EXHIBIT 4.2 



 



THE BANK OF NOVA SCOTIA, 


Issuer 


and


COMPUTERSHARE TRUST COMPANY, N.A., 


U.S. Trustee 


and


COMPUTERSHARE TRUST COMPANY OF CANADA,



Canadian Trustee 


 


 





First Supplemental Indenture 

Dated as of December 16, 2015 


to


Indenture

Dated as of December 16, 2015

Subordinated Debt Securities 


 


 





4.500% Subordinated Notes due 2025

(Non-Viability Contingent Capital (NVCC))

(subordinated indebtedness)


 


 





     


     


    


TABLE OF CONTENTS 


Page





	Article One DEFINITIONS	4
	Section 101. Relation to Base Indenture	4
	Section 102. Definition of Terms	4
	Article Two The Notes	8
	Section 201. Designation and Principal Amount	8
	Section 202. Maturity	9
	Section 203. Form, Payment and Appointment	9
	Section 204. Global Note	9
	Section 205. Interest	9
	Section 206. Satisfaction and Discharge	9
	Section 207. No Repayment at the Option of Holders	10
	Section 208. No Sinking Fund	10
	Section 209. Defeasance and Covenant Defeasance	10
	Section 210. Amendments	10
	Article Three FORM OF NOTES	10
	Section 301. Form of Notes	10
	Article Four ISSUE OF NOTES	10
	Section 401. Original Issue of Notes	10
	Section 402. Additional Issues of Notes	10
	Article Five REMEDIES	11
	Section 501. Events of Default	11
	Section 502. Acceleration of Maturity; Rescission and Annulment	11
	Article Six Certain Covenants Applicable to the Notes	11
	Section 601. Restriction on Subordinated Indebtedness	11
	Section 602. Junior Indebtedness	11
	Article Seven CONVERSION INTO COMMON SHARES UPON A TRIGGER EVENT	12
	Section 701. NVCC Automatic Conversion	12
	Section 702. Conversion Rate	12
	Section 703. Time of NVCC Automatic Conversion	12
	Section 704. Right Not to Deliver Common Shares	12
	Section 705. Fractional Shares	13
	Section 706. Recapitalizations, Reclassifications and Changes in the Common Shares	13
	Section 707. Adjustments	13
	Section 708. General	14
	Article Eight REDEMPTION OF Notes	15
	Section 801. Applicability of Article Eleven of the Base Indenture	15
	Section 802. Regulatory Redemption	15
	Section 803. Tax Redemption	15
	Section 804. Mandatory Redemption; Open Market Purchases	15




     


     


    






	Article Nine MISCELLANEOUS PROVISION	15
	Section 901. Ratification of Base Indenture	15
	Section 902. Trustee Not Responsible for Recitals	15
	Section 903. Governing Law	16
	Section 904. Separability Clause	16
	Section 905. Benefits of First Supplemental Indenture	16
	Section 906. Conflict with Base Indenture	16
	Section 907. Provisions of Trust Indenture Legislation Controlling	16
	Section 908. Execution in Counterparts	16
	Section 909. Indenture and Notes Solely Corporate Obligations	16
	Section 910. Waiver of Jury Trial	17




     


     


    


FIRST SUPPLEMENTAL INDENTURE, dated as
of December 16, 2015, among The Bank of Nova Scotia, a Canadian chartered bank (herein called the “Bank”), having
its principal executive offices located at 44 King Street West, Scotia Plaza, Toronto, Ontario, Canada M5H 1H1, Computershare Trust
Company, N.A., a trust company organized under the laws of the United States, as United States trustee (the “U.S. Trustee”)
and Computershare Trust Company of Canada, a trust company duly organized and existing under the laws of Canada, as Canadian trustee
(the “Canadian Trustee” and, together with the U.S. Trustee, the “Trustee” or “Trustees”).


RECITALS OF THE BANK


WHEREAS, the Bank and the Trustees have
heretofore executed and delivered an Indenture, dated as of December 16, 2015 (the “Base Indenture” and, as
hereby supplemented and amended, the “Indenture”) providing for the issuance from time to time of series of
the Bank’s unsecured subordinated debt indebtedness (hereinafter call the “Securities”);


WHEREAS, Section 901(7) of the Base Indenture
provided that the Bank and the Trustees may enter into an indenture supplemental to the Base Indenture to establish the form or
terms of Securities of any series as permitted by the Base Indenture;


WHEREAS, pursuant to Section 301 of the
Base Indenture, the Bank wishes to provide for the issuance of $1,250,000,000 aggregate principal amount of a new series of Securities
to be known as its 4.500% Subordinated Notes due 2025 (Non-Viability Contingent Capital (NVCC)) (the “Notes”),
the form and terms of such Notes and the terms, provisions and conditions thereof to be set forth as provided in this First Supplemental
Indenture; and


WHEREAS, the Bank has requested that the
Trustees execute and deliver this First Supplemental Indenture; and all requirements necessary to make this First Supplemental
Indenture a valid, binding and enforceable instrument in accordance with its terms, and to make the Notes, when executed by the
Bank and authenticated and delivered by the U.S. Trustee, the valid, binding and enforceable obligations of the Bank, have been
satisfied; and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects.


NOW, THEREFORE, WITNESSETH:


For and in consideration of the premises
and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of the Holders
of Notes, as follows:


Article
One

DEFINITIONS


Section
101. Relation to Base Indenture. This First Supplemental Indenture constitutes an integral
part of the Indenture.


Section
102. Definition of Terms. For all purposes of this First Supplemental Indenture:


		(a)	Capitalized terms used herein without definition shall have the meanings set forth in the Base
Indenture;



		(b)	a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;





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		(c)	unless otherwise specified or unless the context requires otherwise, (i) all references in this
First Supplemental Indenture to Sections refer to the corresponding Sections of this First Supplemental Indenture and (ii) the
terms “herein”, “hereof”, “hereunder” and any other word of similar import refer to this First
Supplemental Indenture; and



		(d)	the following terms have the meanings given to them in this Section 102(d):



“Affiliate” has the
meaning attributed to it in the Bank Act.


“Bank Act”
means the Bank Act (Canada), and any statute hereafter enacted in substitution therefor, as such Act, or substituted statute,
may be amended from time to time.


“Bank’s Auditors”
means an independent firm or firms of accountants duly appointed as auditors of the Bank.


“Business Day” means
each 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.


“Common Share Reorganization”
means any of (i) the issuance of Common Shares or securities exchangeable for or convertible into Common Shares to all holders
of Common Shares as a stock dividend, (ii) the subdivision, re-division or change of the Common Shares into a greater number of
Common Shares, or (iii) the reduction, combination or consolidation of the Common Shares into a lesser number of Common Shares.


“Common
Shares” means the common shares in the capital of the Bank.


“Conversion Price” means,
in respect of each Note, the greater of (i) the Floor Price, and (ii) the Current Market Price.


“Current Market Price”
means the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange (the “TSX”)
or, if not then listed on the TSX, on another exchange or market chosen by the board of directors of the Bank on which the Common
Shares are then traded, for the 10 consecutive trading days ending on the trading day immediately prior to the date on which the
Trigger Event occurs (with the conversion occurring as of the start of business on the date on which the Trigger Event occurs),
converted (if not denominated in U.S. dollars) into U.S. dollars at the Prevailing Rate on the day immediately prior to the date
on which the Trigger Event occurs. If no such trading prices are available, “Current Market Price” shall be the Floor
Price.


“DTC” has the meaning
specified in Section 203.


“Existing Trust Indentures”
means, collectively, the deeds, indentures or other instruments, including any supplement or amendment thereto, to which the Bank
is a party and under which the Bank has issued the following: (i) 8.90% Subordinated Debentures due June 2025; (ii) Floating Rate
Subordinated Capital Debentures due August 2085; (iii) 3.015% Subordinated Callable Notes due November 2037; (iv) 3.37% Subordinated
Callable Notes due April 2038; (v) 6.65% Subordinated Debentures due January 2021; (vi) 2.898% Subordinated Debentures due August
2022, (vii) 3.036% Subordinated Debentures due October 2024; (viii) 2.58% Subordinated Debentures due March 30, 2027; and (ix)
3.367% Subordinated Debentures due December 8, 2025.




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“Floor Price” means
the U.S. dollar equivalent of CDN$5.00 converted into U.S. dollars at the Prevailing Rate on the day immediately prior to the date
on which the Trigger Event occurs, subject to adjustment in the event of a Common Share Reorganization. The adjustment shall be
calculated to the nearest one-tenth of one cent provided that no adjustment of the Floor Price shall be required unless such adjustment
would require an increase or decrease of at least 1% of the Floor Price then in effect; provided, however, that in
such case any adjustment that would otherwise be required to be made will be carried forward and will be made at the time of and
together with the next subsequent adjustment which, together with any adjustments so carried forward, will amount to at least 1%
of the Floor Price.


“Independent Financial Adviser”
means an independent financial institution of international repute appointed by the Bank at its own expense.


“Ineligible Person”
means (i) any person whose address is in, or whom the Bank or the Trustee has reason to believe is a resident of, any jurisdiction
outside Canada or the United States of America to the extent that the issuance by the Bank of Common Shares or delivery of such
shares by its transfer agent to that person, pursuant to an NVCC Automatic Conversion, would require the Bank to take any action
to comply with securities, banking or analogous laws of that jurisdiction, and (ii) any person to the extent that the issuance
by the Bank of Common Shares or delivery of such shares by its transfer agent to that person, pursuant to an NVCC Automatic Conversion,
would, at the time of the Trigger Event, cause the Bank to be in violation of any law to which the Bank is subject.


“Junior Indebtedness”
means any Indebtedness which ranks subordinate to and not equally with or prior to (x) the Notes, and (y) the debentures or notes
issued under the Existing Trust Indentures in right of payment upon the insolvency or winding-up of the Bank and which, pursuant
to the terms of the instrument evidencing or creating the same, is expressed to be subordinate in right of payment to all other
Indebtedness to which the Notes are subordinate in right of payment to at least the same extent as the Notes are made junior and
subordinate thereto by the provisions of Article Fifteen of the Base Indenture.


“Junior Right” has the
meaning specified in Section 602.


“Multiplier” means 1.5.


“Note Value” means,
in respect of each Note, $1,000 plus accrued and unpaid interest on such Note as at the date of the Trigger Event.


“NVCC Automatic Conversion”
has the meaning specified in Section 701.


“OSFI” means the Office
of the Superintendent of Financial Institutions (Canada).


“Prevailing Rate” means,
in respect of any currencies on any day, the spot rate of exchange between the relevant currencies prevailing as at or about 12:00
noon (New York time) on that date as appearing on or derived from the Relevant Page or, if such a rate cannot be determined at
such time, the rate prevailing as at or about 12:00 noon (New York time) on the immediately preceding day on which such rate can
be so determined or, if such rate cannot be so determined by reference to the Relevant Page, the rate determined in such other
manner as an Independent Financial Adviser shall consider in good faith appropriate.


“Regulatory Event Date”
means the date specified in a letter from the Superintendent to the Bank on which the Notes will no longer be recognized in full
as eligible “Tier 2 Capital” or will no longer be eligible to be included in full as risk-based “Total Capital”
on a consolidated basis under the guidelines for capital adequacy requirements for banks in Canada as interpreted by the Superintendent.




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“Relevant Page” means
the relevant page on Bloomberg or such other information service provider that displays the relevant information.


“Senior Indebtedness”
means any Indebtedness other than Subordinated Indebtedness, including any Indebtedness to which the Notes are expressly subordinated
pursuant to Article Fifteen of the Base Indenture.


“Significant Shareholder”
means any person who beneficially owns directly, or indirectly through entities controlled by such person or persons associated
with or acting jointly or in concert with such person, a percentage of the total number of outstanding shares of a class of the
Bank that is in excess of that permitted by the Bank Act.


“Subordinated Indebtedness”
at any time means:


		(a)	the liability of the Bank in respect of the principal and interest on the Notes and the principal
and premium, if any, and interest on notes or debentures issued under the Existing Trust Indentures; 



		(b)	any Indebtedness which ranks equally with and not prior to (x) the Notes, and (y) the notes or
debentures issued under the Existing Trust Indentures, in right of payment in the event of the insolvency or winding-up of the
Bank and which, pursuant to the terms of the instrument evidencing or creating the same, is expressed to be subordinate in right
of payment to all other Indebtedness to which the Notes are subordinate in right of payment to at least the same extent as the
Notes are made junior and subordinate thereto under the provisions of Article Fifteen of the Base Indenture; and 



		(c)	any Indebtedness which ranks subordinate to and not equally with or prior to (x) the Notes, and
(y) the notes or debentures issued under the Existing Trust Indentures, in right of payment in the event of the insolvency or winding-up
of the Bank and which, pursuant to the terms of the instrument evidencing or creating the same, is expressed to be subordinate
in right of payment to all other Indebtedness to which the Notes are subordinate in right of payment to at least the same extent
as the Notes are made junior and subordinate thereto under the provisions of Article Fifteen of the Base Indenture. 



“Subsidiary”
has the meaning attributed to it in the Bank Act.


“Superintendent” means
the Superintendent of Financial Institutions (Canada) appointed pursuant to the Office of the Superintendent of Financial Institutions
Act (Canada).


“Tax Event” means the
Bank has received an opinion of independent counsel of recognized standing experienced in such matters to the effect that, as a
result of, (i) any amendment to, clarification of, or change (including any announced prospective change) in, the laws, or any
regulations thereunder, or any application or interpretation thereof, of Canada, or any political subdivision or taxing authority
thereof or therein, affecting taxation; (ii) any judicial decision, administrative pronouncement, published or private ruling,
regulatory procedure, rule, notice, announcement, assessment or reassessment (including any notice or announcement of intent to
adopt or issue such decision, pronouncement, ruling, procedure, rule, notice, announcement, assessment or reassessment) (collectively,
an “administrative action”); or (iii) any amendment to, clarification of, or change in, the official position
with respect to or the interpretation of any administrative action or any interpretation or pronouncement that provides for a




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position with respect to such administrative action that differs
from the theretofore generally accepted position, in each case (i), (ii) or (iii), by any legislative body, court, governmental
authority or agency, regulatory body or taxing authority, irrespective of the manner in which such amendment, clarification, change,
administrative action, interpretation or pronouncement is made known, which amendment, clarification, change or administrative
action is effective or which interpretation, pronouncement or administrative action is announced on or after the date of the issue
of the Notes, there is more than an insubstantial risk (assuming any proposed or announced amendment, clarification, change, interpretation,
pronouncement or administrative action is effective and applicable) that the Bank is, or may be, subject to more than a de minimus
amount of additional taxes, duties or other governmental charges or civil liabilities because the treatment of any of its items
of income, taxable income, expense, taxable capital or taxable paid up capital with respect to the Notes (including the treatment
by the Bank of interest on the Notes) or the treatment of the Notes, as or as would be reflected in any tax return or form filed,
to be filed, or otherwise could have been filed, will not be respected by a taxing authority.


“Threshold Number” means
the number of Common Shares issuable or deliverable to any Person that would cause that Person to become a Significant Shareholder,
being the sum of (i) the total number of Common Shares held by that Person immediately prior to the NVCC Automatic Conversion and
(ii) the total number of Common Shares otherwise issuable or deliverable to that Person by virtue of the operation of the NVCC
Automatic Conversion, less (iii) the greatest number of Common Shares that such Person could hold, directly or indirectly, without
being a Significant Shareholder.


“Trigger Event” has
the meaning set out in the OSFI, Guideline for Capital Adequacy Requirements (CAR), Chapter 2 - Definition of Capital, effective
January 1, 2013, as such term may be amended or superseded by OSFI from time to time, which term currently provides that each of
the following constitutes a Trigger Event:


		(1)	the Superintendent publicly announces that the Bank has been advised, in writing, that the Superintendent
is of the opinion that the Bank has ceased, or is about to cease, to be viable and that, after the conversion of the Notes and
all other contingent instruments issued by the Bank and taking into account any other factors or circumstances that are considered
relevant or appropriate, it is reasonably likely that the viability of the Bank will be restored or maintained; or



		(2)	a federal or provincial government in Canada publicly announces that the Bank has accepted or
agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political
subdivision or agent or agency thereof without which the Bank would have been determined by the Superintendent to be non-viable.



Article
Two

The Notes


Section
201. Designation and Principal Amount. The Notes may be issued from time to time upon
a Bank Order for the authentication and delivery of Notes pursuant to Section 303 of the Base Indenture. There is hereby authorized
a series of Securities designated as the 4.500% Subordinated Notes due 2025 (Non-Viability Contingent Capital (NVCC)) having an
initial aggregate principal amount of $1,250,000,000 (except for Notes authenticated and delivered upon registration or transfer
of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906 or 1107 of the Base Indenture and except
for Notes which, pursuant to Section 303 of the Base Indenture are deemed to never have been authenticated and delivered under
the Base Indenture). 






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Section
202. Maturity. The date upon which the Notes shall become due and payable at
final maturity, together with any accrued and unpaid interest then owing, is December 16, 2025 (the “Maturity Date”).


Section
203. Form, Payment and Appointment. Except as provided in Section 305 of the
Base Indenture, the Notes will be issued only in book-entry form and will be represented by one or more Global Notes (as defined
below) registered in the name of or held by The Depository Trust Company (and any successor thereto) (“DTC”)
or its nominee. Principal or the Redemption Price, if any, of a Note shall be payable to the Person in whose name that Note is
registered on the Maturity Date or Redemption Date, as the case may be, provided that principal of, the Redemption Price, if any,
of and interest on the Notes represented by one or more Global Notes registered in the name of or held by DTC or its nominee will
be payable in immediately available funds to DTC or its nominee, as the case may be, as the registered holder of such Global Notes.
The principal of any certificated Notes will be payable at the Place of Payment set forth below; provided, however,
that payment of interest may be made at the option of the Bank by check mailed to the Person entitled thereto at such address as
shall appear in the Security Register or by wire transfer to an account appropriately designated by the Person entitled to payment.



The Notes shall have such other terms
as are set forth in the form thereof attached hereto as Exhibit A.


The Security Registrar, Authenticating
Agent and Paying Agent for the Notes shall initially be the U.S. Trustee.


The Place of Payment for the Notes shall
initially be the Corporate Trust Office of the U.S. Trustee.


The Notes will be issuable and may be
transferred only in minimum denominations of $2,000 or any amount in excess thereof that is an integral multiple of $1,000. The
amounts payable with respect to the Notes shall be payable in U.S. dollars.


Section
204. Global Note. The Notes shall be issued initially in the form of one or
more fully registered global notes (each such global note, a “Global Note”) deposited with DTC or its designated
custodian or such other Depositary as any officer of the Bank may from time to time designate. Unless and until a Global Note is
exchanged for Notes in certificated form, such Global Note may be transferred, in whole but not in part, and any payments on the
Notes shall be made, only to DTC or a nominee of DTC, or to a successor Depositary selected or approved by the Bank or to a nominee
of such successor Depositary.


Section
205. Interest. The Notes shall bear interest on their principal amount at the
rate of 4.500% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. Accrued interest on the Notes shall be payable semi-annually in arrears on June 16
and December 16 of each year, beginning on June 16, 2016 (each such date, an “Interest Payment Date”), or if
any such day is not a Business Day, the next Business Day (but no interest will accrue as a result of that postponement), to the
Holders of the Notes at the close of business on the immediately preceding June 1 and December 1 (whether or not a Business Day),
as the case may be. 


Section
206. Satisfaction and Discharge. The provisions of Article Four of the Base Indenture
shall not be applicable to the Notes; however, the following shall apply to the Notes:




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The Indenture shall upon Bank Request
cease to be of further effect, and either Trustee or both, at the expense of the Bank, shall execute proper instruments acknowledging
satisfaction and discharge of the Indenture, when (a) all Notes theretofore authenticated and delivered (other than (i) Notes which
have been mutilated, destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 of the Base Indenture
and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Bank and
thereafter repaid to the Bank or discharged from such trust, as provided in Section 1003 of the Base Indenture) have been delivered
to a Trustee for cancellation; (b) the Bank has paid or caused to be paid all other sums payable hereunder by the Bank; and (c)
the Bank has delivered to the Trustees an Officer’s Certificate stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of the Indenture have been complied with.


Notwithstanding the satisfaction and
discharge of the Indenture, the obligations of the Bank to the Trustees under Section 607 of the Base Indenture shall survive.


Section
207. No Repayment at the Option of Holders. The provisions of Article Twelve of
the Base Indenture relating to purchases or repayments of Securities by the Bank at the option of the Holder shall not be applicable
to the Notes.


Section
208. No Sinking Fund. The provisions of Article Thirteen of the Base Indenture
relating to sinking funds shall not be applicable to the Notes.


Section
209. Defeasance and Covenant Defeasance. The provisions of Article Fourteen of
the Base Indenture relating to Defeasance and Covenant Defeasance shall not be applicable to the Notes.


Section
210. Amendments. Notwithstanding any other provision of the Indenture or the Notes,
the Bank shall not, without the prior written approval of the Superintendent, amend or vary terms of the Notes that would affect
the recognition of the Notes as regulatory capital under capital adequacy requirements adopted by the Superintendent.


Article
Three

FORM OF NOTES


Section
301. Form of Notes. The Notes and the Trustee’s certificate of authentication
thereon are to be substantially in the form attached as Exhibit A hereto, with such changes therein as the officer of the
Bank executing the Notes (by manual or facsimile signature) may approve, such approval to be conclusively evidenced by their execution
thereof. 


Article
Four

ISSUE OF NOTES


Section
401. Original Issue of Notes. Notes having an aggregate principal amount of $1,250,000,000
may from time to time, upon execution of this First Supplemental Indenture, be executed by the Bank and delivered to the Trustees
for authentication, and upon Bank Order either Trustee, or both, shall thereupon authenticate and deliver said Notes in accordance
with a Bank Order pursuant to Section 303 of the Base Indenture without any further action by the Bank (other than as required
by the Base Indenture). 


Section
402. Additional Issues of Notes. The Bank may from time to time, without notice to
or the consent of the Holders of the Notes, issue additional Notes, which Notes will rank pari passu with the Notes and
be identical in all respects as the Notes previously issued (other than issue date, issue price and, if applicable, the first interest
payment date and the initial interest accrual date) in order that such




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additional Notes may be consolidated and form a single series
with the Notes outstanding immediately prior to the issuance of such additional Notes and have the same terms as to status, redemption
or otherwise as the Notes. Such additional Notes may have the same or different CUSIP numbers than the Notes issued on the date
hereof or no CUSIP number, as the case may be.


Article
Five

REMEDIES


Section
501. Events of Default. Notwithstanding any other provisions of the Base
Indenture, and for greater certainty, none of (i) a default in the payment of interest on the Notes, (ii) a default in the
performance of any other covenant of the Bank in the Indenture or (iii) the occurrence of an NVCC Automatic Conversion shall
constitute an Event of Default under the Indenture or the Notes.


Section
502. Acceleration of Maturity; Rescission and Annulment. The first paragraph of Section
502 of the Base Indenture shall be replaced with the following for purposes of the Notes: If an Event of Default with respect to
the Outstanding Notes occurs and is continuing and a Trigger Event has not occurred, then in every such case either Trustee or
the Holders of not less than 25% in principal amount of the Outstanding Notes may declare the principal amount of all Notes and
accrued and unpaid interest thereon to be due and payable immediately, by a notice in writing to the Bank (and to the Trustees
if given by Holders), and upon any such declaration such principal amount shall become immediately due and payable.


Article
Six

Certain Covenants Applicable to the Notes


Section
601. Restriction on Subordinated Indebtedness. The Bank shall not create, issue or
incur any Indebtedness subordinate in right of payment to the deposit liabilities of the Bank which, in the event of the insolvency
or winding-up of the Bank, would rank in right of payment in priority to the Notes.


Section
602. Junior Indebtedness. The Bank shall not create any Junior Indebtedness which,
pursuant to the terms of the instrument evidencing or creating the same, shall have a right attached thereto, in favor of the holders
thereof (the “Junior Right”) to cause the principal amount thereof to become due and payable prior to the later
of its stated maturity or the expiration of any applicable grace period, or otherwise than at the option of the Bank, unless and
until such a right or remedy in respect of the Notes is exercisable and unless and until the Trustees, in their discretion, or
upon the direction of the




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Holders of Notes, shall have exercised any such right or
remedy in respect of the Notes prior to the exercise of the Junior Right.


Article
Seven

CONVERSION INTO COMMON SHARES UPON A TRIGGER EVENT


Section
701. NVCC Automatic Conversion. Upon
the occurrence of a Trigger Event, each outstanding Note will automatically and immediately be converted, on a full and permanent
basis, without any action on the part of, or the consent of, the Holders of Notes, into fully-paid and non-assessable Common Shares,
in accordance with this Article Seven (an “NVCC Automatic Conversion”). 


Section
702. Conversion Rate. The number of Common Shares into which each Note is convertible
at the time of an NVCC Automatic Conversion shall be equal to the quotient obtained by dividing (a) the
Multiplier multiplied by Note Value, by (b) Conversion Price.


Section
703. Time of NVCC Automatic Conversion. An NVCC Automatic Conversion is deemed
to be effected immediately following the occurrence of a Trigger Event and the rights of the holder of such Notes as the
holder thereof shall cease at such time and the person or persons entitled to receive Common Shares upon an NVCC
Automatic Conversion shall be treated for all purposes as having become the holder or holders of record of such Common Shares
at such time. Subject to Section 704, as promptly as practicable after the occurrence of a Trigger Event, the Bank shall
announce the NVCC Automatic Conversion by way of a press release and shall give notice of the NVCC Automatic Conversion in
accordance with the provisions of Section 106 of the Base Indenture to the then Holders of Notes and the Trustees. As
promptly as practicable after the NVCC Automatic Conversion, the Bank shall deliver or cause to be delivered certificates
representing Common Shares registered in the name of the Holders of Notes, or as such Holder shall have directed, on
presentation and surrender of the Global Note, or Notes in certificated form, as the case may be, at the Corporate Trust
Office. From and after the NVCC Automatic Conversion, the Notes shall cease to be outstanding, the holders thereof shall
cease to be entitled to interest thereon, and any certificates representing the Notes shall represent only the right to
receive upon surrender thereof certificates representing the applicable number of Common Shares specified in Section 702. An
NVCC Automatic Conversion shall be mandatory and binding upon both the Bank and all Holders of the Notes notwithstanding
anything else including, without limitation: (a) any prior action to or in furtherance of a redemption of the Notes pursuant
to the Indenture; and (b) any delay or impediment to the issuance or delivery of the Common Shares to the Holders of the
Notes.


Section
704. Right Not to Deliver Common Shares.
Upon an NVCC Automatic Conversion, the Bank reserves the right not to deliver some or all, as applicable, of the Common Shares
issuable thereupon to any Person whom the Bank or either Trustee has reason to believe is an Ineligible Person. In such circumstances,
the Bank will hold, as agent of all Ineligible Persons, all Common Shares otherwise deliverable to the Ineligible Persons and will
attempt to facilitate the sale of such Common Shares to parties other than the Bank and its Affiliates on behalf of such Ineligible
Persons through a registered dealer to be retained by the Bank on behalf of such Ineligible Persons. Those sales (if any) may be
made at any time and at any price. The Bank will not be subject to any liability for failure to sell such Common Shares on behalf
of the Ineligible Persons or at any particular price on any particular day. The net proceeds received by the Bank from the sale
of any such Common Shares will be divided among the Ineligible Persons in proportion to the number of Common Shares that would
otherwise have been delivered to them upon the NVCC Automatic Conversion after deducting the costs of sale and any applicable withholding
taxes. The Bank will deliver a check or send a wire transfer in immediately available funds representing the aggregate net proceeds
to DTC (if the Common Shares are then held in the form or one or more global securities) or in all other cases to such Ineligible
Persons in accordance with the regular practices and procedures of DTC or otherwise. 




    12 


     


    

Upon an NVCC Automatic Conversion, the
Bank reserves the right not to deliver some or all, as applicable, of the Common Shares to any Person who, by virtue of the operation
of the NVCC Automatic Conversion, would become a Significant Shareholder. In such circumstances, the Bank will hold, as agent of
that Person, the Threshold Number of Common Shares otherwise deliverable to such Person, and the Bank will attempt to facilitate
the sale of such Common Shares to parties other than the Bank and its Affiliates on behalf of that Person through a registered
dealer to be retained by the Bank on behalf of such Person. Those sales (if any) may be made at any time and at any price. The
Bank will not be subject to any liability for failure to sell any such Common Shares on behalf of that Person or at any particular
price on any particular day. The net proceeds received by the Bank from the sale of any such Common Shares will be delivered to
that Person, after deducting the costs of sale and any applicable withholding taxes. The Bank will deliver a check or send a wire
transfer in immediately available funds representing the aggregate net proceeds to DTC (if the Common Shares are then held in the
form of one or more global securities) or in all other cases to such Persons in accordance with the regular practices and procedures
of DTC or otherwise.


Section
705. Fractional Shares. In any case where the aggregate number of Common Shares to
be issued to a Holder of Notes pursuant to an NVCC Automatic Conversion includes a fraction of a Common Share, such number of Common
Shares to be issued to such holder shall be rounded down to the nearest whole number of Common Shares and no cash payment shall
be made in lieu of such fractional Common Share. 


Section
706. Recapitalizations, Reclassifications and Changes in the Common Shares. In the
event of a capital reorganization, consolidation, merger or amalgamation of the Bank or comparable transaction affecting the Common
Shares, the Bank will take necessary action to ensure that holders of Notes receive, pursuant to an NVCC Automatic Conversion,
the number of Common Shares or other securities that such Holders would have received if the NVCC Automatic Conversion occurred
immediately prior to the record date for such event.


Section
707. Adjustments. 


(a)               
Upon a Common Share Reorganization, the Floor Price shall be adjusted so that it will equal
the price determined by multiplying the Floor Price in effect immediately prior to such effective date or record date of such event
by a fraction:


		(i)	the numerator of which will be the total number of Common Shares outstanding on such effective date
or record date before giving effect to such Common Share Reorganization; and



		(ii)	the denominator of which will be the total number of Common Shares outstanding immediately after giving
effect to such Common Share Reorganization (including, in the case where securities exchangeable for or convertible into Common
Shares are distributed, the number, without duplication, of Common Shares that would have been outstanding had all such securities
been exchanged for or converted into Common Shares on such effective date or record date).



The adjustment shall
be calculated to the nearest one-tenth of one cent provided that no adjustment of the Floor Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of the Floor Price then in effect; provided, however,
that in such case any adjustment that would otherwise be required then to be made will be carried forward and will be made at




    13 


     


    

the time of and together with the next
subsequent adjustment which, together with any adjustments so carried forward, will amount to at least 1% of the Floor Price.


(b)              
In any case in which the Floor Price definition or Section 706 requires that an adjustment
will become effective immediately after a record date for an event referred to therein or herein, the Bank may defer, until the
occurrence of such event, issuing to the Holders of any Notes upon a NVCC Automatic Conversion occurring after such record date
and before the occurrence of such event, any additional Common Shares issuable upon such conversion by reason of the adjustment
required by such event, provided, however, that the Bank will deliver to such holder evidence of such Holder’s
right to receive such additional Common Shares upon the occurrence of such event and the right to receive any dividends or other
distributions made on such additional Common Shares declared in favor of holders of record of Common Shares on and after the date
of the NVCC Automatic Conversion or such later date on which such holder would, but for the provisions of this Section 707(b),
have become the holder of record of such additional Common Shares.


(c)               
If at any time a dispute arises with respect to adjustments provided for in the Floor Price
definition or in Section 706, such dispute will be conclusively determined, subject to the consent if required, of the Toronto
Stock Exchange and any other stock exchange on which the Common Shares are then listed, by the Bank’s Auditors, or if they
are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action of the board
of directors of the Bank and any such determination will be binding upon the Bank, the holders of the Notes and the other shareholders
of the Bank. Such auditors or accountants will be given access to all necessary records of the Bank.


(d)              
If the Bank sets a record date to take any action that would require an adjustment provided
for in the Floor Price definition or in Section 706 and before the taking of such action, the Bank abandons its plan to take such
action, then no such adjustment shall be made.


(e)               
The Bank will from time to time, immediately after the occurrence of any Common Share Reorganization
or other event that requires an adjustment or readjustment as provided in the definition of Floor Price, Section 706 or this Section
707, deliver an Officer’s Certificate of the Bank to the Trustees specifying the nature of the event requiring the same and
the amount of the adjustment or readjustment necessitated thereby and setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based, and the Trustees shall be entitled to act and rely upon such Officer’s
Certificate of the Bank. Such Officer’s Certificate of the Bank and the amount of the adjustment or readjustment specified
therein will be conclusive and binding on all parties in interest. Until such Officer’s Certificate of the Bank is received
by the Trustees, the Trustees may act and be protected in acting on the presumption that no adjustment or readjustment has been
made or is required. Except in respect of any Common Share Reorganization, the Bank will forthwith give notice to the Holders of
Notes specifying the event requiring such adjustment or readjustment and the amount thereof, including the resulting Floor Price.


Section
708. General. 


(a)               
Upon an NVCC Automatic Conversion, any accrued and unpaid interest, together with the principal
amount of the Notes, will be deemed paid in full by the issuance of Common Shares upon such conversion and the Holders of Notes
shall have no further rights and the Bank shall have no further obligations under the Indenture. If tax is required to be withheld
from such payment of interest in the form of Common Shares, the number of Common Shares received by a Holder of Notes shall reflect
an amount net of any applicable withholding tax.




    14 


     


    

(b)              
Notwithstanding any other provision of the Indenture or the Notes, the conversion of the Notes
shall not be an Event of Default and the only consequence of a Trigger Event shall be the conversion of such Notes into Common
Shares.


(c)               
The Trustees shall have no duty to determine the occurrence of an NVCC Automatic Conversion
or any calculations in connection with any such NVCC Automatic Conversion. The Trustees makes no representation as to the validity
or value of any securities or assets issued upon an NVCC Automatic Conversion, and the Trustees shall not be responsible for the
Bank’s failure to comply with any provisions of this Article Seven. 


Article
Eight

REDEMPTION OF Notes


Section
801. Applicability of Article Eleven of the Base Indenture. The provisions of Article
Eleven of the Base Indenture shall be applicable with respect to the Notes.


Section
802. Regulatory Redemption. The Bank may, at its option, with the prior written approval
of the Superintendent, redeem the Notes, in whole but not in part, at any time within 90 days following a Regulatory Event Date,
on not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount thereof,
plus accrued and unpaid interest to, but excluding, the Redemption Date.


Section
803. Tax Redemption. The Bank may, at its option, with the prior written approval of
the Superintendent, redeem the Notes, in whole but not in part, at any time following the occurrence of a Tax Event, on not less
than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest to, but excluding, the Redemption Date.


Section
804. Mandatory Redemption; Open Market Purchases. The Bank shall not be required to
make mandatory redemption payments or sinking fund payments with respect to the Notes. At any
time the Bank may, with the prior written approval of the Superintendent, purchase Notes by tender offer, open market purchases,
negotiated transactions or otherwise in accordance with applicable securities laws and regulations, so long as such acquisition
does not otherwise violate the terms of the Indenture, upon such terms and at such prices as the Bank may determine. Notwithstanding
the foregoing, any Subsidiary of the Bank may purchase Notes in the ordinary course of its business of dealing in securities.


Article
Nine

MISCELLANEOUS PROVISION


Section
901. Ratification of Base Indenture. The Base Indenture, as supplemented by
this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed
part of the Base Indenture in the manner and to the extent herein and therein provided.


Section
902. Trustee Not Responsible for Recitals. The recitals contained herein and in the
Notes, except for a Trustee’s certificate of authentication, shall be taken as the statements of the Bank, and the Trustees
assume no responsibility for their correctness. The Trustees make no representations as to the validity or sufficiency of this
First Supplement Indenture or of the Notes. The Trustees shall not be accountable for the use or application by the Bank of Notes
or the proceeds thereof.





    15 


     


    

Section
903. Governing Law. This First Supplemental Indenture and the Notes shall be governed
by and construed in accordance with the law of the State of New York, except for Section 301(b) and Article Fifteen of the Base
Indenture and Article Seven of this First Supplemental Indenture, which shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.


Section
904. Separability Clause. In case any provision in this First Supplemental Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby. 


Section
905. Benefits of First Supplemental Indenture. Nothing in this First Supplemental Indenture
or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and
the Holders, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture. 


Section
906. Conflict with Base Indenture. If any provision of this First Supplemental Indenture
relating to the Notes is inconsistent with any provision of the Base Indenture, such provision of this First Supplemental Indenture
shall control.


Section
907. Provisions of Trust Indenture Legislation Controlling. This First Supplemental
Indenture is subject to the provisions of the Trust Indenture Legislation that are required to be part of the Indenture and shall,
to the extent applicable, be governed by such provisions. If any provision of this First Supplemental Indenture limits, qualifies,
or conflicts with a provision of the Trust Indenture Legislation that is required under the Trust Indenture Legislation to be a
part of and govern this First Supplemental Indenture, the latter provision shall control.


Section
908. Execution in Counterparts. This First Supplemental Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument. The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile or electronic
format (i.e., “.pdf” or “.tif”) transmission shall constitute effective execution and delivery of this
First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture for
all purposes. Signatures of the parties hereto transmitted by facsimile or electronic format (i.e., “.pdf” or “.tif”)
shall be deemed to be their original signatures for all purposes.


Section
909. Indenture and Notes Solely Corporate Obligations. No recourse under or upon any
obligation, covenant or agreement of the Indenture or of Notes, or for any claim based thereon or otherwise in respect thereof,
shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Bank or of any
successor corporation, either directly or through the Bank, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly understood that the Indenture and the Notes are solely
corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators,
shareholders, officers or directors, as such, of the Bank or of any successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in the Indenture
or the Notes or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution
or statute, of, and any and all such rights and claims against, every such incorporator, shareholder, officer or director, as such,
because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements
contained in the Indenture or in the Notes or implied therefrom, are hereby expressly waived and released as a condition of, and
as a consideration for, the execution of this First Supplemental Indenture and the issue of the Notes. 






    16 


     


    
Section
910. Waiver of Jury Trial. EACH OF THE BANK AND THE TRUSTEES 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 FIRST SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY. 


 


[Signature page follows]


 




    17 


     


    

IN WITNESS WHEREOF, the parties hereto
have caused this First Supplemental Indenture to be duly executed, all as of the day and year first above written.


 





	 	 	 	 
	 	THE BANK OF NOVA SCOTIA
	 	 	




	 	By:	 	
/s/ Andrew Branion
	 	 	 	Name: Andrew Branion
	 	 	 	Title: Executive Vice-President & Group Treasurer
	 	
         

         

	 	
        COMPUTERSHARE TRUST COMPANY, N.A.,

        as U.S. Trustee

	 	 	
         

         

	 	By:	 	
/s/ John M. Wahl
	 	 	 	Name: John M. Wahl
	 	 	 	Title: Corporate Trust Officer
	 	
         

         

	 	
        COMPUTERSHARE TRUST COMPANY OF CANADA,

        as Canadian Trustee

	 	 	
         

         

	 	By:	 	
/s/ Morag Abraham
	 	 	 	Name: Morag Abraham
	 	 	 	Title: Corporate Trust Officer
	 	
         

         
	 
	 	By:	 	
/s/ Ann Samuel
	 	 	 	Name: Ann Samuel
	 	 	 	Title: Associate Trust Officer


 




     


     


    


Exhibit
A 





Unless
this SECURITY is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the BANK (as defined below) or its agent for registration of transfer, exchange or payment, and any certificate issued is registered
in the name of Cede & Co. or in 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.,
has an interest herein.


THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


THE BANK OF NOVA SCOTIA 


4.500% Subordinated Notes due 2025

(Non-Viability Contingent Capital (NVCC))

(subordinated indebtedness)


This Security will not constitute a
deposit that is insured under

the Canada Deposit Insurance Corporation Act or by the

United States Federal Deposit Insurance Corporation. 


	No.: ________________	CUSIP No.: 064159 HB5
	
         

        Issue Date: ________________
	$___________________
	
        Stated Maturity: December 16, 2025

         
	 


The Bank of Nova Scotia, a Schedule I
bank under the Bank Act (Canada) (herein called the “Bank”, which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal
sum of $_________________ (_____________________ UNITED STATES DOLLARS) on December 16, 2025, and to pay interest thereon from
and including December 16, 2015 or from the most recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on June 16 and December 16 in each year, commencing June 16, 2016, at the rate of 4.500% per annum, until
the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be
the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. If any
Interest Payment Date or the maturity date falls on a day that is not a Business Day, the Bank shall postpone the making of such
interest payment to the next succeeding Business Day (and no interest shall be paid in respect of the delay). Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of




     


     


    


such Defaulted Interest to be fixed by
the Trustees, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Security
may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. A “Business
Day” means each 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.


Payment of the principal of and interest
on this Security will be made at the office or agency of the Bank maintained for that purpose, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and private debts; provided that
payment of the principal of and interest on the Securities represented by one or more Global Securities registered in the name
of or held by DTC or its nominee will be payable in immediately available funds to DTC or its nominee, as the case may be, as the
registered holder of such Global Security.


Reference is hereby made to the further
provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.


Unless the certificate of authentication hereon
has been executed by a Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose. The signature of the executing officer of the Bank on this
Security may be manual or by facsimile.


 


 




     


     


    


IN
WITNESS WHEREOF, the Bank has caused this instrument to be duly executed.


 


Dated:
________________


 





	 	The Bank of Nova Scotia 
	 	 	 
	 	 	 
	 	By: 	 
	 	 	Name:  
	 	 	Title:  







 


 


TRUSTEE’S CERTIFICATE OF AUTHENTICATION


 


This is one of the Securities
of the series designated therein referred to in the within-mentioned Indenture.


 


Dated:
________________


 





	 	COMPUTERSHARE TRUST COMPANY, N.A.,
	 	    as U.S. Trustee 
	 	 	 
	 	 	 
	 	By: 	 
	 	 	Name: 
	 	 	Title: 







 







     


     


    





(Reverse
of SECURITY)


This Security is
one of a duly authorized issue of securities of the Bank (herein called the “Securities”), issued and to be
issued in one or more series under an Indenture, dated as of December 16, 2015 (the “Base Indenture”), among
the Bank, Computershare Trust Company, N.A. (the “U.S. Trustee”) and Computershare Trust Company of Canada (the
“Canadian Trustee” and, together with the U.S. Trustee, the “Trustee” or “Trustees”,
which terms include any successor trustee under the Indenture), as amended and supplemented by the First Supplemental Indenture,
dated as of December 16, 2015, among the Bank and the Trustees (the “Supplemental Indenture” and, together
with the Base Indenture, the “Indenture”), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder of the Bank, the Trustees and the Holders of the
Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of
the series designated on the face hereof initially limited in aggregate principal amount to $1,250,000,000, provided the Bank may,
without the consent of any Holder, at any time and from time to time, increase the initial principal amount.


The Securities are
the Bank’s direct unsecured obligations, constituting subordinated indebtedness for the purpose of the Bank Act.


The indebtedness
evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness and this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustees on his, her or its behalf to take such actions as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints each Trustee as his or her attorney-in-fact for any and all such purposes. Each Holder hereof,
by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness whether now outstanding or hereafter created, incurred, assumed or guaranteed,
and waives reliance by each such holder upon said provisions.


Upon the occurrence
of a Trigger Event, each outstanding Security will automatically and immediately be converted, on a full and permanent basis, without
the consent of the Holders thereof, into that number of fully-paid Common Shares of the Bank determined by dividing (a) the product
of the Multiplier multiplied by the Note Value, by (b) the Conversion Price.


The Bank may, at
its option, with the prior written approval of the Superintendent, redeem the Securities, in whole but not in part, at any time
within 90 days following a Regulatory Event Date, on not less than 30 nor more than 60 days’ prior notice, at a Redemption
Price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date. The
Bank may, at its option, with the prior written approval of the Superintendent, redeem the Securities, in whole but not in part,
on any date following the occurrence of a Tax Event, on not less than 30 nor more than 60 days’ prior notice, at a Redemption
Price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date.


If an Event of Default
with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the Indenture.


The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Bank
and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Bank and the
Trustees with the consent




     


     


    


of the Holders of a majority in principal
amount of the Securities at the time Outstanding of each series to be affected, or in certain cases the unanimous consent of each
of such Holders. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance
by the Bank with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders
of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.


As provided in and
subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustees written notice of a continuing Event of Default with respect to the Securities of this
series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have
made written request to the Trustees to institute proceedings in respect of such Event of Default as Trustees and offered the Trustees
reasonable indemnity, and the Trustees shall not have received from the Holders of a majority in principal amount of Securities
of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such
proceeding, for 90 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.


No reference herein
to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Bank, which
is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.


For disclosure purposes
under the Interest Act (Canada), whenever in the Securities of this series or the Indenture interest at a specified rate
is to be calculated on the basis of a period less than a calendar year, the yearly rate of interest to which such rate is equivalent
is such rate multiplied by the actual number of days in the relevant calendar year and divided by the number of days in such period.


As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or agency of the Bank in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Bank and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or transferees.


The Securities of
this series are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in
excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.


No service charge
shall be made for any such registration of transfer or exchange, but the Bank and the Trustees may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.




     


     


    


Prior to due presentment
of this Security for registration of transfer, the Bank, the Trustees and any agent of the Bank or the Trustees may treat the Person
in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither
the Bank, the Trustees nor any such agent shall be affected by notice to the contrary.


All terms used in
this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.