of such amount but including any related liability for penalties only if Party A has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)) and Party B will promptly pay to the relevant government revenue authority the amount of such liability (including any related liability for interest and penalties) and (B) where X is Party A and Party A would have been required to pay a Gross Up Amount to Party B, Party A will promptly pay to the relevant government revenue authority the amount of such liability (including any related liability for interest and penalties).

(o) Condition Precedent

Section 2(a)(iii) shall be amended by the deletion of the words “or Potential Event of Default” in respect of obligations of Party A only.

(p) Representations

Section 3(b) shall be amended by the deletion of the words “or Potential Event of Default” in respect of the representation given by Party B only.

(q) Additional Definitions

Words and expressions defined in the Master Definitions and Construction Agreement made between the parties to the Transaction Documents (as defined therein) on September 30, 2013 (as the same may be amended, restated and/or supplemented from time to time) (the “Master Definitions and Construction Agreement”) shall, except so far as the context otherwise requires, have the same meaning in this Agreement. In the event of any inconsistency between the definitions in this Agreement and in the Master Definitions and Construction Agreement the definitions in this Agreement shall prevail. The rules of interpretation set out in the Master Definitions and Construction Agreement shall apply to this Agreement.

(r) Notice of Termination/Novation to CMHC

Upon any termination or novation of this Agreement, Party B shall provide notice to CMHC of such termination or novation contemporaneously with the earlier of (i) notice of such termination or novation being provided to a Rating Agency, (ii) notice of such termination or novation being provided to or otherwise made available to Covered Bondholders, and (iii) five Toronto Business Days following such termination or novation. Any such notice shall include the reasons for the termination or novation, and if this Agreement has been novated, all information relating to the replacement counterparty to this Agreement required by the CMHC Guide to be provided to CMHC in relation to such counterparty, together with all applicable documents governing such contractual relationship.

(s) Ontario Jurisdiction.

Section 13(b) is restated as follows:

“(b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement (“Proceedings”), each party irrevocably:

i) submits to the non-exclusive jurisdiction of the courts of the Province of Ontario;

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ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object with respect to such Proceeding, that such court does not have any jurisdiction over such party; and

iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.”

(t) Payments on Early Termination. For the purposes of Section 6(e) of this Agreement, in determining a party’s Close-out Amount under this Agreement, all outstanding Transactions shall be deemed to be in effect at the time of such determination notwithstanding the Effective Date thereof as set out in the relevant Confirmation.

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BANK OF MONTREAL		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
Name: Cathy Cranston		Name: Chris Hughes
Title:   Senior Vice President, Finance & Treasurer		Title:   President and Secretary

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Confirmation—Series — Covered Bond            

Canadian Dollar to US Dollar Currency Swap

From:	Bank of Montreal
To:	BMO Covered Bond Guarantor Limited Partnership c/o Bank of Montreal
Attention:	Senior Manager, Securitization Finance and Operations

[Date]

Dear Sirs,

Confirmation—Series — Covered Bond Canadian Dollar to United States Dollar Currency Swap

This confirmation constitutes a “Confirmation” as referred to in the 1992 ISDA Master Agreement (Multicurrency-Cross Border) dated as of —, 2013 entered into between us and you on the date hereof as amended and supplemented from time to time (the “Agreement”). The purpose of this letter (the “Confirmation”) is to confirm the terms and conditions of the Swap Transaction entered into between us on the Trade Date specified below.

The definitions and provisions contained in the 2006 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc. (the “Definitions”) are incorporated into this Confirmation. In the event of any inconsistency between any of the following, the first listed shall govern (i) this Confirmation; (ii) the Master Definitions and Construction Agreement; and (iii) the Definitions. The following expressions shall, for the purpose of this confirmation, have the following meanings:

The term “Transaction” as used herein shall, for the purposes of the Definitions, have the same meaning as “Swap Transaction”.

For purposes of this Transaction, the “Series — Covered Bonds” means the Covered Bonds issued on the date hereof by the Issuer under Series Number —.

1. This Confirmation supplements, forms part of, and is subject to, the Agreement. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

2. The terms of the Transactions to which this Confirmation relates are as follows:

Party A:	Bank of Montreal.
Party B:	BMO Covered Bond Guarantor Limited Partnership.
Trade Date:	—, 2013.
Effective Date:	The earliest to occur of (i) an Issuer Event of Default (ii) a Guarantor Event of Default, together with the service of a Guarantor Acceleration Notice on the Issuer and on the

	Guarantor, and (ii) Party A, or any Credit Support Provider from time to time in respect of Party A, no longer having ratings of at least BBB(high) (in respect of DBRS), BBB+ (in respect of Fitch) and Baa1 (in respect of Moody’s), as applicable, in respect of its long-term, unsecured, unsubordinated and unguaranteed debt obligations (or, in the case of Fitch, its long-term issuer default rating).
Termination Date:	The earlier of:
	(1) the Final Maturity Date in respect of the Series — Covered Bonds, subject to adjustment in accordance with the Other Provisions, but in no case shall the Termination Date be later than —, 20— (the “Extended Due for Payment Date”); and
	(2) the final date on which the Security Trustee distributes the proceeds of the Security to the Covered Bondholders in accordance with the Post-Enforcement Priority of Payments following the enforcement of the Security pursuant to Condition 9(b) of the Series — Covered Bonds.
Currency Exchange Rate:	CAD — per USD.
Business Days:	New York and Toronto.
Business Day Convention:	Following (with no adjustment for Period End Dates).
Calculation Agent:	Party A.

Party A Fixed Amounts:

Fixed Rate Payer:	Party A.
Fixed Rate Payer Calculation Amount:	In respect of each Calculation Period in respect of which Party A pays Fixed Amounts, an amount in United States Dollars equal to the Principal Amount Outstanding of the Series — Covered Bonds on the first day of such Fixed Rate Payer Calculation Period, such amount to be reduced by any redemption on that day.

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Party A Fixed Rate Payment Dates:	(a) Prior to and including the Final Maturity Date, each Interest Payment Date in respect of the Series — Covered Bonds from and including the Interest Payment Date falling on or immediately following the Effective Date up to, and including, the Final Maturity Date; provided, however, that the first Party A Fixed Rate Payment Date will be the date which is the later of (i) two Business Days following the Effective Date or (ii) the date on which the Guaranteed Amounts are otherwise Due for Payment; and
	(b) each Interim Exchange Date unless such date is already a Party A Fixed Rate Payment Date under (a) above.
	For the avoidance of doubt:
	(a) if the Effective Date falls on an Interest Payment Date in respect of the Series — Covered Bonds, then the first Party A Fixed Rate Calculation Period shall commence on (and include) the immediately preceding Interest Payment Date in respect of the Series — Covered Bonds (or, where the Effective Date is the first Interest Payment Date in respect of the Series — Covered Bonds, the Issue Date of the Series — Covered Bonds) and end on (but exclude) the Effective Date; and
	(b) if the Effective Date does not fall on an Interest Payment Date in respect of the Series — Covered Bonds, then the first Party A Fixed Rate Calculation Period shall commence on (and include) the immediately preceding Interest Payment Date in respect of the Series — Covered Bonds (or, where the Effective Date is the first Interest Payment Date in respect of the Series — Covered Bonds, the Issue Date of the Series — Covered Bonds) and end on (but exclude) the first Party A Fixed Rate Payment Date; and
	(c) Party A shall not pay any Fixed Amounts after the Final Maturity Date.
Fixed Rate:	— per cent. per annum.
Party A Fixed Rate Day Count Fraction:	30/360.
Party A Floating Amounts:	If, pursuant to the Other Provisions, Party A does not receive a Redemption Notice confirming the Series — Covered Bonds are redeemable in full on the Final Maturity Date (and the Series — Covered Bonds are not redeemed in full on or prior to the Extension Determination Date (as defined below)), then Party A will pay Party A Floating Amounts in accordance with these provisions.

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Party A Floating Currency Amounts:	In respect of each Party A Floating Calculation Period, the Principal Amount Outstanding of the Series — Covered Bonds on the first day of such Party A Floating Calculation Period, such amount to be reduced by any redemption of the Series — Covered Bonds on that day.
Party A Floating Calculation Periods:	Each period (if any) from, and including, each Party A Floating Rate Payment Date to, but excluding, the next Party A Floating Rate Payment Date; provided, however, that the initial Party A Floating Calculation Period (if any) shall be from, and including, the Final Maturity Date to, but excluding, the initial Party A Floating Rate Payment Date.
Party A Floating Rate Option:	USD-LIBOR-BBA.
Designated Maturity:	[One] month.
Spread:	plus — per cent. per annum.
Party A Floating Rate
Day Count Fraction:	Actual/360.
Party A Floating Rate Payment Dates:	(a) From, but excluding, the Final Maturity Date to, and including, the Extended Due for Payment Date, the — day of each month, subject to adjustment in accordance with the Party A Floating Business Day Convention; and
	(b) each Interim Exchange Date unless such date is already a Party A Floating Rate Payment Date under (a) above.
	For the avoidance of doubt, there shall be no Party A Floating Rate Payment Date later than the Termination Date.
Party A Floating Rate Reset Dates:	From, and including, the Final Maturity Date to, but excluding, the Extended Due for Payment Date, the — day of each month, subject to adjustment in accordance with the Party A Floating Business Day Convention.
Party A Floating Business Day Convention:	Modified Following.

Party B Floating Amounts:

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Party B Calculation Amount:	In respect of each Party B Calculation Period, an amount in Canadian Dollars equal to the Principal Amount Outstanding of the Series — Covered Bonds on the first day of such Party B Calculation Period (after taking into account any redemption on such day) converted at the Currency Exchange Rate.
Party B Calculation Period:	Shall have the meaning given “Calculation Period” in the Master Definitions and Construction Agreement.
Party B Payment Dates:	(a) Each Guarantor Payment Date from and including the Guarantor Payment Date falling on or immediately following the earlier of the Final Maturity Date and the Effective Date, up to, and including, the Termination Date; provided, however, that (i) in lieu of the Guarantor Payment Date falling on or around the Final Maturity Date, a Party B Payment Date shall instead fall on the Final Maturity Date; and (ii) in lieu of the Guarantor Payment Date falling on or around the Extended Due for Payment Date, a Party B Floating Rate Payer Payment Date shall instead fall on the Extended Due for Payment Date, subject to adjustment in accordance with the Business Day Convention; and
	(b) each Interim Exchange Date unless such date is already a Party B Payment Date under (a) above.
	For the avoidance of doubt:
	(a) if the Effective Date falls on a Guarantor Payment Date, then the first Party B Calculation Period shall commence on (and include) the first day of the calendar month immediately preceding the Guarantor Payment Date (or, if the Effective Date occurs before the first Guarantor Payment Date following the drawdown of the Term Advance relating to the Series — Covered Bonds, the Drawdown Date of such Term Advance) and end on (and exclude) the Effective Date; and
	(b) if the Effective Date does not fall on a Guarantor Payment Date, then the first Party B Calculation Period shall commence on (and include) the first day of the calendar month immediately preceding the subsequent Guarantor Payment Date (or, if the Effective Date occurs before the first Guarantor Payment Date following the drawdown of the Term Advance relating to the Series — Covered Bonds, the Drawdown Date of such Term Advance) and end on (but exclude) the first Party B Payment Date.

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Party B Floating Rate Option:	CAD-BA-CDOR.
Designated Maturity:	One month; except that (a) in respect of any Party B Calculation Period from, and including the Effective Date, to, but excluding, the first calendar day of the next following month following the Guarantor Payment Date immediately following the Effective Date, Linear Interpolation of between one and two months will apply (for the avoidance of doubt, regardless of the length of any such Party B Calculation Period) and the relevant Reset Date for the purposes of calculating Linear Interpolation for each such Party B Calculation Period shall be deemed to be the Effective Date; (b) in respect of any Party B Calculation Period from, and including, the first day of the calendar month immediately preceding the Final Maturity Date, to, but excluding, the Final Maturity Date, Designated Maturity of one month will apply (for the avoidance of doubt, regardless of the length of any such Party B Calculation Period) and the relevant Reset Date for such Party B Calculation Period shall be deemed to be the first day of the calendar month immediately preceding the Final Maturity Date; (c) in respect of any Party B Calculation Period from, and including, the Final Maturity Date to, but excluding, the first day of the calendar month immediately following the Final Maturity Date (if applicable), Designated Maturity of one month will apply (for the avoidance of doubt, regardless of the length of any such Party B Calculation Period) and the relevant Reset Date for such Party B Calculation Period shall be deemed to be the first day of the calendar month immediately preceding the Final Maturity Date; and (d) in respect of any Party B Calculation Period from, and including the first day of the calendar month immediately preceding the Extended Due for Payment Date, to, but excluding, the Extended Due for Payment Date, Designated Maturity of one month will apply (for the avoidance of doubt, regardless of the length of any such Party B Calculation Period) and the relevant Reset Date for such Party B Calculation Period shall be deemed to be the first day of the calendar month immediately preceding the Extended Due for Payment Date.
Party B Spread:	plus — per cent. per annum.
Party B Day
Count Fraction:	Actual/365 (Fixed)
Party B Reset Dates:	Subject to “Designated Maturity” above, the Reset Date in respect of each Party B Calculation Period shall be the

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	first day of each Party B Calculation Period, or, if such day is not a Toronto Business Day, the Reset Date shall be the immediately preceding day which is a Toronto Business Day.
Interim Exchange:
Interim Exchange Dates:	Each Business Day falling on or after the Effective Date and prior to the Final Maturity Date on which any of the Series — Covered Bonds are redeemed in whole or in part; provided, however, that the first Interim Exchange Date will be the date which is the later of (i) two Business Days following the Effective Date or (ii) the date on which Guaranteed Amounts are otherwise Due for Payment; and provided that, if such Business Day is not a Canadian Business Day, the relevant Party B Interim Exchange Date shall be the immediately preceding Canadian Business Day.
Party A Interim
Exchange Amount:	In respect of each Interim Exchange Date, an amount in United States Dollars equal to the amount of the Series — Covered Bonds to be redeemed on such Interim Exchange Date.
Party B Interim
Exchange Amount:	In respect of each Interim Exchange Date, the Canadian Dollar equivalent of the Party A Interim Exchange Amount for such Interim Exchange Date converted by reference to the Currency Exchange Rate.
Final Exchange:
Final Exchange Date:	Each of: (a) the Final Maturity Date in respect of the Series — Covered Bonds; (b) each Business Day during the period (if any) commencing on, but excluding, the Final Maturity Date to, and including, the Extension Determination Date (if any and as defined below); (c) each Interest Payment Date from, but excluding, the Extension Determination Date (if any and as defined below) to, but excluding, the Extended Due for Payment Date (if any); and (d) the Extended Due for Payment Date (if any), provided that, if at any time a Redemption Notice (as defined below) is given confirming that the Series — Covered Bonds then outstanding are redeemable in full on a Final Exchange Date, that Final Exchange Date will be the last Final Exchange Date, and provided that, if any such date is not a Canadian Business Day, the relevant Party B Final Exchange Date shall be the immediately preceding Canadian Business Day.

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	“Extension Determination Date” means the date that is seven calendar days plus two Business Days from, and including, the Final Maturity Date.
Party A Final Exchange Amount:	In respect of each Final Exchange Date, the relevant Redemption Notice Amount (as defined below).
Party B Final Exchange Amount:	In respect of each Final Exchange Date, the Canadian Dollar equivalent of the relevant Redemption Notice Amount, converted by reference to the Currency Exchange Rate.

3. Account Details:

Payments to Party A
in Canadian Dollars:	Bank:	Bank of Montreal (BOFMCAM2)
	Transit Number:	3169
	Account Number:	—
	Favour:	Bank of Montreal, Toronto.
Payments to Party B
in USD:	As notified to Party A.
Payments to Party B in Canadian Dollars:	As notified to Party A.

4. Other Provisions

Redemption Notice: Party B, or the Cash Manager acting on Party B’s behalf, shall notify Party A of the amount of principal payments to be made on the Series — Covered Bonds on each Interim Exchange Date and Final Exchange Date (for purposes of calculating payment of any Interim Exchange Amounts and Final Exchange Amounts, respectively). Such notification may be made in respect of an Interim Exchange Date or Final Exchange Date by receipt by Party A of a written confirmation from Party B, or the Cash Manager acting on Party B’s behalf, of an irrevocable payment instruction to a bank from Party B to make a payment to Party A in an amount in Canadian Dollars corresponding to the Principal Amount Outstanding in respect of the Series — Covered Bonds to be redeemed

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on such Interim Exchange Date or Final Exchange Date converted by Party B by reference to the Currency Exchange Rate on or prior to 5:00 p.m., Toronto time, four Business Days prior to such Interim Exchange Date or Final Exchange Date, as the case may be (a “Redemption Notice” and the amount specified in the written confirmation delivered to Party A, the “Redemption Notice Amount”).

If Party A does not receive a Redemption Notice with respect to any Interim Exchange Date or Final Exchange Date, then the parties will not be required to pay any Interim Exchange Amounts or Final Exchange Amounts, respectively, on such Interim Exchange Date or Final Exchange Date, as the case may be.

In addition, if Party A does not receive a Redemption Notice confirming that the Series — Covered Bonds are redeemable in full on the Final Maturity Date (and the Covered Bonds are not redeemed in full on or prior to the Extension Determination Date): (i) the Termination Date for this Transaction shall be deemed to be the Final Exchange Date in respect of which a Redemption Notice is given and, taking into account such Redemption Notice and each other Redemption Notice, the sum of all Redemption Notice Amounts equals the Principal Amount Outstanding of the Series — Covered Bonds as at the Effective Date; (ii) for the avoidance of doubt, Party A’s obligation to pay Party A Fixed Amounts shall cease as from the Final Maturity Date and Party A shall from such date be obliged to pay the Party A Floating Amounts to Party B; (iii) for the avoidance of doubt, Party B shall be obliged to continue to pay the Party B Floating Amounts; and (iv) the final Party A Calculation Period and the final Party B Calculation Period shall end on, but exclude, the Termination Date. Without prejudice to the generality of the above provisions, Party B, or the Cash Manager acting on Party B’s behalf, shall notify Party A at least two Business Days prior to the Final Maturity Date whether or not the Series — Covered Bonds will be redeemed (in whole or in part) on the Final Maturity Date and, if they will not be, whether or not the Series — Covered Bonds will be redeemed (in whole or in part) on or prior to the Extension Determination Date.

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	If on the Extended Due for Payment Date the sum of all Redemption Notice Amounts specified in Redemption Notices delivered to Party A on or prior to such date is not equal to the Principal Amount Outstanding of the Series — Covered Bonds as at the Effective Date (such difference, the “Redemption Shortfall”):
	(i)     Party A will pay to Party B an amount in United States Dollars equal to such Redemption Shortfall; and
	(ii)    Party B will pay to Party A the Canadian Dollar equivalent of the Redemption Shortfall, converted at the Currency Exchange Rate.
	For purposes of calculating any amount due under Section 6(e) of the Agreement in respect of a Termination Event that occurs during the period from, but excluding the Final Maturity Date to, and including the Extension Determination Date, the Termination Date shall be deemed to be the Final Maturity Date, unless Party B or the Cash Manager has determined as of that date that Party B has insufficient funds to pay the Guaranteed Amounts, in which case the Termination Date shall be deemed to be the Extended Due for Payment Date (subject as provided above).
	Party B agrees as soon as reasonably practicable after a Redemption Notice has been given to advise Party A by telephone (or email if provided in the notice details below) of the fact of such Redemption Notice; provided, however, that the failure by Party B, or the Cash Manager acting on Party B’s behalf, to do so shall not affect the validity of any Redemption Notice under the Transaction evidenced by this Confirmation.
Reduced Payments:	In the event that any payment made by Party B to Party A under this Transaction is less than the amount which Party B would be required to pay Party A (but for Part 5(s) of the Schedule to the Agreement), the payment obligation of Party A to Party B shall be reduced by a percentage equivalent to the percentage reduction in Party B payments since the corresponding Fixed Rate Payer Payment Date or Floating Rate Payer Payment Date (as applicable). For the avoidance of doubt, the payment of such a reduced amount by Party A shall not constitute a breach of the payment obligations specified in Section 2(a)(i) of the Agreement.

5. Notification to Party A

For the purpose of making any determination or calculation hereunder, the Calculation Agent may rely on any information, report, notice or certificate delivered to it by the Cash Manager or Party B and the Calculation Agent shall not be liable for any error, incompleteness or omission regarding such information.

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Party B or the Cash Manager acting on its behalf, shall notify Party A of the amount of principal payments to be made on the Series — Covered Bonds on each Interest Payment Date no later than one (1) Business Day prior to such Interest Payment Date.

6. Notice Details:

Party A:	Bank of Montreal
Address:	250 Yonge Street, 10th Floor, Toronto, Ontario M5B 2L7
Facsimile Number:	(416) 552-7905/7926
Telephone Number:	(416) 552-7442
Attention:	Senior Manager, Confirmations
Party B:	BMO Covered Bond Guarantor Limited Partnership
Address:	c/o Bank of Montreal, 18th Floor, 1 First Canadian Place, 100 King Street West, Toronto, Ontario M5X 1A1
Facsimile Number:	(416) 867-4166
Attention:	Senior Manager, Securitization Finance and Operations

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Yours faithfully,

BANK OF MONTREAL	BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, by its managing general partner, BMO COVERED BOND GP, INC.
By:	By:
Name:	Name:
Title:	Title:

International Swaps and Derivatives Association, Inc.

CREDIT SUPPORT ANNEX

to the Schedule to the

Covered Bond Swap

1997 ISDA Master Agreement

dated as of September 30, 2013

between

Bank of Montreal (“Party A”) and BMO Covered Bond Guarantor Limited Partnership (“Party B”)

This Annex supplements, forms part of, and is subject to, the ISDA Master Agreement referred to above and is part of its Schedule. For the purposes of this Agreement, including, without limitation, Sections 1(c), 2(a), 5 and 6, the credit support arrangements set out in this Annex constitute a Transaction (for which this Annex constitutes the Confirmation).

Paragraph 1. Interpretation

Capitalised terms not otherwise defined in this Annex or elsewhere in this Agreement have the meanings specified pursuant to Paragraph 10, and all references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any inconsistency between this Annex and the other provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency between Paragraph 11 and the other provisions of this Annex, Paragraph 11 will prevail. For the avoidance of doubt, references to “transfer” in this Annex mean, in relation to cash, payment, and in relation to the assets, delivery.

Paragraph 2. Credit Support Obligations

(a) Delivery Amount. Subject to Paragraphs 3 and 4, upon a demand made by the Transferee on or promptly following a Valuation Date, if the Delivery Amount for that Valuation Date equals or exceeds the Transferor’s Minimum Transfer Amount, then the Transferor will transfer to the Transferee Eligible Credit Support having a Value as of the date of transfer at least equal to the applicable Delivery Amount (rounded pursuant to Paragraph 11(b)(iii)(D)). Unless otherwise specified in Paragraph 11(b), the “Delivery Amount” applicable to the Transferor for any Valuation Date will equal the amount by which:

(i) the Credit Support Amount

exceeds

(ii) the Value as of that Valuation Date of the Transferor’s Credit Support Balance (adjusted to include any prior Delivery Amount and to exclude any prior Return Amount, the transfer of which, in each case, has not yet been completed and for which the relevant Settlement Day falls on or after such Valuation Date).

(b) Return Amount. Subject to Paragraphs 3 and 4, upon a demand made by the Transferor on or promptly following a Valuation Date, if the Return Amount for that Valuation Date equals or exceeds the Transferee’s Minimum Transfer Amount, then the Transferee will transfer to the Transferor Equivalent Credit Support specified by the Transferor in that demand having a Value as of the date of transfer as close as practicable to the applicable Return

Amount (rounded pursuant to Paragraph 11(b)(iii)(D)) and the Credit Support Balance will, upon such transfer, be reduced accordingly. Unless otherwise specified in Paragraph 11(b), the “Return Amount” applicable to the Transferee for any Valuation Date will equal the amount by which:

(i) the Value as of that Valuation Date of the Transferor’s Credit Support Balance (adjusted to include any prior Delivery Amount and to exclude any prior Return Amount, the transfer of which, in each case, has not yet been completed and for which the relevant Settlement Day falls on or after such Valuation Date).

exceeds

(ii) the Credit Support Amount.

Paragraph 3. Transfers, Calculations and Exchanges

(a) Transfers. All transfers under this Annex of any Eligible Credit Support, Equivalent Credit Support, Interest Amount or Equivalent Distributions shall be made in accordance with the instructions of the Transferee or Transferor, as applicable, and shall be made:

(i) in the case of cash, by transfer into one or more bank accounts specified by the recipient;

(ii) in the case of certificated securities which cannot or which the parties have agreed will not be delivered by book-entry, by delivery in appropriate physical form to the recipient or its account accompanied by any duly executed instruments of transfer, transfer tax stamps and any other documents necessary to constitute a legally valid transfer of the transferring party’s legal and beneficial title to the recipient; and

(iii) in the case of securities which the parties have agreed will be delivered by book-entry, by the giving of written instructions (including, for the avoidance of doubt, instructions given by telex, facsimile transmission or electronic messaging system) to the relevant depository institution or other entity specified by the recipient, together with a written copy of the instructions to the recipient, sufficient, if complied with, to result in a legally effective transfer of the transferring party’s legal and beneficial title to the recipient.

Subject to Paragraph 4 and unless otherwise specified, if a demand for the transfer of Eligible Credit Support or Equivalent Credit Support is received by the Notification Time, then the relevant transfer will be made not later than the close of business on the Settlement Day relating to the date such demand is received; if a demand is received after the Notification Time, then the relevant transfer will be made not later than the close of business on the Settlement Day relating to the day after the date such demand is received.

(b) Calculations. All calculations of Value and Exposure for purposes of Paragraphs 2 and 4(a) will be made by the relevant Valuation Agent as of the relevant Valuation Time. The Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) of its calculations not later than the Notification Time on the Local Business Day following the applicable Valuation Date (or, in the case of Paragraph 4(a), following the date of calculation).

(c) Exchanges.

(i) Unless otherwise specified in Paragraph 11, the Transferor may on any Local Business Day by notice inform the Transferee that it wishes to transfer to the Transferee Eligible Credit Support specified in that notice (the “New Credit Support”) in exchange for certain Eligible Credit Support (the “Original Credit Support”) specified in that notice comprised in the Transferor’s Credit Support Balance.

(ii) If the Transferee notifies the Transferor that it has consented to the proposed exchange, (A) the Transferor will be obliged to transfer the New Credit Support to the Transferee on the first Settlement Day following the date on which it receives notice (which may be oral telephonic notice) from the Transferee of its consent and (B) the Transferee will be obliged to transfer to the Transferor Equivalent Credit Support in respect of the Original Credit Support not later than the Settlement Day following the date on which the Transferee receives the New Credit Support, unless otherwise specified in Paragraph 11(d) (the “Exchange Date”);

provided that the Transferee will only be obliged to transfer Equivalent Credit Support with a Value as of the date of transfer as close as practicable to, but in any event not more than, the Value of the New Credit Support as of that date.

Paragraph 4. Dispute Resolution

(a) Disputed Calculations or Valuations. If a party (a “Disputing Party”) reasonably disputes (I) the Valuation Agent’s calculation of a Delivery Amount or a Return Amount or (II) the Value of any transfer of Eligible Credit Support or Equivalent Credit Support, then:

(1) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party) not later than the close of business on the Local Business Day following, in the case of (I) above, the date that the demand is received under Paragraph 2 or, in the case of (II) above, the date of transfer;

(2) in the case of (I) above, the appropriate party will transfer the undisputed amount to the other party not later than the close of business on the Settlement Day following the date that the demand is received under Paragraph 2;

(3) the parties will consult with each other in an attempt to resolve the dispute; and

(4) if they fail to resolve the dispute by the Resolution Time then:

(i) in the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise specified in Paragraph 11(c), the Valuation Agent will recalculate the Exposure and the Value as of the Recalculation Date by:

(A) utilising any calculations of that part of the Exposure attributable to the Transactions that the parties have agreed are not in dispute;

(B) calculating that part of the Exposure attributable to the Transactions in dispute by seeking four actual quotations at mid-market from Reference Market-makers for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available for a particular Transaction, then fewer than four quotations may be used for that Transaction, and if no quotations are available for a particular Transaction, then the Valuation Agent’s original calculations will be used for the Transaction; and

(C) utilising the procedures specified in Paragraph 11(e)(ii) for calculating the Value, if disputed, of the outstanding Credit Support Balance;

(ii) in the case of a dispute involving the Value of any transfer of Eligible Credit Support or Equivalent Credit Support, the Valuation Agent will recalculate the Value as of the date of transfer pursuant to Paragraph 11(e)(ii).

Following a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) as soon as possible but in any event not later than the Notification Time on the Local Business Day following the Resolution Time. The appropriate party will, upon demand following such notice given the Valuation Agent or resolution pursuant to (3) above and subject to Paragraph 3(a), make the appropriate transfer.

(b) No Event of Default. The failure by a party to make a transfer of any amount which is the subject of a dispute to which Paragraph 4(a) applies will not constitute an Event of Default for as long as the procedures set out in this Paragraph 4 are being carried out. For the avoidance of doubt, upon completion of those procedures, Section 5(a)(i) of this Agreement will apply to any failure by a party to make a transfer required under the final sentence of Paragraph 4(a) on the relevant due date.

Paragraph 5. Transfer of Title, No Security Interest, Distributions and Interest Amount

(a) Transfer of Title. Each party agrees that all right, title and interest in and to any Eligible Credit Support, Equivalent Credit Support, Equivalent Distributions or Interest Amount which it transfers to the other party under the terms of this Annex shall vest in the recipient free and clear of any liens, claims, charges or encumbrances or any other interest of the transferring party or of any third person (other than a lien routinely imposed on all securities in a relevant clearance system).

(b) No Security Interest. Nothing in this Annex is intended to create or does create in favour of either party any mortgage, charge, lien, pledge, encumbrance or other security interest in any cash or other property transferred by one party to the other party under the terms of this Annex.

(c) Distributions and Interest Amount.

(i) Distributions. The Transferee will transfer to the Transferor not later than the Settlement Day following each Distributions Date cash, securities or other property of the same type, nominal value, description and amount as the relevant Distributions (“Equivalent Distributions”) to the extent that a Delivery Amount would not be created or increased by the transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed a Valuation Date for this purpose).

(ii) Interest Amount. Unless otherwise specified in Paragraph 11(f)(iii), the Transferee will transfer to the Transferor at the times specified in Paragraph 11(f)(ii) the relevant Interest Amount to the extent that a Delivery Amount would not be created or increased by the transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed a Valuation Date for this purpose).

Paragraph 6. Default

If any Early Termination Date is designated or deemed to occur as a result of an Event of Default in relation to a party, an amount equal to the Value of the Credit Support Balance, determined as though the Early Termination Date were a Valuation Date, will be deemed to be an Unpaid Amount due to the Transferor (which may or may not be the Defaulting Party) for purposes of Section 6(e). For the avoidance of doubt, if Market Quotation is the applicable payment measure for purposes of Section 6(e), then the Market Quotation determined under Section 6(e) in relation to the Transaction constituted by this Annex will be deemed to be zero, and if Loss is the applicable payment measure for purposes of Section 6(e), then the Loss determined under Section 6(e) in relation to the Transaction will be limited to the Unpaid Amount representing the Value of the Credit Support Balance.

Paragraph 7. Representation

Each party represents to the other party (which representation will be deemed to be repeated as of each date on which it transfers Eligible Credit Support, Equivalent Credit Support or Equivalent Distributions) that is the sole owner of or otherwise has the right to transfer all Eligible Credit Support, Equivalent Credit Support or Equivalent Distributions it transfers to the other party under this Annex, free and clear of any security interest, lien encumbrance or other restriction (other than lien routinely imposed on all securities in a relevant clearance system).

Paragraph 8. Expenses

Each party will pay its own costs and expenses (including any stamp, transfer, or similar transaction tax or duty payable on any transfer it is required to make under this Annex) in connection with performing its obligations under this Annex, and neither party will be liable for any such costs and expenses incurred by the other party.

Paragraph 9. Miscellaneous

(a) Default Interest. Other than in the case of an amount which is the subject of dispute under Paragraph 4(a), if a Transferee fails to make, when due, any transfer of Equivalent Credit Support, Equivalent Distributions or the Interest Amount, it will be obliged to pay the Transferor (to the extent permitted under applicable law) an amount equal to

interest at the Default Rate multiplied by the Value on the relevant Valuation Date of the items of property that were required to be transferred, from (and including) the date that the Equivalent Credit Support, Equivalent Distributions or Interest Amount were required to be transferred to (but excluding) the date of transfer of the Equivalent Credit Support, Equivalent Distributions or Interest Amount. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(b) Good Faith and Commercially Reasonable Manner. Performance of all obligations under this Annex, including, but not limited to, all calculations, valuations and determinations made by either party, will be made in good faith and in a commercially reasonable manner.

(c) Demands and Notices. All demands and notices given by a party under this Annex will be given as specified in Section 12 of this Agreement.

(d) Specifications of Certain Matters. Anything referred to in this Annex as being specified in Paragraph 11 also may be specified in one or more Confirmations or other documents and this Annex will be construed accordingly.

Paragraph 10. Definitions

As used in this Annex:

“Base Currency” means the currency specified as such in Paragraph 11(a)(i).

“Base Currency Equivalent” means, with respect to an amount on a Valuation Date, in the case of an amount denominated in the Base Currency, such Base Currency and, in the case of an amount denominated in a currency other than the Base Currency (the “Other Currency”), the amount of Base Currency required to purchase such amount of the Other Currency at the spot exchange rate determined by the Valuation Agent for value on such Valuation Date.

“Credit Support Amount” means, with respect to a Transferor on a Valuation Date, (i) the Transferee’s Exposure plus (ii) all Independent Amounts applicable to the Transferor, if any, minus (iii) all Independent Amounts applicable to the Transferee, if any, minus (iv) the Transferor’s Threshold; provided, however, that the Credit Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields a number less than zero.

“Credit Support Balance” means, with respect to a Transferor on a Valuation Date, the aggregate of all Eligible Credit Support that has been transferred to or received by the Transferee under this Annex, together with any Distributions and all proceeds of any such Eligible Credit Support or Distributions, as reduced pursuant to Paragraph 2(b), 3(c)(ii) or 6. Any Equivalent Distributions or Interest Amount (or portion of either) not transferred pursuant to Paragraph 5(c)(i) or (ii) will form part of the Credit Support Balance.

“Delivery Amount” has the meaning specified in Paragraph 2(a).

“Disputing Party” has the meaning specified in Paragraph 4.

“Distributions” means, with respect to any Eligible Credit Support comprised in the Credit Support Balance consisting of securities, all principal, interest and other payments and distributions of cash or other property to which a holder of securities of the same type, nominal value, description and amount as such Eligible Credit Support would be entitled from time to time.

“Distribution Date” means, with respect to any Eligible Credit Support comprised in the Credit Support Balance other than cash, each date on which a holder of such Eligible Credit Support is entitled to receive Distributions or, if that date is not a Local Business Day, the next following Local Business Day.

“Eligible Credit Support” means, with respect to a party, the items, if any, specified as such for that party in Paragraph 11(b)(ii) including, in relation to any securities, if applicable, the proceeds of any redemption in whole or in party of such securities by the relevant issuer.

“Eligible Currency” means each currency specified as such in Paragraph 11(a)(ii), if such currency is freely available.

“Equivalent Credit Support” means, in relation to any Eligible Credit Support comprised in the Credit Support Balance, Eligible Credit Support of the same type, nominal value, description and amount as that Eligible Credit Support.

“Equivalent Distributions” has the meaning specified in Paragraph 5(c)(i).

“Exchange Date” has the meaning specified in Paragraph 11(d).

“Exposure” means, with respect to a party on a Valuation Date and subject to Paragraph 4 in the case of a dispute, the amount, if any, that would be payable to that party by the other party (expressed as a positive number) or by that party to the other party (expressed as a negative number) pursuant to Section 6(e)(ii)(1) of this Agreement if all Transactions (other than the Transaction constituted by this Annex) were being terminated as of the relevant Valuation Time, on the basis that (i) that party is not the Affected Party and (ii) the Base Currency is the Termination Currency; provided that Market Quotations will be determined by the Valuation Agent on behalf of that party using its estimates at mid-market of the amounts that would be paid for Replacement Transactions (as that term is defined in the definition of “Market Quotation”).

“Independent Amount” means, with respect to a party, the Base Currency Equivalent of the amount specified as such for that party in Paragraph 11(b)(iii)(A); if not amount is specified, zero.

“Interest Amount” means, with respect to an Interest Period, the aggregate sum of the Base Currency Equivalents of the amounts of interest determined for each relevant currency and calculated for each day in that Interest Period on the principal amount of the portion of the Credit Support Balance comprised of cash in such currency, determined by the Valuation Agent for each such day as follows:

(x) the amount of cash in such currency on that day; multiplied by

(y) the relevant Interest Rate in effect for that day; divided by

(z) 360 (or, in the case of pounds sterling, 365).

“Interest Period” means the period from (and including) the last Local Business Day on which an Interest Amount was transferred (or, if no Interest Amount has yet been transferred, the Local Business Day on which Eligible Credit Support or Equivalent Credit Support in the form of cash was transferred to or received by the Transferee) to (but excluding) the Local Business Day on which the current Interest Amount is transferred.

“Interest Rate” means with respect to an Eligible Currency, the rate specified in Paragraph 11(f)(i) for that currency.

“Local Business Day”, unless otherwise specified in Paragraph 11(h), means:

(i) in relation to a transfer of cash or other property (other than securities) under this Annex, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment;

(ii) in relation to a transfer of securities under this Annex, a day on which the clearance system agreed between the parties for delivery of the securities is open for the acceptance and execution of settlement instructions or, if delivery of the securities is contemplated by other means, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place(s) agreed between the parties for this purpose.

(iii) in relation to a valuation under this Annex, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place of location of the Valuation Agent and in the place(s) agreed between the parties for this purpose; and

(iv) in relation to any notice or other communication under this Annex, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the place specified in the address for notice most recently provided by the recipient.

“Minimum Transfer Amount” means, with respect to a party, the amount specified as such for that party in Paragraph 11(b)(iii)(C); if no amount is specified, zero.

“New Credit Support” has the meaning specified in Paragraph 3(c)(i).

“Notification Time” has the meaning specified in Paragraph 11(c)(iv).

“Recalculation Date” means the Valuation Date that gives rise to the dispute under Paragraph 4; provided, however, that if a subsequent Valuation Date occurs under Paragraph 2 prior to the resolution of the dispute, then the “Recalculation Date” means the most recent Valuation Date under Paragraph 2.

“Resolution Time” has the meaning specified in Paragraph 11(c)(i).

“Return Amount” has the meaning specified in Paragraph 2(b).

“Settlement Day” means, in relation to a date, (i) with respect to a transfer of cash or other property (other than securities), the next Local Business Day and (ii) with respect to a transfer of securities, the first Local Business Day after such date on which settlement of a trade in the relevant securities, if effected on such date, would have been settled in accordance with customary practice when settling through the clearance system agreed between the parties for delivery of such securities or, otherwise, on the market in which such securities are principally traded (or, in either case, if there is no such customary practice, on the first Local Business Day after such date on which it is reasonably practicable to deliver such securities).

“Threshold” means, with respect to a party, the Base Currency Equivalent of the amount specified as such for that party in Paragraph 11(b)(iii)(B); if no amount is specified, zero.

“Transferee” means, in relation to each Valuation Date, the party in respect of which Exposure is a positive number and, in relation to a Credit Support Balance, the party which, subject to this Annex, owes such Credit Support Balance or, as the case may be, the Value of such Credit Support Balance to the other party.

“Transferor” means, in relation to a Transferee, the other party.

“Valuation Agent” has the meaning specified in Paragraph 11(c)(i).

“Valuation Date” means each date specified in or otherwise determined pursuant to Paragraph 11(c)(ii).

“Valuation Percentage” means, for any item of Eligible Credit Support, the percentage specified in Paragraph 11(b)(ii).

“Valuation Time” has the meaning specified in Paragraph 11(c)(iii).

“Value” means, for any Valuation Date or other date for which Value is calculated, and subject to Paragraph 4 in the case of a dispute, with respect to:

(i) Eligible Credit Support comprised in a Credit Support Balance that is:

(A) an amount of cash, the Base Currency Equivalent of such amount multiplied by the applicable Valuation Percentage, if any; and

(B) a security, the Base Currency Equivalent of the bid price obtained by the Valuation Agent multiplied by the applicable Valuation Percentage, if any; and

(ii) items that are comprised in a Credit Support Balance and are not Eligible Credit Support, zero.

Paragraph 11. Elections and Variables

(a) Base Currency and Eligible Currency.

(i) “Base Currency” means Canadian Dollars.

(ii) “Eligible Currency” means the Base Currency and each other currency specified here: US Dollars.

It is agreed by the parties that where the Credit Support Amount is denominated in a currency other than the Base Currency, the Valuation Percentage specified in Paragraph 11(b)(ii) shall be reduced by a percentage agreed by the parties and approved by the relevant rating agency (“Additional Valuation Percentage”). For the purpose of this Annex, references to the “relevant rating agency” shall mean the rating agency whose Ratings Agency Requirement will be used to determine the amount of Eligible Credit Support that Party A is required to transfer to Party B following a credit ratings downgrade of Party A.

(b) Credit Support Obligations.

(i) Delivery Amount, Return Amount and Credit Support Amount.

(A) “Delivery Amount”: Paragraph 2(a) shall apply, except that the words, “upon a demand made by the Transferee” shall be deleted and the word “that” on the second line of Paragraph 2(a) shall be replaced with the Word “a”.

(B) “Return Amount” has the meaning as specified in Paragraph 2(b).

(C) “Credit Support Amount” has the meaning specified under the relevant definition of Ratings Agency Requirement. In circumstances where more than one of the Ratings Agency Requirements apply to Party A, the Credit Support Amount shall be calculated by reference to the Ratings Agency Requirement of the rating agency which has triggered the requirement by Party A to post collateral under this Annex. Where there is more than one rating agency whose requirements under Part 5 of the Schedule to this Agreement requires Party A to post collateral, the Ratings Agency Requirement shall be used which would result in Party A transferring the greatest amount of Eligible Credit Support. Subject to Paragraph 11(b)(iii)(D), under no circumstances will Party A be required to transfer more Eligible Credit Support than the greatest amount calculated in accordance with the Ratings Agency Requirement set out below.

(c) Eligible Credit Support. The following items will qualify as “Eligible Credit Support” for Party A:

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch	Valuation Percentages in respect of DBRS
(A)	Provided Party B will not exceed the Prescribed Cash Limitation and subject to the provision immediately following this Eligible Credit Support chart, cash in the Base Currency	100%	100%	100% if cash is in the Base Currency

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch		Valuation Percentages in respect of DBRS
(B)	Negotiable debt obligations denominated in an Eligible Currency issued by: the U.S. Treasury Department, (with local and foreign currency issuer ratings equal to or greater than AA- by Fitch and Aa3 by Moody’s) having a remaining time to maturity of:	In relation to residual maturity as set out in the corresponding order under Collateral Type:	In relation to residual maturity as set out in the corresponding order under Collateral Type:		In relation to residual maturity as set out in the corresponding order under Collateral Type:
			Highest Covered Bond Rated AA- or higher	Highest Covered Bond Rated A+ or below
(i)	35 days or less	99%	83.9%	88.7%	100% if collateral is in the Base Currency, otherwise, as agreed between Party A and DBRS
(ii)	more than 35 days but not more than one year;	99%	83.9%	88.7%	98% if collateral is in the Base Currency, otherwise, to be agreed between Party A and DBRS
(iii)	more than one year but not more than 3 years	To be agreed between Party A and Moody’s	82.6%	87.3%	To be agreed between Party A and DBRS
(iv)	more than 3 years but not more than 5 years;	To be agreed between Party A and Moody’s	80.4%	85.5%	To be agreed between Party A and DBRS
(v)	more than 5 years but not more than 7 years;	To be agreed between Party A and Moody’s	80.0%	85.1%	To be agreed between Party A and DBRS
(vi)	more than 7 years but not more than 10 years;	To be agreed between Party A and Moody’s	78.3%	83.7%	To be agreed between Party A and DBRS
(vii)	more than 10 years but less than 30 years	To be agreed between Party A and Moody’s	74.8%	80.5%	To be agreed between Party A and DBRS
(C)	Negotiable debt obligations denominated in the Base Currency issued by: the Government of Canada; or any Province of Canada;

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch		Valuation Percentages in respect of DBRS
	(with local and foreign currency issuer ratings equal to or greater than AA- by Fitch, Aa3 by Moody’s and AA(low) or R-1 (middle) by DBRS) having a remaining time to maturity of:
			Highest Covered Bond Rated AA- or higher	Highest Covered Bond Rated A+ or below
(i)	35 days or less	99%	97.5%	98.0%	100% if collateral is in the Base Currency and issued by the Government of Canada, 98% if collateral is in the Base Currency and issued by any Province of Canada, otherwise, as agreed between Party A and DBRS
(ii)	more than 35 days but not more than one year;	99%	97.5%	98.0%	98% if collateral is in the Base Currency and issued by the Government of Canada, 97.5% if collateral is in the Base Currency and issued by any Province of Canada, otherwise, to be agreed between Party A and DBRS
(iii)	More than one year but not more than 3 years	To be agreed between Party A and Moody’s	96.0%	96.5%	To be agreed between Party A and DBRS
(iv)	more than 3 years but not more than 5 years;	To be agreed between Party A and Moody’s	93.5%	94.5%	To be agreed between Party A and DBRS
(v)	more than 5 years but not more than 7 years; or	To be agreed between Party A and Moody’s	93.0%	94.0%	To be agreed between Party A and DBRS
(vi)	More than 7 years but not more than 10 years	To be agreed between Party A and Moody’s	91.0%	92.5%	To be agreed between Party A and DBRS

	Collateral Type	Valuation Percentages in respect of Moody’s	Valuation Percentages in respect of Fitch		Valuation Percentages in respect of DBRS
(vii)	more than 10 years but not more than 30 years	To be agreed between Party A and Moody’s	87.0%	89.0%	To be agreed between Party A and DBRS
(D)	Commercial Paper denominated in an Eligible Currency (with a rating equal to or greater than Prime-1 and Aa3 by Moody’s, F1+ by Fitch and AA(low) or R-1(middle) by DBRS) with a remaining time to maturity of less than 3 months (or less than one year for DBRS), provided that if such Commercial Paper comprises asset-backed commercial paper (“ABCP”), (i) in the case of DBRS, it must be denominated in the Base Currency, have the benefit of global-style liquidity and a rating of at least R-1(high) by DBRS. and, (ii) in the case of Moody’s, the Valuation Percentage will be 0%.	To be agreed between Party A and Moody’s	To be agreed between Party A and Fitch		For commercial paper issued or guaranteed by a bank in the Base Currency, (i) 100% if the remaining time to maturity is 35 days or less (ii) 97.5% if the remaining time to maturity is more than 35 days but less than one year, and (iii) otherwise, to be agreed between Party A and DBRS; and for ABCP in the Base Currency, (i) 100% if the remaining time to maturity is 35 days or less (ii) 97% if the remaining time to maturity is more than 35 days but less than one year and (iii) otherwise, to be agreed between Party A and DBRS
(E)	Such other items as agreed between Party A and the Rating Agencies, from time to time, which Party B can lawfully receive from, and transfer back to, Party A as required, that will qualify as Eligible Credit Support.	To be agreed between Party A and Moody’s	To be agreed between Party A and Fitch		To be agreed between Party A and DBRS

In order to ensure that the amount of cash held by Party B on any day, including the amount of cash transferred to Party B hereunder, does not in the aggregate exceed Party B’s Prescribed Cash Limitation, upon providing notice to Party A, Party B shall exchange all or a portion of cash originally transferred as Eligible Credit Support hereunder (such amount of cash to be exchanged, the “Original Cash Amount”) for non-cash Eligible Credit Support having a Value at least equal to the Original Cash Amount.

For the avoidance of doubt, where negotiable debt obligations are rated by only one of the above relevant rating agencies, the rating applied will be based on the rating of that agency.

Where the ratings and/or the Valuation Percentages of the relevant rating agencies differ with respect to the same negotiable debt obligation, for the purposes of B to E above the lower of the ratings and/or the Valuation Percentages, as the case maybe, shall apply.

For the purpose of this Annex, references to the “relevant rating agency” shall mean the rating agency whose Ratings Agency Requirement will be used to determine the amount of Eligible Credit Support that Party A is required to transfer to Party B following a credit ratings downgrade of Party A.

(i) Thresholds.

(A) “Independent Amount” means, for Party A and for Party B, for each Transaction, zero.

(B) “Threshold” means, for Party A:

infinity, unless (A) (i) an Initial Rating Event has occurred and is continuing for 10 Business Days AND (ii) Party A has not otherwise complied with Part 5(h)(i) of the Agreement, OR (B) (i) a Subsequent Rating Event has occurred and is continuing for 10 Business Days AND (ii) Party A has not otherwise complied with Part 5(h)(ii) of the Agreement, then its Threshold shall be zero.

“Threshold” means, for Party B: infinity

(C) “Minimum Transfer Amount” means, with respect to Party A and Party B, CAD50,000; provided, that if (1) an Event of Default has occurred and is continuing with respect to Party A, or (2) an Additional Termination Event has occurred in respect of which Party A is an Affected Party, the Minimum Transfer Amount with respect to such party shall be zero. Notwithstanding the above, if the long-term, unsecured and unsubordinated debt obligations of Party A (or its successor) or any Credit Support Provider in respect of Party A cease to be rated at least as high as A3 (or its equivalent) by Moody’s, the Minimum Transfer Amount with respect to Party A shall be zero.

(D) “Rounding” The Delivery Amount and the Return Amount will be rounded up and down to the nearest integral multiple of CAD10,000 respectively, subject to the maximum Return Amount being equal to the Credit Support Balance.

(d) Valuation and Timing.

(i) “Valuation Agent” means, Party A.

(ii) “Valuation Date” means each Local Business Day.

(iii) “Valuation Time” means the close of business in the relevant market, as determined by the Valuation Agent, on the Local Business Day immediately preceding the Valuation Date or date of calculation, as applicable; provided that the calculations of Value and Exposure, as far as practicable, will be made at approximately the same time on the same date.

(iv) “Notification time” means by 3:00 p.m., Toronto time, on a Local Business Day.

(e) Exchange Date. “Exchange Date” has the meaning specified in paragraph 3(c)(ii).

(f) Dispute Resolution.

(i) “Resolution Time”, means 2:00 p.m., Toronto time, on the Local Business Day following the date on which notice of the dispute is given under Paragraph 4.

(ii) “Value”. For the purpose of Paragraph 4(a)(4)(i)(C) and 4(a)(4)(ii), the Value of the outstanding Credit Support Balance or of any transfer of Eligible Credit Support or Equivalent Credit Support, as the case may be, will be calculated as follows:

with respect to any Cash, the Base Currency Equivalent of the amount thereof.

(iii) “Alternative”. The provisions of Paragraph 4 will apply.

(g) Distribution and Interest Amount.

(i) “Interest Rate”. The “Interest Rate” in relation to any Eligible Currency will be the weighted average of interest earned by the Transferee or such rate as may be agreed between the parties from time to time.

(ii) “Transfer of Interest Amount”. The transfer of the Interest Amount will be made on the second Local Business Day in respect of which the “Interest Period” means the preceding calendar month to the extent that Party B has earned and received such amount of interest and that the Valuation Agent has confirmed in writing that a Delivery Amount would not be created or increased by that transfer, and on any other Local Business Day on which Equivalent Credit Support is transferred to the Transferor pursuant to Paragraph 2(b), provided, that Party B shall only be obliged to transfer any Interest Amount to Party A to the extent that it has received such amount.

(iii) “Alternative to Interest Amount”. The provisions of Paragraph 5(c)(ii) will apply.

(iv) “Interest Amount”. The definition of “Interest Amount” shall be deleted and replaced with the following:

“Interest Amount” means, with respect to an Interest Period and each portion of the Credit Support Balance comprised of cash in an Eligible Currency, the sum of the amounts of interest determined for each day in that Interest Period by the Valuation Agent as follows:

(x) the amount of such currency comprised in the Credit Support Balance at the close of business for general dealings in the relevant currency on such day (or, if such day is not a Local Business Day, on the immediately preceding Local Business Day); multiplied by

(y) the relevant Interest Rate; divided by

(z) 365.

(v) “Credit Support Balance”. The definition of “Credit Support Balance” in paragraph 10 shall be amended by the deletion of the last sentence and, for the avoidance of doubt, it is agreed and acknowledged that Equivalent Distributions or Interest Amount (or any portion of either) not transferred pursuant to Paragraph 5(c)(i) or (ii) will not form part of the Credit Support Balance.

(h) Addresses for Transfers.

Party A:

CAD CASH
Account With:	To be advised.

Beneficiary:	To be advised.
Account No:	To be advised.
Reference:	To be advised.

USD CASH
Account With:	To be advised.
Beneficiary:	To be advised.
Account No:	To be advised.
Reference:	To be advised.

Party B:

Details to be obtained from:

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

c/o BANK OF MONTREAL

Attention:             Senior Manager, Securitization Finance and Operations

Facsimile No:        (416) 867-4166

(i) Other Provisions.

(i) Transfer Timing.

(A) The final paragraph of Paragraph 3(a) shall be deleted and replaced with the following:

“Subject to Paragraph 4, and unless otherwise specified, any transfer of Eligible Credit Support or Equivalent Credit Support (whether by the Transferor pursuant to Paragraph 2(a) or by the Transferee pursuant to Paragraph 2(b)) shall be made not later than the close of business on the Settlement Day.”

(B) The definition of Settlement Day shall be deleted and replaced with the following:

““Settlement Day” means the next Local Business Day after the Demand Date”.

(C) For the purposes of this Paragraph 11(h)(i):

“Demand Date” means, with respect to a transfer by a party:

(i) in the case of a transfer pursuant to Paragraph 2, Paragraph 3 or Paragraph 4(a)(2), the relevant Valuation Date. For the avoidance of doubt, for the purposes of Paragraph 2(b) and Paragraph 4(a)(2), the Transferor will be deemed to receive notice of the demand by the Transferee to make a transfer of Eligible Credit Support on the Demand Date; and

(ii) in the case of a transfer pursuant to Paragraph 3(c)(ii)(A), the date on which the Transferee has given its consent to the proposed exchange.

For the avoidance of doubt, on each Demand Date the Transferor shall deliver to the Transferee and the Security Trustee a statement showing the amount of Eligible Credit Support to be delivered.

(ii) Early Termination.

The heading for Paragraph 6 shall be deleted and replaced with “Early Termination” and the following shall be added after the word “Default” in the first line of Paragraph 6, “or a Termination Event in relation to all (but not less than all) Transactions”.

(iii) Costs of Transfer on Exchange.

Notwithstanding Paragraph 8, the Transferor will be responsible for, and will reimburse the Transferee for, all transfer and other taxes and other costs involved in the transfer of Eligible Credit Support either from the Transferor to the Transferee or from the Transferee to the Transferor hereto.

(iv) Cumulative Rights.

The rights, power and remedies of the Transferee under this Annex shall be in addition to all rights, powers and remedies given to the Transferee by the Agreement or by virtue of any statute or rule of law, all of which rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing the rights of the Transferee in the Credit Support Balance created pursuant to this Annex.

(v) Single Transferor and Single Transferee.

Party A and Party B agree that, notwithstanding anything to the contrary in this Annex, (including, without limitation, the recital hereto, Paragraph 2 or the definitions in Paragraph 10), (a) the term “Transferee” as used in this Annex means only Party B; (b) the term “Transferor” as used in this Annex means only Party A; (c) only Party A will be required to make Transfers of Eligible Credit Support hereunder, and (d) in the calculation of any Credit Support Amount, where the Transferee’s Exposure would be expressed as a negative number, such Exposure shall be deemed to be zero.

(vi) Ratings Agency Requirement.

“Rating Agency Requirement” means the Moody’s Requirements, the DBRS Requirements and the Fitch Requirements, as defined below.

(i) Moody’s Requirements.

“Credit Support Amount” shall equal, with respect to a Transferor on a Valuation Date, (A) the greatest of:

(i) zero;

(ii) the aggregate amount of the Next Payments for all Next Payment Dates, provided that, to the extent that any Next Payment (or portion thereof) cannot be determined with certainty on such Valuation Date due to variables that are to be determined on a date following such Valuation Date, it shall be calculated by reference to the Valuation Agent’s prediction of what such variables will be and such prediction shall be made by the Valuation Agent in a commercially reasonable manner using the information then available to it; and

(iii) the sum of (x) the Transferee’s Exposure and (y) the aggregate of the Moody’s Additional Amounts for all Transactions,

less (B) the Threshold for Party A.

“Moody’s Additional Amount” means:

(A) in respect of any Transaction that is both a cross-currency hedge and an Optionality Hedge, the lesser of (x) the sum of (1) the product of Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date and the Moody’s Cross Currency Notional Amount Lower Multiplier and (2) the product of the Moody’s Cross Currency DV01 Multiplier (Optionalilty) and the Transaction Cross Currency DV01 for such Transaction and (y) the product of the Moody’s Cross Currency Notional Amount Higher Multiplier (Optionality) and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date;

(B) in respect of any Transaction that is a cross-currency hedge and is not an Optionality Hedge, the lesser of (x) the sum of (1) the product of Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date and the Moody’s Cross Currency Notional Amount Lower Multiplier and (2) the Moody’s Cross Currency DV01 Multiplier and the Transaction Cross Currency DV01 for such Transaction and (y) the product of the Moody’s Cross Currency Notional Amount Higher Multiplier and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date;

(C) in respect of any Transaction that is not a cross-currency hedge and is an Optionality Hedge, the lesser of (x) the product of the Moody’s Single Currency DV01 Multiplier (Optionality) and the Transaction Single Currency DV01 for such Transaction and (y) the product of the Moody’s Single Currency Notional Amount Multiplier (Optionality) and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date; and

(D) in respect of any Transaction that is neither a cross-currency hedge nor an Optionality Hedge, the lesser of (x) the product of the Moody’s Single Currency DV01 Multiplier and the Transaction Single Currency DV01 for such Transaction and (y) the product of the Moody’s Single Currency Notional Amount Multiplier and the Transaction Notional Amount for such Transaction for the Calculation Period which includes such Valuation Date.

“Moody’s Cross Currency DV01 Multiplier” means, (A) if each Local Business Day is a Valuation Date, 15 and (B) otherwise, 25.

“Moody’s Cross Currency DV01 Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 30 and (B) otherwise, 40.

“Moody’s Cross Currency Notional Amount Higher Multiplier” means, (A) if each Local Business Day is a Valuation Date, 0.09 and (B) otherwise, 0.1.

“Moody’s Cross Currency Notional Amount Higher Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 0.11 and (B) otherwise, 0.12.

“Moody’s Cross Currency Notional Amount Lower Multiplier” means, (A) if each Local Business Day is a Valuation Date, 0.06 and (B) otherwise, 0.07.

“Moody’s Single Currency DV01 Multiplier” means, (A) if each Local Business Day is a Valuation Date, 50 and (B) otherwise, 60.

“Moody’s Single Currency DV01 Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 65 and (B) otherwise, 75.

“Moody’s Single Currency Notional Amount Multiplier” means, (A) if each Local Business Day is a Valuation Date, 0.08 and (B) otherwise, 0.09.

“Moody’s Single Currency Notional Amount Multiplier (Optionality)” means, (A) if each Local Business Day is a Valuation Date, 0.10 and (B) otherwise, 0.11.

“Next Payment” means, in respect of each Next Payment Date, the Base Currency Equivalent of any payments due to be made by Party A under Section 2(a) (after taking account of any applicable netting under Section 2(c)) on such Next Payment Date.

“Next Payment Date” means each date on which the next scheduled payment under any Transaction (other than the Transaction constituted by this Annex) is due to be paid or would be due to be paid but for the application of netting.

“Optionality Hedge” means any Transaction that is a cap, floor, swaption, or a Transaction-Specific Hedge.

“Transaction Cross Currency DV01” means, with respect to a Transaction and any date of determination, the greater of (i) the estimated absolute change in the Base Currency Equivalent in the mid-market value with respect to such Transaction that would result from a one basis point change in the relevant swap curve (denominated in the currency of Party A’s payment obligations under such Transaction) on such date and (ii) the estimated absolute change in the Base Currency Equivalent of the mid-market value with respect to such Transaction that would result from a one basis point change in the relevant swap curve (denominated in the currency of Party B’s payment obligations under such Transaction) on such date, in each case as determined by the Valuation Agent in good faith and in a commercially reasonable manner in accordance with the relevant methodology customarily used by the Valuation Agent.

“Transaction Notional Amount” means (A) in respect of any Transaction that is a cross currency hedge, the Base Currency Equivalent of the Currency Amount applicable to Party A’s payment obligations and (B) in respect of any other Transaction, the Base Currency Equivalent of the Notional Amount.

“Transaction Single Currency DV01” means, with respect to a Transaction and any date of determination, the estimated absolute change in the Base Currency Equivalent of the mid-market value with respect to such Transaction that would result from a one basis point change in the relevant swap curve on such date, as determined by the Valuation Agent in good faith and in a commercially reasonable manner in accordance with the relevant methodology customarily used by the Valuation Agent.

“Transaction-Specific Hedge” means any Transaction in respect of which the Transaction Notional Amount for each Calculation Period is “balance guaranteed” or otherwise not an amount that is fixed at the inception of the Transaction.

(ii) Fitch Requirements.

“Credit Support Amount” shall mean, with respect to a Transferor on the Valuation Date:

(a) if the long-term issuer default rating of Party A or its Credit Support Provider is below the Minimum Fitch Rating (as defined in Part 5(k) of the Schedule to the Agreement) but the short-term issuer default rating of Party A or its Credit Support Provider is at least as high as “F2” (or its equivalent) and the long-term issuer default rating of Party A or its Credit Support Provider is at least as high as “A-” (or its equivalent) by Fitch, the result of the following formula:

max [0; MV plus (Liquidity Adjustment multiplied by VC multiplied by 70% multiplied by N)]; and

(b) if the long-term issuer default rating of Party A or its Credit Support Provider ceases to be at least as high as “A-” (or its equivalent) by Fitch, but the short-term issuer default rating of Party A or its Credit Support Provider is at least as high as “F2” (or its equivalent) and the long-term issuer default rating of Party A or its Credit Support Provider is at least as high as “BBB+” (or its equivalent) by Fitch, the result of the following formula:

max [0; MV plus (Liquidity Adjustment multiplied by VC multiplied by N)]; and

(c) if the short-term issuer default rating of Party A or its Credit Support Provider ceases to be at least “F2” (or its equivalent) or the long-term issuer default rating of Party A or its Credit Support Provider ceases to be at least as high as “BBB+” (or its equivalent) by Fitch, the result of the following formula:

max [0; MV plus (Liquidity Adjustment multiplied by VC multiplied by N multiplied by 1.25)];

where:

“BLA” means basic liquidity adjustment which is 0% or 25% as determined by Fitch in accordance with the Fitch Criteria;

“Liquidity Adjustment” means (1 + BLA) multiplied by (1 plus max (0%; 5% multiplied by (WAL—20));

“max” means maximum;

“MV” means the Transferee’s Exposure;

“VC” means the applicable volatility cushion at that time as determined by reference to percentages set out in the relevant table under the section headed “Volatility Cushions” in the addendum entitled “Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum” published by Fitch and dated May 13, 2013 as amended and supplemented from time to time;

“N” means the sum of the Transaction Notional Amount(s) for each outstanding Transaction under this Agreement (other than the Transaction constituted by this Annex) at that time. Where the Transaction Notional Amounts differ under this Agreement, the higher of the Transaction Notional Amounts is expected to be used; and

“WAL” means the weighted average life of the Transaction determined in the manner described in “Volatility Cushions” appearing in the Fitch Criteria;

“Fitch Criteria” means the criteria used by Fitch as set out in the reports by Fitch Ratings dated May 13, 2013 and headed “Counterparty Criteria for Structured Finance and Covered Bonds” and “Counterparty Criteria for Structured Finance Transactions: Derivative Addendum”, each as amended and supplemented from time to time.

(iii) DBRS Requirements.

“Credit Support Amount” shall mean on any day before a Subsequent Rating Event has occurred, the greater of (i) zero and (ii) an amount equal to the Base Currency Equivalent of the payment due to be made by Party A under Section 2(a) (after taking account of any applicable netting under Section 2(c)) on the next scheduled Payment Date under all Transactions (other than the Transaction constituted by this Annex) and shall mean on any day after a Subsequent Rating Event has occurred, the greater of (i) zero and (ii) an amount equal to the aggregate of the Base Currency Equivalent of all remaining scheduled payments due to be made by Party A under Section 2(a) (after taking account of any applicable netting under Section 2(c)) in respect of all Transactions (other than the Transaction constituted by this Annex).

(vii) Demands and Notices.

All demands, specifications and notices under this Annex will be made pursuant to Section 12 of this Agreement.

(viii) Exposure. For purposes of this Agreement and any other Transaction Document, in determining a party’s Exposure under this Agreement, all outstanding Transactions shall be deemed to be in effect at the time of such determination notwithstanding the Effective Date thereof as set out in the relevant Confirmation.

(ix) Definitions.

As used in this Annex, the following terms shall mean:

“Cross-Currency Swap” means any cross-currency swap rate transaction between Party A and Party B entered into pursuant to the Agreement as evidenced by a Confirmation;

“DBRS” means DBRS Limited and includes any successors thereto;

“Fitch” means Fitch Ratings Inc. and includes any successors thereto;

“Interest Rate Cap” means any interest rate cap transaction entered into pursuant to the Agreement between Party A and Party B as evidenced by a Confirmation;

“Interest Rate Swap” means any interest rate swap transaction entered into pursuant to the Agreement between Party A and Party B as evidenced by a Confirmation;

“Libor Basis Swap” means any libor basis swap transaction between Party A and Party B entered into pursuant to the Agreement as evidenced by a Confirmation.

“Moody’s” means Moody’s Investors Service Limited and includes any successors thereto;

“Rating Agencies” means Moody’s, DBRS and Fitch;

“Transaction” means a Transaction entered into pursuant to this Agreement; and

“Transaction Notional Amount” means in respect of a Valuation Date, the Currency Amount applicable to Party A in respect of a Cross Currency Swap Transaction, or in respect of an Interest Rate Swap Transaction, the Notional Amount of such Interest Rate Swap Transaction, each as at such Valuation Date.

BANK OF MONTREAL		BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP, acting by its managing general partner, BMO COVERED BOND GP, INC.
By:	/s/ Cathy Cranston	By:	/s/ Chris Hughes
	Name: Cathy Cranston		Name: Chris Hughes
	Title:   Senior Vice President, Finance & Treasurer		Title:   President and Secretary
	Date:   September 30, 2013		Date:   September 30, 2013

[Signature page to ISDA Credit Support Annex to the Schedule to the Covered Bond Swap 1997 ISDA Master Agreement]

EX-5.1

Exhibit 5.1

OPINION OF OSLER, HOSKIN & HARCOURT LLP

October —, 2013

Bank of Montreal

1 First Canadian Place

Toronto, Ontario Canada M5X 1A1

and

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

1 First Canadian Place

Toronto, Ontario Canada M5X 1A1

Dear Sirs/Mesdames:

We have acted as Canadian counsel to Bank of Montreal (the Bank) and BMO Covered Bond Guarantor Limited Partnership (the Guarantor, and together with the Bank, the Registrants), in connection with the filing by the Registrants of a shelf registration on Form F-3 dated July 3, 2013 as amended by Amendment No. 1 thereto dated October 3, 2013 (collectively, the Registration Statement) under the United States Securities Act of 1933, as amended (the Act). The Registration Statement registers U.S. $10,000,000,000 aggregate amount of covered bonds (the Covered Bonds) unconditionally and irrevocably guaranteed as to payments (the Guarantee) by the Guarantor, to be issued pursuant to a trust deed, dated as of September 30, 2013 (the Trust Deed) between the Bank, as issuer, the Guarantor, as guarantor, and Computershare Trust Company of Canada, as Bond Trustee. We have participated, together with Allen & Overy LLP, United States counsel to the Bank and the Guarantor in the preparation of the following: (i) the Registration Statement; (ii) the prospectus of the Bank included in the Registration Statement (the Prospectus); and (iii) the Trust Deed.

For the purposes of our opinions below, we have examined such statutes, public and corporate records, certificates and other documents, and considered such questions of law, as we have considered relevant and necessary as a basis for the opinions hereinafter set forth. In such examination we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies or facsimiles.

For the purposes of the opinions expressed herein, we have, without independent investigation or verification, assumed that the Trust Deed has been duly authorized, executed and delivered by, and constitutes or will constitute, as the case may be, a legal, valid and binding obligation of, each party thereto other than the Bank and the Guarantor. In giving this opinion, we express no opinion as to any laws other than the laws, at the date hereof, of the Provinces of Ontario and the federal laws of Canada applicable therein.

With respect to the continuing existence of the Bank as a Schedule I bank under the Bank Act (Canada) referred to in paragraph 1 below, we have relied, without independent investigation or verification, exclusively upon a Certificate of Confirmation dated October 3, 2013 issued by the Office of the Superintendent of Financial Institutions.

With respect to the continuing existence of the Guarantor as a limited partnership existing under the Limited Partnership Act (Ontario), and in connection therewith BMO Covered Bond GP, Inc., the managing general partner of the Guarantor, existing as a corporation under the Canada Business Corporations Act referred to in paragraphs 2 below, we have relied, without independent investigation or verification, exclusively upon a limited partnerships report dated October 3, 2013 in respect of the Guarantor issued pursuant to the Limited Partnership Act (Ontario), and a certificate of compliance dated October 3, 2013 issued in respect of BMO Covered Bond GP, Inc. pursuant to the Canada Business Corporations Act.

Based on and relying upon and subject to the qualifications set forth herein, we are of the opinion that:

1. the Bank validly exists as a Schedule I bank under the Bank Act (Canada) and has the corporate power to create, issue and sell the Covered Bonds;

2. The Guarantor exists as a limited partnership under the Limited Partnership Act (Ontario). BMO Covered Bond GP, Inc. exists as a corporation incorporated under the Canada Business Corporations Act and has the corporate power to act as managing general partner of the Guarantor and, on behalf of the Guarantor, to create, issue and sell the Guarantee;

3. When each Covered Bond to be issued pursuant to the Registration Statement has been duly completed in substantially the form set forth as a schedule to the Trust Deed, executed, authenticated, issued in accordance with the Trust Deed and delivered against payment therefor as contemplated in the Registration Statement and the Prospectus and any applicable agreement of purchase and sale, such Covered Bonds and the Guarantee in respect thereof will be validly issued;

4. The Trust Deed has been duly authorized, executed and delivered by the Bank and BMO Covered Bond GP, Inc. on behalf of the Guarantor and constitutes a legal, valid and binding obligation of the Bank, the Guarantor and BMO Covered Bond GP, Inc., enforceable against each of them in accordance with its terms;

5. The opinions set forth in paragraph 4 above as to the enforceability of the Trust Deed are subject to the following qualifications:

(i) equitable remedies, such as specific performance and injunctive relief, are remedies which may only be granted at the discretion of a court of competent authority;

(ii) enforceability may be limited by bankruptcy, insolvency and other laws of general application affecting the rights of creditors (including the provisions of the Bank Act (Canada) respecting such matters); and

(iii) pursuant to the Currency Act (Canada), a judgment by a court in any province in Canada may be awarded in Canadian currency only and such judgment may be based on a rate of exchange which may be the rate in existence on a day other than the day of payment of such judgment.

- 2 -

We disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or any subsequent changes in applicable law.

The opinions expressed herein are provided solely for the benefit of the addressees in connection with the filing of the Registration Statement with the United States Securities and Exchange Commission and are not to be transmitted to any other person, nor are they to be relied upon by another person or for any other purpose or referred to in any public document or filed with any government agency or other person without our prior express consent.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the references to us under the headings “Legal Matters” and “Limitations on Enforcement of U.S. Laws Against the Bank, Our Management and Others” in the Prospectus.

In giving such permission, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission thereunder.

Yours very truly,

OSLER, HOSKIN & HARCOURT LLP

- 3 -

EX-8.1

Exhibit 8.1

ALLEN & OVERY LLP
Bank of Montreal 100 King Street West 1 First Canadian Place Toronto, Ontario, Canada M5X 1A1	Allen & Overy LLP 1221 Avenue of the Americas New York NY 10020 Tel                  212 610 6300 Fax                 212 610 6399
Our ref                     0013935-0000044 NY:17451520.2
October 3, 2013

Bank of Montreal Registration Statement on Form F-3

Ladies and Gentlemen:

We have acted as special United States tax counsel for Bank of Montreal, a chartered bank incorporated under the laws of Canada (the “Bank”) in connection with the preparation of the registration statement on Form F-3 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”) on the date hereof, of which the prospectus (the “Prospectus”) forms a part. The Registration Statement and Prospectus relate to the registration under the Securities Act of Covered Bonds up to an aggregate initial offering price of U.S. $ 10,000,000,000 (the “Securities”).

As United States tax counsel, we have advised the Bank with respect to certain general United States tax consequences of the proposed issuance of the Securities. This advice is summarized under the heading “U. S. Federal Income Taxation” (the “Discussion”) in the Prospectus. We hereby confirm that the statements set forth in the Discussion represent our opinions as to the matters of law covered by them, subject to the qualifications stated therein.

We are aware that we are referred to in the Discussion in the Prospectus. We hereby consent to the reference to us in that section and the filing with the Commission of this letter as an exhibit to the Registration Statement without thereby implying or admitting that we are “experts” within the meaning of the Securities Act or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this exhibit.

Very truly yours,

/s/ Allen & Overy LLP

Allen & Overy LLP is a limited liability partnership registered in England and Wales with registered number OC306763. It is authorized and regulated by the Solicitors Regulation Authority of England and Wales. Allen & Overy LLP is a multi-jurisdictional law firm with lawyers admitted to practise in a variety of jurisdictions. A list of the members of Allen & Overy LLP and their professional qualifications is open to inspection at its registered office, One Bishops Square, London, E1 6AD and at the above address. The term partner is used to refer to a member of Allen & Overy LLP or an employee or consultant with equivalent standing and qualifications.

Allen & Overy LLP or an affiliated undertaking has an office in each of: Abu Dhabi, Amsterdam, Antwerp, Athens, Bangkok, Beijing, Belfast, Bratislava, Brussels, Bucharest (associated office), Budapest, Casablanca, Doha, Dubai, Düsseldorf, Frankfurt, Hamburg, Hanoi, Ho Chi Minh City, Hong Kong, Istanbul, Jakarta (associated office), London, Luxembourg, Madrid, Mannheim, Milan, Moscow, Munich, New York, Paris, Perth, Prague, Riyadh (associated office), Rome, São Paulo, Shanghai, Singapore, Sydney, Tokyo, Warsaw and Washington, D.C.

EX-8.2

Exhibit 8.2

OPINION OF OSLER, HOSKIN & HARCOURT LLP

October 3, 2013

Bank of Montreal

1 First Canadian Place

Toronto, Ontario Canada M5X 1A1

and

BMO Covered Bond Guarantor Limited Partnership

c/o Bank of Montreal

1 First Canadian Place

Toronto, Ontario Canada M5X 1A1

Dear Sirs/Mesdames:

We have acted as Canadian tax counsel to Bank of Montreal (the Bank) and BMO Covered Bond Guarantor Limited Partnership (the Guarantor, and together with the Bank, the Registrants), in connection with the filing by the Registrants of a shelf registration on Form F-3 dated July 3, 2013 as amended by Amendment No. 1 thereto dated October 3, 2013 (collectively, the Registration Statement) under the United States Securities Act of 1933, as amended (the Act). The Registration Statement registers U.S.$10,000,000,000 aggregate amount of covered bonds (the Covered Bonds) unconditionally and irrevocably guaranteed as to payments (the Guarantee) by the Guarantor, to be issued pursuant to a trust deed, dated as of September 30, 2013 between the Bank, as issuer, the Guarantor, as guarantor, and Computershare Trust Company of Canada, as Bond Trustee.

We hereby confirm that, although the discussion set forth under the heading “Taxation—Canadian Taxation” in the prospectus included in the Registration Statement (the Prospectus) does not purport to discuss all possible Canadian federal income tax consequences of the ownership and disposition of the Covered Bonds to be issued pursuant to the Registration Statement, in our opinion, such discussion constitutes, in all material respects, a fair and accurate summary of the Canadian income tax consequences of the ownership and disposition of such Covered Bonds, based upon current law.

We hereby consent to the use of our name under the heading “Taxation—Canadian Taxation” in the Prospectus. We further consent to your filing a copy of this opinion as Exhibit 8.2 to the Registration Statement. In giving such permission, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission thereunder.

This opinion is expressed as of the date hereof and applies only to the disclosure under the heading “Taxation—Canadian Taxation” set forth in the Prospectus. We disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or any subsequent changes in applicable law.

Yours very truly,

OSLER, HOSKIN & HARCOURT LLP

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Bank of Montreal

We consent to the use of our reports, each dated December 4, 2012, with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting incorporated by reference herein and to the reference to our firm under the heading “Experts” in the Registration Statement.

Chartered Accountants, Licensed Public Accountants

October 3, 2013

Toronto, Canada

EX-25.1

Exhibit 25.1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

¨ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

COMPUTERSHARE TRUST COMPANY OF CANADA

(Exact name of trustee as specified in its charter)

CANADA

(Jurisdiction of incorporation if not a U.S. national bank)

Not Applicable

(I.R.S. employer identification no.)

100 University Avenue, 9th Floor, North Tower

Toronto, Ontario, Canada M5J 2Y1

(416) 263-9200

(Address of principal executive offices)

COMPUTERSHARE TRUST COMPANY, N.A.

350 Indiana Street, Suite 800, Golden, CO 80401

(303) 262-0707

(Name, address and telephone number of agent for service)

BANK OF MONTREAL

BMO COVERED BOND GUARANTOR LIMITED PARTNERSHIP

(Exact name of obligor as specified in its charter)

CANADA

ONTARIO

(State or other jurisdiction of incorporation or organization)

Not Applicable

(I.R.S. employer identification no.)

100 King Street West, 1 First Canadian Place, 68th Floor, Toronto, Ontario, Canada M5X 1A1

Suite 6100, 100 King Street West, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1A1

(Address of principal executive offices)

Covered Bonds

(Title of the indenture securities)

1. General information.

Furnish the following information as to the Trustee —

(a) Name and address of each examining or supervising authority to which it is subject.

Office of the Superintendent of Financial Institutions (OSFI) 225 Albert Street, Ottawa, Ontario, Canada K1A OH2.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee.

No responses are included for Items 3-15 of this Form T-1 because the Obligor is not in default as provided under Item 13.

15. Foreign Trustee

Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified under the Act.

The Trustee filed a Form T-6, Application Under Section 310(a)(1) of the Trust Indenture Act of 1939 for Determination of Eligibility of a Foreign Person to Act as Institutional Trustee, on September 27, 2010 in connection with the Registration on Form S-1/A (File No. 333-168856) filed by Atlantic Power Corporation (the “2010 Registration Statement”). The order in response to the Form T-6 authorizing the Trustee to act as the sole trustee was deemed issued by the SEC concurrently with the effectiveness of the 2010 Registration Statement.

16. List of Exhibits.

List below all exhibits filed as a part of this statement of eligibility.

1. Articles of Incorporation of the Trustee, as now in effect.

2. Certificate of authority for the Trustee to commence business.

3. Authorization of the Trustee to exercise corporate trust powers.

4. Bylaws of the Trustee, as now in effect.

5. Not Applicable.

6. Not Applicable.

7. A Consolidated Statement of Comprehensive Income for the period ended Q2 2013, and a Consolidated Monthly Balance Sheet as of June 30, 2013.

8. Not Applicable.

9. Trustee’s consent to serve of process on Form F-X.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, Computershare Trust Company of Canada, a corporation organized and existing under the laws of Canada, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Toronto, and Province of Ontario, on the 30th day of September, 2013.

COMPUTERSHARE TRUST COMPANY OF CANADA
By:	/s/ C. Sean Pigott
	Name: C. Sean Pigott
	Title: Corporate Trust Officer

EXHIBIT 1

Industry Canada Industrie Canada

Certificate of Incorporation	Certificat de constitution
Canada Business Corporations Act	Loi canadicnne sur les sociétés par actions

3725529 Canada Inc.	372552-9
Name of corporation-Dénomination de la société	Corporation number-Numéro de la société
I hereby certify that the above-named corporation, the articles of incorporation of which are attached, was incorporated under the Canada Business Corporations Act.	Je certifie que la société susmentionnée, dont les statuts constitutifs sont joints, a été constituée en société en vertu de la Loi canadiennue sur les sociétés par actions.
	February 29, 2000 / le 29 février 2000 Date of Incorporation—Date de constitution

CANADA BUSINESS CORPORATIONS ACT

FORM 1

ARTICLES OF INCORPORATION

(SECTION 6)

1. Name of corporation:

3725529 Canada Inc.

2. The place in Canada where the registered office is to be situated:

City of Toronto, Province of Ontario

3. The classes and any maximum number of shares that the Corporation is authorized to issue:

An unlimited number of common shares.

4. Restrictions, if any, on share transfers:

No share shall be transferred without either (a) the consent of the directors of the Corporation expressed by a resolution passed by the board of directors or by an instrument or instruments in writing signed by all of such directors, or (b) the consent of the holders of shares to which are attached more than 50% of the voting rights attaching to all shares for the time being outstanding entitled to vote at such time expressed by a resolution passed by such shareholders at a meeting duly called and constituted for that purpose or by an instrument or instruments in writing signed by all of such shareholders.

5. Number (or minimum and maximum number) of directors:

A minimum of one (1) and a maximum of ten (10).

6. Restrictions, if any, on business the corporation may carry on:

None.

7. Other provisions, if any:

(a) The number of shareholders of the Corporation, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the Corporation, were, while in that employment, and have continued after the termination of that employment to be, shareholders of the Corporation, is limited to not more than 50, 2 or more persons who are the joint registered owners of 1 or more shares being counted as 1 shareholder;

(b) Any invitation to the public to subscribe for any securities of the Corporation is prohibited; and

(c) The directors may appoint one or more directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.

8. Incorporator:

Name	Address
Brian M. Pukier	46 Alcina Avenue
	Toronto, Ontario M6G 2E8

-2-

Industry Canada Industrie Canada

Certificate of Amendment	Certificat de Modification
Canada Business Corporations Act	Loi canadienne sur les sociétés par actions

Computershare Investor Services, Inc.			372552-9
Name of corporarion-Dénomination de la société			Corporation number-Numéro de la société
I hereby certify that the articles of the above-named corporation were amended:			Je certifie que les statuts de la société susmentionnée ont été modifiés:
a)	under section 13 of the Canada Business Corporations Act in accordance with the attached notice:	£	a)	en vertu de l’article 13 de la Loi canadienne sur les sociétés par actions, conformément à l’avis ci-joint;
b)	under section 27 of the Canada Business Corporations Act as set out in the attached articles of amendment designating a series of shares;	£	b)	en vertu de l’article 27 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses modificatrices ci-jointes désignant une série d’actions;
c)	under section 179 of the Canada Business Corporations Act as set out in the attached articles of amendment;	S	c)	en vertu de l’article 179 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses modificatrices ci-jointes;
d)	under section 191 of the Canada Business Corporations Act as set out in the attached articles of reorganization;	£	d)	en vertu de l’article 191 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses de réorganisation ci-jointes;
		May 1,2000 / le 1 mai 2000 Date of Amendment—Date de modification

Industry Canada Industrie Canada

	Canada Business      Loi canadienne sur Corporations Act      les sociétés par actions	FORM 4 ARTICLES OF AMENDMENT (SECTION 27 OR 177)	FORMULE 4 CLAUSES MODIFICATRICES (ARTICLES 27 OU 177)
1 - Name of corporation—Dénomination de la société		2 - Corporation No. - N° de la société
3725529 Canada Inc.		372552-9
3 - The articles of the above-named corporation are amended as follows:		Les statuts de la société mentionnée ci-dessus sont modifiés de la façon suivante:
To change the name of the Corporation to Computershare Investor Services Inc.

Industry Canada Industrie Canada

Certificate of Amendment	Certificat de Modification
Canada Business Corporations Act	Loi canadienne sur les sociétés par actions

Computershare Investor Services Inc.
Services aux investisseurs Computershare inc.			372552-9
Name of corporarion-Dénomination de la société			Corporation number-Numéro de la société
I hereby certify that the articles of the above-named corporation were amended:			Je certifie que les statuts de la société susmentionnée ont été modifiés:
a)	under section 13 of the Canada Business Corporations Act in accordance with the attached notice:	£	a)	en vertu de l’article 13 de la Loi canadienne sur les sociétés par actions, conformément à l’avis ci-joint;
b)	under section 27 of the Canada Business Corporations Act as set out in the attached articles of amendment designating a series of shares;	£	b)	en vertu de l’article 27 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses modificatrices ci-jointes désignant une série d’actions;
c)	under section 179 of the Canada Business Corporations Act as set out in the attached articles of amendment;	S	c)	en vertu de l’article 179 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses modificatrices ci-jointes;
d)	under section 191 of the Canada Business Corporations Act as set out in the attached articles of reorganization;	£	d)	en vertu de l’article 191 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses de réorganisation ci-jointes;
				June 29, 2000 / le 29 juin 2000 Date of Amendment—Date de modification

Industry Canada Industrie Canada

		FORM 4	FORMULE 4
	Canada Business      Loi canadienne sur	ARTICLES OF AMENDMENT	CLAUSES MODIFICATRICES
	Corporations Act      les sociétés par actions	(SECTION 27 OR 177)	(ARTICLES 27 OU 177)
1 - Name of corporation—Dénomination de la société		2 - Corporation No. - N° de la société
Computershare Investor Services Inc.		372552-9
3 - The articles of the above-named corporation are amended as follows:		Les statuts de la société mentionnée ci-dessus sont modifiés de la façon suivante:

The articles of the Corporation be amended to authorize the Corporation to use its corporate name in either the existing English version or in the following French version:

Services aux investisseurs Computershare inc.

Letters Patent of Continuance	Lettres patentes de prorogation
Trust and Loan Companies Act	Loi sur les sociétés de fiducie et de prêt
The Security of State (International Financial Institutions), on behalf of the Minister of Finance and pursuant to section 33 of the Trust and Loan Companies Act:	Au nom du ministre des Finances, et en vertu de l’article 33 de la Loi sur les sociétés de fiducie et de prêt, le secrétaire d’Etat (Institutions financières internationales) :
•       continues Computershare Investor Services Inc., a company incorporated under Canada Business Corporations Act, as a company under the Trust and Loan Companies Act;	•       proroge Computershare Investor Services Inc., une société constituée aux termes de la Loi sur les sociétés par actions, comme une société sous le régime de la Loi sur les sociétés de fiducie et de prêt;
•       declares that tile name of the company is Computershare Trust Company of Canada;	•       statue que la dénomination sociale de la société est Société de fiducie Computershare du Canada;
•       declares that the head office of the company shall be in the City of Toronto, in the Province of Ontario; and	•       fixe le siège de la société dans la ville de Toronto, dans la province de l’Ontario;
•       declares that these letters patent are effective on January 9, 2001.	•       statue que les lettres patentes entrent en vigueur le 9 janvier 2001,
Date: January 9, 2001	Date: Le 9 janvier 2001

Secretary Of State

(International Financial Institutions)

Le secrétaire d’État

(Institutions financicères internationales)

EXHIBIT 2

Office of the Superintendent of Financial Institutions Bureau du surintendant des institutions financières

Order to Commence and Carry	Autorisation de fonctionnement
On Business
Trust and Loan Companies Act	Loi sur les sociétés de fiducie et
	de prêt

Whereas on January 9, 2001, Computershare Trust Company of Canada was continued as a company under the Trust and Loan Companies Act, and therefore, pursuant to subsection 52(4) of the Act, I approve the commencement and carrying on of business by Computershare Trust Company of Canada and authorise the company to carry on the activities referred to in section 412 of that Act.	Attendu que le 9 janvier 2001, Société de fiducie Computershare du Canada a été prorogée comme une société sous la Loi sur les sociétés de fiducie et de prêt, et à ces causes, en vertu du paragraphe 52(4) de ladite Loi, j’autorise la Société de fiducie Computershare du Canada à commencer à fonctionner ainsi qu’à exercer les activités mentionnées à l’article 412 de la Loi.
This Order is effective on January 9, 2001.	La présente ordonnance entre en vigueur le 9 janvier 2001.

COMPUTERSHARE TRUST COMPANY OF CANADA

BY-LAW NO. 4, AS AMENDED AND RESTATED

Section 2.4 – Execution of Instruments

Deeds, transfers, assignments, contracts, obligations, certificates and other instruments may be signed on behalf of the Company by any two of the directors, Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, Executive Vice-Presidents, Senior Vice-Presidents, Regional Vice-Presidents or Vice-Presidents. In addition, the board of directors or any two of the Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, Executive Vice-Presidents, Senior Vice-Presidents, Regional Vice-Presidents or Vice-Presidents may from time to time direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same.

CERTIFIED to be a true and exact copy of an extract from By-Law No. 4 of the By-Laws of Computershare Trust Company of Canada, which By-Law is in full force and effect as of the date hereof.

DATED at Toronto, this 29^th day of August, 2013.

/s/ Magdalena Autea

Assistant Secretary

COMPUTERSHARE TRUST COMPANY OF CANADA (the “Company”)

RESOLUTION REGARDING

EXECUTION OF DOCUMENTS AND COUNTERSIGNATURES

RESOLVED that pursuant to the authority of the Board of Directors under the terms of Section 2.4 of By-Law No. 4 of the Company, the Company hereby makes the following designations, which shall supersede any previous designations pursuant to such By-law:

1. THAT for the purposes of this designation each person listed on the attached pages shall be designated as a Signing Officer of the Company as a holder of the positions set out next to his or her name for so long as each person remains an employee of the Company.

2. THAT for the purposes of this designation the Officers and Signing Officers of the Company shall be divided into the following classes:

CLASS A	CLASS B	CLASS C
President	General Manager	Manager, Disbursements
Chief Executive Officer	Branch Manager	Manager, Investor Services
Chief Financial Officer	Corporate Trust Officer	Manager, Trade Processing
Controller	Director, Broker Products	Manager, Transfer Processing
Executive Vice President	Regional Manager, Service Delivery	Professional, Administrative Services
Senior Vice President	Manager, Administration	Professional, Product Specialist
Vice President	Manager, Client Services	Professional, SEDAR
Treasurer	Manager, Client Services, Communication Services	Professional, Transfers
Secretary	Manager, Commercial Development, Communication Services	Team Leader, Bond Administration
	Manager, Corporate Actions	Team Leader, Client Services, Communication
	Manager, Corporate Administration	Services
	Manager, Corporate Trust	Team Leader, Corporate Actions
	Manager, Employee Plans	Team Leader, Legals
	Manager, MBS	Team Leader, Oil Royalties
	Manager, Oil Royalties	Team Leader, Research
	Manager, Operations, Communication Services	Team Leader, Security Flow
	Manager, Production Development, Communication Services	Team Leader, Trust Investments
	Manager, Stock Transfer	Administrator, Audit
	Manager, Stock Transfer &	Administrator, Client Services
	Client Services	Administrator, Corporate Actions
	Manager, Stock Transfer & Operations	Administrator, Corporate Trust
	Professional, Client Services	Administrator, Escrows
	Professional, Corporate Actions	Administrator, MBS
	Professional, Employee Plans	Administrator, Oil Royalties
	Professional, MBS	Administrator, Stock Transfer
	Professional, Service Delivery	Associate Trust Officer
	Professional, Stock Transfer

3. THAT, any two Signing Officers listed in Class A or B, or both, or any one Class A or B Signing Officer together with one Class C Signing Officer may represent and act in the name of the Company, but only in the ordinary course of the Company’s trust and agency services business activities including, without limitation, transfer agency, record keeping, plan administration and debt trusteeship. The above mentioned Signing Officers, on behalf of the Company, shall be authorized:

(a) to execute and deliver all affidavits, agreements, certificates, contracts, deeds, indentures, notices, undertakings, conveyances or other documents required in the course of its operations including, without restricting the generality of the foregoing, documents evidencing any assignment, charge, co-ownership of immoveable, conveyance, deposit, exchange, habitation, hypothec, insurance, lease, lien, loan, mortgage, partnership, pledge, privilege, purchase, registration of real rights, retrocession, sale, suretyship, usufruct or other like documents;

(b) to secure any loans or other sums owed by way of mortgage, hypothec, lien or other charges upon property, real or personal, moveable or immovable;

(c) to acquire, convey, dispose or sell, in whole or in part, by way of public or private sale, by auction or otherwise, of said property so mortgaged, hypothecated or otherwise given as security;

(d) to grant easements, encumbrances, servitudes, rights of way and other charges and liens upon immovable or real property;

(e) to grant partial or total acquittances, discharges, mainlevées and releases, with or without consideration, of charges, hypothecs, liens, mortgages, pledges, privileges and of any effect of a giving-in-payment clause or of a resolutory clause;

(f) to execute and deliver all agreements, contracts, deeds or other documents pertaining to the administration, the custody or the transfer of bonds, certificates of deposits, debentures, notes, options, shares, warrants or like securities and to receive funds and invest same in said instruments; and

(g) to accept, convey, issue, purchase, receive, sell, subscribe for or transfer bonds, certificates of deposits, debentures, notes, options, shares, warrants or like securities.

The Signing Officers are authorized to exercise all powers, responsibilities and rights and to execute all obligations required under the terms of any affidavit, agreement, certificate, contract, deed, indenture, notice or other empowering document in the course of the Company’s operations and generally to do all such things as are necessary and useful to the fulfillment of the above objects, subject to any limitations imposed by law, in order to give full effect and purpose to the foregoing.

4. THAT the authorization contained herein does not include contracts and agreements for the purchase of goods and services by the Company for its own use which are excluded from the operation of this authorization.

5. THAT any one Signing Officer from Classes A, B or C, or any combination thereof, may sign and counter-sign bonds, debentures, stock certificates and other securities on behalf of the Company, when it acts as trustee, transfer agent and/or registrar.

6. THAT any Signing Officer may affix the corporate seal to any instrument requiring same.

7. THAT any officer holding a dual position shall sign only once.

DATED at Toronto, Ontario, as of the 15^th day of May, 2013.

CERTIFIED TRUE COPY

I, Magdalena Autea, Assistant Secretary of Computershare Trust Company of Canada, hereby certify that this copy of the Resolution Regarding Execution Of Documents and Countersignatures for Computershare Trust Company of Canada is a true copy of the original which was passed by the Board of Directors on May 15^th, 2013 and is of full force and effect as of the date hereof.

Certified at Toronto on this 29^th day of August, 2013.

/s/ Magdalena Autea

Assistant Secretary

COMPUTERSHARE TRUST COMPANY OF CANADA

AUTHORIZED SIGNATURES

/s/ Morag Abraham	/s/ Nico Avendano
Morag Abraham, Corporate Trust Officer	Nico Avendano, Corporate Trust Officer
/s/ Jason Barskey	/s/ Shelley Bloomberg
Jason Barskey, Corporate Trust Officer	Shelley Bloomberg, Manager, Corporate Trust
/s/ Aaron Cao	/s/ Charles Cuschieri
Aaron Cao, Administrator, MBS	Charles Cuschieri, Associate Trust Officer
/s/ Dien Jin	/s/ Charles Eric Gauthier
Dien Jin, Administrator, MBS	Charles Eric Gauthier, General Manager
/s/ Soheil Kafai	/s/ Youngin Kim
Soheil Kafai Corporate Trust Officer	Youngin Kim, Administrator, MBS
/s/ Prasath Kugananthan	/s/ Stanley Kwan
Prasath Kugananthan, Professional, MBS	Stanley Kwan, Associate Trust Officer

I, Magdalena Autea, Assistant Secretary of Computershare Trust Company of Canada, hereby certify that each of the above named persons holds the office set out beside his or her name and that the facsimile signature appearing with the name of each such person is a true exact copy of the signature of such person.

Certified at Toronto on this 29^th day of August, 2013.

/s/ Magdalena Autea

Assistant Secretary

COMPUTERSHARE TRUST COMPANY OF CANADA

AUTHORIZED SIGNATURES

/s/ Annie Yong Lu	/s/ Scott Markham
Annie Yong Lu, Professional, MBS	Scott Markham, Manager, Corporate Trust
/s/ Daniel Marz	/s/ Mircho Mirchev
Daniel Marz, Corporate Trust Officer	Mircho Mirchev, Corporate Trust Officer
/s/ Shivani Moktan	/s/ Musabbeha Nagori
Shivani Moktan, Administrator, MBS	Musabbeha Nagori, Administrator, MBS
/s/ Ann Pierce	/s/ Sean Pigott
Ann Pierce, Team Leader, Bond Administration	Sean Pigott, Corporate Trust Officer
/s/ Susanne Pynn	/s/ Christina Quintal
Susanne Pynn, Professional, MBS	Christina Quintal, Administrator, MBS
/s/ Ann Samuel	/s/ Aruna Santsarran
Ann Samuel, Associate Trust Officer	Aruna Santsarran, Team Leader, Trust Investments
/s/ Michelle Schultz	/s/ Judith Sebald
Michelle Schultz, Associate Trust Officer	Judith Sebald, Corporate Trust Officer

I, Magdalena Autea, Assistant Secretary of Computershare Trust Company of Canada, hereby certify that each of the above named persons holds the office set out beside his or her name and that the facsimile signature appearing with the name of each such person is a true exact copy of the signature of such person.

Certified at Toronto on this 29^th day of August, 2013.

/s/ Magdalena Autea

Assistant Secretary

COMPUTERSHARE TRUST COMPANY OF CANADA

AUTHORIZED SIGNATURES

/s/ Mohanie Shivprasad	/s/ Diane Small
Mohanie Shivprasad, Associate Trust Officer	Diane Small, Manager, MBS
/s/ Danrry Snider	/s/ Stuart Swartz
Danrry Snider, Corporate Trust Officer	Stuart Swartz, Senior Vice President, Corporate Trust
/s/ Anastassia Tikhomirova	/s/ Patricia Wakelin
Anastassia Tikhomirova, Corporate Trust Officer	Patricia Wakelin, Corporate Trust Officer
/s/ Steven Wang	/s/ Kelly Wood,
Steven Wang, Administrator, MBS	Kelly Wood, Manager, Administration

I, Magdalena Autea, Assistant Secretary of Computershare Trust Company of Canada, hereby certify that each of the above named persons holds the office set out beside his or her name and that the facsimile signature appearing with the name of each such person is a true exact copy of the signature of such person.

Certified at Toronto on this 29^th day of August, 2013.

/s/ Magdalena Autea

Assistant Secretary

EXHIBIT 4

COMPUTERSHARE TRUST COMPANY OF CANADA

(the “Company”)

BY-LAW NO. 4, AS AMENDED AND RESTATED

A by-law relating generally to the transaction of the business and affairs of the Company.

TABLE OF CONTENTS

ARTICLE 1
INTERPRETATION
Section 1.1	Definitions	1
Section 1.2	Conflict With Unanimous Shareholder Agreement	2
ARTICLE 2
BUSINESS OF THE COMPANY
Section 2.1	Registered Office	3
Section 2.2	Corporate Seal	3
Section 2.3	Financial year	3
Section 2.4	Execution of Instruments	3
Section 2.5	Banking Arrangements	3
Section 2.6	Voting Rights in Other Bodies Corporate	3
Section 2.7	Divisions	4
ARTICLE 3
BORROWING AND SECURITIES
Section 3.1	Borrowing Power	4
Section 3.2	Delegation	5
ARTICLE 4
DIRECTORS
Section 4.1	Number of Directors and Quorum	5
Section 4.2	Qualification	5
Section 4.3	Election and Term	6
Section 4.4	Removal of Directors	6
Section 4.5	Termination of Office	6
Section 4.6	Vacancies	6
Section 4.7	Action by the Board	6

(i)

Section 4.8	Canadian Majority at Meetings	7
Section 4.9	Meeting by Telephone	7
Section 4.10	Place of Meetings	7
Section 4.11	Calling of Meetings	7
Section 4.12	Notice of Meeting	7
Section 4.13	First Meeting of New Board	8
Section 4.14	Adjourned Meeting	8
Section 4.15	Regular Meetings	8
Section 4.16	Chairman	8
Section 4.17	Votes to Govern	9
Section 4.18	Conflict of Interest	9
Section 4.19	Remuneration and Expenses	9
ARTICLE 5
COMMITTEES
Section 5.1	Committees of the Board	9
Section 5.2	Conduct Review Committee	9
Section 5.3	Audit Committee	10
Section 5.4	Transaction of Business	10
Section 5.5	Advisory Bodies	10
Section 5.6	Procedure	10
ARTICLE 6
OFFICERS
Section 6.1	Appointment	10
Section 6.2	Chairman of the Board	11
Section 6.3	Chief Executive Officer	11
Section 6.4	President	11
Section 6.5	Vice-President	11
Section 6.6	Secretary	11
Section 6.7	Treasurer	11
Section 6.8	Powers and Duties of Other Officers	12
Section 6.9	Variation of Powers and Duties	12
Section 6.10	Term of Office	12
Section 6.11	Terms of Employment and Remuneration	12
Section 6.12	Conflict of Interest	12
Section 6.13	Agents and Attorneys	12
Section 6.14	Fidelity Bonds	12
ARTICLE 7
PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
Section 7.1	Limitation of Liability	13
Section 7.2	Indemnity	13
Section 7.3	Insurance	14

(ii)

ARTICLE 8
SHARES
Section 8.1	Allotment of Shares	14
Section 8.2	Commissions	14
Section 8.3	Registration of Share Transfer	14
Section 8.4	Transfer Agents and Registrars	14
Section 8.5	Non-Recognition of Trusts	15
Section 8.6	Share Certificates	15
Section 8.7	Replacement of Share Certificates	15
Section 8.8	Joint Holders	15
Section 8.9	Deceased Shareholders	16
ARTICLE 9
DIVIDENDS AND RIGHTS
Section 9.1	Dividends	16
Section 9.2	Dividend Cheques	16
Section 9.3	Non-Receipt of Cheques	16
Section 9.4	Record Date for Dividends and Rights	17
Section 9.5	Unclaimed Dividends	17
ARTICLE 10
MEETINGS OF SHAREHOLDERS
Section 10.1	Annual Meetings	17
Section 10.2	Special Meetings	17
Section 10.3	Place of Meetings	17
Section 10.4	Notice of Meetings	17
Section 10.5	List of Shareholders Entitled to Notice	18
Section 10.6	Record Date for Notice	18
Section 10.7	Meetings Without Notice	18
Section 10.8	Chairman, Secretary and Scrutineers	19
Section 10.9	Persons Entitled to be Present	19
Section 10.10	Quorum	19
Section 10.11	Right to Vote	20
Section 10.12	Proxyholders and Representatives	20
Section 10.13	Time for Deposit of Proxies	20
Section 10.14	Joint Shareholders	21
Section 10.15	Votes to Govern	21
Section 10.16	Show of Hands	21
Section 10.17	Ballots	21

(iii)

Section 10.18	Adjournment	22
Section 10.19	Resolution in Writing	22
Section 10.20	Only One Shareholder	22
ARTICLE 11
NOTICES
Section 11.1	Method of Giving Notices	22
Section 11.2	Notice to Joint Holders	23
Section 11.3	Computation of Time	23
Section 11.4	Undelivered Notices	23
Section 11.5	Omissions and Errors	23
Section 11.6	Persons Entitled by Death or Operation of Law	23
Section 11.7	Waiver of Notice	23
ARTICLE 12
EFFECTIVE DATE
Section 12.1	Effective Date	24
Section 12.2	Repeal	24

(iv)

BE IT ENACTED as a by-law of the Company as follows:

ARTICLE 1

INTERPRETATION

Section 1.1 Definitions.

(1) In the by-laws of the Company, unless the context otherwise requires:

“Act” means the Trust and Loan Companies Act, and any statute that may be substituted therefor, as from time to time amended.

“appoint” includes “elect” and vice versa.

“board” means the board of directors of the Company.

“by-laws” means this by-law and all other by-laws of the Company from time to time in force and effect.

“cheque” includes a draft.

“Company” means the Company continued under the Act on January 9th, 2001.

“letters patent” means the letters patent of the Company as from time to time amended or restated.

“meeting of shareholders” includes an annual meeting of shareholders and a special meeting of shareholders.

“non-business day” means Saturday, Sunday and any other day that is a holiday as defined in the Interpretation Act (Canada) as from time to time amended.

“ordinary resolution” means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution or signed by all of the shareholders entitled to vote on that resolution.

“recorded address” means in the case of a shareholder his address as recorded in the securities register; and in the case of joint shareholders the address appearing in the securities register in respect of such joint holding or the first address so appearing if there are more than one; and in the case of a director (subject to the provisions of Section 11.1), officer, auditor or member of a committee of the board, his latest address as recorded in the records of the Company.

“resident Canadian” means an individual who is:

(a) A Canadian citizen ordinarily resident in Canada;

(b) A Canadian citizen not ordinarily resident in Canada who is a member of a class of persons prescribed in the regulations to the Act, as amended from time to time; or

(c) A permanent resident within the meaning of the Immigration Act and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which he first became eligible to apply for Canadian citizenship.

“signing officer” means, in relation to any instrument, any person authorized to sign the same on behalf of the Company by or pursuant to section 2.4.

“special meeting of shareholders” includes a meeting of any class or classes of shareholders and a special meeting of all shareholders entitled to vote at an annual meeting of shareholders.

“special resolution” means a resolution passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution.

“unanimous shareholder agreement” means a written agreement among all the shareholders of the Company or among all such shareholders and a person who is not a shareholder or a written declaration of the beneficial owner of all of the issued shares of the Company that restricts, in whole or in part, the powers of the directors to manage the business and affairs of the Company, as from time to time amended.

(2) Save as aforesaid, words and expressions defined in the Act have the same meanings when used herein. Words importing the singular number include the plural and vice versa; words importing gender include the masculine, feminine and neuter genders; and words importing a person include an individual, partnership, association, body corporate, unincorporated organization, trustee, executor, administrator and legal representative.

Section 1.2 Conflict With Unanimous Shareholder Agreement.

Where any provision in the by-laws conflicts with any provision of a unanimous shareholder agreement the provision of such unanimous shareholder agreement shall govern.

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ARTICLE 2

BUSINESS OF THE COMPANY

Section 2.1 Registered Office.

The registered office of the Company shall be at the place within Canada from time to time specified in the articles and at such address therein as the board may from time to time determine.

Section 2.2 Corporate Seal.

Until changed by the board, the corporate seal of the Company shall be in the form impressed hereon.

Section 2.3 Financial Year.

Until changed by the board, the financial year of the Company shall end on the last day of December in each year.

Section 2.4 Execution of Instruments.

Deeds, transfers, assignments, contracts, obligations, certificates and other instruments may be signed on behalf of the Company by any two of the directors, Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, Executive Vice-Presidents, Senior Vice-Presidents, Regional Vice-Presidents or Vice-Presidents. In addition, the board of directors or any two of the Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, Executive Vice-Presidents, Senior Vice-Presidents, Regional Vice-Presidents or Vice-Presidents may from time to time direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same.

Section 2.5 Banking Arrangements.

The banking business of the Company including, without limitation, the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies or other bodies corporate or organizations or persons as may from time to time be designated by or under the authority of the board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of powers as the board may from time to time prescribe or authorize.

Section 2.6 Voting Rights in Other Bodies Corporate.

The person or persons authorized under Section 2.4 may execute and deliver proxies and arrange for the issuance of voting certificates or other evidence of the right to exercise the voting rights attaching to any securities held by the Company. Such instruments, certificates or other evidence shall be in favour of such person or

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persons as may be determined by the said person or persons executing such proxies or arranging for the issuance of voting certificates or such other evidence of the right to exercise such voting rights. In addition, the board may from time to time direct the manner in which and the person or persons by whom any particular voting rights or class of voting rights may or shall be exercised.

Section 2.7 Divisions.

The board may cause the business and operations of the Company or any part thereof to be divided or segregated into one or more divisions upon such basis, including without limitation, character or type of businesses or operations, geographical territories, product lines or goods or services as the board may consider appropriate in each case. From time to time the board or, if authorized by the board, the chief executive officer may authorize, upon such basis as may be considered appropriate in each case:

(a) Sub-Division and Consolidation. The further division of the business and operations of any such division into sub-units and the consolidation of the business and operations of any such divisions and sub-units;

(b) Name. The designation of any such division or sub-unit by, and the carrying on of the business and operations of any such division or sub-unit under, a name other than the name of the Company; provided that the Company shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the Company; and

(c) Officers. The appointment of officers for any such division or sub-unit, the determination of their powers and duties, and the removal of any such officer so appointed without prejudice to such officer’s rights under any employment contract or in law, provided that any such officers shall not, as such, be officers of the Company, unless expressly designated as such.

ARTICLE 3

BORROWING AND SECURITIES

Section 3.1 Borrowing Power.

(1) Without limiting the borrowing powers of the Company as set forth in the Act, the board may from time to time on behalf of the Company, without authorization of the shareholders:

(a) Borrow money upon the credit of the Company;

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(b) Issue, reissue, sell or pledge bonds, debentures, notes or other evidences of indebtedness or guarantee of the Company, whether secured or unsecured;

(c) To the extent permitted by the Act, give a guarantee on behalf of the Company to secure performance of any present or future indebtedness, liability or obligation of any person; and

(d) Charge, mortgage, hypothecate, pledge, or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal, movable or immovable, property of the Company, including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or guarantee or any other present or future indebtedness, liability or obligation of the Company.

(2) Nothing in this section limits or restricts the borrowing of money by the Company on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Company.

Section 3.2 Delegation.

The board may from time to time delegate to a committee of the board, one or more directors or officers of the Company or any other person as may be designated by the board all or any of the powers conferred on the board by section 3.1 or by the Act to such extent and in such manner as the board shall determine at the time of each such delegation.

ARTICLE 4

DIRECTORS

Section 4.1 Number of Directors and Quorum.

Until changed in accordance with the Act, the board shall consist of not fewer than one (1) director and not more than ten (10) directors. Subject to section 4.8, the quorum for the transaction of business at any meeting of the board shall consist of a majority of the number of directors or such greater number of directors as the board may from time to time determine.

Section 4.2 Qualification.

No person shall be qualified for election as a director if he is less than 18 years of age; if he is of unsound mind and has been so found by a court in Canada or elsewhere; if he is not an individual; or if he has the status of a bankrupt. A director need not be a shareholder. A majority of the directors shall be resident Canadians.

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Section 4.3 Election and Term.

The election of directors shall take place at the first meeting and thereafter at each annual meeting of shareholders and all the directors then in office shall retire but, if qualified, shall be eligible for re-election. The number of directors to be elected at any such meeting shall, if a minimum and maximum number of directors, is authorized, be the number of directors then in office unless the directors or the shareholders otherwise determine or shall, if a fixed number of directors is authorized, be such fixed number. The election shall be by ordinary resolution. If an election of directors is not held at the proper time, the incumbent directors shall continue in office until their successors are elected.

Section 4.4 Removal of Directors.

Subject to the provisions of the Act, the shareholders may by ordinary resolution passed at a special meeting of shareholders called for such purpose remove any director from office and the vacancy created by such removal may be filled at the same meeting, failing which it may be filled by the board.

Section 4.5 Termination of Office.

A director ceases to hold office when he dies; he is removed from office by the shareholders; he ceases to be qualified for election as a director; or his written resignation is sent or delivered to the Company, or, if a time is specified in such resignation, at the time so specified, whichever is later.

Section 4.6 Vacancies.

Subject to the provisions of the Act, a quorum of the board may fill a vacancy in the board, except a vacancy resulting from an increase in the number or minimum number of directors specified in the articles or from a failure of the shareholders to elect the number or minimum number of directors specified in the articles. In the absence of a quorum of the board, or if the vacancy has arisen from a failure of the shareholders to elect the number or minimum number of directors specified in the articles, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy. If such directors fail to call such meeting or if there are no such directors then in office, any shareholder may call the meeting.

Section 4.7 Action by the Board.

Subject to any unanimous shareholder agreement, the board shall manage the business and affairs of the Company. Subject to sections 4.8 and 4.9, the powers of the board may be exercised by resolution passed at a meeting at which a quorum is present or by resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of the board. Where there is a vacancy in the board, the remaining directors may exercise all the powers of the board so long as a quorum remains in office. Where the Company has only one director, that director may constitute a meeting.

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Section 4.8 Canadian Majority at Meetings.

The board shall not transact business at a meeting, other than filling a vacancy in the board, unless a majority of the directors present are resident Canadians, except where:

(a) A resident Canadian director who is unable to be present approves in writing or by telephone or other communications facilities the business transacted at the meeting; and

(b) A majority of resident Canadians would have been present had that director been present at the meeting.

Section 4.9 Meeting by Telephone.

If all the directors of the Company consent, a director may participate in a meeting of the board or of a committee of the board by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed to be present at the meeting. Any such consent shall be effective whether given before or after the meeting to which it relates and may be given with respect to all meetings of the board and of committees of the board.

Section 4.10 Place of Meetings.

Meetings of the board may be held at any place in or outside Canada.

Section 4.11 Calling of Meetings.

Meetings of the board shall be held from time to time at such time and at such place as the board, the chairman of the board, the chief executive officer, the president or any two directors may determine.

Section 4.12 Notice of Meeting.

Notice of the time and place of each meeting of the board shall be given in the manner provided in Article Eleven to each director not less than 48 hours before the time when the meeting is to be held. A notice of a meeting of directors need not specify the purpose of or the business to be transacted at the meeting except where the Act requires such purpose or business to be specified, including, if required by the Act, any proposal to:

(a) Submit to the shareholders any question or matter requiring approval of the shareholders;

(b) Fill a vacancy among the directors or in the office of auditor;

(c) Issue securities, except in the manner and on the terms authorized by the directors;

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(d) Declare dividends;

(e) Purchase, redeem or otherwise acquire shares issued by the Company;

(f) Pay a commission for the sale of shares;

(g) Approve a management proxy circular referred to in the Act;

(h) Approve a take-over bid circular or directors’ circular referred to in the Act;

(i) Approve any annual financial statements referred to in the Act; or

(j) Adopt, amend or repeal by-laws.

Section 4.13 First Meeting of New Board.

Provided a quorum of directors is present, each newly elected board may hold its first meeting, without notice, immediately following the meeting of shareholders at which such board is elected.

Section 4.14 Adjourned Meeting.

Notice of an adjourned meeting of the board is not required if the time and place of the adjourned meeting is announced at the original meeting.

Section 4.15 Regular Meetings.

The board may appoint a day or days in any month or months for regular meetings of the board at a place and hour to be named. A copy of any resolution of the board fixing the place and time of such regular meetings shall be sent to each director forthwith after being passed, but no other notice shall be required for any such regular meeting except where the Act requires the purpose thereof or the business to be transacted thereat to be specified.

Section 4.16 Chairman.

The chairman of any meeting of the board shall be the first mentioned of such of the following officers as have been appointed and who is a director and is present at the meeting: chairman of the board, chief executive officer, president or a vice-president. If no such officer is present, the directors present shall choose one of their number to be chairman. If the secretary of the Company is absent, the chairman shall appoint some person, who need not be a director, to act as secretary of the meeting.

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Section 4.17 Votes to Govern.

At all meetings of the board every question shall be decided by a majority of the votes cast on the question. In case of an equality of votes the chairman of the meeting shall not be entitled to a second or casting vote.

Section 4.18 Conflict of Interest.

A director or officer who is a party to, or who is a director or officer of or has a material interest in any person who is a party to, a material contract or proposed material contract with the Company shall disclose the nature and extent of his interest at the time and in the manner provided by the Act and such material interest shall be entered in the minutes of the meetings of directors or otherwise noted in the records of the Company. Any such contract or proposed contract shall be referred to the board or shareholders for approval even if such contract is one that in the ordinary course of the Company’s business would not require approval by the board or shareholders. Such a director shall not vote on any resolution to approve the same except as provided by the Act.

Section 4.19 Remuneration and Expenses.

Subject to any unanimous shareholder agreement, the directors shall be paid such remuneration for their services as the board may from time to time determine. The directors shall also be entitled to be reimbursed for travelling and other expenses properly incurred by them in attending meetings of the board or any committee thereof. Nothing herein contained shall preclude any director from serving the Company in any other capacity and receiving remuneration therefor.

ARTICLE 5

COMMITTEES

Section 5.1 Committees of the Board.

The board may appoint one or more committees of the board, however designated, and delegate to any such committee any of the powers of the board except those which pertain to items which, under the Act, a committee of the board has no authority to exercise. A majority of the members of any such committee shall be resident Canadians.

Section 5.2 Conduct Review Committee.

The board shall establish a conduct review committee. The conduct review committee shall have such duties, powers and responsibilities as may be conferred upon it by the Act and such further duties, powers and responsibilities as the board may, by resolution delegate to it. Subject to the Act, the board may from time to time determine the size and composition of the conduct review committee.

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Section 5.3 Audit Committee.

The board shall establish an audit committee. The audit committee shall have such duties, powers and responsibilities as may be conferred upon it by the Act and such further duties, powers and responsibilities as the board may, by resolution delegate to it. Subject to the Act, the board may from time to time determine the size and composition of the audit committee.

Section 5.4 Transaction of Business.

Subject to the provisions of section 4.9, the powers of a committee of the board may be exercised by a meeting at which a quorum is present or by resolution in writing signed by all members of such committee who would have been entitled to vote on that resolution at a meeting of the committee. Meetings of any such committee may be held at any place in or outside of Canada.

Section 5.5 Advisory Bodies.

The board may from time to time appoint such advisory bodies as it may deem advisable.

Section 5.6 Procedure.

Unless otherwise determined by the board, each committee and advisory body shall have power to fix its quorum at not less than a majority of its members, to elect its chairman, and to regulate its procedure.

ARTICLE 6

OFFICERS

Section 6.1 Appointment.

The board shall appoint from their number a chief executive officer. Subject to any unanimous shareholder agreement, the board may from time to time appoint a president, one or more vice-presidents (to which title may be added words indicating seniority or function), a secretary, a treasurer and such other officers as the board may determine, including one or more assistants to any of the officers so appointed. The board may specify the duties of and, in accordance with this by-law and subject to the provisions of the Act, delegate to such officers powers to manage the business and affairs of the Company. The chief executive officer may appoint such officers as he or she may determine and specify such officers’ duties. At the next meeting of the board of directors following any such appointment by the chief executive officer, the board of directors may confirm the appointment of such officer. In the event that such appointment is not confirmed, such officer shall cease to hold the office appointed by the chief executive officer. Subject to sections 6.2 and 6.3, an officer may but need not be a director and one person may hold more than one office.

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Section 6.2 Chairman of the Board.

The board may from time to time also appoint a chairman of the board who shall be a director. If appointed, the board may assign to him any of the powers and duties that are by any provisions of this by-law assigned to the chief executive officer or to the president, and he shall, subject to the provisions of the Act, have such other powers and duties as the board may specify. During the absence or disability of the chairman of the board, his duties shall be performed and his powers exercised by the chief executive officer.

Section 6.3 Chief Executive Officer.

The chief executive officer shall be ordinarily resident in Canada and shall be a director. The chief executive officer, subject to the authority of the board, shall have general supervision of the business and affairs of the Company; and he shall, subject to the provisions of the Act, have such other powers and duties as the board may specify.

Section 6.4 President.

If appointed, the president shall be the chief operating officer and, subject to the authority of the board, shall have such other powers and duties as the board may specify.

Section 6.5 Vice-President.

A vice-president shall have such powers and duties as the board or the chief executive officer may specify.

Section 6.6 Secretary.

The secretary shall enter or cause to be entered minutes of all proceedings of all meetings of the board, shareholders and committees of the board in records kept for that purpose; he shall give or cause to be given, as and when instructed, all notices to shareholders, directors, officers, auditors and members of committees of the board; he shall be the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Company and of all books, papers, records, documents, and instruments belonging to the Company, except when some other officer or agent has been appointed for that purpose; and he shall have such other powers and duties as the board or the chief executive officer may specify.

Section 6.7 Treasurer.

The treasurer shall keep or cause to be kept proper accounting records in compliance with the Act and shall be responsible for the deposit of money, the safekeeping of securities and the disbursement of the funds of the Company; he shall render or cause to be rendered to the board whenever required an account of all his transactions as treasurer and of the financial position of the Company; and he shall have such other powers and duties as the board or the chief executive officer may specify.

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Section 6.8 Powers and Duties of Other Officers.

The powers and duties of all other officers shall be such as the terms of their engagement call for or as the board or the chief executive officer may specify. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the board or the chief executive officer otherwise directs.

Section 6.9 Variation of Powers and Duties.

The board may from time to time and subject to the provisions of the Act, vary, add to or limit the powers and duties of any officer.

Section 6.10 Term of Office.

The board, in its discretion, may remove any officer of the Company, without prejudice to such officer’s rights under any employment contract. Otherwise each officer appointed by the board shall hold office until his successor is appointed, or until his earlier resignation.

Section 6.11 Terms of Employment and Remuneration.

The terms of employment and the remuneration of an officer appointed by the board shall be settled by it from time to time.

Section 6.12 Conflict of Interest.

An officer shall disclose his interest in any material contract or proposed material contract with the Company in accordance with section 4.18.

Section 6.13 Agents and Attorneys.

Subject to the provisions of the Act, the Company, by or under the authority of the board shall have power from time to time to appoint agents or attorneys for the Company in or outside Canada with such powers of management, administration or otherwise (including the power to sub-delegate) as may be thought fit.

Section 6.14 Fidelity Bonds.

The board may require such officers, employees and agents of the Company as the board deems advisable to furnish bonds for the faithful discharge of their powers and duties, in such form and with such surety as the board may from time to time determine.

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ARTICLE 7

PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

Section 7.1 Limitation of Liability.

Every director and officer of the Company in exercising his powers and discharging his duties shall act honestly and in good faith with a view to the best interests of the Company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Subject to the foregoing, no director or officer shall be liable for the acts, receipts, neglects or defaults of any other director, officer or employee, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to the Company through the insufficiency or deficiency of title to any property acquired for or on behalf of the Company, or for the insufficiency or deficiency of any security in or upon which any of the monies of the Company shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any of the monies, securities or effects of the Company shall be deposited, or for any loss occasioned by any error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto; provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof.

Section 7.2 Indemnity.

(1) Subject to the limitations contained in the Act, the Company shall indemnify a director or officer, a former director or officer, or a person who acts or acted at the Company’s request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Company or such body corporate, if:

(a) He acted honestly and in good faith with a view to the best interests of the Company; and

(b) In the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

(2) The Company shall also indemnify such person in such other circumstances as the Act permits or requires. Nothing in this by-law shall limit the right of any person entitled to indemnity to claim indemnity apart from the provisions of this by-law.

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Section 7.3 Insurance.

Subject to the Act, the Company may purchase and maintain insurance for the benefit of any person referred to in section 7.2 against such liabilities and in such amounts as the board may from time to time determine and as are permitted by the Act.

ARTICLE 8

SHARES

Section 8.1 Allotment of Shares.

Subject to the Act, the articles and any unanimous shareholder agreement, the board may from time to time allot or grant options to purchase the whole or any part of the authorized and unissued shares of the Company at such times and to such persons and for such consideration as the board shall determine, provided that no share shall be issued until it is fully paid as provided by the Act.

Section 8.2 Commissions.

The board may from time to time authorize the Company to pay a reasonable commission to any person in consideration of his purchasing or agreeing to purchase shares of the Company, whether from the Company or from any other person, or procuring or agreeing to procure purchasers for any such shares.

Section 8.3 Registration of Share Transfer.

Subject to the provisions of the Act, no transfer of a share in respect of which a certificate has been issued shall be registered in a securities register except upon presentation of the certificate representing such share with an endorsement which complies with the Act made thereon or delivered therewith duly executed by an appropriate person as provided by the Act, together with such reasonable assurance that the endorsement is genuine and effective as the board may from time to time prescribe, upon payment of all applicable taxes and any reasonable fee, not to exceed $3, prescribed by the board, upon compliance with such restrictions on transfer as are authorized by the articles.

Section 8.4 Transfer Agents and Registrars.

The board may from time to time appoint one or more agents to maintain, in respect of each class of securities of the Company issued by it in registered form, a central securities register and one or more branch securities registers. Such a person may be designated as transfer agent or registrar according to his functions and one person may be designated both registrar and transfer agent. The board may at any time terminate such appointment.

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Section 8.5 Non-Recognition of Trusts.

Subject to the provisions of the Act, the Company may treat as absolute owner of any share the person in whose name the share is registered in the securities register as if that person had full legal capacity and authority to exercise all rights of ownership, irrespective of any indication to the contrary through knowledge or notice or description in the Company’s records or on the share certificate.

Section 8.6 Share Certificates.

Every holder of one or more shares of the Company shall be entitled, at his option, to a share certificate, or to a non-transferable written certificate off acknowledgement of his right to obtain a share certificate, stating the number and class or series of shares held by him as shown on the securities register. Such certificates and certificates of acknowledgement of a shareholder’s right to a share certificate, respectively, shall be in such form as the board may from time to time approve. Any share certificate shall be signed in accordance with section 2.4 and need not be under the corporate seal; provided that, unless the board otherwise determines, certificates representing shares in respect of which a transfer agent and/or registrar has been appointed shall not be valid unless countersigned by or on behalf of such transfer agent and/or registrar. The signature of one of the signing officers or, in the case of a certificate which is not valid unless countersigned by or on behalf of a transfer agent and/or registrar, and in the case of a certificate which does not require manual signature under the Act, the signatures of both signing officers, may be printed or mechanically reproduced in facsimile thereon. Every such facsimile signature shall for all purposes be deemed to be the signature of the officer whose signature it reproduces and shall be binding upon the Company. A certificate executed as aforesaid shall be valid notwithstanding that one or both of the officers whose facsimile signature appears thereon no longer holds office at the date of issue of the certificate.

Section 8.7 Replacement of Share Certificates.

The board or any officer or agent designated by the board may in its or his discretion direct the issue of a new share or other such certificate in lieu of and upon cancellation of a certificate that has been mutilated or in substitution for for a certificate claimed to have been lost, destroyed or wrongfully taken on payment of such reasonable fee, not to exceed $3, and on such terms as to indemnity, reimbursement of expenses and evidence of loss and of title as the board may from time to time prescribe, whether generally or in any particular case.

Section 8.8 Joint Holders.

If two or more persons are registered as joint holders of any share, the Company shall not be bound to issue more than one certificate in respect thereof, and delivery of such certificate to one of such persons shall be sufficient delivery to all of them. Anyone of such persons may give effectual receipts for the certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warrant issuable in respect of such share.

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Section 8.9 Deceased Shareholders.

In the event of the death of a holder, or of one of the joint holders, of any share, the Company shall not be required to make any entry in the securities register in respect thereof or to make any dividend or other payments in respect thereof; except upon production of all such documents as may be required by law and upon compliance with the reasonable requirements of the Company and its transfer agents.

ARTICLE 9

DIVIDENDS AND RIGHTS

Section 9.1 Dividends.

Subject to the provisions of the Act, the board may from time to time declare dividends payable to the shareholders according to their respective rights and interest in the Company. Dividends may be paid in money or property or by issuing fully paid shares of the Company.

Section 9.2 Dividend Cheques.

A dividend payable in money shall be paid by cheque drawn on the Company’s bankers or one of them to the order of each registered holder of shares of the class or series in respect of which it has been declared and mailed by prepaid ordinary mail to such registered holder at his recorded address, unless such holder otherwise directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order of all of such joint holders, and mailed to them at their recorded address. The mailing of such cheque as aforesaid, unless the same is not paid on due presentation, shall satisfy and discharge the liability for the dividend to the extent of the sum represented thereby plus the amount of any tax which the Company is required to and does withhold.

Section 9.3 Non-Receipt of Cheques.

In the event of non-receipt of any dividend cheque by the person to whom it is sent as aforesaid, the Company shall issue to such person a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses, and evidence of non-receipt and of title as the board may from time to time prescribe, whether generally or in any particular case.

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Section 9.4 Record Date for Dividends and Rights.

The board may fix in advance a date, preceding by not more than 50 days the date for the payment of any dividend or the date for the issue of any warrant or other evidence of the right to subscribe for securities of the Company, as a record date for the determination of the persons entitled to receive payment of such dividend or to exercise the right to subscribe for such securities; and notice of any such record date shall be given not less than 7 days before such record date in the manner provided for by the Act. If no record date is so fixed, the record date for the determination of the persons entitled to receive payment of any dividend or to exercise the right to subscribe for securities of the Company shall be at the close of business on the day on which the resolution relating to such dividend or right to subscribe is passed by the board.

Section 9.5 Unclaimed Dividends.

Any dividend unclaimed after a period of 6 years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the Company.

ARTICLE 10

MEETINGS OF SHAREHOLDERS

Section 10.1 Annual Meetings.

The annual meeting of shareholders shall be held at such time in each year and, subject to section 10.3, at such place as the board, the chairman of the board, the chief executive officer, or the president may from time to time determine, for the purpose of considering the financial statements and reports required by the Act to be placed before the annual meeting, electing directors, appointing an auditor, and for the transaction of such other business as may properly be brought before the meeting.

Section 10.2 Special Meetings.

The board, the chairman of the board, the chief executive officer, or the president shall have power to call a special meeting of shareholders at any time.

Section 10.3 Place of Meetings.

Meetings of shareholders shall be held at the registered office of the Company or elsewhere in the municipality in which the registered office is situate or, if the board shall so determine, at some other place in Canada or, if all the shareholders entitled to vote at the meeting so agree, at some place outside Canada.

Section 10.4 Notice of Meetings.

Notice of the time and place of each meeting of shareholders shall be given in the manner provided in Article Eleven not less than 21 nor more than 50 days before the date of the meeting to each director, to the auditor, and to each shareholder who at the close of business on the record date for notice is entered in the securities

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register as the holder of one or more shares carrying the right to vote at the meeting. Notice of a meeting of shareholders called for any purpose other than consideration of the financial statements and auditor’s report, election of directors and reappointment of the incumbent auditor shall state the nature of such business in sufficient detail to permit the shareholder to form a reasoned judgment thereon and shall state the text of any special resolution to be submitted to the meeting. A shareholder and any other person entitled to attend a meeting of shareholders may in any manner waive notice of or otherwise consent to a meeting of shareholders.

Section 10.5 List of Shareholders Entitled to Notice.

For every meeting of shareholders, the Company shall prepare a list of shareholders entitled to receive notice of the meeting, arranged in alphabetical order and showing the number of shares held by each shareholder entitled to vote at the meeting. If a record date for the meeting is fixed pursuant to section 10.6. the shareholders listed shall be those registered at the close of business on such record date. If no record date is fixed, the shareholders listed shall be those registered at the close of business on the day immediately preceding the day on which notice of the meeting is given or, where no such notice is given, on the day on which the meeting is held. The list shall be available for examination by any shareholder during usual business hours at the registered office of the Company or at the place where the central securities register is maintained and at the meeting for which the list was prepared. Where a separate list of shareholders has not been prepared, the names of persons appearing in the securities register at the requisite time as the holder of one or more shares carrying the right to vote at such meeting shall be deemed to be a list of shareholders.

Section 10.6 Record Date for Notice.

The board may fix in advance a date, preceding the date of any meeting of shareholders by not more than 50 days and not less than 21 days, as a record date for the determination of the shareholders entitled to notice of the meeting, and notice of any such record date shall be given not less than 7 days before such record date, by newspaper advertisement in the manner provided in the Act. If no record date is so fixed, the record date for the determination of the shareholders entitled to receive notice of the meeting shall be at the close of business on the day immediately preceding the day on which the notice is given or, if no notice is given, the day on which the meeting is held.

Section 10.7 Meetings Without Notice.

A meeting of shareholders may be held without notice at any time and place permitted by the Act (a) if all the shareholders entitled to vote thereat are present in person or represented by proxy or if those not present or represented by proxy waive notice of or otherwise consent to such meeting being held, and (b) if the auditors and the directors are present or waive notice of or otherwise consent to

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such meeting being held; so long as such shareholders, auditors or directors present are not attending for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. At such a meeting any business may be transacted which the Company at a meeting of shareholders may transact. If the meeting is held at a place outside Canada, shareholders not present or represented by proxy, but who have waived notice of or otherwise consented to such meeting, shall also be deemed to have consented to the meeting being held at such place.

Section 10.8 Chairman, Secretary and Scrutineers.

The chairman of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: chief executive officer, president, chairman of the board, or a vice-president who is a shareholder. If no such officer is present within 15 minutes from the time fixed for holding the meeting, the persons present and entitled to vote shall choose one of their number to be chairman. If the secretary of the Company is absent, the chairman shall appoint some person, who need not be a shareholder, to act as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders, may be appointed by a resolution or by the chairman with the consent of the meeting.

Section 10.9 Persons Entitled to be Present.

The only persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and auditor of the Company and others who, although not entitled to vote, are entitled or required under any provision of the Act or the articles or by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with the consent of the meeting.

Section 10.10 Quorum.

Subject to the Act, a quorum for the transaction of business at any meeting of shareholders shall be one person present in person, being a shareholder entitled to vote thereat or a duly appointed proxyholder or representative for an absent shareholder so entitled, and holding or representing by proxy not less than 51% of the outstanding shares of the Company carrying voting rights at the meeting. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented by proxy may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of shareholders, the shareholders present or represented by proxy may adjourn the meeting to a fixed time and place but may not transact any other business.

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Section 10.11 Right to Vote.

Subject to the provisions of the Act as to authorized representatives of any other body corporate or association, at any meeting of shareholders for which the Company has prepared the list referred to in section 10.5, every person who is named in such list shall be entitled to vote the shares shown thereon opposite his name at the meeting to which such list relates except to the extent that, where the Company has fixed a record date in respect of such meeting pursuant to section 10.6, such person has transferred any of his shares after such record date and the transferee, having produced properly endorsed certificates evidencing such shares or having otherwise established that he owns such shares, has demanded not later than 10 days before the meeting that his name be included in such list. In any such case the transferee shall be entitled to vote the transferred shares at the meeting. At any meeting of shareholders for which the Company has not prepared the the referred to in section 10.5, every person shall be entitled to vote at the meeting who at the time of the commencement of the meeting is entered in the securities register as the holder of one or more shares carrying the right to vote at such meeting.

Section 10.12 Proxyholders and Representatives.

(1) Every shareholder entitled to vote at a meeting of shareholders may appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, to attend and act as his representative at the meeting in the manner and to the extent authorized and with the authority conferred by the proxy. A proxy shall be in writing executed by the shareholder or his attorney and shall conform with the requirements of the Act.

(2) Alternatively, every such shareholder which is a body corporate or association may authorize by resolution of its directors or governing body an individual to represent it at a meeting of shareholders and such individual may exercise on the shareholder’s behalf all the powers it could exercise if it were an individual shareholder. The authority of such an individual shall be established by depositing with the Company a certified copy of such resolution, or in such other manner as may be satisfactory to the secretary of the Company or the chairman of the meeting. Any such representative need not be a shareholder.

Section 10.13 Time for Deposit of Proxies.

The board may specify in a notice calling a meeting of shareholders a time, preceding the time of such meeting by not more than 48 hours exclusive of non-business days, before which time proxies to be used at such meeting must be deposited. A proxy shall be acted upon only if, prior to the time so specified, it shall have been deposited with the Company or an agent thereof specified in such notice or if, no such time having been specified in such notice, it has been received by the secretary of the Company or by the chairman of the meeting or any adjournment thereof prior to the time of voting.

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Section 10.14 Joint Shareholders.

If two or more persons hold shares jointly, any one of them present in person or duly represented by proxy at a meeting of shareholders may, in the absence of the other or others, vote the shares; but if two or more of those persons are present in person or represented by proxy and vote, they shall vote as one the shares jointly held by them.

Section 10.15 Votes to Govern.

At any meeting of shareholders every question shall, unless otherwise required by the articles or by-laws or by law, be determined by a majority of the votes cast on the question. In case of an equality of votes either upon a show of hands or upon a poll, the chairman of the meeting shall not be entitled to a second or casting vote.

Section 10.16 Show of Hands.

Subject to the provisions of the Act, any question at a meeting of shareholders shall be decided by a show of hands, unless a ballot thereon is required or demanded as hereinafter provided. Upon a show of hands every person who is present and entitled to vote shall have one vote. Whenever a vote by show of hands shall have been taken upon a question, unless a ballot thereon is so required or demanded, a declaration by the chairman of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the shareholders upon the said question.

Section 10.17 Ballots.

On any question proposed for consideration at a meeting of shareholders, and whether or not a show of hands has been taken thereon, the chairman or any person who is present and entitled to vote, whether as shareholder or proxyholder, on such question at the meeting may demand a ballot. A ballot so required or demanded shall be taken in such manner as the chairman shall direct. A requirement or demand for a ballot may be withdrawn at any time prior to the taking of the ballot. If a ballot is taken each person present shall be entitled, in respect of the shares which he is entitled to vote at the meeting upon the question, to that number of votes provided by the Act or the articles, and the result of the ballot so taken shall be the decision of the shareholders upon the said question.

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Section 10.18 Adjournment.

The chairman at a meeting of shareholders may, with the consent of the meeting and subject to such conditions as the meeting may decide, adjourn the meeting from time to time and place to place. If a meeting of shareholders is adjourned for less than 30 days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. Subject to the Act, if a meeting of shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting.

Section 10.19 Resolution in Writing.

A resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders unless a written statement with respect to the subject matter of the resolution is submitted by a director or the auditor in accordance with the Act.

Section 10.20 Only One Shareholder.

Where the Company has only one shareholder or only one holder of any class or series of shares, the shareholder present in person or duly represented by proxy constitutes a meeting.

ARTICLE 11

NOTICES

Section 11.1 Method of Giving Notices.

Any notice or document to be given pursuant to the Act, the regulations thereunder, the articles or the by-laws to a shareholder or director of the Company may be sent by prepaid mail addressed to, or may be delivered personally to the shareholder at his latest address as shown in the records of the Company or its transfer agent and the director at his latest address as shown on the records of the Company or in the last notice of directors or notice of change of directors filed under the Act. A notice or document sent in accordance with the foregoing to a shareholder or director of the Company shall be deemed to be received by him at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the shareholder or director did not receive the notice or document at the time or at all. The secretary may change or cause to be changed the recorded address of any shareholder, director, officer, auditor or member of a committee of the board in accordance with any information believed by him to be reliable. The foregoing shall not be construed so as to limit the manner or effect of giving notice by any other means of communication otherwise permitted by law.

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Section 11.2 Notice to Joint Holders.

If two or more persons are registered as joint holders of any share, any notice shall be addressed to all of such joint holders but notice addressed to one of such persons shall be sufficient notice to all of them,

Section 11.3 Computation of Time.

In computing the date when notice must be given under any provision requiring a specified number of days’ notice of any meeting or other event, the date of giving the notice shall be excluded and the date of the meeting or other event shall be included.

Section 11.4 Undelivered Notices.

If any notice given to a shareholder pursuant to section 11.1 is returned on three consecutive occasions because he cannot be found, the Company shall not be required to give any further notices to such shareholder until he informs the Company in writing of his new address.

Section 11.5 Omissions and Errors.

The accidental omission to give any notice to any shareholder, director, officer, auditor or member of a committee of the board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise founded thereon.

Section 11.6 Persons Entitled by Death or Operation of Law.

Every person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which shall have been duly given to the shareholder from whom he derives his title to such share prior to his name and address being entered on the securities register (whether such notice was given before or after the happening of the event upon which he became so entitled) and prior to his furnishing to the Company the proof of authority or evidence of his entitlement prescribed by the Act.

Section 11.7 Waiver of Notice.

Any shareholder, proxyholder, other person entitled to attend a meeting of shareholders, director, officer, auditor or member of a committee of the board may at any time waive any notice, or waive or abridge the time for any notice, required to be given to him under any provision of the Act, the regulations thereunder, the articles, the by-laws or otherwise and such waiver or abridgement, whether given before or after the meeting or other event of which notice is required to be given, shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of shareholders or of the board or of a committee of the board which may be given in any manner.

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ARTICLE 12

EFFECTIVE DATE

Section 12.1 Effective Date.

This by-law shall come into force when made by the board in accordance with the Act.

Section 12.2 Repeal.

All previous by-laws of the Company are repealed as of the coming into force of this by-law. Such repeal shall not affect the previous operation of any by-law so repealed or affect the validity of any act done or right, privilege, obligation or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to, or the validity of any articles or predecessor charter documents of the Company obtained pursuant to, any such by-law prior to its repeal. All officers and persons acting under any by-law so repealed shall continue to act as if appointed under the provisions of this by-law and all resolutions of the shareholders or the board or a committee of the board with continuing effect passed under any repealed by-law shall continue good and valid except to the extent inconsistent this by-law and until amended or repealed.

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EXHIBIT 7

Computershare Trust Company of Canada

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year to date: End of Q2 - 2013

(in thousands of dollars)

Interest and dividends income
Deposits with regulated financial institutions	191
Securities issued or guaranteed by Government of Canada, provinces, municipal or school
Other Securities
Loans
Non-mortgage loans
Individuals for non-business purposes
Others
Mortgages
Residential
Non-residential	0
Interest income on impaired loans
Other	27,692
Total interest income	27,883
Interest expense
Demand and notice deposits
Fixed term deposits
Subordinated debt	0
Other	9,662
Total interest expense	9,662
Net interest income	18,221
Charge for impairment	122
Net interest income after charge for impairment	18,099
Trading Income	0
Gains (Losses) on instruments held for other than trading purposes	0
Other Income
Service charges on retail and commercial deposit accounts
Credit and debit card service fees	0
Mortgage, standby, commitment and other loan fees
Acceptance, guarantees and letter of credit fees
Investment management and custodial services	34,181
Mutual(investment) fund, underwriting on new issues and securities commissions and fees
Foreign exchange revenue other than trading	0
Insurance related non-interest income (net)
Other
Total non-interest income	34,181
Net interest and other income	52,280
Non-interest expenses
Salaries, pensions and other staff benefits	16,920
Premises and equipment
Rental of real estate, premises, furniture & fixtures	4,149
Computers & equipment	1,048
Other expenses

Advertising, public relations & business development	352
Office and general expenses	497
Capital and business taxes	129
Professional fees	472
Other	859
Total non-interest expenses	24,426
Net income before provision for income taxes	27,854
Provision for income taxes
Current	8,448
Deferred	-1,257
Net income before discontinued operations	20,663
Discontinued operations	0
Net income attributable to equity holders and non-controlling interests	20,663
Net income attributable to non-controlling interests	0
Net income attributable to equity holders	20,663
SCHEDULE 1 - Comprehensive income (loss), attributable to equity holders and non-controlling interests, net of taxes
Net income attributable to equity holders and non-controlling interests	20,663
Other Comprehensive Income (loss)
Items that may be reclassified subsequently to net income:
Available for sale securities
Change in unrealized gains and losses
Equities	0
Debt	0
Loans	0
Reclassification of (gains)/losses to net income	0
Derivatives designed as cash flow hedges
Change in unrealized gains and losses	0
Reclassification of (gains)/losses to net income	0
Foreign currency translation
Change in unrealized gains and losses	0
Impact of hedging
Other	0
Subtotal of items that may be reclassified subsequently to net income	0
Items that will not be reclassified to net income:
Share of other comprehensive income (loss) of associates and joint ventures	0
Remeasurements of defined benefit plans	0
Other
Subtotal of items that will not be reclassified to net income
Total other comprehensive income (loss)	0
Total comprehensive income (loss)	20,663
Attributable to:
Equity holders of the bank	20,663
Non-controlling interests	0

SCHEDULE 2 - Accumulated other comprehensive income (loss), attributable to equity holders, net of taxes
Items that may be reclassified subsequently to net income:
Available for sale securities
Equities	0
Debt	0
Loans	0
Derivatives designed as cashflow hedges	0
Foreign currency translation, net of hedging activities	0
Other	0
Subtotal of items that may be reclassified subsequently to net income	0
Items that will not be reclassified to net income:
Share of other comprehensive income (loss) of associates and joint ventures	0
Other
Subtotal of items that will not be reclassified to net income	0
Total	0

Consolidated Monthly Balance Sheet - Banks, Trust and Loan Page 1 of 2

Computershare Trust Company of Canada

CONSOLIDATED MONTHLY BALANCE SHEET

As At June 30, 2013

(in thousands of dollars)

Section I - Assets	Foreign          Currency	Total Currency
1. Cash and cash equivalent
(a) Gold, bank notes, deposits with Bank of Canada, cheques and other items in transit		0
(b) Deposits with regulated financial institutions, less allowances for impairment	465	68,428
2. Securities
(a) Securities issues or guaranteed by Canada/Canadian Province/Canadian Municipal or School Corporation
(i) Treasury Bills and other short term paper	0	0
(ii)Other securities	0	0
(b) Other securities, less allowance for impairment
(i) Debt	0	0
(ii) Shares	0	0
3. Loans
(a) Non-Mortgage Loans, less allowance for impairment
(i) Call and other short loans to investment dealers and brokers, secured	0	0
(ii) To regulated financial institutions	0	0
(iii) To Canadian federal government, provinces, municipal or school corporations	0	0
(iv) To foreign governments	0	0
(v) Lease receivables	0	0
(vi) To individuals for non-business purposes	0	0
Of          (A) Secured by residential property	0	0
which:    (B) Secured by other than residential property	0	0
(vii) Reverse repurchase agreements	0	0
(viii) To individuals and others for business purposes	0	0
Of          (A) Secured by residential property	0	0
which:    (B) Secured by other than residential property	0	0
(b) Mortgages, less allowance for impairment
(i) Residential
(A) Insured	0	0
(B) Of which: NHA MBS pooled and unsold	0	0
(C) Uninsured	0	0
(D) Reverse Mortgages	0	0
(ii) Non-residential	0	0
4. Customers’ liability under acceptances, less allowances for impairment	0	0
5. Land, buildings, and equipment, less accumulated depreciation	0	4,356
6. Other assets
(a) Insurance-related assets	0	0
(b) Accrued interest	0	6,858
(c) Prepaid and deferred charges	0	1,916
(d) Goodwill	0	6,055
(e) Intangibles
(i) with definite lives	0	43,505
(ii) with indefinite lives	0	0
(f) Deferred tax assets	0	0
(g) Derivatives related amounts	0	0
(h) Due from Head Office and related Canadian regulated Financial Institutions	0	0
(i) Interests in associates and joint ventures	0	0
(j) Other	25	33,581
Total Assets	490	164,699

Consolidated Monthly Balance Sheet - Banks, Trust and Loan Page 2 of 2

Computershare Trust Company of Canada

CONSOLIDATED MONTHLY BALANCE SHEET

As At June 30, 2013

(in thousands of dollars)

Section II - Liabilities	Foreign Currency	Total
1. Demand and notice deposits
(a) Federal and Provincial	0	0
(b) Municipal and School Corporations	0	0
(c) Deposit-taking institutions	0	0
(d) Individuals
(i) Tax sheltered	0	21,547
(ii) Other	0	0
(e) Other	0	0
2. Fixed-term deposits
(a) Federal and Provincial	0	0
(b) Municipal and School Corporations	0	0
(c) Deposit-taking institutions	0	0
(d) Individuals
(i) Tax-sheltered	0	0
(ii) Other	0	0
(e) Others	0	0
3. Cheques and other items in transit	0	0
4. Advances from the Bank of Canada	0	0
5. Acceptances	0	0
6. Other liabilities
(a) Liabilities of subsidiaries, other than deposits
(i) Call and other short loans payable	0	0
(ii) Other	0	0
(b) Insurance-related liabilities	0	0
(c) Accrued interest	0	0
(d) Mortgages and loans payable	0	0
(e) Income taxes
(i) Current	0	2,102
(ii) Deferred	0	595
(f) Obligations related to borrowed securities	0	0
(g) Obligations related to assets sold under repurchase agreements	0	0
(h) Deferred income	0	5,809
(i) Derivative related amounts	0	0
(j) Due to Head Office and related Canadian regulated Financial Institutions	0	0
(k) Other	1,120	7,788
7. Subordinated debt	0	0
8. Shareholders’ equity
(a) Preferred shares	0	0
(b) Common shares	0	70,622
(c) Contributed surplus	0	18,642
(d) Retained earnings		37,594
(e) Non-controlling interests	0	0
(f) Accumulated Other Comprehensive Income (Loss)		0
Total liabilities and shareholders’ equity	1,120	164,699

EXHIBIT 9

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-X

APPOINTMENT OF AGENT FOR SERVICE OF PROCESS AND UNDERTAKING

A.	Name of issuer or person filing (“Filer”):		Computershare Trust Company of Canada
B.	(1)	This is [check one]
	¨	an original filing for the Filer
	x	an amended filing for the Filer
	(2)	Check the following box if you are filing the Form F-X in paper in accordance with Regulation S-T Rule 101(b)(9)  ¨
C.	Identify the filing in conjunction with which this Form is being filed:
	Name of registrants:		Bank of Montreal BMO Covered Bond Guarantor Limited Partnership
	Form type:		F - 3
	File Number (if known):		333-189814
	Filed by:		Computershare Trust Company of Canada
	Date Filed (if filed concurrently, so indicate)		Filed concurrently
D.	The Filer is incorporated or organized under the laws of Canada and has its principal place of business at 100 University Avenue, 11th Floor, Toronto, Ontario, Canada, M5J2Y1 Telephone No. 416-263-9200.
E.	The Filer designates and appoints Computershare Trust Company, N.A. (“Agent”) located at 350 Indiana Street, Suite 750, Golden, Colorado, 80401 as the agent of the Filer upon whom may be served any process, pleadings, subpoenas, or other papers in (a) any investigation or administrative proceeding conducted by the Commission; and (b) any civil suit or action brought against the Filer or to which the Filer has been joined as defendant or respondent, in any appropriate court in any place subject to the jurisdiction of any state or of the United States or of any of its territories or possessions or of the District of Columbia, where the investigation, proceeding or cause of action arises out of or relates to or concerns (i) any offering made or purported to be made in connection with the securities registered or qualified by the Filer on Form F-10 on June 17, 2009 or any purchases or sales of any security in connection therewith; (ii) the securities in relation to which the obligation to file an annual report on Form 40-F arises, or any purchases or sales of such securities; (iii) any tender offer for the securities of a Canadian issuer with respect to which filings are made by the Filer with the Commission on Schedule 13E-4F, l4D-IF or 14D-9F; or (iv) the securities in relation to which the Filer acts as trustee pursuant to an exemption under Rule 10a-5 under the Trust Indenture Act of 1939. The Filer stipulates and agrees that any such civil suit or action or administrative proceeding may be commenced by the service of process upon, and that service of an administrative subpoena shall be effected by service upon such agent for service of process, and that service as aforesaid shall be taken and held in all courts and administrative tribunals to be valid and binding as if personal service thereof had been made.

F.

The Filer stipulates and agrees to appoint a successor agent for service of process and file an amended Form F-X if the Filer discharges the Agent or the Agent is unwilling or unable to accept service on behalf of the Filer at any time until six years have elapsed from the date of the last sale of securities in reliance upon the Regulation A exemption. The Filer further undertakes to advise the Commission promptly of any change to the Agent’s name or address during the applicable period by amendment of this Form, referencing the file number of the relevant form in conjunction with which the amendment is being filed.

G.

The Filer undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the Forms, Schedules and offering statements described in General Instructions I. (a), I. (b), I. (c), I. (d) and I. (f) of this Form, as applicable; the securities to which such Forms, Schedules and offering statements relate; and the transactions in such securities.

The Filer certifies that it has duly caused this power of attorney, consent, stipulation and agreement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Canada, this 29th day of August, 2013.

COMPUTERSHARE TRUST COMPANY OF CANADA
By:	/s/ Stuart Swartz
	Name: Stuart Swartz
	Title:   Senior Vice-President, Corporate Trust
By:	/s/ Sean Pigott
	Name: Sean Pigott
	Title:   Corporate Trust Officer

This statement has been signed by the following persons in the capacities and on the dates indicated.

Authorized Agent in the United States

COMPUTERSHARE TRUST COMPANY, N.A.
By:	/s/ Rose Stroud
	Name: Rose Stroud
	Title:   Corporate Trust Officer

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