INFORMATION STATEMENT DATED AUGUST 16, 2010 BANK OF MONTREAL SGI SMART MARKET NEUTRAL COMMODITY INDEX SM DEPOSIT, SERIES 2

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1 INFORMATION STATEMENT DATED AUGUST 16, 2010 This Information Statement has been prepared solely for assisting prospective purchasers in making an investment decision with respect to the Deposit Notes. This Information Statement constitutes an offering of these Deposit Notes only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell the Deposit Notes. No securities commission or similar authority in Canada has in any way passed upon the merits of the Deposit Notes offered hereunder and any representation to the contrary is an offence. The Deposit Notes offered under this Information Statement have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any State securities laws and may not be offered for sale or sold in the United States or to United States persons. BANK OF MONTREAL SGI SMART MARKET NEUTRAL COMMODITY INDEX SM DEPOSIT, SERIES 2 PRICE: $100 PER DEPOSIT NOTE Minimum Subscription: $2,000 (20 Deposit Notes) The Bank of Montreal SGI Smart Market Neutral Commodity Index SM Deposit, Series 2 (the Deposit Notes ) issued by Bank of Montreal are a principal protected product that will mature on March 31, 2016 ( Maturity ). The closing of this offering is scheduled to occur on or about September 29, 2010 (the Closing Date ). At Maturity a holder will receive the deposit amount of $100 (the Deposit Amount ) in respect of each of the holder s Deposit Notes plus a variable return, if any, that will be determined based on the performance of the SGI Smart Market Neutral Commodity Index (USD - Excess Return) (the Index ). The performance of the Index is based on volatilityadjusted exposure, through the SGI Market Neutral Commodity Index (USD - Excess Return) (the Underlying Index ), to the notional purchase and sale of the futures contracts comprising six commodity indices (the Component Indices ). The Index employs a market neutral strategy by offsetting long positions in three of the Component Indices having exposure to the energy, agriculture and livestock, and industrial metals sectors with short positions in the other three Component Indices, which have exposure to the same commodity sectors. If the closing level of the Index on March 24, 2016 (the Final Valuation Date ) is greater than the closing level of the Index on the Closing Date, the variable return for each Deposit Note at Maturity will equal $100 multiplied by the percentage increase in the closing level of the Index from the Closing Date to and including the Final Valuation Date. No variable return will be payable to a holder at Maturity unless the closing level of the Index on the Final Valuation Date is greater than the closing level of the Index on the Closing Date. See Note Program - Variable Return. Subject to certain exceptions, no payment will be made prior to Maturity. See Special Circumstances. BMO Nesbitt Burns Inc. is the selling agent (the Selling Agent ) and is a wholly-owned subsidiary of BMO Nesbitt Burns Corporation Limited which, in turn, is an indirect majority-owned subsidiary of Bank of Montreal. Consequently, Bank of Montreal is a related issuer of the Selling Agent under applicable securities legislation. See Plan of Distribution. Bank of Montreal has taken reasonable care to ensure that the facts in this Information Statement with respect to the description of the Deposit Notes are true and accurate in all material respects. All information in this Information Statement relating to the Index, the Underlying Index and the Component Indices has been obtained from publicly available sources. As such, none of Bank of Montreal, the Selling Agent, the Manager or the Calculation Agent assumes any responsibility for the accuracy, reliability or completeness of such information. Bank of Montreal makes no assurances, representations or warranties with respect to the accuracy, reliability or completeness of information obtained from such publicly available sources. Furthermore, Bank of Montreal makes no recommendation concerning the Index, the Underlying Index, the Component Indices, the futures contracts and underlying commodities represented in the Component Indices, futures contracts or commodities as an asset class, or the suitability of investing in futures contracts or commodities generally or the Deposit Notes in particular. In connection with the issue and sale of Deposit Notes by Bank of Montreal, no person is authorized to give any information or to make any representation not contained in this Information Statement and Bank of Montreal does not accept any responsibility for any information not contained herein. JHN 907

2 TABLE OF CONTENTS SUMMARY OF THE OFFERING...4 DEFINITIONS...12 NOTE PROGRAM...15 MATURITY PAYMENT...15 VARIABLE RETURN...15 VARIABLE RETURN EXAMPLES...15 SECONDARY MARKET...15 SPECIAL CIRCUMSTANCES...17 DETERMINATIONS OF THE CALCULATION AGENT AND MANAGER...17 DISCONTINUANCE OR MODIFICATION OF THE INDEX...17 MARKET DISRUPTION EVENT...18 EXTRAORDINARY EVENT...19 FUNDSERV...20 GENERAL INFORMATION...20 DEPOSIT NOTES HELD THROUGH THE CUSTODIAN...20 PURCHASE OF FUNDSERV NOTES...20 SALE OF FUNDSERV NOTES...20 SUITABILITY AND APPROPRIATENESS FOR INVESTMENT...21 DESCRIPTION OF THE DEPOSIT NOTES...21 OFFERING...21 MATURITY PAYMENT...22 VARIABLE RETURN...22 RANK...22 SETTLEMENT OF PAYMENTS...22 BOOK-ENTRY SYSTEM...23 GLOBAL NOTE...23 CUSTODIAN...24 DEFINITIVE DEPOSIT NOTES...24 NOTICES TO HOLDERS...25 AMENDMENTS TO THE GLOBAL NOTE...25 INVESTOR S RIGHT TO CANCEL THE AGREEMENT TO PURCHASE A DEPOSIT NOTE...25 DATE OF AGREEMENT TO PURCHASE A DEPOSIT NOTE...25 THE INDEX...25 SGI SMART MARKET NEUTRAL COMMODITY INDEX (USD EXCESS RETURN)...26 SGI MARKET NEUTRAL COMMODITY INDEX (USD - EXCESS RETURN)...27 THE COMPONENT INDICES...28 FEES AND EXPENSES OF THE OFFERING...32 RISK FACTORS...32 SUITABILITY OF DEPOSIT NOTES FOR INVESTMENT...32 NON-CONVENTIONAL DEPOSIT NOTES...32 VARIABLE RETURN MAY NOT BE PAYABLE...33 RISK FACTORS RELATING TO THE RELEVANT INDICES AND THE UNDERLYING FUTURES CONTRACTS...33 SECONDARY TRADING OF DEPOSIT NOTES...35 LEGISLATIVE, REGULATORY AND ADMINISTRATIVE CHANGES...35 CONFLICTS OF INTEREST...35 CREDIT RATING...36 CREDIT RISK...36 NO DEPOSIT INSURANCE...36 CANADIAN INVESTOR PROTECTION FUND...36 SPECIAL CIRCUMSTANCES...36 VALUATION OF THE INDEX...37 NO INDEPENDENT CALCULATION...37 NO OWNERSHIP OF A RELEVANT INDEX OR THE UNDERLYING FUTURES CONTRACTS...37 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS...37 VARIABLE RETURN...37 DISPOSITION OF DEPOSIT NOTES...38 ELIGIBILITY FOR INVESTMENT BY REGISTERED PLANS...38 PLAN OF DISTRIBUTION...38

3 BMO (M-bar roundel symbol) and BMO Capital Markets are registered trade-marks of Bank of Montreal. Nesbitt Burns is a registered trade-mark of BMO Nesbitt Burns Corporation Limited used under license. SGI Smart Market Neutral Commodity Index SM, SGI Market Neutral Commodity Index SM, SGI Agriculture and Livestock Static Index SM, SGI Energy Semi Dynamic Index SM and SGI Industrial Metals Semi Dynamic Index SM are service marks of Société Générale and have been licensed for use by Bank of Montreal. Standard & Poor s and S&P are registered trade-marks of Standard & Poor s used under license by Bank of Montreal and its affiliates. The SGI Smart Market Neutral Commodity Index SM, SGI Market Neutral Commodity Index SM, SGI Agriculture and Livestock Static Index SM, SGI Energy Semi Dynamic Index SM and SGI Industrial Metals Semi Dynamic Index SM (the SGI Indices ) are the property of Société Générale. Each Holder acknowledges and agrees that the Deposit Notes are not sponsored, endorsed, or promoted by Société Générale or any of its affiliates, or Standard & Poor s, a division of the McGraw Hill Companies, Inc. ( S&P and, together with Société Générale and each of its affiliates, the Index Parties ). The Index Parties have not passed on the legality or suitability of, or the accuracy or adequacy of the descriptions and disclosures relating to the Deposit Notes, including those disclosures with respect to the SGI Indices. The Index Parties make no representation whatsoever, whether express or implied, as to the advisability of investing in securities generally or purchasing Deposit Notes, the ability of the SGI Indices to track relevant markets performances, or otherwise relating to the SGI Indices or any transaction or product with respect thereto, or of assuming any risks in connection therewith. The Index Parties have no obligation to take the needs of the Holders into consideration in determining, composing or calculating the SGI Indices. The Index Parties are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of the Deposit Notes to be issued or in the determination or calculation of the amounts payable thereunder. The Index Parties have no liability in connection with the administration, marketing or trading of the Deposit Notes. Neither Société Générale nor any of its affiliates acts as an investment adviser or provides advice as to the value of any securities or as to the advisability of investing in, purchasing, or selling any securities, with respect to the SGI Indices, Bank of Montreal, the Deposit Notes or any investor in or purchaser of the Deposit Notes, or otherwise acts as an investment adviser, as defined under the Investment Advisers Act of 1940, as amended, or the Investment Company Act of 1940, as amended, with respect thereto except in cases where Société Générale or such affiliate has expressly agreed in writing to do so. Neither Société Générale nor any of its affiliates accepts any fiduciary duties with respect to any investor in or purchaser of any Deposit Note. The Index Parties make no representation or warranty whatsoever, whether express or implied, and hereby expressly disclaim all warranties (including, without limitation, those of merchantability or fitness for a particular purpose or use), with respect to the SGI Indices or any data included therein or relating thereto, and in particular disclaim any guarantee or warranty either as to the quality, accuracy and/or completeness of the SGI Indices or any data included therein, the results obtained from the use of the SGI Indices and/or the composition of the SGI Indices at any particular time on any particular date or otherwise. The Index Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the SGI Indices, and the Index Parties are under no obligation to advise any person of any error therein, or for any interruption in the calculation of the SGI Indices. No Index Party shall have any liability to any party for any act or failure to act by the Index Parties in connection with the determination, adjustment or maintenance of the SGI Indices. Without limiting the foregoing, in no event shall an Index Party have any liability for any lost profits or special, incidental, punitive, indirect or consequential damages, even if notified of the possibility of such damages. Société Générale and its affiliates may deal in any commodities or financial instruments that compose or underlie the SGI Indices, and may act with respect to any such commodity or financial instrument as if the SGI Indices did not exist, regardless of whether such action might adversely affect the SGI Indices or the Deposit Notes. Each of the Index Parties and its affiliates may be in possession of information in relation to any commodity or financial instrument that composes or underlies the SGI Indices that may or may not be publicly available or known to any other party, and each party purchasing the Deposit Notes agrees that the Deposit Notes do not create any obligation on the part of any Index Party or its affiliates to disclose any such information. The SGI Indices are the exclusive property of Société Générale, which has contracted with S&P to maintain and calculate the SGI Indices. S&P shall have no liability for any errors or omissions in calculating the SGI Indices.

4 SUMMARY OF THE OFFERING This is a summary of the offering of Deposit Notes under this Information Statement. Please note that this summary is not intended to be a detailed description of the offering and may not contain all the information that you may need to make a decision as to whether to purchase any Deposit Notes. For more detailed and complete information, please refer to the body of this Information Statement. In this summary, $ refers to Canadian dollars, unless otherwise specified, we, us and our each refer to Bank of Montreal and BMO Capital Markets refers to a company owned by us called BMO Nesbitt Burns Inc. and any of its affiliates. Issuer: Subscription Price: Minimum Subscription: Issue Size: Closing Date: Maturity Date: Offering: Payment at Maturity: We will issue the Bank of Montreal SGI Smart Market Neutral Commodity Index SM Deposit, Series 2 (the Deposit Notes ). The price for each Deposit Note is $100 (the Deposit Amount ). You must invest a minimum of $2,000 (20 Deposit Notes). The maximum issue size is $25,000,000. We may change the maximum issue size of the offering at our discretion. The Deposit Notes will be issued on or about September 29, 2010 (the Closing Date ). The Deposit Notes will mature on March 31, The term of the Deposit Notes is approximately 5.5 years. This offering has been developed to provide you with payment at maturity of (i) the Deposit Amount, and (ii) an amount of variable return, if any, based on the performance of the SGI Smart Market Neutral Commodity Index (USD - Excess Return) (the Index ) as set out below under Payment at Maturity. Subject to the occurrence of certain special circumstances, for each Deposit Note you hold at maturity, you will receive (i) the Deposit Amount, and (ii) a variable return, if any, based on the performance of the Index. More specifically, if the closing level of the Index on March 24, 2016 (the Final Valuation Date ) is greater than the closing level of the Index on the Closing Date, you will receive a variable return for each Deposit Note you hold at maturity equal to $100 multiplied by the percentage increase in the closing level of the Index from the Closing Date to and including the Final Valuation Date. No variable return will be paid to you at maturity unless the closing level of the Index on the Final Valuation Date is greater than the closing level of the Index on the Closing Date. See Note Program Variable Return. The Index: You cannot elect to receive any payments prior to maturity. No interest or distributions will be paid during the term of the Deposit Notes. The performance of the Index will determine the amount of variable return, if any, you will receive at maturity. The Index may change in certain circumstances. See Special Circumstances. The performance of the Index is based on the performance of the SGI Market Neutral Commodity Index (USD - Excess Return) (the Underlying Index ), which in turn is based on the performance of six commodity indices (the Component Indices, each a Component Index ). Each Component Index tracks the performance of a different commodity sector by notionally buying and selling commodity futures contracts. Futures contracts provide for the purchase and delivery of a commodity at a fixed price on a specified future delivery date. Since futures contracts expire on specified dates, in order for a Component Index to maintain its exposure to the commodity, each futures contract must be notionally sold as it approaches its expiration date and replaced with a new futures contract that expires at a later date. This is referred to as rolling a futures position. Traditionally, an expiring futures contract represented in a commodities index is rolled into a futures contract with the next available delivery date. The difference between the price at which a futures contract is sold and the cost to acquire its replacement is referred to as the roll yield. 4

5 Depending on the characteristics of the market for the relevant commodity and the delivery date of the replacement futures contract, the replacement cost may be higher or lower than the price at which the expiring futures contract is sold. This results in a loss (negative roll yield) or a gain (positive roll yield), respectively, for the relevant Component Index. The Underlying Index seeks to take advantage of inefficiencies in this rolling mechanism by taking long positions in three Component Indices (the Component Indices (Long) ) with non-traditional rolling mechanisms and short positions in three other Component Indices (the Component Indices (Short) ) with traditional rolling mechanisms. When the Underlying Index takes a long position in a Component Index (Long), the level of the Underlying Index rises and falls as the level of the Component Index (Long) rises and falls. When the Underlying Index takes a short position in a Component Index (Short), the level of the Underlying Index rises as the level of the Component Index (Short) falls and falls as the level of the Component Index (Short) rises. The Component Indices (Long) are the SGI Energy Semi Dynamic Index (USD Excess Return), the SGI Agriculture and Livestock Static Index (USD Excess Return), and the SGI Industrial Metals Semi Dynamic Index (USD Excess Return). The Component Indices (Short) are the S&P GSCI Energy Index Excess Return, the S&P GSCI Agricultural & Livestock Index Excess Return, and the S&P GSCI Industrial Metals Index Excess Return. Each of the Component Indices is an excess return index. The index level of an excess return index on any date is based on the hypothetical returns of an investment in the futures contracts represented in the index. Returns on the futures contracts reflect changes in their prices and the roll yield resulting from their purchase and sale, as described above. Both the Component Indices (Long) and the Component Indices (Short) are exposed to the same commodity sectors - energy, agriculture and livestock, and industrial metals. Accordingly, for each Component Index (Long) there is a corresponding Component Index (Short) exposed to the same commodity sector. The Underlying Index therefore maintains both a long position and a short position in the same commodity sectors. As a result, movement in the level of a Component Index (Long) due to a change in the price of an underlying commodity is generally offset by similar movement in the level of the corresponding Component Index (Short). The aim of this strategy - referred to as a market neutral or non-directional strategy - is to minimize the effect of commodity price changes on the Underlying Index. However, the Underlying Index is exposed to the performance of the rolling mechanisms of the Component Indices (Long) relative to the rolling mechanisms of the Component Indices (Short). Each Component Index (Short) uses a traditional rolling mechanism: an expiring futures contract in these indices is rolled into the futures contract with the next available delivery date. The Component Indices (Long), on the other hand, use several non-traditional rolling mechanisms. One such rolling mechanism ( dynamic ) uses a set of rules to look at futures contracts with various delivery dates in an attempt to determine the futures contract that will produce the greatest positive roll yield or the least negative roll yield. Another rolling mechanism ( seasonal ) applies seasonal rolling to futures contracts on commodities that have historically shown seasonal changes in price. A third rolling mechanism ( static two-month forward ) looks two months ahead to determine what futures contract the corresponding Component Index (Short) will notionally purchase in two months and then rolls into that futures contract. The exposure of the Index to the Underlying Index depends on the historical volatility of (the size and frequency of changes in) the Underlying Index. When volatility of the Underlying Index is at a target rate of 6%, the Index maintains 100% exposure to the Underlying Index. The exposure of the Index to the Underlying Index (i) decreases when the volatility of the Underlying Index increases and (ii) increases when the volatility of the Underlying Index decreases. This exposure ranges from a minimum of zero (when volatility of the Underlying Index is high) to a maximum of 200% (when volatility of the 5

6 Underlying Index is low). The strategy underlying the Index, as summarized above, is not guaranteed to be successful; neither Société Générale, Bank of Montreal nor any of their respective affiliates is providing investment advice in connection with the Deposit Notes nor guarantees any positive performance of the Index. Potential investors should seek their own investment advice as necessary to assess this investment. The relationship among the Index, the Underlying Index and the Component Indices is represented in the chart below: SGI Smart Market Neutral Commodity Index (USD Excess Return) (Index) SGI Market Neutral Commodity Index (USD Excess Return) (Underlying Index) SGI Energy Semi Dynamic Index (USD Excess Return) (Long) minus S&P GSCI Energy Index Excess Return (Short) SGI Agriculture and Livestock Static Index (USD Excess Return) (Long) minus S&P GSCI Agricultural & Livestock Index Excess Return (Short) SGI Industrial Metals Semi Dynamic Index (USD Excess Return) (Long) minus S&P GSCI Industrial Metals Index Excess Return (Short) Fees and Expenses of the Offering: Secondary Market: Each of the Index, the Underlying Index and the Component Indices (Long) were developed by, and are the exclusive property of Société Générale, which has contracted with Standard & Poor s, a division of the McGraw Hill Companies, Inc. ( S&P ), to maintain, calculate and publish the closing levels of each of these indices. S&P also owns, calculates and publishes the closing levels of each Component Index (Short). See The Index. In this summary, each of the Index, the Underlying Index and the Component Indices is referred to as a Relevant Index as the context requires. For more information about the Relevant Indices, a holder should refer to the website (the Index Disclosure ). You will not have, and the Deposit Notes do not represent, any direct or indirect ownership of or entitlement to the Index, the Underlying Index, the Component Indices, the futures contracts that comprise the Component Indices, or the commodities underlying such futures contracts. As such, you will not have the rights and benefits of an investor who directly invests in the futures contracts comprising the Component Indices or the commodities underlying such futures contracts. References to the Index, the Underlying Index and the Component Indices are to notional, rather than actual, indices. There is no requirement for Bank of Montreal or any of its affiliates to hold any actual interest in such indices, in the future contracts comprising the Component Indices, or in the commodities underlying such futures contracts. Expenses of this offering of $3.50 (3.50%) per Deposit Note will be paid out of the proceeds of this offering to BMO Nesbitt Burns Inc. for its services as selling agent. The selling agent will pay all or a portion of this amount to qualified selling members for selling the Deposit Notes. See Fees and Expenses of the Offering. The Deposit Notes will not be listed on any stock exchange. Moreover, you do not have the right to require us to redeem (that is, buy or repay) the Deposit Notes prior to maturity. However, BMO Capital Markets will use reasonable efforts, subject to normal market conditions, to arrange for a secondary market for the sale of Deposit Notes using the FundSERV network. This secondary market is available only for Deposit Notes purchased 6

7 using the FundSERV network and is the only way that you can sell your Deposit Notes prior to maturity. The price that BMO Capital Markets will pay to a holder for a Deposit Note prior to maturity will be determined by BMO Capital Markets, acting in its sole discretion, and will be based on, among other things: the performance of the Index since the Closing Date; the fact that the Deposit Amount is payable on the maturity date regardless of the performance of the Index; and a number of other interrelated factors, including, without limitation, the volatility of the Index, the Underlying Index and the Component Indices and the correlation and volatility of the prices of the futures contracts comprising the Component Indices, or the commodities underlying such futures contracts, prevailing interest rates and the time remaining to the maturity date. The relationship among these factors is complex and may also be influenced by various political, economic and other factors that can affect the secondary market price of a Deposit Note. In particular, you should realize that any trading price for the Deposit Notes (a) may have a non-linear sensitivity to the increases and decreases in the closing levels of the Index (i.e., the trading price of a Deposit Note will increase and decrease at a different rate compared to the percentage increases and decreases in the closing levels of the Index); and (b) may be substantially affected by changes in interest rates independent of the performance of the Index. If you sell your Deposit Notes prior to maturity, you may receive less than the Deposit Amount even if the performance of the Index has been positive, and as a result, you may suffer losses. If you sell a Deposit Note within the first 360 days from the closing of this offering, the proceeds from the sale of the Deposit Note will be reduced by an early trading charge that will be equal to the applicable percentage of the Deposit Amount, as set out in the table below. If Sold Within Early Trading Charge 0-60 days 4.50% days 3.75% days 3.00% days 2.25% days 1.50% days 0.75% Thereafter Nil BMO Capital Markets is under no obligation to facilitate or arrange for a secondary market, and such secondary market, if commenced, may be suspended at any time at the sole discretion of BMO Capital Markets, without notice to you. If there is no secondary market, you will not be able to sell your Deposit Notes. The Deposit Notes are intended to be instruments held to maturity with their principal being payable on the maturity date. You should consult your financial advisor on whether it would be more favourable in the circumstances at any time to sell the Deposit Notes on the secondary market, if available, or hold the Deposit Notes until maturity. You should also consult your tax advisor as to the income tax consequences arising from a sale of the Deposit Notes prior to maturity as compared to holding the Deposit Notes until maturity. See FundSERV and Secondary Market. 7

8 Suitability and Appropriateness for Investment: Risk Factors: The Deposit Notes may be suitable and appropriate for investors who are prepared to: invest for the mid to long-term; receive the Deposit Amount only at maturity; receive a return at maturity that (i) is not based wholly on a fixed, floating or other specified interest rate but on the performance of the Index, (ii) is uncertain until maturity, and (iii) may be zero; and accept the risks set out under Risk Factors, including the risks associated with the Index, the Underlying Index and the Component Indices. The Index, through the Underlying Index, is based on a market-neutral investment strategy (i.e., not significantly affected by increases or decreases in the prices of the commodities represented in the Component Indices). Accordingly, the Deposit Notes are not suitable for investors seeking directional exposure to the broader commodity market. You should make a decision to invest in the Deposit Notes after carefully considering, with your advisors, the suitability of this investment in light of your investment objectives and the information in this Information Statement. See Suitability and Appropriateness for Investment. These Deposit Notes may not be suitable for all investors and in deciding whether to invest in Deposit Notes you should take into account various risks associated with such an investment. The following is a summary list of these risks in addition to those described beside Suitability and Appropriateness for Investment above and Consequences of Special Circumstances below. For a complete description of these risks, please see Risk Factors in this Information Statement. Non-Conventional Deposit Notes The Deposit Notes are not conventional notes or debt securities in that they do not provide you with a return or income stream prior to maturity, or a return at maturity, that is calculated wholly by reference to a fixed or floating rate of interest that can be determined before the maturity date. The return on the Deposit Notes, unlike that on many deposit liabilities of Canadian chartered banks, is uncertain and the Deposit Notes could provide no return. Variable Return May Not Be Payable It is possible that you may not receive a variable return on your Deposit Notes. Whether you receive a variable return, and if so, how much of a variable return, will depend on the performance of the Index as described under Payment at Maturity, above. Risk Factors Relating to the Index, the Underlying Index, the Component Indices and the Underlying Futures Contracts Certain risk factors applicable to investors with exposure to the Relevant Indices are also applicable to an investment in the Deposit Notes. Those risks factors include: (i) the strategy underlying the Index and/or the Underlying Index may not be successful; (ii) an investment linked to the Index is not the same as an investment linked to the Underlying Index; (iii) actual volatility of the Index may not equal the target volatility; (iv) the Index has a limited history; (v) publicly available information on the Index is limited; (vi) actions by the index sponsor upon the occurrence of certain events could adversely affect the value of the Deposit Notes; (vii) commodity prices may change unpredictably, affecting the value of the Relevant Indices in unforeseeable ways; and (viii) suspension or disruptions of market trading in commodities and related futures contracts may adversely affect the value of the Deposit Notes. This is not a complete description of the risks applicable to the futures contracts and their underlying commodities represented in the Index, the Underlying Index and the Component Indices. See Risk Factors for a more complete description of these risk factors. 8

9 Secondary Trading of Deposit Notes There is currently no market through which the Deposit Notes may be sold and it is possible that no such market will be arranged. Sale of a Deposit Note prior to maturity may result in a loss even if the performance of the Index has been positive. Legislative, Regulatory and Administrative Changes Changes in laws, regulations or administrative practices, including with respect to taxation, could have an impact on you. Various national governments have expressed concern regarding the disruptive effects of speculative trading in the commodity markets and the need to regulate the derivative markets in general. In the United States in particular, the regulation of commodity transactions is subject to ongoing modification by governmental and judicial action. On July 21, 2010, the Wall Street Transparency and Accountability Act of 2010 which is Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted. This legislation provides for significant direct regulation of, among others, over-the-counter ( OTC ) derivatives markets, OTC derivatives dealers and major non-dealer participants. Such actions could cause unexpected volatility and instability in commodity markets, with a substantial and adverse effect on the performance of the Index, the Underlying Index or the Component Indices and, consequently, the value of the Deposit Notes. Conflicts of Interest In the course of normal business operations, we and BMO Capital Markets may hold interests linked to the Relevant Indices or their constituent futures contracts or underlying commodities or enter into other business dealings involving the Relevant Indices or their constituent futures contracts or underlying commodities. In addition, BMO Capital Markets, which has undertaken to use reasonable efforts to provide a secondary market, is an affiliate of Bank of Montreal. If we or BMO Capital Markets take any such actions, we and BMO Capital Markets will not necessarily take into account the effect, if any, that such actions could have on the Deposit Notes or the variable return that may be payable on the Deposit Notes. Société Générale and its affiliates, may from time to time, engage in trading linked to the underlying commodities, futures contracts and other investments relating to the Relevant Indices on a regular basis as part of their general business or to hedge obligations under products linked to an index, and may be a business in competition with the Deposit Notes. Société Générale and its affiliates also actively enter into or trade and market securities, swaps, options, derivatives, and related instruments which are linked to the performance of commodities or are linked to the performance of a Relevant Index. Neither Société Générale nor any of its respective affiliates has any obligation to take into consideration at any time the needs of any buyer, seller, holder, issuer or market maker of the Deposit Notes. Credit Rating There is no assurance that the Deposit Notes, if rated, would receive the same rating as our other deposit liabilities. Credit Risk The likelihood that you will receive all the payments owing to you under the Deposit Notes will depend on our financial health and creditworthiness. No Deposit Insurance Unlike conventional bank deposits, the Deposit Notes are not insured under the Canada Deposit Insurance Corporation Act or any other deposit insurance regime designed to ensure that depositors receive payment of all or a portion of their deposits if the deposit taking financial institution becomes insolvent. Canadian Investor Protection Fund There is no assurance that your investment in the Deposit Notes will be eligible for protection under the Canadian Investor Protection Fund. 9

10 Consequences of Special Circumstances: Amendments: Investor s Right to Cancel: Date of Agreement: Eligibility for Investment: Certain Canadian Federal Income Tax Considerations: Valuation of the Index In valuing the Index, the calculation agent will be dependent on information reported by the index sponsor and the index sponsor s determination of the closing levels of the Index, which generally will be unaudited. No Independent Calculation We will not retain an independent person to make or confirm the determinations and calculations made for the Deposit Notes. No Ownership of the Index, the Underlying Index, the Component Indices or their Underlying Futures Contracts You will have no rights of ownership in the Index, the Underlying Index, the Component Indices or any of their underlying futures contracts or other constituent instruments or securities. In certain circumstances, BMO Capital Markets may, as it determines appropriate, (i) make determinations, estimates and/or adjustments in respect of levels or values of a Relevant Index as at applicable valuation dates or any other component or variable relevant to determining the variable return, (ii) replace a Relevant Index with a comparable index, (iii) defer the timing of the calculations of levels or values of a Relevant Index and the variable return and payment of the variable return, if any, or (iv) on the occurrence of an extraordinary event, instead of paying the variable return, if any, at maturity, pay the estimated present value, on the occurrence of the extraordinary event, of the variable return, if any, that would have been payable at maturity if the extraordinary event had not occurred. See Special Circumstances for a discussion of these circumstances. We may amend the terms of the Deposit Notes after they have been issued without your consent if we and BMO Capital Markets agree that the amendment would not materially and adversely affect your interests. In all other cases, amendments must be approved by the votes of holders representing at least two-thirds of the outstanding aggregate Deposit Amounts of the Deposit Notes represented at a meeting held to consider the amendment. See Description of the Deposit Notes Amendments to the Global Note. You may cancel an order to purchase a Deposit Note (or cancel its purchase if the Deposit Note has been issued) by providing instructions to us through your financial advisor any time up to 48 hours after the later of (i) the day on which the agreement to purchase the Deposit Note is entered into, and (ii) deemed receipt of this Information Statement. See Description of the Deposit Notes Investor s Right to Cancel the Agreement to Purchase a Deposit Note. If you place an order to purchase a Deposit Note in person or electronically, the agreement to purchase the Deposit Note will be deemed to have been entered into on the third day after the later of (i) the day your purchase order is received, and (ii) five business days after the postmark date, if this Information Statement is provided to you by mail, or the date this Information Statement is actually received by you, if it is provided other than by mail. If an order to purchase a Deposit Note is received by telephone, the agreement to purchase the Deposit Note will be deemed to have been entered into at the time your purchase order is received. Unless Canadian law changes, you will be able to hold your Deposit Notes in a trust governed by a registered retirement savings plan, registered retirement income fund, registered education savings plan, registered disability savings plan, tax-free savings account or deferred profit sharing plan (other than a trust governed by a deferred profit sharing plan to which contributions are made by us or by an employer with which we do not deal at arm s length within the meaning of the Income Tax Act (Canada)). This income tax summary is subject to the limitations and qualifications set out under Certain Canadian Federal Income Tax Considerations in the body of this Information Statement. In the opinion of Torys LLP, counsel to Bank of Montreal, if you hold Deposit Notes at 10

11 Rank: CDIC: maturity, you will be required to include in your income the amount, if any, by which the payment at maturity exceeds the Deposit Amount. Generally, you should not have to report any amount in your tax return in respect of the variable return, if any, for any taxation year ending before the year in which the Deposit Notes mature; provided that if there has been an extraordinary event, you may have to report the accrued variable return, if any, prior to maturity. However, counsel understands that the Canada Revenue Agency is currently reviewing its administrative practice in relation to the relevance of a secondary market for prescribed debt obligations such as the Deposit Notes in determining whether there is a deemed accrual of interest on such debt obligations. Bank of Montreal will file an information return with the Canada Revenue Agency in respect of any interest or deemed interest to be included in your income and will provide you with a copy of such information return. Provided an extraordinary event has not occurred and while the matter is not free from doubt, a disposition of a Deposit Note by you (other than on or following the Final Valuation Date) should give rise to a capital gain (or capital loss) to you to the extent your proceeds of disposition exceed (or are less than) the aggregate of your adjusted cost base of the Deposit Note and any reasonable costs of disposition. You should consult your own tax advisor with respect to your particular circumstances if you plan to sell a Deposit Note prior to maturity. See Certain Canadian Federal Income Tax Considerations. The Deposit Notes will rank equally with all of our other deposit liabilities. See Description of the Deposit Notes Rank. The Deposit Notes will not constitute deposits that are insured under the Canada Deposit Insurance Corporation Act or any other deposit insurance regime designed to ensure the payment of all or a portion of a deposit upon the insolvency of the deposit taking financial institution. You may request information about the Deposit Notes or another copy of this Information Statement by calling BMO Capital Markets at to speak to someone in English and to speak to someone in French. A copy of this Information Statement is also posted at During the term of the Deposit Notes, you may inquire as to the net asset value of the Deposit Notes and the formula for determining the variable return under the Deposit Notes by contacting BMO Capital Markets at the above numbers. 11

12 DEFINITIONS In this Information Statement, unless the context otherwise requires: BMO Capital Markets means, collectively, BMO Nesbitt Burns Inc. and any of its affiliates; Book-Entry System means the record entry securities transfer and pledge system established and governed by one or more agreements between CDS and CDS Participants pursuant to which the operating rules and procedures for such system are established and administered by CDS, including in relation to CDS; Business Day means any day (other than a Saturday or a Sunday or a statutory holiday) on which commercial banks are open for business in Toronto, Ontario; Calculation Agent means BMO Capital Markets or a third party appointed by BMO Capital Markets to act as calculation agent for the Note Program; CDS means CDS Clearing and Depository Services Inc. or its nominee; CDS Participant means a broker, dealer, bank or other financial institution or other person for whom CDS effects book-entry transfers and pledges of Deposit Notes under the Book-Entry System; Closing Date means on or about September 29, 2010; Closing Level means the official closing level or value for the Index, as announced by the Index Sponsor, provided that, if on or after the Closing Date the Index Sponsor materially changes the time of day at which the official closing level or value is determined or no longer announces the official closing level or value, the Calculation Agent may thereafter deem the Closing Level to be the level or value of the Index as of the time of day used by the Index Sponsor to determine the official closing level or value prior to such change or failure to announce; Component Commodity has the meaning given to that term under Special Circumstances-Market Disruption Event ; Component Indices means the commodity indices comprising the Underlying Index, initially being the SGI Energy Semi Dynamic Index (USD Excess Return), the SGI Agriculture and Livestock Static Index (USD Excess Return), the SGI Industrial Metals Semi Dynamic Index (USD Excess Return), the S&P GSCI Energy Index Excess Return, the S&P GSCI Agricultural & Livestock Index Excess Return, and the S&P GSCI Industrial Metals Index Excess Return (each a Component Index ); Component Indices (Long) means the Component Indices in which the Underlying Index takes a long position, initially being the SGI Energy Semi Dynamic Index (USD Excess Return), the SGI Agriculture and Livestock Static Index (USD Excess Return), and the SGI Industrial Metals Semi Dynamic Index (USD Excess Return); Component Indices (Short) means the Component Indices in which the Underlying Index takes a short position, initially being the S&P GSCI Energy Index Excess Return, the S&P GSCI Agricultural & Livestock Index Excess Return, and the S&P GSCI Industrial Metals Index Excess Return; CRA means the Canada Revenue Agency; Custodian means Bank of Montreal or a person appointed by Bank of Montreal; DBRS means DBRS Limited; Deposit Amount means $100 per Deposit Note; Deposit Notes means the Bank of Montreal SGI Smart Market Neutral Commodity Index Deposit, Series 2, issued by Bank of Montreal; Early Trading Charge means the early trading charge per Deposit Note, if any, described under Secondary Market ; Exchange means any exchange or trading system from which prices are derived for use in the calculation of the Closing Level from time to time, subject to certain special circumstances described under Special Circumstances ; Exchange Business Day means any Business Day which is also an Exchange Day on which each Exchange and each Related Exchange are open for trading; 12

13 Exchange Day means any day on which each Exchange and each Related Exchange are scheduled to be open for trading during their respective regular trading sessions; Extraordinary Event has the meaning given to that term under Special Circumstances Extraordinary Event ; Extraordinary Event Notification Date has the meaning given to that term under Special Circumstances Extraordinary Event ; Final Index Value means the Closing Level on the Final Valuation Date, subject to the provisions set out under Special Circumstances ; Final Valuation Date means March 24, 2016 or, if such Business Day is not an Exchange Business Day, the first following Exchange Business Day; FundSERV means FundSERV Inc.; Holder means a beneficial owner of a Deposit Note; Index means the SGI Smart Market Neutral Commodity Index (USD - Excess Return), subject to certain special circumstances described under Special Circumstances ; Index Disclosure means the website, which a Holder should refer to for more information about the Relevant Indices; Index Return means an amount, expressed as a percentage and rounded to two decimal places, equal to: Final Index Value - Initial Index Value Initial Index Value; Index Sponsor means S&P, in its capacity as the index sponsor for the Index, the Underlying Index and each of the Component Indices, or any Successor Source; Initial Index Value means the Closing Level on the Closing Date, provided that, if the Closing Date is not an Exchange Business Day, then the Initial Index Value means the Closing Level on the first following Exchange Business Day, and subject further to the provisions set out under Special Circumstances ; Manager means BMO Capital Markets or a person appointed by BMO Capital Markets to act as manager of the Note Program; Market Disruption Event has the meaning given to that term under Special Circumstances - Market Disruption Event ; Material Index Change has the meaning given to that term under Special Circumstances Discontinuance or Modification of the Index ; Maturity or Maturity Date means March 31, 2016; Moody s means Moody s Investors Service Inc.; New Index has the meaning given to that term under Special Circumstances Discontinuance or Modification of the Index ; Note Program means the Bank of Montreal SGI Smart Market Neutral Commodity Index Deposit, Series 2 note program administered by BMO Capital Markets; Offering means the offering of the Deposit Notes to prospective investors under this Information Statement; Price Source means the announcement of the Index Sponsor reporting the Closing Level (or the information necessary for determining the Closing Level), subject to certain special circumstances described under Special Circumstances ; Price Source Disruption means the failure of a Price Source to announce the Closing Level (or the information necessary for determining the Closing Level), or the temporary or permanent discontinuance or unavailability of the Price Source; Related Exchange means any exchange or trading system on which futures or options relating to the Index are listed from time to time; Relevant Index means each of the Index, the Underlying Index and the Component Indices, as the context requires; 13

14 Replacement Event has the meaning given to that term under Special Circumstances Discontinuance or Modification of the Index ; S&P means Standard & Poor s, a division of the McGraw-Hill Companies, Inc.; Selling Agent means BMO Nesbitt Burns Inc.; Subscription Price means $100 per Deposit Note; Successor Source means any entity acceptable to Bank of Montreal that succeeds the prevailing Index Sponsor for the Index and continues calculation and announcement of the Closing Level from time to time; TSX means the Toronto Stock Exchange; Underlying Index means SGI Market Neutral Commodity Index (USD - Excess Return); Valuation Date means any day on which the Initial Index Value or the Final Index Value is scheduled to be determined for calculating the Variable Return, or any other day on which the Closing Level is required to be determined, subject to the provisions set out under Special Circumstances ; Variable Return means, on a per Deposit Note basis, (i) the Deposit Amount multiplied by the Index Return, if the Index Return is greater than zero, or (ii) zero, if the Index Return is zero or negative; Variable Return Early Payment Amount has the meaning given to that term under Special Circumstances Extraordinary Event ; and $ means Canadian dollars, unless otherwise specified. 14

15 NOTE PROGRAM The Note Program provides investors with an entitlement to: (i) payment of the Deposit Amount at Maturity, and (ii) payment of a Variable Return, if any, at Maturity based on the performance of the Index. See Maturity Payment and Variable Return. Maturity Payment Each Deposit Note matures on March 31, At Maturity, each Holder will be entitled to receive the Deposit Amount, regardless of the performance of the Index. A Holder will also be entitled to receive the Variable Return, if any, at Maturity as discussed below. Variable Return The Variable Return, if any, payable on the Maturity Date will be based on the performance of the Index and will be determined by the Calculation Agent. The Variable Return, if any, will be payable in an amount per Deposit Note equal to (i) the Deposit Amount multiplied by the percentage increase in the Closing Level from the Closing Date to and including the Final Valuation Date (subject to the provisions set out in the Definitions and under Special Circumstances ), if the Final Index Value is greater than the Initial Index Value, or (ii) zero, if the Final Index Value is equal to or less than the Initial Index Value. There is a possibility that a Holder may not receive any Variable Return. No Variable Return will be payable unless the Final Index Value is greater than the Initial Index Value. The amount of Variable Return, if any, will be payable on the Maturity Date unless the Final Valuation Date is postponed to a later date due to a Market Disruption Event or the Variable Return Early Payment Amount is determined and paid due to an Extraordinary Event as described under Special Circumstances. Variable Return Examples The following examples are included for illustration purposes only. The Closing Levels used to illustrate the calculation of the Variable Return are not estimates or forecasts of the Initial Index Value and Final Index Value on which the calculation of the Variable Return, will depend. The examples are based on hypothetical Closing Levels at each Valuation Date and are not intended as a forecast of Closing Levels or as a forecast of any Variable Return payable on the Deposit Notes. Each of the scenarios refers to a Holder holding a single Deposit Note and assumes that no Extraordinary Event or Market Disruption Event has occurred. Example #1 - Calculation of the Variable Return where the Index Return is positive. Initial Index Value Final Index Value Index Return % In the first scenario, the Holder receives the Deposit Amount at Maturity and a Variable Return for each Deposit Note equal to the Index Return multiplied by the Deposit Amount. The Variable Return would be calculated as follows: Variable Return = $100 Index Return = $ % = $50.00, equivalent to an annual compounded return of approximately 7.65%. Example #2 - Calculation of the Variable Return where the Index Return is not positive. Initial Index Value Final Index Value Index Return % In the second scenario, the Index Return for the Index is negative (as the Final Index Value is less than the Initial Index Value). As a result, no Variable Return is payable at Maturity and the Holder will receive only the Deposit Amount at Maturity. SECONDARY MARKET The Deposit Notes will not be listed on any stock exchange. Moreover, a Holder may not require Bank of Montreal to redeem the Deposit Notes prior to Maturity. However, Deposit Notes purchased using the FundSERV network 15