PROVICE OF ONTARIO FISCAL AGENCY AGREEMENT

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The Province of Ontario (the "Province") proposes to sell the principal amount of its securities identified in Schedule II hereto (the "Securities") to the underwriters named in Schedule II hereto (the "Underwriters"), for whom you are acting as representatives (the "Representatives").  The Securities will be issued in the form of one  fully registered permanent global security (the "Global Security") registered in the name of CDS & Co., as the nominee of CDS Clearing and Depository Services Inc. ("CDS"), subject to the provisions of the fiscal agency agreement between the Province and BNY Trust Company of Canada, as fiscal agent, expected to be dated the Closing Date (as defined below) (the "Fiscal Agency Agreement").  As of January 25, 2018, (the "Time of Sale"), the Province had prepared the electronic roadshow presentation (as amended and supplemented) relating to the offering of the Securities (the "Marketing Materials") and the following information (collectively, the "Time of Sale Information"): a Preliminary Final Prospectus (as defined below) dated January 19, 2018, and the Issuer Free Writing Prospectus (as defined below) in the form of Schedule I hereto.  As used herein, "Issuer Free Writing Prospectus" shall have the meaning assigned to the term "issuer free writing prospectus" in Section 433 under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and shall include the Marketing Materials.  This Agreement is to confirm the arrangements with respect to the purchase of the Securities by the Underwriters.

 

The Global Security shall be made available for inspection and checking by the Representatives in Toronto, Ontario not later than 3:00 P.M. (Toronto time) on the business day prior to the Closing Date.  For purposes of this Agreement, "business day" shall mean a day on which banking institutions in The City of Toronto are not authorized or obligated by law or executive order to be closed.

(i)	the expression "retail investor" means a person who is one (or more) of the following:

A.	a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or

B.	a customer within the meaning of Directive 2002/92/EC, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or

C.	not a qualified investor as defined in Directive 2003/71/EC; and

(ii)	the expression "offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities.

(i)

it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets ▇▇▇ ▇▇▇▇, as amended (including the Financial Services Act 2012) (the "FSMA")) received by it in connection with the issue or sale of the Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Province; and

(ii)	it has complied and will comply with all applicable provisions of the FSMA and the Financial Services ▇▇▇ ▇▇▇▇ with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

(i)

it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Securities other than (A) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the "SFO") and any rules made under the SFO; or (B) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and

(ii)

it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Securities, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Securities which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the SFO and any rules made under the SFO.

(i)

this Agreement has been duly authorized, executed and delivered by the Province in accordance with the laws of the Province of Ontario and the Order or Orders of the Lieutenant Governor in Council applicable thereto, and constitutes a legal, valid and binding agreement of the Province, enforceable in accordance with its terms;

(ii)

the Fiscal Agency Agreement has been duly authorized, executed and delivered by the Province in accordance with the laws of the Province of Ontario and the Order or Orders of the Lieutenant Governor in Council applicable thereto, and, assuming due execution and delivery by the Fiscal Agent, constitutes a legal, valid and binding agreement of the Province, enforceable in accordance with its terms;

(iii)

the Securities have been duly authorized and the Global Security has been duly executed by and sealed on behalf of the Province in accordance with the laws of the Province of Ontario and the Order or Orders of the Lieutenant Governor in Council applicable thereto, and, when the Global Security is authenticated in accordance with the provisions of the Fiscal Agency Agreement and delivered and paid for by the Underwriters pursuant to this Agreement, it will constitute  a legal, valid and binding obligation of the Province, enforceable in accordance with its terms;

(iv)	the statements in the Preliminary Final Prospectus and the Final Prospectus under the headings "Description of Debt Securities — Canadian Income Tax Considerations" and "Taxation — Canadian Taxation" are accurate in all material respects, subject to the qualifications therein stated;

(v)	the payment of principal of and interest on the Securities will be a charge on and payable out of the Consolidated Revenue Fund of the Province of Ontario (as defined in the Financial Administration Act (Ontario));

(vi)

no authorization, consent, waiver or approval of, or filing, registration, qualification or recording with, any governmental authority of the Province of Ontario or of Canada is required in connection with the execution, delivery and performance by the Province of this Agreement or the Fiscal Agency Agreement or the sale of the Securities by the Province in the manner contemplated in this Agreement and the Final Prospectus, except for the Order or Orders of the Lieutenant Governor in Council applicable thereto, and an approval under section 28 of the Financial Administration Act (Ontario), which have been obtained;

(vii)

no stamp or other similar duty or levy is payable under the laws of the Province of Ontario or the federal laws of Canada applicable in the Province of Ontario in connection with the execution, delivery and performance by the Province of this Agreement or the Fiscal Agency Agreement or in connection with the issue and sale of the Securities by the Province in the manner contemplated in this Agreement, the Time of Sale Information and the Final Prospectus; and

(viii)

Her Majesty the Queen in right of Ontario may be sued in the courts of the Province of Ontario with regard to any claims arising out of or relating to the obligations of the Province under the Securities.  No law in the Province of Ontario requires the consent of any public official or authority for suit to be brought or judgment to be obtained against Her Majesty the Queen in right of Ontario arising out of or relating to the obligations of the Province under the Securities, though in certain circumstances prior notice and particulars of a claim must be given to Her Majesty the Queen in right of Ontario.  An amount payable by Her Majesty the Queen in right of Ontario under an order of a court of the Province of Ontario that is final and not subject to appeal is payable out of the Consolidated Revenue Fund of the Province of Ontario pursuant to the Proceedings Against the Crown Act (Ontario).

(i)

the statements in the Preliminary Final Prospectus, read together with the Time of Sale Information, and the Final Prospectus under the caption "Description of Bonds" and "Underwriting", in each case, insofar as such statements constitute summaries of documents referred to therein, fairly summarize in all material respects the documents referred to therein; and

(ii)

the statements in the Preliminary Final Prospectus, read together with the Time of Sale Information, and the Final Prospectus under the caption "Description of Debt Securities — United States Federal Income Tax Considerations", as supplemented by "Taxation — United States Taxation", in each case, insofar as such statements constitute summaries of legal matters referred to therein, fairly summarize in all material respects the legal matters referred to therein.

Such counsel shall also state that although they have not verified, are not passing upon and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Time of Sale Information or the Final Prospectus (including the documents incorporated by reference therein), such counsel has, however, generally reviewed and discussed such statements with certain officers or employees of the Province, and with counsel and representatives of the Underwriters, and, in the opinion of such counsel, (a) each of the documents incorporated by reference in the Preliminary Final Prospectus, read together with the Time of Sale Information, and the Final Prospectus (other than the financial statements and other financial data contained therein or omitted therefrom, as to which such counsel need express no opinion), except to the extent that any statement therein is modified or superseded in the Preliminary Final Prospectus or the Final Prospectus, at the time it was filed with the SEC, appears on its face to be appropriately responsive in all material respects to the requirements of the U.S. Exchange Act and the applicable rules and regulations of the SEC thereunder, and (b) each of the Registration Statement and the Final Prospectus, excluding the documents incorporated by reference therein, and any supplements or amendments thereto (other than the financial statements and other financial data contained therein or omitted therefrom, as to which such counsel need not express any opinion) appears on its face to be appropriately responsive in all material respects to the requirements of the U.S. Securities Act and the applicable rules and regulations of the SEC thereunder.

Such counsel shall also state that, subject to the limitations set forth in the immediately preceding paragraph, in the course of such review and discussion, no facts have come to such counsel's attention which caused them to believe that (i) the Registration Statement (including the documents incorporated by reference therein, other than the financial statements and other financial data contained therein or omitted therefrom, as to which such counsel has not been requested to comment), as of the date of the Time of Sale, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; (ii) the Time of Sale Information (other than the financial statements and other financial data contained therein or omitted therefrom, as to which such counsel has not been requested to comment), as of the Time of Sale (which such counsel may assume to be the date of the Underwriting Agreement), contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) the Final Prospectus as amended or supplemented, if applicable (including the documents incorporated by reference therein, other than the financial statements and other financial data contained therein or omitted therefrom, as to which such counsel has not been requested to comment), as of the date of such Final Prospectus as amended or supplemented, if applicable, or the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In giving such opinions, such counsel may rely, without independent investigation, as to matters relating to the laws of the Province of Ontario or the federal laws of Canada applicable therein, on the opinion of the Deputy Attorney General, Assistant Deputy Attorney General or Acting Assistant Deputy Attorney General of the Province or any solicitor who is an employee of the Crown and seconded to the Legal Services Branch, Ministry of Finance, rendered pursuant to Section 7(b) hereof.

(i)

the representations and warranties of the Province in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Province has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;

(ii)	no stop order suspending the effectiveness of the Registration Statement, as amended, has been issued and no proceedings for that purpose have been instituted or, to the Province's knowledge, threatened; and

(iii)

there has been no material adverse change in the financial, economic or political conditions of the Province from those set forth in or contemplated by the Registration Statement, the Time of Sale Information and the Final Prospectus other than changes arising in the ordinary and normal course.

If any of the conditions specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives, this Agreement and all obligations of the Underwriters hereunder may be cancelled at, or at any time prior to, the Closing Date by the Representatives.  Notice of such cancellation shall be given to the Province in writing or by telephone or facsimile transmission, in either case confirmed in writing.

(i)

to the same extent as the foregoing indemnity from the Province to such Underwriter, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Province by or on behalf of such Underwriter through the Representatives specifically for use in the preparation of the documents referred to in the foregoing indemnity;

(ii)

against any and all losses, claims, damages or liabilities, joint or several, to which the Province may become subject under the laws of any jurisdiction, including but not limited to the U.S. Securities Act, the U.S. Exchange Act or other United States Federal or state statutory law or regulation, at common law 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 a material fact contained in any document prepared by such Underwriter and distributed by it in connection with the offering of the Securities, including any "free writing prospectus", or which arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, and which statement or omission is not contained in the Time of Sale Information, the Final Prospectus or the agreed press releases; and

(iii)

against any and all losses, claims, damages or liabilities, joint or several, to which the Province may become subject arising out of or in connection with a breach by such Underwriter (or its affiliates that participate in the initial distribution of the Securities) of any representation, or failure to perform or observe any agreement, contained in Section 6 of this Agreement.

Each Underwriter, severally and not jointly, agrees to reimburse, as incurred, any legal or other expenses reasonably incurred by the Province in connection with investigating or defending any such loss, claim, damage, liability or action referred to in clauses (i), (ii) and (iii) above.  This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have.  The Province acknowledges, for the purposes of Sections 1(i), 1(iv), 9(a) and 9(b)(i) above, that the statements set forth under the heading "Underwriting" (except for the statements in the paragraphs relating to the European Economic Area, the United Kingdom and the securities laws of Japan, Hong Kong, Switzerland and Singapore and the sentence relating to stamp taxes and other charges and expenses of the offering) in any Preliminary Final Prospectus or the Final Prospectus constitute the only information furnished in writing by or on behalf of the Underwriters for inclusion in any of the documents referred to in the foregoing indemnity, and the Underwriters confirm that such statements are correct; provided that such acknowledgement by the Province does not extend to any "free writing prospectus" other than the Issuer Free Writing Prospectus in the form of Schedule I hereto.

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 appoint counsel satisfactory to such indemnified party to represent the indemnified party in such action; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties.  An indemnifying party will not, without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld or delayed), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.  In order to be entitled to an indemnity with respect to a claim hereunder, an indemnified party will not, without the prior written consent of the indemnifying parties (which consent shall not be unreasonably withheld or delayed), settle or compromise or consent to the entry of any judgment with respect to such pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnifying parties are actual or potential parties to such claim or action).

Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless:

(i)

the indemnified party shall have employed separate counsel in accordance with the proviso to the first sentence of the next preceding paragraph (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of paragraph (a) of this Section 9, representing the indemnified parties under such paragraph (a) who are parties to such action),

(ii)	the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, or

(iii)

the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii).

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The Honourable ▇▇▇▇▇▇▇ ▇▇▇▇▇

Minister of Finance

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Dear Minister:

Subject:

Province of Ontario Issue of C$1,000,000,000  2.65%  Bonds due February 5, 2025

 

Yours truly,

 

 

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Legal Counsel

Legal Services Branch

Ministry of Finance