Document:

ex_389232.htm

Exhibit 10.1

 

 

FORM OF

 

STATERA BIOPHARMA, INC.

 

INDEPENDENT DIRECTOR’S AGREEMENT

 

This Independent Director’s Agreement (the “Agreement”) is entered into as of the ___ day of ______, 2022 by and between Statera Biopharma, Inc. a Delaware corporation with address at 2537 Research Blvd. Suite 201, Fort Collins CO 80526 (the “Company”), and ____________ at ______________ (the “Director”).

 

WHEREAS, the Company desires to retain and attract as directors the most capable persons available to serve on its Board of Directors (the “Board”);

 

WHEREAS, the Company believes that the Director possesses the necessary qualifications and abilities to serve as a director of the Company and perform the functions associated with such service; and

 

WHEREAS, the Company appointed the Director effective as of the date hereof (the “Effective Date”) and desires to enter into an agreement with the Director with respect to such appointment; and

 

WHEREAS, the Director is willing to accept such appointment and to serve the Company on the terms set forth herein and in accordance with the provisions of this Agreement.

 

NOW, THERFORE, in consideration of the foregoing, the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Director agree as follows:

 

	 	
			1.

				
			Service as Director. Director consents to serve as a member of the Board and agrees that he will perform all duties as a director of the Company, including without limitations (a) attending meetings of the Board; (b) using reasonable efforts to promote the interests of the Company (c) performing services as is consistent with his position as a member of the Board, as required and authorized by the Company’s Amended and Restated Articles of Incorporation, as amended (“Articles”) and bylaws; and (d) performing these and all services in accordance with high professional and ethical standards and in accord with all applicable laws and rules and regulations pertaining to his performance hereunder, including without limitation, all laws, rules and regulations relating to a private and potential a public company.

			

 

	 	
			2.

				
			Requirements of Director. During the Directorship Term (as defined herein), the Director will make reasonable efforts to attend and participate in all Board meetings, including quarterly pre-scheduled Board and committee meetings of the Board; participate on Management conference calls; serve on appropriate committees and subcommittees as reasonably requested and agreed upon by the Board; make himself available to the Company at mutually convenient times and places; attend external meetings and presentations when agreed on in advance, as appropriate and convenient; acknowledge and follow policies and procedures of the Company; and perform such duties, services and responsibilities expected of a Director, having the authority commensurate to such position. The Director will use his best efforts to promote the interests of the Company. The Company recognizes that the Director (i) is or may become a full-time executive employee of another entity and that his responsibilities to such entity must have priority and (ii) sits or may sit on the board of directors of other entities, subject to any

			

 

 

	Page 1 of 6
	Director’s Agreement Statera Biopharma, Inc.	_____________ / _____________

  

 

 

 

limitations set forth by the Sarbanes Oxley Act of 2002 and limitations provided by any exchange or quotation service on which the Company’s common stock is listed or traded. Director shall observe all applicable laws and regulations relating to independent Directors of a public company as promulgated from time and shall immediately report to the Company if he knows of any failure to satisfy the applicable laws and regulations relating to independent directors of a public company.

 

	 	
			3.

				
			Compensation and Expenses. As compensation for the services to be rendered by the Director under this Agreement, the Company will provide the following compensation and benefits:

			

	 	
			a.

				
			Reimbursement of Expenses. During the Directorship Term, the Company shall reimburse the Director for all reasonable out-of-pocket expenses incurred by the Director in attending any in-person meetings, or otherwise incurred, provided that the Director complies with the generally applicable policies, practices and procedures of the Company for submission of expense reports, receipts or similar documentation regarding such expenses. Expenses authorized pursuant to this Section 3(b) shall be reimbursed promptly upon receipt of all required documentation. If the Director anticipates that for any particular quarter that his out-of-pocket expenses is likely to exceed $5,000.00, the Director agrees to notify the Company in advance to discuss the circumstances in a reasonable effort to contain costs.

			

 

	 	
			b.

				
			Compensation. The Company will provide compensation per the table and committee commitments in Appendix 1.

			

 

	 	
			c.

				
			Other Benefits. The Board (or a designated committee) may from time to time authorize additional compensation and benefits for Directors, including awards under any stock incentive, stock option, stock compensation or long-term incentive plan of the Company.

			

 

	 	
			d.

				
			Independent Contractor. The Director’s status during the Directorship Term shall be that of an independent contractor and not, for any purpose, that of an employee or agent with authority to bind the Company in any respect. All payments and other consideration made or provided to the Director under this Section 3 shall be made or provided without withholding or deduction of any kind, and the Director shall assume sole responsibility for discharging all tax or other obligations associated therewith.

			

 

	 	
			4.

				
			Term and Termination. The term of this Agreement and Director’s services hereunder shall commence upon execution by Director and the Company of this Agreement and shall continue until the Company’s 2022 annual meeting of shareholders, unless terminated as provided for in this Section 4. This Agreement and Director’s services hereunder shall terminate upon the earlier of the following: (a) removal of Director as a director of the Company, upon proper Board or shareholder action in accordance with the bylaws, Articles and applicable law; (b) resignation by Director as a director of the Company upon written notice to the Board; or (c) termination of this Agreement by the Company, in the event the requirements specified in Section 2 hereof are not satisfied, as determined by the Company in its sole discretion.

			

 

 

 

	Page 2 of 6
	Director’s Agreement Statera Biopharma, Inc.	_____________ / _____________

  

 

 

 

	 	
			5.

				
			Indemnification. The Company agrees to indemnify the Director for his activities as a member of the Board to the fullest extent permitted under applicable law.

			

 

	 	
			6.

				
			Confidential Information.

			

 

	 	
			a.

				
			Director acknowledges that during his service as a director of the Company, Director will have access to certain highly-sensitive, confidential, and proprietary information relating to the Company and its business (collectively, “Confidential Information”). Director acknowledges that, unless otherwise available to the public, Confidential Information includes, but is not limited to, the following categories of Company related confidential or proprietary information and material, whether in electronic, print, or other form, including all copies, notes, or other reproductions or replicas thereof: record relating to any intellectual property developed by, owned and/or licensed by, controlled, or maintained by the Company; financial statements and information; budgets, forecasts, and projections; business and strategic plans; marketing, sales, and distribution strategies; research and development projects; information related to the processes; non-public information relating to the Company’s employees, suppliers, distributors, or investors; the specific terms of the Company’s agreements or arrangements, whether oral or written, with any supplier, vendor, or contractor with which the Company may be associated from time to time; and any and all other non- public information relating to the operation of the Company’s business which the Company may from time to time designate as confidential or proprietary or that Director reasonably knows should be, or has been, treated by the Company as confidential or proprietary.

			

 

	 	
			b.

				
			Confidential Information does not include any information that: (i) at the time of disclosure is generally known to, or readily ascertainable by, the public; (ii) becomes known to the public through no fault of Director or other violation of this Agreement; or (iii) is disclosed to Director by a third party under no obligation to maintain the confidentiality of the information.

			

 

	 	
			c.

				
			Director acknowledges that all Confidential Information is the confidential and proprietary information of the Company and agrees to hold in trust and confidence all Confidential Information, and will not disclose any Confidential Information to any person or entity, nor use any Confidential Information for the benefit of Director and/or any third party, except in connection with providing services as a director of the Company or as authorized in writing by the Company.

			

 

	 	
			d.

				
			The restrictions in Section 6(c) above will not apply to any information that Director is required to disclose by law, provided that Director (i) notifies the Company of the existence and terms of such obligations (ii) gives the Company a reasonable opportunity to seek a protective or similar order to prevent or limit such disclosure, and (iii) only discloses that information actually required to be disclosed.

			

 

 

 

	Page 3 of 6
	Director’s Agreement Statera Biopharma, Inc.	_____________ / _____________

  

 

 

 

	 	
			e.

				
			Director acknowledges and agrees that the Company will suffer irreparable harm in the event that Director breaches any of his obligations under Section 6 and that monetary damages would be inadequate to compensate the Company for such a breach. Accordingly, Director agrees that, in the event of a breach or threatened breach of any of Director’s obligations under this Section 6, the Company will be entitled to obtain from any court of competent jurisdiction preliminary and permanent injunctive relief in order to prevent or to restrain any such breach. The Company shall not be required to post bond or other security in connection with any such injunctive relief. The Company will be entitled to recover its costs incurred n connection with any action to enforce this Section 6, including reasonable attorneys’ fees and expenses. The remedies described in the Section 6(e) are cumulative (not alternative) and in addition to all other rights and remedies available to the Company at law, in equity, or otherwise.

			

 

	 	
			f.

				
			Director’s obligation pursuant to this Section 6 shall survive any termination of this Agreement.

			

 

	 	
			7.

				
			Miscellaneous

			

 

	 	
			a.

				
			Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (whether written or oral and whether express or implied) between the parties relating to such subject matter.

			

 

	 	
			b.

				
			Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns and, in the case of Director, heirs, executors, and/or personal representatives. The Company may freely assign or transfer this Agreement to an affiliated company or to a successor following a merger, consolidation, sale of assets, or other business transaction. Director may not assign, delegate or otherwise transfer any of Director’s obligations in this Agreement without the prior written approval of the Company.

			

 

	 	
			c.

				
			Counterparts. This Agreement may be executed in one or more counterparts (each of which may be traditional originals, fax copies, or PDF copies via email or other generally accepted electronic transmission), each of which will be deemed an original but all of which together will constitute one and the same agreement.

			

 

	 	
			d.

				
			Notices. Any notice pursuant to this Agreement must be in writing and will be deemed effectively given to the other party on the date it is actually delivered by (i) certified or registered U.S. mail, return receipt requested (ii) overnight courier service (such as FedEx), or (iii) personal delivery of such notice in person; in each case to the appropriate address shown below (or to such other address as party may designate by written notice to the other party):

			

 

 

 

	Page 4 of 6
	Director’s Agreement Statera Biopharma, Inc.	_____________ / _____________

  

 

 

 

If to the Director:

 

[__]

Phone: [__]

Email: [__]

 

 

If to the Company:

 

Statera Biopharma, Inc.

 

2537 Research Blvd, Suite 201 Fort Collins, CO 80537

Email: [__]

 

Attention: Chairman

 

	 	
			e.

				
			Amendments and Waivers. No amendments of any provision of this Agreement will be valid unless the amendment is in writing and signed by the Company and Director. No waiver of any provision of this Agreement on a particular occasion will be deemed or will constitute a waiver of that provision on a subsequent occasion or a waiver of any other provision of this Agreement.

			

 

	 	
			f.

				
			Severability. Each Provision of this Agreement is severable from every other provision of this Agreement. Any provision of this Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any other provision. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not help invalid or unenforceable.

			

 

	 	
			g.

				
			Construction. The section headings in this Agreement are inserted for convenience only and are not intended to affect the interpretation of this Agreement. Any reference in this Agreement to and “Section” refers to the corresponding Section of this Agreement. All words in this Agreement will be construed to be of such gender or number as the circumstances require.

			

 

	 	
			h.

				
			Governing Law. This Agreement will be governed by the laws of the State of Florida without giving effect to any choice or conflict of law principles of any jurisdiction.

			

 

 

[REST OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

 

 

	Page 5 of 6
	Director’s Agreement Statera Biopharma, Inc.	_____________ / _____________

  

 

 

 

IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

	
			STATERA BIOPHARMA, INC.  

				 	
			DIRECTOR

				
			 

			
	 	 	 	 	 
	 	 	 	 	 
	 	
			 

				 	
			 

				
			 

				
			 

			
	 	
			 

				 	
			 

				
			 

				
			 

			
	By: 	
			 

				 	
			By: 

				
			 

				
			 

			
	
			Name:      Michael K. Handley, Chairman

				 	
			Name:      [__]

				
			 

			
	 	
			 

				 	
			 

				
			 

				
			 

			

  

 

 

 

 

CONFIDENTIAL APPENDIX 1

 

 

So long as consistent with applicable regulations and laws, the issuance of the first two quarters’ compensation in restricted shares and/or warrants may be reasonably delayed at the request of the Director with the agreement of the Company, such agreement by the Company not unreasonably withheld.

 

 

 

 

 

 

 

 

	Page 6 of 6
	Director’s Agreement Statera Biopharma, Inc.	_____________ / _____________Exhibit 4.5

 

(FACE OF SECURITY)

 

GLOBAL
SECURITY (NOTE NO. 1) FOR MICROSECTORSTM  TRAVEL 3X LEVERAGED ETNS DUE MAY 29,
2042

 

This Security will not constitute a deposit that is insured under
the Canada Deposit Insurance Corporation act or by the U.S. Federal Deposit Insurance Corporation.

 

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

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BANK OF MONTREAL, OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

 

BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE
THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 7 ON THE FACE OF THIS SECURITY. 

 

THE PERSON MAKING THE DECISION TO ACQUIRE THIS SECURITY SHALL
BE DEEMED, ON BEHALF OF ITSELF AND THE HOLDER, BY ACQUIRING AND HOLDING THIS SECURITY OR EXERCISING ANY RIGHTS RELATED THERETO, TO REPRESENT
THAT: 

 

		(i)	THE FUNDS THAT THE HOLDER IS USING TO ACQUIRE THIS SECURITY ARE NOT THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN DESCRIBED IN AND SUBJECT TO SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), A GOVERNMENTAL PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW THAT IS SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE
“PLAN ASSETS” BY REASON OF DEPARTMENT OF LABOR REGULATION SECTION 2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA, OR OTHERWISE;
OR 

 

    	 		 

    	 

    

 

		(ii)	(A) NEITHER THE PURCHASE, HOLDING OR DISPOSITION OF THIS SECURITY OR THE EXERCISE OF ANY RIGHTS RELATED TO THIS SECURITY WILL RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE (OR WITH RESPECT TO A GOVERNMENTAL PLAN, UNDER ANY SIMILAR APPLICABLE LAW
OR REGULATION); AND (B) NEITHER BANK OF MONTREAL NOR ANY OF ITS AFFILIATES IS A “FIDUCIARY” (WITHIN THE MEANING OF SECTION
3(21) OF ERISA OR, WITH RESPECT TO A GOVERNMENTAL PLAN, UNDER ANY SIMILAR APPLICABLE LAW OR REGULATION) WITH RESPECT TO THE PURCHASER
OR HOLDER IN CONNECTION WITH SUCH PERSON’S ACQUISITION, DISPOSITION OR HOLDING OF THIS SECURITY, OR AS A RESULT OF ANY EXERCISE
BY BANK OF MONTREAL OR ANY OF ITS AFFILIATES OF ANY RIGHTS IN CONNECTION WITH THIS SECURITY, AND NO ADVICE PROVIDED BY BANK OF MONTREAL
OR ANY OF ITS AFFILIATES HAS FORMED A PRIMARY BASIS FOR ANY INVESTMENT DECISION BY OR ON BEHALF OF SUCH PURCHASER OR HOLDER IN CONNECTION
WITH THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED WITH RESPECT TO THIS SECURITY. 

 

(Face of Security continued on next page)

 

    	 	2	 

    	 

    

 

CUSIP No.: 06368J200

 

ISIN: US06368J2006

 

bank
of MONTREAL 

 

MEDIUM-TERM NOTES, SERIES I

 

	
    

    MicroSectorsTM
     Travel 3X Leveraged ETNs due May 29, 2042

     

    (Note No. 1)

    

 

The following terms apply to this Security. Capitalized terms
that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security.

 

Principal Amount: $25 per Security; the initial aggregate
Principal Amount of this Security is equal to $4,000,000 (160,000 Securities). The aggregate Principal Amount may be increased or decreased
as set forth herein.

 

Index: MerQube MicroSectorsTM U.S. Travel Index

 

Initial Index Level: 1,581.11, the closing level of the Index
on the Initial Trade Date

 

Initial Trade Date: June 21, 2022

 

Denomination: $25 per Security

 

Interest Rate: The principal of this Security shall not
bear interest.

 

Payment at Maturity:  The holder of each $25 Principal
Amount of this Security shall receive a cash payment on the Maturity Date (the “Cash Settlement Amount”) that shall
be equal to the arithmetic mean of the closing Indicative Note Values on each Index
Business Day in the Final Measurement Period. The Cash Settlement Amount shall not be less than $0.

 

Payment Upon Redemption by the Holder:  Prior to the Maturity
Date, the Holder may, subject to the procedural requirements in Section 5 hereof, elect to offer all or a portion of the Principal Amount
of this Security for repurchase by the Bank on any Redemption Date, subject to the repurchase requirements and procedures set forth in
Section 5 hereof. If the Holder fulfills the repurchase requirements and procedures in Section 5 for a Redemption Date, the Bank shall
be obligated to repurchase the Principal Amount of this Security so requested to be repurchased on the Redemption Date. The Index Business
Day immediately succeeding the applicable Redemption Notice Date shall be the Redemption Measurement Date applicable to such repurchase,
subject to adjustment as provided in Section 3 hereof. On the Redemption Date, the Holder will receive the Redemption Amount.

 

    	 	3	 

    	 

    

 

Payment Upon Call by the Bank: The Bank will have the
right to repurchase this Security in whole or in part on any Index Business Day to and including the Maturity Date. To call the Securities
for repurchase, the Bank will deliver an irrevocable call notice to The Depository Trust Company (“DTC”) (as the Holder
of this Global Security). If the Bank issues a call notice on any calendar day, the “Call Calculation Date” will be
the next Index Business Day after the call notice is issued.

 

On the Call Settlement Date, the Holder of this Security will
receive the Call Settlement Amount.

 

Calculation Agent: BMO Capital Markets Corp.

 

Defeasance: Neither full defeasance nor covenant defeasance
applies to this Security.

 

Listing: NYSE Arca, Inc.

 

OTHER TERMS

 

All terms used in this Security that are not defined in this
Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the
Indenture. Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security.

 

An “Averaging Date” means each of the Index
Business Days during the Final Measurement Period or Call Measurement Period, as applicable, subject to adjustment as described in Section
3 hereof.

 

A “Business Day” means a Monday, Tuesday,
Wednesday, Thursday or Friday that is neither a legal holiday nor a day on which banking institutions are authorized or obligated by law
or executive order to close in New York City.

 

The “Calculation Date” means May 12, 2042,
unless such day is not an Index Business Day, in which case the Calculation Date will be the next Index Business Day, subject to adjustment
as provided in Section 3 hereof.

 

The “Call Measurement Period” will be the
10 Index Business Days from and including the Call Calculation Date, subject to adjustment as provided in Section 3 hereof. If the Calculation
Agent determines that the “aggregate market value” of the portion of this Security to be called in a whole or partial call
is less than or equal to $100,000,000 at the close of trading on the Index Business Day immediately preceding the date of delivery by
the Bank of the notice to holders described above of its exercise of the Call Right, then the Call Measurement Period will consist solely
of the Call Calculation Date, and will not extend for 10 Index Business Days. The Calculation Agent will determine the aggregate market
value for purposes of this provision by multiplying the closing Indicative Note Value on the applicable date by the number of units represented
by this Security that are outstanding on that date.

 

“Call Settlement Amount” means a cash payment
per $25 Principal Amount of this Security equal to the arithmetic mean of the closing Indicative Note Values on each Index Business Day
in the Call Measurement Period. The Call Settlement Amount will not be less than $0.

 

    	 	4	 

    	 

    

 

The “Call Settlement Date” means the fifth
Business Day following the last Index Business Day in the Call Measurement Period.

 

A “Constituent Issuer” means any of the issuers
of the Index Constituents.

 

The “Daily Financing Charge” was $0 on the
Initial Trade Date. On any subsequent Exchange Business Day until maturity, call or redemption of the notes represented by this Security,
the Daily Financing Charge will equal the product of (a) the closing Indicative Note Value on the immediately preceding Exchange Business
Day times (b) the Daily Financing Factor times (c) the Daily Financing Rate divided by (d) 365 times (e) the number of calendar days since
the last Exchange Business Day.

 

The “Daily Financing Factor” is 2.

 

The “Daily Financing Rate” equals (a) the
most recent bank prime loan rate published by the Board of Governors of the Federal Reserve System (the “Federal Reserve Bank Prime
Loan Rate”); plus (b) the Financing Spread.

 

The “Daily Investor Fee” was $0 on the Initial
Trade Date. On any subsequent Exchange Business Day until maturity, call or redemption of this Security, the Daily Investor Fee will equal
the product of (a) the Indicative Note Value at the close of the immediately preceding Exchange Business Day times (b) the Fee Rate divided
by (c) 365 times (d) the number of calendar days since the last Exchange Business Day.

 

The “Daily Leverage Factor” is 3.

 

An “Exchange Business Day” means any day on
which the primary exchange or market for trading of this Security is scheduled to be open for trading.

 

The “Final Measurement Period” means the 10
Index Business Days from and including the Calculation Date, subject to adjustment as provided in Section 3 hereof. If the Calculation
Agent determines that the “aggregate market value” represented by this Security is less than or equal to $100,000,000 at the
close of trading on the Index Business Day immediately preceding the Calculation Date, the Final Measurement Period will consist solely
of the Calculation Date.

 

The Calculation Agent will determine the aggregate market value
for purposes of this section by multiplying the closing Indicative Note Value on the applicable date by the number of units represented
by this Security that are outstanding on that date.

 

The “Fee Rate” is 0.95% per annum.

 

On the Initial Trade Date, the “Financing Level”
was equal to the Long Index Amount minus the principal amount on the Initial Trade Date, which was equal to $50. On any subsequent
Exchange Business Day until maturity, call or redemption of the notes represented by this Security, the Financing Level will equal (a)
the closing Indicative Note Value on the immediately preceding Exchange Business Day times the Daily Financing Factor plus (b) the Daily
Financing Charge on that Exchange Business Day, plus (c) the Daily Investor Fee on that Exchange Business Day.

 

    	 	5	 

    	 

    

 

“Financing Spread” means, as of the Initial
Trade Date, 2.75%. The Financing Spread may be adjusted from time to time by the Calculation Agent, but in no case will it increase by
more than 2.25% per annum, to a maximum amount of 5.00%. The Calculation Agent may adjust the Financing Spread up to that maximum amount.
If it elects to do so, the Bank will notify the Trustee, and issue a press release that it will publish on a website at least five Business
Days prior to the effective date (a “Fee Effective Date”) of the applicable change. The date on which the Bank publishes such
a press release is referred to as a “Fee Notice Date.” Notwithstanding the forgoing, the Fee Effective Date for any reduction
to the Financing Spread may be any date after the Fee Notice Date that is designated in the applicable press release.

 

An “Index Business Day” means any day on which
the Index Sponsor publishes the Index Closing Level.

 

The “Index Closing Level” on any Index Business
Day means the closing level of the Index as published on Bloomberg under the ticker symbol “MQUSTRAV<Index>”, subject
to adjustment as provided in Section 3 hereof.

 

An “Index Constituent” means the equity interests
of the Constituent Issuer included in the Index.

 

The “Index Performance Factor” on the Initial
Trade Date was 1. On any subsequent Exchange Business Day until maturity, call or redemption of this Security, the Index Performance Factor
will equal (a) the Index Closing Level on that Exchange Business Day (or, if such day is not an Index Business Day, the Index Closing
Level on the immediately preceding Index Business Day) divided by (b) the Index Closing Level on the immediately preceding Index Business
Day, as determined by the Calculation Agent.

 

If a Market Disruption Event occurs or is continuing on any applicable
Index Business Day on which the Index Performance Factor must be determined, the Calculation Agent will determine the Index Performance
Factor for the Securities on that day using an appropriate closing level of the Index for the applicable Index Business Day, taking into
account the nature and duration of such Market Disruption Event. Furthermore, if a Market Disruption Event occurs and is continuing with
respect to this Security on any Index Business Day (or occurred or was continuing on the immediately preceding Index Business Day), the
calculation of the Index Performance Factor will be modified so that the applicable leveraged exposure does not reset until the first
Index Business Day on which no Market Disruption Event with respect to this Security is continuing.

 

Furthermore, if a Market Disruption Event occurs and is continuing
with respect to this Security on any Index Business Day or occurred or was continuing on the immediately preceding Index Business Day,
the calculation of the Index Performance Factor will be modified as set forth in Section 3.

 

“Index Sponsor” means MerQube, Inc. or any
successor.

 

The “Indicative Note Value” of this Security
on the Initial Trade Date was equal to the Principal Amount of $25. On any subsequent Exchange Business Day until maturity, call or redemption
of this Security, the closing Indicative Note Value will equal (a) the Long Index Amount on that Exchange Business Day minus (b) the Financing
Level on that Exchange Business Day; provided that if that calculation results in a value less than or equal to $0, the closing Indicative
Note Value will be $0. If the closing Indicative Note Value is $0 on any Exchange Business Day, or the Intraday Indicative Value at any
time during the core trading session on the NYSE Arca on an Exchange Business Day, is less than or equal to $0, then the Indicative Note
Value on all future days during the term of this Security will be $0.

 

    	 	6	 

    	 

    

 

The “Intraday Indicative Value” of this Security
at any time during an Exchange Business Day will equal (a) the Intraday Long Index Amount minus (b) the Financing Level; provided that
if such calculation results in a value less than or equal to $0, the Intraday Indicative Value will be $0. If the Intraday Indicative
Value is less than or equal to $0 at any time on any Exchange Business Day, then both the Intraday Indicative Value and the closing Indicative
Note Value on that day, and for the remainder of the term of this Security, will be $0. The Intraday Indicative Value is published by
Bloomberg under the symbol FLYUIV.

 

The “Intraday Long Index Amount” of this Security
will equal the product of (a) the closing Indicative Note Value on the immediately preceding Exchange Business Day times (b) the Daily
Leverage Factor times (c) the Intraday Index Performance Factor.

 

The “Intraday Index Performance Factor” of
this Security will equal (a) the most recently published level of the Index divided by (b) the Index Closing Level on the immediately
preceding Index Business Day.

 

The “Long Index Amount” of this Security on
the Initial Trade Date was equal to the Daily Leverage Factor times the principal amount, which equals $75. On any subsequent Exchange
Business Day until maturity, call or redemption of this Security, the Long Index Amount will equal the product of (a) the closing Indicative
Note Value on the immediately preceding Exchange Business Day times (b) the Daily Leverage Factor times (c) the Index Performance Factor
on that Exchange Business Day.

 

A “Market Disruption Event” means with respect
to the Index, in each case as determined by the Calculation Agent in its sole discretion:

 

		(a)	the suspension, absence or material limitation of trading in a material number of the Index Constituents for more than two hours or
during the one-half hour before the close of trading in the applicable Primary Exchange or Primary Exchanges;

 

		(b)	the suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a material number
of Index Constituents on a Related Exchange for more than two hours of trading or during the one-half hour before the close of trading
in that market;

 

		(c)	the Index is not published, or the Calculation Agent reasonably determines that the published level of the Index is or may be inaccurate;
or

 

		(d)	any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with the ability
of the Bank or any of its affiliates to unwind all or a material portion of a hedge with respect to this Security that the Bank or its
affiliates have effected or may effect.

 

    	 	7	 

    	 

    

 

The following events will not be Market Disruption
Events with respect to the Index:

 

		(a)	a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in the regular
business hours of the Primary Exchange or Related Exchange; or

 

		(b)	a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index Constituents.

 

For this purpose, an “absence of trading” in the
primary securities market on which option or futures contracts related to the Index or any Index Constituents are traded will not include
any time when that market is itself closed for trading under ordinary circumstances.

 

Notwithstanding the occurrence of one or more of the events described
above, which may, in the Calculation Agent’s discretion, constitute a Market Disruption Event, the Calculation Agent in its discretion
may waive its right to postpone the determination of the Index Closing Level if it determines that one or more of the above events has
not and is not likely to materially impair its ability to determine the Index Closing Level on any date.

 

“Maturity Date” means the third Business Day
following the last Index Business Day in the Final Measurement Period, which is scheduled to be May 29, 2042, unless that day is not a
Business Day, in which case the Maturity Date will be the following Business Day, subject to adjustment as provided in Sections 3 and
11 hereof.

 

“Primary Exchange” means, with respect to
each Index Constituent or each component underlying a successor index, the primary exchange or market of trading such Index Constituent
or such component underlying a successor index.

 

The “Redemption Amount” means a cash payment
on the relevant Redemption Date equal to the Indicative Note Value as of the Redemption Measurement Date, minus the Redemption Fee Amount.
The Redemption Amount will not be less than $0.

 

A “Redemption Confirmation” is the confirmation
of the Holder’s redemption delivered to the Bank.

 

A “Redemption Date” means any Business Day
during the term of this Security until the last scheduled Index Business Day prior to the Calculation Date or Call Calculation Date, as
applicable, subject to compliance with Section 5 hereof. Any Redemption Date shall also be the third
Business Day after the applicable Redemption Measurement Date.

 

The “Redemption Fee Amount” equals 0.125%
of the Indicative Note Value, subject to the Bank’s right from time to time to reduce or waive the Redemption Fee Amount in its
sole discretion on a case-by-case basis.

 

The applicable “Redemption Measurement Date”
means the Index Business Day following the applicable Redemption Notice Date, subject to adjustment as provided in Section 3 hereof. The
Bank reserves the right to accelerate the Redemption Measurement Date to the Redemption Notice Date, in its sole discretion.

 

    	 	8	 

    	 

    

 

A “Redemption
Notice” is the form provided by the Bank substantially in the form of Annex A to this Security.

 

A “Redemption Notice Date” will be the date
that the applicable Redemption Notice and Redemption Confirmation are delivered in compliance with Section 5 hereof. If such Redemption
Notice or Redemption Confirmation is delivered on a day that is not an Index Business Day, then the Redemption Notice Date shall be the
next Index Business Day.

 

A “Related Exchange” means, with respect to
each Index Constituent or each component underlying a successor index, each exchange or quotation system where trading has a material
effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to such Index Constituent
or such component underlying a successor index.

 

The “Trustee” means, The Bank of New York
Mellon, as series trustee under the third supplemental indenture, dated as of May 26, 2022, among Bank of Montreal, The Bank of New York
Mellon, as series trustee with respect to the Senior Medium-Term Notes, Series I, and Wells Fargo Bank, National Association, and as further
amended from time to time.

 

		1.	Promise to Pay at Maturity or Upon Early Redemption or Call

 

Bank of Montreal, a Canadian chartered bank (together with its
successors and assigns, the “Bank”), for value received, hereby promises to pay (or cause to be paid) to Cede &
Co., as nominee for The Depository Trust Company, or registered assigns, the principal sum, calculated as provided under (i) “Payment
upon Redemption by the Holder” and elsewhere on the face of this Security on the applicable Redemption Date, in the case of any
Securities in respect of which a Holder exercises such Holder’s right to require the Bank to repurchase such Holder’s Securities
prior to the Maturity Date, (ii) “Payment upon Call by the Bank” and elsewhere on the face of this Security on the applicable
Call Settlement Date, in the case of any Securities in respect of which the Bank exercises its right to repurchase all Securities prior
to the Maturity Date or (iii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date.

 

		2.	Payment of Interest

 

The principal of this Security shall not bear interest.

 

		3.	Discontinuance or Modification of the Index; Market Disruption Event

 

If the Index Sponsor discontinues publication of the Index, or
if the Bank is unable to obtain or maintain a license to use the Index in connection with the Securities, and the Index Sponsor or anyone
else publishes a substitute index that the Calculation Agent determines is comparable to the Index, then the Calculation Agent will replace
the Index with that substitute index (the “successor index”) for all purposes, and all terms of the Securities applying to
the Index will thereafter apply to the successor index instead. If the Calculation Agent replaces the applicable Index with a successor
index, then the Calculation Agent will determine the Cash Settlement Amount, Redemption Amount or Call Settlement Amount, as applicable,
by reference to the successor index.

 

    	 	9	 

    	 

    

 

If the Calculation Agent determines that the publication of the
applicable Index is discontinued, or if the Bank is unable to obtain or maintain a license to use the Index (or any applicable successor
index) in connection with the Securities, the Calculation Agent will determine the level of the Index and thus the Cash Settlement Amount,
Redemption Amount or Call Settlement Amount, as applicable, by a computation methodology that the Calculation Agent determines will as
closely as reasonably possible replicate the Index.

 

If the Calculation Agent determines that the Index, the Index
Constituents or the method of calculating the Index is changed at any time in any respect, including whether the change is made by the
Index Sponsor under its existing policies or following a modification of those policies, is due to the publication of a successor index,
is due to events affecting the Index Constituents or is due to any other reason and is not otherwise reflected in the level of the Index
by the Index Sponsor pursuant to the Index methodology, then the Calculation Agent will be permitted (but not required) to make such adjustments
in the Index or the method of its calculation as it believes are appropriate to ensure that the Index Closing Level used to determine
the Cash Settlement Amount, Redemption Amount or Call Settlement Amount, as applicable, is equitable.

 

If a Market Disruption Event with respect to this Security occurs
or is continuing on any Index Business Day (for purposes of this paragraph, the “date of determination”) or if a Market Disruption
Event with respect to this Security occurred or was continuing on the Index Business Day immediately preceding the date of determination,
then the Index Performance Factor for this Security on the date of determination will be determined as set forth in the pricing supplement
and product supplement.

 

To the extent a Market Disruption Event has occurred or is continuing
on an Averaging Date or on a Redemption Measurement Date, the closing Indicative Note Value for such Averaging Date or for such Redemption
Measurement Date will be determined by the Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which
a Market Disruption Event does not occur or is not continuing (the “Deferred Averaging Date”) irrespective of whether, pursuant
to such determination, the Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the postponement
described in the preceding sentence results in the closing Indicative Note Value being calculated on a day originally scheduled to be
an Averaging Date, for purposes of determining the closing Indicative Note Value on the Index Business Days during the Final Measurement
Period or Call Measurement Period, or on a Redemption Measurement Date, as applicable, the Calculation Agent or one of its affiliates,
as the case may be, will apply the closing Indicative Note Value for such Deferred Averaging Date (i) on the date(s) of the original Market
Disruption Event and (ii) such Averaging Date.

 

In no event, however, will any postponement pursuant to the two
immediately preceding paragraphs result in the final Averaging Date or the Redemption Measurement Date, as applicable, occurring more
than three Index Business Days following the day originally scheduled to be such final Averaging Date or Redemption Measurement Date.
If the third Index Business Day following the date originally scheduled to be the final Averaging Date, or the Redemption Measurement
Date, as applicable, is not an Index Business Day or a Market Disruption Event has occurred or is continuing on such third Index Business
Day, the Calculation Agent or one of its affiliates will determine the Index Closing Level to be used in the calculation of the closing
Indicative Note Value based on its good faith estimate of the Index Closing Level that would have prevailed on such third Index Business
Day but for such Market Disruption Event.

 

    	 	10	 

    	 

    

 

		4.	Payment at Maturity or Upon Repurchase

 

The payment of this Security that becomes due and payable on
the Maturity Date, Call Settlement Date or a Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem
this Security as provided herein under “Payment at Maturity,” “Payment Upon Redemption by the Holder” and “Payment
Upon Call by the Bank,” respectively. The payment of this Security that becomes due and payable upon acceleration of the Maturity
Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the payment as determined pursuant to Section 9
hereof. When the principal referred to in either of the two preceding sentences has been paid as provided herein (or such payment has
been made available), the principal of this Security shall be deemed to have been paid in full, whether or not this Security shall have
been surrendered for payment or cancellation. References to the payment at maturity or upon repurchase of this Security on any day shall
be deemed to mean the payment of cash that is payable on such day as provided in this Security. This Security shall cease to be Outstanding
as provided in the definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full
as provided above.

 

		5.	Procedure for Early Redemption

 

Prior to the Maturity Date, the Holder may elect to offer all
or a portion of the Principal Amount of this Security for redemption by the Bank on any Redemption Date, in a minimum of at least 25,000
Securities by following the procedures set forth below:

 

		·	cause its broker to deliver a Redemption Notice to the Bank via email no later than 2:00 p.m. (New York City time) on the Index Business
Day preceding the applicable Redemption Measurement Date;

 

		·	cause its broker to deliver the signed Redemption Confirmation to the Bank via e-mail in the specified form by 5:00 p.m. (New York
City time) on the same day. The Bank or its affiliate must acknowledge receipt in order for the Redemption Confirmation to be effective;

 

		·	cause its broker to instruct its DTC custodian book a delivery vs. payment trade with respect to this Security on the applicable Redemption
Measurement Date at a price equal to the Redemption Amount; and

 

		·	cause its broker to make its DTC custodian deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m. (New York
City time) on the applicable Redemption Date.

 

Any redemption instructions received in compliance with the foregoing
procedures shall be irrevocable and, upon compliance with the foregoing procedures, the Bank shall be obliged to repurchase the principal
amount of this Security so requested to be redeemed on the Redemption Date.

 

The Bank will act as paying agent in connection with repurchases
at the election of the Holder of this Security and upon such repurchase the Bank shall so advise the Trustee and deliver the Principal
Amount of this Security that is so repurchased to the Trustee for cancellation.

 

    	 	11	 

    	 

    

 

		6.	Role of Calculation Agent

 

BMO Capital Markets Corp., an affiliate of the Bank, will act
as the Calculation Agent for this Security. The Calculation Agent will make all determinations relating to this Security, including the
Index Performance Factor, the Index Closing Level on any Index Business Day on which such Index Closing Level is to be determined during
the term of this Security, the Indicative Note Value, the Long Index Amount, the Financing Level, the Daily Financing Charge, the Daily
Investor Fee, the Redemption Fee Amount, the Cash Settlement Amount, if any, the Redemption Amount, if any, and the Call Settlement Amount,
if any. The Calculation Agent will also be responsible for determining whether a Market Disruption Event has occurred, whether the Index
has been discontinued and whether there has been a material change in the Index. All determinations made by the Calculation Agent will
be at the sole discretion of the Calculation Agent and will, in the absence of manifest error, be conclusive for all purposes and binding
on the Holder and on the Bank. The Holder shall not be entitled to any compensation from the Bank for any loss suffered as a result of
any determinations or calculations made by the Calculation Agent.

 

The Calculation Agent will provide written notice to the Trustee
at its New York office, on which notice the Trustee may conclusively rely, of the amount to be paid at Maturity or Call, or upon early
redemption on or prior to 12:00 p.m., New York City time, on the Business Day immediately preceding the Maturity Date, any Redemption
Date or any Call Settlement Date, as applicable. Insofar as this Security provides for the Calculation Agent to determine the matters
specified in the preceding paragraph and all such other matters as may be specified elsewhere herein as matters to be determined by the
Calculation Agent, the Calculation Agent may do so from any source or sources of the kind contemplated or otherwise permitted hereby notwithstanding
that any one or more of such sources are the Calculation Agent, affiliates of the Calculation Agent or affiliates of the Bank.

 

		7.	Tax Characterization

 

By its purchase of this Security, the Holder, on behalf of itself
and any other Person having a beneficial interest in this Security, hereby agrees with the Bank (in the absence of a change in law or
administrative or judicial ruling to the contrary) to treat this Security as a pre-paid cash-settled derivative contract in respect of
the Index for all U.S. federal income tax purposes.

 

		8.	Payment

 

Payment of any amount payable on this Security will be made in
such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Payment will be made to an account designated by the Holder in writing to the Bank and the Trustee on or before any Redemption Date or
the last Index Business Day in the Call Measurement Period or the Final Measurement Period, as applicable, and acceptable to the Bank
or, if no such account is designated and acceptable as aforesaid, at the office or agency of the Bank maintained for that purpose in The
City of New York; provided, however, that payment on the Maturity Date, any Redemption Date or the Call Settlement
Date shall be made only upon surrender of this Security at such office or agency (unless the Bank waives surrender). Notwithstanding the
foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted
in said Indenture.

 

    	 	12	 

    	 

    

 

All dollar amounts related to determination of the Indicative
Note Value, the Daily Investor Fee, the Daily Financing Charge, the Financing Level, the Long Index Amount, the Redemption Amount and
Redemption Fee Amount, if any, the Call Settlement Amount, if any, and the Cash Settlement Amount, if any, may be rounded by the Calculation
Agent; and all dollar amounts paid on the aggregate Principal Amount of this Security will be rounded to the nearest cent, with one-half
cent rounded upward.

 

		9.	Default Amount Upon Acceleration of Maturity

 

In case an Event of Default with respect to this Security shall
have occurred and be continuing, the amount declared due and payable upon any acceleration of the maturity of this Security will be determined
by the Calculation Agent and will be an amount in cash equal to the Redemption Amount, calculated as if the date of acceleration were
the Redemption Measurement Date. For purposes of this calculation the Repurchase Fee Amount shall be $0.

 

		10.	Split or Reverse Split of the Securities

 

If the Bank or the Calculation Agent decides to initiate a split
or reverse split, the Calculation Agent will issue a notice to Holders announcing the split or reverse split, specifying the effective
date of the split or reverse split. The Calculation Agent will determine the ratio of such split or reverse split, as the case may be,
using relevant market indicia, and will adjust the terms of this Security accordingly. Any adjustment of the closing indicative value
will be rounded to eight decimal places.

 

In the case of a reverse split, the Bank reserves the right to
address odd numbers of Securities (commonly referred to as “partials”) in a manner determined by the Calculation Agent in
its sole discretion.

 

The minimum number of Securities an investor must offer for repurchase
under Section 5 hereof will not change as a result of any split or reverse split of this Security, but the stated Principal Amount of
the Securities corresponding to such minimum number will change.

 

		11.	Extension of Maturity.

 

The Maturity Date may be extended at the Bank’s option
for up to two additional five-year periods. The Bank may only extend the scheduled Maturity Date for five years at a time. If the Bank
exercises its option to extend the maturity of this Security, the Bank will notify DTC and the Trustee at least 45 but not more than 60 calendar
days prior to the then scheduled Maturity Date. The Bank will provide that notice to DTC and the Trustee in respect of each five-year
extension of the scheduled Maturity Date of this Security.

 

		12.	Payment When Offices Are Closed

 

Notwithstanding any provision of this Security or of the Indenture,
if, after giving effect to any provision of this Security governing the timing of payment hereunder of the payment at maturity, call or
redemption, payment of such amount would otherwise be due on this Security on a day (the “Specified Day”) that is not
a Business Day, such amount may be paid (or made available for payment) on the next succeeding Business Day with the same force and effect
as if such amount were paid on the Specified Day. The provisions of this Section shall apply to this Security in lieu of the provisions
of Section 113 of the Indenture.

 

    	 	13	 

    	 

    

 

		13.	Increases and Decreases of Principal Amount

 

At any time after the initial
issue date, the aggregate Principal Amount of this Security shall be the most recent amount set forth on Schedule I hereto under the heading
”Principal Amount of this Security Following Such Increase or Decrease”, if applicable. Upon receipt of a written instruction
from the Bank instructing the Trustee to issue more Securities represented by this Security and delivery of such Securities through the
DTC book-entry system, the Trustee shall make notations on Schedule I to evidence such issuance and the new aggregate Principal Amount
represented by this Security. 

 

The Bank may also instruct the
Trustee to cancel Securities held by the Bank represented by this Security. Upon delivery of the Securities to be cancelled through the
DTC book-entry system, the Trustee shall make notations on Schedule I to evidence such cancellation and the new aggregate Principal Amount
represented by this Security.

 

The Trustee may, as necessary,
add additional pages of the same format to Schedule I, to evidence additional issuances, cancellations and the aggregate Principal
Amount represented by this Security, which additional pages shall constitute part of this Security to the same extent as if they had been
part of this Security at the initial issuance and authentication hereof.

 

		14.	Reverse of this Security

 

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

 

		15.	Certificate of Authentication

 

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

 

    	 	14	 

    	 

    

 

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

 

	Dated:  June 24, 2022	Bank of Montreal
	 	 	 	 	 
	 	By:  	 	 
	 	 	Name:	Laurence Kaplan
	 	 	Title:	Managing Director, Cross Asset Solutions

 

 

 

 

 

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

 

 

Dated: June 24, 2022

 

	 	THE BANK OF NEW YORK MELLON
	 	as Trustee
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	Authorized Signatory	 

 

    	 	15	 

    	 

    

 

(Reverse of Security)

 

This Security is one of a duly authorized issue of securities
of the Bank (herein called the “Securities”), issued and to be issued in one or more series under the Senior Indenture (the
“Indenture”), dated as of January 25, 2010, between Bank of Montreal and Wells Fargo Bank, National Association, as trustee,
as supplemented by the first supplemental indenture thereto, dated as of September 23, 2018, between Bank of Montreal and Wells Fargo
Bank, National Association, as trustee, and the second supplemental indenture thereto, dated as of May 27, 2021, and the third supplemental
indenture thereto, dated as of May 26, 2022, among Bank of Montreal, The Bank of New York Mellon, as trustee with respect to the Senior
Medium-Term Notes, Series I, and Wells Fargo Bank, National Association, and as further amended from time to time), and reference is hereby
made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Bank, the
Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.
Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall control
for purposes of this Security.

 

The terms set forth in the sections “Summary” of
the pricing supplement and “Additional Terms of the Notes” of the product supplement (each as it may be amended or supplemented)
relating to the notes represented hereby are incorporated by reference herein, and are binding upon Holders of such notes.

 

This Security is one of the series designated on the face hereof
limited in aggregate principal amount to $100,000,000, provided that the Bank may, without the consent of any Holder, at any time and
from time to time, increase such principal amount if in the future it determines that it may wish to sell additional Securities of this
series. References herein to “this series” mean the series designated on the face hereof.

 

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

 

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

 

    	 	16	 

    	 

    

 

No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the Bank, which is absolute and unconditional, to pay the principal
of this Security as herein provided.

 

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

 

The Securities of this series are issuable only in registered
form without coupons in denominations of $25.00 and any integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this
series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

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

 

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

 

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

 

This Security is a Global Security and is subject to the provisions
of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global
Securities.

 

This Security and the Indenture shall be governed by and construed
in accordance with the laws of the State of New York. 

 

    	 	17	 

    	 

    

 

SCHEDULE I

 

The initial principal amount of this Security
is $4,000,000. The following increases or decreases in the Principal Amount of this Security have been made:

 

	Date	Amount of Increase in 

Principal Amount of 

this Security	Amount of Decrease in 

Principal Amount of 

this Security	Principal Amount of this 

Security Following Such 

Increase or Decrease	Initials of Officer 

of Trustee
	 	$	$	$	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

    	 	I-1	 

    	 

    

 

ANNEX A

 

 

FORM OF NOTICE OF EARLY REDEMPTION

 

To: [    ].com

 

Subject: Notice of Early Redemption, CUSIP No.: 06368J200

 

[BODY OF EMAIL]

 

Name of broker: [ ]

 

Name of beneficial holder: [ ]

 

Number of Notes to be redeemed: [ ]

 

Applicable Redemption Measurement Date: [ ], 20[ ]

 

Broker Contact Name: [ ]

 

Broker Telephone #: [ ]

 

Broker DTC # (and any relevant sub-account): [ ]

 

The undersigned acknowledges that in addition to any other requirements specified
in the pricing supplement relating to the notes being satisfied, the notes will not be redeemed unless (i) this notice of redemption is
delivered to BMO Capital Markets Corp. (“BMO Capital Markets”) by 2:00 p.m. (New York City time) on the Index Business Day
prior to the applicable Redemption Measurement Date; (ii) the confirmation, as completed and signed by the undersigned is delivered to
BMO Capital Markets by 5:00 p.m. (New York City time) on the same day the notice of redemption is delivered; (iii) the undersigned has
booked a delivery vs. payment (“DVP”) trade on the applicable Redemption Measurement Date, facing BMO Capital Markets DTC
5257 and (iv) the undersigned instructs DTC to deliver the DVP trade to BMO Capital Markets as booked for settlement via DTC at or prior
to 10:00 a.m. (New York City time) on the applicable Redemption Date.

 

The undersigned further acknowledges that the undersigned has read the section “Risk
Factors — You will not know the Redemption Amount at the time you elect to request that we redeem your notes” in the pricing
supplement relating to the notes and the undersigned understands that it will be exposed to market risk on the Redemption Measurement
Date.

 

 

A-1

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