MASTER CREDIT CARD TRUST II. Up to $4,000,000,000 Credit Card Receivables-Backed Notes

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1 This short form prospectus is referred to as a base shelf prospectus and has been filed under legislation in each of the provinces and territories of Canada that permits certain information about these securities to be determined after this prospectus has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery to purchasers of a pricing supplement containing the omitted information within a specified period of time after agreeing to purchase any of these securities. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form base shelf prospectus, together with each document deemed to be incorporated by reference herein, constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States, except in certain transactions exempt from the registration requirements of such Act. Information has been incorporated by reference in this short form base shelf prospectus from documents filed with the securities commissions or similar authorities in Canada. Copies of the documents incorporated by reference may be obtained on request without charge from Bank of Montreal, Corporate Secretary s Department, 100 King Street West, 1 First Canadian Place, 21 st Floor, Toronto, Ontario, M5X 1A1, telephone: (416) and are also available electronically at SHORT FORM BASE SHELF PROSPECTUS Initial Public Offering April 30, 2013 MASTER CREDIT CARD TRUST II Up to $4,000,000,000 Credit Card Receivables-Backed Notes Master Credit Card Trust II (the Issuer or the Trust ) may, from time to time, during the 25 months that this short form base shelf prospectus, including any amendments hereto (the Prospectus ) remains valid, offer and issue credit card receivables-backed notes (the Notes ) in an aggregate principal amount not to exceed $4,000,000,000. The Notes will be issued in series (each a Series ), each of which will evidence debt obligations of the Trust secured by, and with recourse limited to, credit card receivables and certain other assets acquired by the Trust from Bank of Montreal (the Seller ). The head and registered office of the Trust is located at the office of Computershare Trust Company of Canada, the trustee of the Trust (in such capacity, the Issuer Trustee ) located at 100 University Avenue, 9th Floor, Toronto, Ontario M5J 2Y1. It will be a condition of the issuance of any Notes that they shall have received an Approved Rating as hereinafter defined from at least two Rating Agencies. The offering of Notes hereunder will be made pursuant to the medium term note program of the Trust (the MTN Program ) as contemplated by National Instrument Shelf Distributions of the Canadian securities administrators (the National Instrument ). The National Instrument permits the omission from the Prospectus of certain terms of the Notes, which will be established at the time of the offering and the sale of the Notes and will be included in pricing supplements incorporated by reference herein, as more particularly described under the heading Documents Incorporated by Reference. Accordingly, the specific terms of Notes to be offered and sold hereunder pursuant to the MTN Program will be set out in pricing supplements delivered to purchasers in connection with the sale of such Notes. The Notes will be denominated in, and the principal of, and interest (if any) on, the Notes will be payable in Canadian dollars or United States dollars. The interest rate (if any) applicable to the Notes may be fixed or variable or calculated in some other manner as set out in the applicable pricing supplement. The specific designation, aggregate principal amount, currency of denomination and payment, interest payment dates, authorized denominations, maturity, offering price, or other specific terms of a particular issue of Notes will also be set forth in the applicable pricing supplement. RATES ON APPLICATION The Notes will be offered severally by one or more dealers as may be appointed from time to time by the Issuer (collectively, the Dealers ), as agents of the Issuer or as principals, subject to confirmation by the Issuer pursuant to the agreement

2 referred to under the heading Plan of Distribution. The rate of commission payable in connection with sales of the Notes by the Dealers will be as determined from time to time by mutual agreement. The Notes may be purchased from time to time by any of the Dealers, as principal, at such prices as may be agreed to between the Issuer and such Dealer, for resale to the public at prices to be negotiated with purchasers. Such resale prices may vary during the period of distribution and as between purchasers. Commissions may be paid in connection with such purchases and the Dealer s compensation will be increased or decreased by the amount by which the aggregate price paid for the Notes by purchasers exceeds or is less than the aggregate price paid by such Dealer to the Issuer for the Notes. The Issuer may also offer the Notes directly to the public from time to time pursuant to any applicable statutory registration exemptions at such prices and upon such terms as may be agreed upon by the Issuer and the purchaser. The commission payable, if any, will be set forth in the applicable pricing supplement. The Issuer and, if applicable, the Dealers reserve the right to reject any offer to purchase Notes in whole or in part. The Issuer also reserves the right to withdraw, cancel or modify an offering of Notes under the Prospectus without notice. The offering of Notes is subject to approval of legal matters on behalf of the Trust and the Seller by Osler, Hoskin and Harcourt LLP and on behalf of the Dealers by Bennett Jones LLP. BMO Nesbitt Burns Inc. is an indirect wholly-owned subsidiary of Bank of Montreal. As a result of the relationship between Bank of Montreal (and its affiliates) and the Trust, the Trust may be considered to be a connected issuer of BMO Nesbitt Burns Inc. under applicable securities legislation. See Plan of Distribution. The Notes are being offered on a continuous basis by the Issuer through the Dealers. The Notes will not be listed on any securities exchange. There is no market through which the Notes may be sold and purchasers may not be able to resell Notes purchased under the Prospectus. This may affect the pricing of the securities in any secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. Each Dealer expects, but is not obligated, to make a market in the Notes for which it is a Dealer. If such a market develops, there is no assurance that it will continue. See Risk Factors for a discussion of certain factors that should be considered by prospective purchasers of the Notes. The Notes, if issued on the date hereof, would not be precluded as investments under certain statutes as set out under Eligibility for Investment. THE NOTES WILL REPRESENT SECURED DEBT OBLIGATIONS OF THE TRUST ONLY, WITH RECOURSE LIMITED TO THE SECURED PROPERTY ALLOCATED TO THE NOTEHOLDERS AS DESCRIBED HEREIN, AND WILL NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF, OR GUARANTEED OR INSURED BY, BANK OF MONTREAL, COMPUTERSHARE TRUST COMPANY OF CANADA (OTHER THAN IN ITS CAPACITY AS TRUSTEE OF THE TRUST), BNY TRUST COMPANY OF CANADA, THE DEALERS, THE BENEFICIARIES OF THE TRUST OR ANY AFFILIATE OF ANY OF THE FOREGOING. NONE OF THESE ENTITIES HAS REPRESENTED OR UNDERTAKEN THAT THE RECEIVABLES AND THE RELATED ASSETS WILL REALIZE THEIR FACE VALUE OR ANY PART THEREOF AND, ACCORDINGLY, NEITHER THE TRUST NOR ITS CREDITORS WILL HAVE ANY CLAIM AGAINST ANY OF THESE ENTITIES FOR ANY DEFICIENCY ARISING IN THE REALIZATION OF THE RECEIVABLES AND THE RELATED ASSETS. THE TRUST IS NOT A TRUST COMPANY AND DOES NOT CARRY ON OR INTEND TO CARRY ON THE BUSINESS OF A TRUST COMPANY. THE NOTES ARE NOT DEPOSITS WITHIN THE MEANING OF THE CANADA DEPOSIT INSURANCE CORPORATION ACT AND NEITHER THE NOTES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE CANADA DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. 2

3 TABLE OF CONTENTS Page DOCUMENTS INCORPORATED BY REFERENCE... 5 ELIGIBILITY FOR INVESTMENT... 6 TRANSACTION STRUCTURE SUMMARY... 6 TRANSACTION STRUCTURE THE TRUST THE SELLER THE TRUSTEES Issuer Trustee Indenture Trustee THE ADMINISTRATOR TRUST ASSETS THE CREDIT CARD BUSINESS OF BANK OF MONTREAL General Acquisition and Use of Credit Cards Collection of Delinquent Accounts Interchange THE ACCOUNTS General Billing and Payments MASTER TRUST PROVISIONS Acquisition of Additional Trust Assets Redeemed Accounts Outstanding Series New Issuances Collection Account Deposits in Collection Account Excess Funding Account Allocations Among Series SERIES PROVISIONS General Interest Principal Postponement of Accumulation Period Allocations and Reallocations Reallocations Among Securities of Different Series Reallocated Investor Finance Charge Collections and Excess Finance Charge Collections Subordination Allocation of Investor Principal Collections Principal Funding Account Payments Defaulted Receivables; Recoveries; Rebates and Fraudulent Charges Investor Charge-Offs; Other Reductions of the Allocated Amount Cash Collateral Account Amortization Events Events of Default Sale of Receivables Servicing Compensation and Payment of Expenses Record Date

4 TABLE OF CONTENTS (continued) Page Optional Termination; Final Payment of Principal Reports List of Noteholders THE RECEIVABLES PURCHASE AGREEMENT AND THE NOTE ISSUANCE AGREEMENT GENERALLY The Seller Note Conveyance of Receivables Representations and Warranties Indemnification Collection and Other Servicing Procedures Servicer Covenants Certain Matters Regarding the Servicer Servicer Default Evidence as to Compliance Amendments MATERIAL CONTRACTS RISK FACTORS Series Considerations Master Trust Considerations PLAN OF DISTRIBUTION SELLER S SECURITIES LAW INDEMNITY COVENANT USE OF PROCEEDS RATINGS BOOK-ENTRY REGISTRATION Book-Entry Registration Definitive Notes CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS Interest Disposition Refundable Tax AUDITORS, TRANSFER AGENT AND REGISTRAR PROMOTER INTEREST OF EXPERTS LEGAL MATTERS STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION UNDERTAKING CERTIFICATE OF THE TRUST AND THE PROMOTER... 1 CERTIFICATE OF THE DEALERS

5 DOCUMENTS INCORPORATED BY REFERENCE Information has been incorporated by reference in the Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary s Department, Bank of Montreal, 100 King Street West, 1 First Canadian Place, 21 st Floor, Toronto, Ontario, M5X 1A1, telephone: (416) For the purposes of the Province of Québec, this simplified prospectus contains information to be completed by consulting the permanent information record. A copy of the permanent information record may be obtained from Bank of Montreal at the above-mentioned address and telephone number. The following documents filed with the various securities commissions or similar securities regulatory authorities in each of the provinces and territories of Canada are incorporated by reference into the Prospectus: (a) the Annual Information Form of the Trust dated April 30, 2013; (b) (c) (d) the audited annual financial statements of the Trust for the year ended December 31, 2012, together with the auditors report thereon together with management s discussion and analysis of financial condition and results of operations in respect thereof; the comparative audited annual financial statements of Master Credit Card Trust for the years ended December 31, 2012 and December 31, 2011, together with the auditors report thereon together with management s discussion and analysis of financial condition and results of operations in respect thereof; and the Trust s portfolio data as at February 28, 2013 pertaining to the Trust Assets. Any annual information forms, material change reports (excluding confidential reports), any other disclosure document filed pursuant to an undertaking to a provincial or territorial securities regulatory authority, comparative annual and interim financial statements and related auditors reports and management discussion and analysis and annual filings filed by the Issuer with the securities regulatory authorities in each of the provinces and territories of Canada subsequent to the date of the Prospectus and prior to the termination of the offering shall be deemed to be incorporated by reference into the Prospectus. All shelf information omitted from the Prospectus will be contained in one or more pricing supplements that will be delivered to purchasers together with the Prospectus. A pricing supplement containing the specific terms in respect of an offering of Notes will be delivered to purchasers of such Notes together with the Prospectus and will be deemed to be incorporated by reference into the Prospectus for purposes of securities legislation as of the date of such pricing supplement, but only for purposes of the offering of such Notes (unless otherwise expressly provided therein). Upon a new annual information form and the related annual financial statements being filed by the Issuer with, and where required, accepted by, the applicable securities regulatory authorities during the currency of the Prospectus, the previous annual information form, the previous annual financial statements and all interim financial statements, material change reports and information circulars filed prior to the commencement of the Issuer s financial year in which the new annual information form was filed shall be deemed no longer to be incorporated into the Prospectus for purposes of future offers and sales of Notes hereunder. The Administrator may post on from time to time certain information pertaining to the Trust Assets. Any such posted information will be incorporated by reference into the Prospectus for purposes of securities legislation as at the date of such posting. Upon new data being posted by Bank of Montreal, as Administrator of the Trust, the previously posted data shall be deemed no longer incorporated into the Prospectus for purposes of future offers and sales of Notes hereunder. Except as referenced above, no other document or information is incorporated by reference in, or forms part of, the Prospectus. Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for the purposes of the Prospectus to the extent that a statement contained herein, or in any other subsequently filed document which also is incorporated or is deemed to be incorporated by reference herein, modifies or supersedes such statement. 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. The making of a modifying or superseding statement shall 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 5

6 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 the Prospectus. ELIGIBILITY FOR INVESTMENT In the opinion of Osler, Hoskin & Harcourt LLP and Bennett Jones LLP, Notes of a particular Series (or, if there is more than one class in the particular Series, Notes of a particular class), if acquired on the date hereof, and unless otherwise specified in a pricing supplement, will be qualified investments on such date under the Income Tax Act (Canada) and the regulations thereunder (the Tax Act ) for trusts governed by registered retirement savings plans ( RRSPs ), registered retirement income funds ( RRIFs ), registered education savings plans, deferred profit sharing plans, registered disability savings plans or tax-free savings accounts ( TFSAs ) provided that, at that time, such Notes have an investment grade rating from a prescribed rating agency as contemplated under Ratings below and provided that, at that time, such Notes are issued as part of a single issue of debt of at least $25 million or, if such Notes are issued under a debt issuance program under which debt obligations are issued on a continuous basis, the Trust has issued and outstanding debt under the program of at least $25 million. The Notes will not be a prohibited investment under the Tax Act for an RRSP, RRIF or TFSA provided the annuitant of the RRSP or RRIF or the holder of the TFSA, as the case may be, deals at arm s length with the Trust and does not have a significant interest (within the meaning of the Tax Act) in the Trust (or, if proposed amendments to the Tax Act contained in draft legislation released on December 21, 2012 are not enacted as proposed, in a corporation, partnership or trust that does not deal at arm s length with the Trust). TRANSACTION STRUCTURE SUMMARY The following is a brief overview of the transaction structure and is qualified by the more detailed information contained elsewhere in the Prospectus. Certain terms are defined in this Transaction Structure Summary for ease of reference and are also defined elsewhere. In some cases the meanings of such terms have been simplified or abbreviated to preserve the summary intent of this part of the Prospectus. Prospective investors are cautioned that such intent may be inconsistent with a full understanding of the material terms of the transactions described. Reference to the more detailed descriptions is recommended. Bank of Montreal Bank of Montreal (the Seller ), a chartered bank subject to the provisions of the Bank Act (Canada), was founded in 1817 and is Canada s oldest chartered bank. The head office of Bank of Montreal is located at 129 Rue Saint-Jacques, Montréal, Québec H2Y 1L6, and the executive offices are located at 1 First Canadian Place, Toronto, Ontario M5X 1A1. Bank of Montreal offers, domestically and internationally, a broad range of credit and non-credit products and services to individuals, industry, financial institutions and governments directly and through special-purpose domestic and foreign subsidiaries. The Trust The Trust has been established pursuant to the laws of the Province of Ontario by a Declaration of Trust made by the Issuer Trustee on September 28, 2012 (the Declaration of Trust ). Pursuant to an Assignment and Assumption Agreement made as of September 28, 2012 (the Assignment and Assumption Agreement ) between the Trust and Master Credit Card Trust ( MCCT ), the Trust acquired all of the right, title and interest of MCCT in, to and under (i) the Purchased Assets (as defined in the amended and restated receivables purchase agreement made as of September 25, 2006, as further amended pursuant to an Amending Agreement dated as of October 9, 2007 (the Original Receivables Purchase Agreement ) between Bank of Montreal and MCCT, (ii) the Original Receivables Purchase Agreement, (iii) the Second Amended and Restated Certificate Issuance Agreement dated as of March 30, 2010 between MCCT, Bank of Montreal and the Indenture Trustee (the Second Amended and Restated Certificate Issuance Agreement ), and (iv) each of the outstanding Series Supplements (as defined below), the consideration for which was the assumption by the Trust of all of the duties and obligations of MCCT pursuant to the Seller Note and the outstanding series of notes previously issued by MCCT, the Original Receivables Purchase Agreement, the Second Amended and Restated Certificate Issuance Agreement and the outstanding Series Supplements, in each case as outstanding on September 28, 2012 (such date, the Assignment Date ). As a result, (i) the Trust is responsible for the payment obligations of each series of notes of MCCT that was outstanding on the Assignment Date (such series of notes collectively, the Previously Issued Series ), along with the payment obligations to the Seller pursuant to the Seller Note, and (ii) the Trust has obtained the benefit of each representation, warranty, covenant or other agreement made by the Seller under the Receivables Purchase Agreement prior to the Assignment Date, including the 6

7 applicable remedies relating thereto.. See Master Trust Provisions - Outstanding Series. The Original Receivables Purchase Agreement was further amended and restated pursuant to a Second Amended and Restated Receivables Purchase Agreement dated as of September 28, 2012 made between Bank of Montreal and the Trust (as assignee) (as so amended and restated, the Receivables Purchase Agreement ). The Second Amended and Restated Certificate Issuance Agreement was further amended and restated pursuant to a Third Amended and Restated Note Issuance Agreement dated as of September 28, 2012 made between Bank of Montreal, the Indenture Trustee and the Trust (as assignee) (as so amended and restated, the Note Issuance Agreement ). The assumption by the Trust of the obligations of MCCT was necessary in order to allow for a continuation of the credit card receivable securitization program of the Seller. MCCT will be terminated on June 30, 2018 in accordance with the terms of the deed of settlement under which it was established and, as a result, MCCT could not continue to issue credit card receivables-backed notes with final maturity dates that extend past June 30, The historical continuous disclosure filings of MCCT for periods prior to the Assignment Date will continue to be available at under MCCT s issuer profile, and all necessary continuous disclosure information with respect to the Previously Issued Series for periods following the Assignment Date shall be included in the continuous disclosure filings of the Trust. The Trust has issued and is expected to issue Series from time to time and may issue Additional Securities. The Trust has not and will not engage in any business activity other than acquiring and holding Trust Assets and proceeds therefrom, fulfilling its payment obligations under the Previously Issued Series, the Series Notes and the Seller Note, issuing Notes and any Additional Securities and making payments thereon and related activities. As a consequence, the Trust does not and is not expected to have any resources other than the Trust Assets. The assets of the Trust (the Trust Assets ) include a portfolio of receivables (the Receivables ) arising under the Accounts from time to time, funds collected or to be collected from cardholders in respect of the Receivables ( Collections ), the right to receive Interchange fees attributed to cardholder charges for merchandise and services in the Accounts, monies on deposit in certain segregated bank accounts of the Trust, funds collected or to be collected from Participation Interests, if any, and any Series Enhancement issued with respect to a particular Series. The drawing on or payment of any Series Enhancement for the benefit of a Series or class of Notes will not be available to the Noteholders of any other Series or class. The term Series Enhancement means, with respect to any Series or class of Notes, any letter of credit, surety bond, cash collateral account, spread account, guaranteed rate agreement, maturity liquidity facility, interest rate swap agreement or other similar arrangement for the benefit of Noteholders of such Series or class. The Receivables The Receivables which (i) were assigned to MCCT pursuant to the Original Receivables Purchase Agreement and subsequently assigned to the Trust pursuant to the Assignment and Assumption Agreement, and (ii) the Seller has assigned or will assign to the Trust from time to time pursuant to the Receivables Purchase Agreement, have been or will be generated from transactions made by holders of certain credit card accounts. Bank of Montreal will service these accounts at its facilities located in Toronto and Montréal. The Receivables assigned to the Trust prior to the date hereof were generated under the MasterCard program and were originated by Bank of Montreal. Such accounts are owned by Bank of Montreal. Servicing The Servicer (initially, Bank of Montreal) (the Servicer ) is responsible for servicing, managing and making collections of the Receivables. Subject to certain limitations, the Servicer will use for its own benefit and not segregate collections of Receivables received by it during any calendar month (each a Due Period ) until not later than 12:00 noon (Toronto time) on the twenty-first day of the following month or, if such day is not a business day, the next succeeding business day (each an Allocation Date ). On or about the third business day preceding each Allocation Date (each a Determination Date ), the Servicer will determine the amounts allocable to the Noteholders Allocation, to the Noteholders Allocation for any other Series and to the Seller s Allocation as described herein in respect of Collections of Receivables for the related Due Period. On each Allocation Date, the Servicer will deposit all such Collections into the Collection Account, net of any amounts permitted to be deducted by the Servicer as described under Master Trust Provisions Deposits in Collection Account. Revolving Period The Revolving Period for each Series will commence on the applicable date of issuance (the Series Issuance Date ) and will continue to, but not include, the earlier of (i) the day the Accumulation Period for such Series commences, 7

8 and (ii) the day the Early Amortization Period for such Series commences. During the Revolving Period, Principal Collections and certain other amounts otherwise forming part of such Series Noteholders Allocation will generally be used by the Trust to purchase new Receivables from the Seller in accordance with the Receivables Purchase Agreement or otherwise used to maintain such Series Noteholders Allocation until the end of the Revolving Period. Under Series Provisions see Principal, Allocations and Reallocations and Amortization Events for a discussion of the events which might lead to the termination of the Revolving Period for a Series prior to its scheduled ending date. The Servicer may, based on the principal payment rate on the Receivables and the amount of principal allocable or payable to Noteholders of all outstanding Series scheduled to be in revolving periods, postpone the commencement of the Accumulation Period and extend the length of the Revolving Period for a Series. See Series Provisions - Postponement of Accumulation Period. Accumulation Period Unless an Amortization Event has occurred with respect to a Series, the Notes of such Series will have an accumulation period (the Accumulation Period ) which will commence at the close of business on the date specified in the related Series Supplement (and set out in the applicable pricing supplement) subject to certain conditions, or such other date as the Servicer may determine in accordance with the terms of the related Series Supplement, and will continue until the earliest of (a) the commencement of an Early Amortization Period for such Series or (b) payment of the Allocated Amount of the Notes of such Series in full. During such Accumulation Period, Principal Collections and certain other amounts forming part of such Series Noteholders Allocation will be deposited on each Allocation Date in the related Principal Funding Account and used to make principal payments on the Notes of such Series when due. The amount to be deposited in the Principal Funding Account on any Allocation Date may be limited to an amount equal to the Controlled Accumulation Amount plus any existing Deficit Controlled Accumulation Amount, in each case in respect of such Series, that was to be deposited into the related Principal Funding Account on the prior Allocation Dates (collectively, the Controlled Payment Amount ). Under Series Provisions see Principal, Principal Funding Account and Payments. Subject to the commencement of the Early Amortization Period for a Series: (a) funds on deposit in the related Principal Funding Account (in an amount not to exceed the outstanding principal amount of the Class A Notes of such Series) will be available to be paid to the holders of the Class A Notes of such Series (the Class A Noteholders ) in respect of the principal amount of such Class A Notes on the expected final payment date for such Series as specified in the related Series Supplement (such date for a Series, the Expected Final Payment Date ); (b) funds on deposit in the related Principal Funding Account in excess of the outstanding principal amount of such Class A Notes (in an amount not to exceed the outstanding principal amount of the Class B Notes of such Series) will be available to be paid to holders of the Class B Notes of such Series (the Class B Noteholders ) in respect of the principal amount of such Class B Notes on their Expected Final Payment Date; (c) funds on deposit in the related Principal Funding Account in excess of the sum of the outstanding principal amount of such Class A Notes and the outstanding principal amount of such Class B Notes (in an amount not to exceed the outstanding principal amount of the Class C Notes of such Series) will be available to be paid to holders of the Class C Notes of such Series (the Class C Noteholders ) in respect of the principal amount of such Class C Notes on their Expected Final Payment Date; and (d) funds on deposit in the related Principal Funding Account in excess of the sum of the outstanding principal amount of such Class A Notes, the outstanding principal amount of such Class B Notes and the outstanding principal amount of such Class C Notes (in an amount not to exceed the outstanding principal amount of the Class D Notes of such Series) will be available to be paid to holders of the Class D Notes of such Series (the Class D Noteholders ) in respect of the principal amount of such Class D Notes on their Expected Final Payment Date. If the Notes of a Series have not been paid in full on their Expected Final Payment Date, the Early Amortization Period for such Series will commence. Although it is anticipated that during the Accumulation Period for a Series, funds will be deposited in the related Principal Funding Account in an amount equal to the applicable Controlled Payment Amount on each Allocation Date and that sufficient amounts will be available for payment to the Noteholders of such Series on their Expected Final Payment Date, no assurance can be given in that regard. See Series Provisions - Allocation of Investor Principal Collections. If an Amortization Event occurs during the Accumulation Period for a Series, the Early Amortization Period for such Series will commence as described herein. Amortization Period The Early Amortization Period for a Series means the period commencing at the close of business on the day before the day on which an Amortization Event has occurred with respect to such Series and ending on the earlier of (a) the date on which all amounts to which the Notes of such Series are entitled have been paid in full and (b) the series termination 8

9 date for such Series as specified in the related Series Supplement (and as set forth in the applicable pricing supplement) (the Series Termination Date ). Amounts which form part of such Series Noteholders Allocation and, if the Amortization Event applies to other Series, to the Noteholders Allocation for such other Series that would otherwise be used by the Trust to purchase new Receivables, to maintain such Series Noteholders Allocation or be accumulated in the related Principal Funding Account, will instead be paid as principal payments to the applicable holders of Notes ( Noteholders monthly on each Allocation Date beginning with the first Special Payment Date (which is the Allocation Date in the Due Period following the Due Period in which the Early Amortization Period for such Series commences). During an Early Amortization Period, payments of principal to Noteholders of such Series will not be subject to any Controlled Payment Amount. In addition, upon the commencement of the Early Amortization Period, any funds on deposit in a related Principal Funding Account or Interest Funding Account will be paid to the Noteholders of such Series on the first Special Payment Date. See Series Provisions - Amortization Events. 9

10 TRANSACTION STRUCTURE The following diagram depicts generally how this transaction is structured. The diagram is a simplified overview only and should be considered together with the information contained in the Prospectus and any pricing supplement. Principal and Finance Charges Credit Card Obligors Bank of Montreal Credit Card Receivables Payment for Trust Assets (including payments in respect of the Seller Note) Master Credit Card Trust II Interest and Principal Series Allocation of Receivables Proceeds of Notes Class A Notes Class B Notes Class C Notes Class D Notes Investors THE TRUST The Trust has been established pursuant to the laws of the Province of Ontario by a declaration of trust dated as of September 28, 2012 (the Declaration of Trust ) made by Computershare Trust Company of Canada, as issuer trustee (the Issuer Trustee ). The Trust has assumed all of the obligations of MCCT under the Previously Issued Series, has issued the Series Notes (as defined below), and is expected to issue additional Series from time to time and may issue Additional Securities (as defined below). The Trust has not and will not engage in any business activity other than acquiring and holding Trust Assets and proceeds therefrom, fulfilling its payment obligations under the Previously Issued Series, the Series Notes and the Seller Note, issuing the Notes and any Additional Securities and making payments thereon and related activities, including investing in Eligible Investments (as hereinafter defined). See Risk Factors - Master Trust Considerations. As a consequence, the Trust does not and is not expected to have any resources other than the Trust Assets. THE SELLER Bank of Montreal (the Seller ), a chartered bank subject to the provisions of the Bank Act (Canada), was founded in 1817 and is Canada s oldest chartered bank. The head office of Bank of Montreal is located at 129 Rue Saint-Jacques, Montréal, Québec H2Y 1L6, and the executive offices are located at 1 First Canadian Place, Toronto, Ontario M5X 1A1. Bank of Montreal offers, domestically and internationally, a broad range of credit and non-credit products and services to individuals, industry, financial institutions and governments directly and through special-purpose domestic and foreign subsidiaries. 10

11 THE TRUSTEES Issuer Trustee The Issuer Trustee is a trust company established under the laws of Canada and is licensed to carry on business as a trustee in each of the provinces and territories of Canada. The head and registered office of the Issuer Trustee is located at 100 University Avenue, 9th Floor, Toronto, Ontario M5J 2Y1. The issuer trustee of the Trust shall at all times be a resident of Canada for purposes of the Tax Act, and unless the Rating Agency Condition is otherwise satisfied, shall (i) either (a) have risk-based capital of at least $50,000,000 or, in the case of an entity that is not subject to risk-based capital adequacy requirements, has a combined capital and surplus of at least $50,000,000 or (b) be a wholly owned subsidiary of a Canadian or United States entity which has risk-based capital of at least $50,000,000 or, in the case of an entity that is not subject to risk-based capital adequacy requirements, has a combined capital and surplus of at least $50,000,000, and (ii) have long-term unsecured debt obligations that are rated by two or more rating agencies in a generic rating category which denotes investment grade. Indenture Trustee BNY Trust Company of Canada is the Indenture Trustee (the Indenture Trustee ) of the Trust under the third amended and restated note issuance agreement dated as of September 28, 2012 made between Bank of Montreal, the Trust and the Indenture Trustee (the Note Issuance Agreement ). The Indenture Trustee is a trust company incorporated under the laws of Canada and is licensed to carry on business as a trustee in each of the provinces and territories of Canada or is exempt from such requirements. The head office of the Indenture Trustee is Suite King Street West, Toronto, Ontario M5H 1B8. The Indenture Trustee of the Trust shall at all times (a) be a trust company resident in Canada and organized and doing business under the laws of Canada or any province thereof authorized under such laws to exercise corporate trust powers, (b) be subject to supervision or examination by federal or provincial authority and (c) be, or be a wholly-owned subsidiary (directly or indirectly) of, a Canadian chartered bank or a bank or bank holding company organized, in good standing and doing business under the laws of the United States of America, any State thereof or the District of Columbia which has a combined capital and surplus of at least $50,000,000 and whose long-term debt is rated investment grade by applicable rating agencies. THE ADMINISTRATOR Pursuant to an administration agreement dated as of September 28, 2012 between the Trust and Bank of Montreal (the Administration Agreement ), Bank of Montreal carries out certain administrative activities for and on behalf of the Trust (in such capacity, the Administrator ). The Trust has agreed to pay Bank of Montreal an annual fee in an amount equal to $500 per fiscal quarter payable in arrears (to be paid monthly in twelve equal instalments) (the Monthly Administration Fee ) and its expenses in consideration for the performance by Bank of Montreal of the activities and the fulfilment by Bank of Montreal of its responsibilities under the Administration Agreement. TRUST ASSETS The assets of the Trust (the Trust Assets ) include a portfolio of receivables (the Receivables ) arising under the Accounts from time to time, funds collected or to be collected from cardholders in respect of the Receivables ( Collections ), the right to receive Interchange fees attributed to cardholder charges for merchandise and services in the Accounts, monies on deposit in certain segregated bank accounts of the Trust, funds collected or to be collected from Participation Interests, if any, and any Series Enhancement issued with respect to a particular Series. The drawing on or payment of any Series Enhancement for the benefit of a Series or class of Notes will not be available to the Noteholders of any other Series or class. The term Series Enhancement means, with respect to any Series or class of Notes, any letter of credit, surety bond, cash collateral account, spread account, guaranteed rate agreement, maturity liquidity facility, interest rate swap agreement or other similar arrangement for the benefit of Noteholders of such Series or class. The Receivables are all amounts shown on the Servicer s records as amounts payable by the person or persons obliged to make payments, including any guarantor thereof, on any Account from time to time. The Receivables consist of all amounts billed to cardholders including periodic finance charges, annual fees, cash advance transaction fees and services and certain other fees specified in the Receivables Purchase Agreement and the amount of all Principal Receivables Discounts 11

12 (collectively, Finance Charge Receivables ), and all amounts charged to cardholders for merchandise and services, amounts advanced to cardholders as cash advances and all other fees billed to cardholders or posted to the Accounts other than Finance Charge Receivables (collectively, Principal Receivables ). In addition, Interchange attributed to cardholder charges for merchandise and services in the Accounts will be treated as Finance Charge Collections. See The Credit Card Business of Bank of Montreal - Interchange. From time to time, subject to certain conditions, certain of the amounts described above which are included in Principal Receivables may be treated as Finance Charge Receivables. Recoveries of charged-off Receivables will be treated as Finance Charge Collections. The amount of Receivables will fluctuate from day to day as new Receivables are generated and sold to the Trust and as existing Receivables are collected, charged-off as uncollectible or otherwise adjusted. The Trust Assets will be allocated as described herein to secure the Trust s obligations under the Notes, any Notes of other Series and certificates issued to the Seller. General THE CREDIT CARD BUSINESS OF BANK OF MONTREAL The Receivables which (i) were assigned to MCCT pursuant to the Original Receivables Purchase Agreement and subsequently assigned to the Trust pursuant to the Assignment and Assumption Agreement, and (ii) the Seller has assigned or will assign to the Trust from time to time pursuant to the Receivables Purchase Agreement, have been or will be generated from transactions made by holders of certain credit card accounts. Bank of Montreal will service these Accounts at its facilities located in Toronto and Montréal. The Receivables assigned to the Trust prior to the date hereof were generated under the MasterCard program and were originated by Bank of Montreal. Such Accounts are owned by Bank of Montreal. Subject to certain conditions, the Seller may assign to the Trust receivables arising in credit card accounts of a type not currently included in the Accounts. In addition, the Seller may purchase portfolios of credit card accounts from other credit card issuers and receivables in such accounts may be sold to the Trust. Such accounts may not be originated, used or collected in the same manner as the MasterCard accounts described below and may differ with respect to loss and delinquency or revenue experience and historical payment rates. Such accounts may also have different terms than the accounts described below, including lower periodic finance charges. Consequently, the sale to the Trust of the receivables arising in such accounts could have the effect of reducing the Portfolio Yield. See Master Trust Provisions - Acquisition of Additional Trust Assets and The Receivables Purchase Agreement and Note Issuance Agreement Generally - Representations and Warranties. The following discussion describes certain terms and characteristics of the portfolio of Canadian dollar consumer MasterCard accounts owned by Bank of Montreal. The Accounts represent substantially all of the Canadian dollar consumer MasterCard accounts of Bank of Montreal, and the Receivables therein represent approximately 98% of the balance of the receivables in Bank of Montreal s entire consumer MasterCard portfolio, in each case, as of the date of this Prospectus. In addition, Additional Accounts will consist of Eligible Accounts which are not currently in existence and which may not be of the same type as Accounts the Receivables in which have been sold to the Trust previously. See Master Trust Provisions - Acquisition of Additional Trust Assets and The Receivables Purchase Agreement and Note Issuance Agreement Generally - Representations and Warranties. Bank of Montreal is a member of the MasterCard program operated by MasterCard International Incorporated. The MasterCard credit card is issued as part of the worldwide MasterCard system, and transactions creating receivables through the use of the credit card are processed through the MasterCard authorization and settlement system. Should that system materially curtail its activities, or should Bank of Montreal cease to be a member of MasterCard for any reason, an Amortization Event could occur, and delays in payments on the Receivables and possible reductions in the amounts thereof could also occur. The Receivables in the Accounts which have been assigned to the Trust arise in a variety of MasterCard accounts. Such Accounts have varying billing and payment structures, including varying periodic finance charges and fees. The MasterCard credit cards of the types pursuant to which the Accounts were or will be established may be used to purchase merchandise and services and to obtain cash advances. A cash advance is made when a credit card account is used Bank of Montreal is a licensed user of the registered trademark owned by MasterCard International. to obtain cash from a financial institution or automated banking machine, which may be located at a financial institution, 12

13 supermarket or other business establishment, or when a cardholder draws a cheque on his or her credit card account. Amounts due with respect to both purchases and cash advances will be included in the Receivables. The MasterCard credit card accounts owned by Bank of Montreal were principally generated through (a) applications mailed directly to prospective cardholders, (b) applications made available to prospective cardholders at the banking facilities of Bank of Montreal and at retail outlets, (c) telephone solicitations, and (d) the internet. Acquisition and Use of Credit Cards When Bank of Montreal receives applications for MasterCard accounts, it reviews each application for completeness and creditworthiness. In addition, Bank of Montreal generally obtains a credit report issued by an independent credit reporting agency with respect to the applicants. In the event there are discrepancies between the application and the credit report and in certain other circumstances, Bank of Montreal may verify certain of the information regarding the applicant. Bank of Montreal generally evaluates the ability of an applicant for a MasterCard credit card account to repay credit card balances by applying a credit scoring system using models developed which incorporate Bank of Montreal s credit policy. Credit scoring is intended to provide a general indication, based on the information available, of the applicant s willingness and ability to repay his or her obligations. Credit scoring evaluates a potential cardholder s credit profile to arrive at an estimate of the associated credit risk. Models for credit scoring are developed by using statistics to evaluate certain selected criteria and their correlation with credit risk. From time to time, the credit scoring models used by Bank of Montreal are reviewed and, if necessary, updated to reflect current economic trends and their impact on credit risk. Once an application to open an account is approved, an initial credit limit is established for the account based on, among other things, the applicant s credit score and ability to pay. The Receivables Purchase Agreement permits Bank of Montreal to sell to the Trust receivables in credit card accounts which it has purchased from other institutions. Any such sales will be subject to the general requirement regarding the addition of assets to the Trust. See Master Trust Provisions - Acquisition of Additional Trust Assets. Each cardholder is subject to an agreement governing the terms and conditions of the accounts. Pursuant to such agreements, Bank of Montreal reserves the right to change or terminate any terms, conditions, services or features of the accounts (including increasing or decreasing periodic finance charges, other charges or minimum payments). Credit limits may be adjusted periodically based upon an evaluation of the cardholder s performance. Collection of Delinquent Accounts Generally, Bank of Montreal considers a MasterCard account delinquent if a minimum payment due thereunder is not received by Bank of Montreal by the due date indicated on the cardholder s statement. Efforts to collect delinquent credit card receivables are made by the personnel of Bank of Montreal, supplemented by collection agencies and counsel retained by Bank of Montreal. Under current practice, Bank of Montreal includes a request for payment of overdue amounts on all billing statements issued after the account becomes delinquent. Bank of Montreal may also, at its discretion, enter into arrangements with delinquent cardholders who are liable on an account to extend or otherwise change payment schedules. The current policy of Bank of Montreal is to charge-off an account when that account becomes 180 days delinquent; provided that if Bank of Montreal receives notice that a cardholder that is liable for an account has filed for bankruptcy or has a bankruptcy petition filed against it, Bank of Montreal charges-off such account not later than 30 days after Bank of Montreal receives such notice. The credit evaluation, servicing and charge-off policies and collection practices of Bank of Montreal may change over time in accordance with the business judgment of Bank of Montreal, applicable law and guidelines established by applicable regulatory authorities. Interchange MasterCard credit card-issuing financial institutions receive certain fees ( Interchange ) from MasterCard International Incorporated, which in turn collects fees from institutions that clear transactions for merchants in connection with cardholder charges for merchandise and services. Interchange represents partial compensation for taking credit risk, absorbing fraud losses and funding receivables for a limited period prior to initial billing. Bank of Montreal is required, pursuant to the terms of the Receivables Purchase Agreement, to transfer to the Trust the amount of Interchange attributed to consumer cardholder charges for merchandise and services in the Accounts which is payable to Bank of Montreal by Mastercard International Incorporated. Interchange is allocated to the Trust on the basis of the percentage equivalent of the ratio that the amount of consumer cardholder charges for merchandise and services in the Accounts bears to the total amount of cardholder charges for merchandise and services in Bank of Montreal s consumer cardholder portfolio. MasterCard 13