New and Innovative Opportunity for Canadian Investors

The Bank of Nova Scotia Deutsche Bank X-Alpha™ Notes are an innovative investment that provide investors with enhanced exposure to proprietary index trading strategies through a single investment with no direct currency risk.

Simple Structure

The Notes’ variable return is linked to the upside performance of the Index with 100% principal protection by The Bank of Nova Scotia if held until maturity.

Issuer & Guarantor

The Bank of Nova Scotia

Secondary Market

The Notes will not be listed on any stock exchange. Scotia Capital Inc., intends to effect certain actions and maintain a secondary market for the Notes through FundSERV.

Early Trading Charge

An early trading charge of up to 5.95% of the principal amount of a Note sold to Scotia Capital Inc. will apply for the 1080 days following issuance.

Documentation

IMPORTANT INFORMATION

The information above must be read in conjunction with the Information Statement. This information is a summary only of certain aspects of the Notes and you are urged to read the Information Statement in its entirety for complete information related to the Notes, including the risk factors. A hard copy of the Information Statement will be sent to all investors.

A prospective investor should decide to invest in the Notes only after carefully considering with his or her advisor as to whether the Notes are a suitable investment in light of the information set out in the Information Statement. None of the Bank of Nova Scotia including in its capacity as Calculation Agent, Scotia Capital Inc., including in its capacity as Selling Agent, nor BluMont Capital Corporation in its capacity as Sub-Agent makes any recommendation as to whether the Notes are a suitable investment for any person.

The Notes have certain investment characteristics that differ from conventional fixed income investments in that they do not provide holders with any return or income stream prior to the Maturity Date, or a return at the Maturity Date that is calculated by reference to a fixed or floating rate of interest that is determinable prior to the Maturity Date. The return on the Notes (if any), unlike the return on many deposit liabilities of Canadian chartered banks, is uncertain in that the Notes could produce no return on the holder's original investment. Therefore, the Notes are not suitable investments for a holder if the holder needs or expects to receive any return or a specific return on investment. The Notes are designed for holders with a long–term investment horizon who are prepared to hold the Notes to the Maturity Date and are prepared to assume risks with respect to a return tied to the performance of the Index. Prospective purchasers should take into account additional risk factors associated with this Offering. See “Risk Factors” in the Information Statement.

If a holder sells Notes prior to the Maturity Date, the holder may have to do so at a discount from the original Principal Amount even if the performance of the Index has been positive and, as a result, the holder may suffer losses. In addition, an "Early Trading Charge" of up to 5.95% of the principal amount of a Note will apply if the holder sells a Note prior to maturity in years 1 or 2 following the issue date. The Notes are not redeemable by the holder. The Notes are generally not suitable for a holder who requires liquidity prior to the Maturity Date.

A holder should consult his or her investment advisor concerning whether it would be more favourable to the holder in the circumstances at any time, to sell the Notes (assuming the availability of a secondary market) or to hold the Notes until the Maturity Date.

A holder should also consult his or her tax advisor as to the income tax consequences arising from a sale prior the Maturity Date as compared to holding the Notes until the Maturity Date.

The Notes are issued by The Bank of Nova Scotia. The Notes are not deposits insured under the Canada Deposit Insurance Act or under any other deposit insurance regime. The price to be paid by each holder upon issuance of a Note has been determined by agreement between the Bank of Nova Scotia and Scotia Capital Inc. (the “Selling Agent”). The Selling Agent is a subsidiary of the Bank of Nova Scotia. As a result, the Bank is a related issuer of the Selling Agent under applicable Canadian securities legislation.