Bank of Montreal - Re Share Option Agreement

RNS No 6329u
BANK OF MONTREAL
8th June 1998



LETTER TO:  COMPANY ANNOUNCEMENTS OFFICE

We are counsel to Bank of Montreal (the "Bank") in respect of a proposed
amalgamation between the Bank and the Royal Bank of Canada (the "Royal Bank")
under the Bank Act (Canada) (the "Amalgamation"). Each of the Bank and the Royal
Bank is a listed issuer by virtue of the secondary listing of its common shares
on the Exchange.

Further to our letter dated February 3, 1998, in which we provided notification
to the Exchange, regarding the Common Share Option Agreement and the Preferred
Share Option Agreement (each as defined in that letter), the Bank and Royal Bank
have entered into amended and restated versions of each of those agreements and
filed copies of those agreements with, among others, the Canadian stock
exchanges on which the Bank has its primary listing.

Accordingly, pursuant to sections 17.22 and 17.30 of the Exchange's Listing
Rules, enclosed are copies of the amended and restated versions of each of the
Common Share Option Agreement and the Preferred Share Option Agreement.

As indicated in our letter dated February 3, 1998, as the Common Share Option
and the Preferred Share Option only become exercisable in certain circumstances,
which may never occur, the Bank does not propose to apply for listing of the
Bank Common Shares issuable under the Common Share Option Agreement or the
Preferred Share Option Agreement at this time. Should the circumstances warrant
it, the Bank would apply for listing of such Bank Common Shares within the time
period set out in section 17.64.of the Exchange's Listing Rules.

If you have any questions concerning the foregoing, please contact the writer on
0171 214 4603.


LETTER FROM: Robert T. Stuart 
             OSLER HOSKIN & HARCOURT


                 AMENDED AND RESTATED BANK OF MONTREAL 
                     COMMON SHARE OPTION AGREEMENT


BANK OF MONTREAL COMMON SHARE OPTION AGREEMENT, dated as of January 23, 1998
(the "Agreement") by and between Bank of Montreal ("Issuer") and Royal Bank of
Canada ("Grantee"), as amended as of February 28, 1998.

WHEREAS, Grantee and Issuer are concurrently herewith entering into an agreement
dated as of the date hereof (the "Merger Agreement"; capitalized terms not
defined herein shall have the meanings set forth in the Merger Agreement),
providing for, among other things, the amalgamation of Grantee and Issuer to
continue as a single amalgamated bank;

WHEREAS, as a condition of, and in consideration for, Grantee's willingness to
enter into the Merger Agreement and the Royal Bank Share Option Agreements,
Grantee has requested that Issuer agree, and Issuer has agreed, to grant Grantee
the Option (as defined below) and that certain option to purchase Bank of
Montreal Class A Preferred Shares pursuant to that certain option agreement (the
"Bank of Montreal Preferred Share Option Agreement") dated January 23, 1998 (the
"Bank of Montreal Preferred Share Option");

WHEREAS, as a condition of, and in consideration for, Issuer's willingness to
enter into the Merger Agreement, this Agreement and the Bank of Montreal
Preferred Share Option Agreement, Issuer has requested that Grantee agree, and
Grantee has agreed, to grant Issuer options to purchase common shares of Grantee
on substantially the same terms as the Option and to purchase certain other
capital shares of Grantee on substantially the same terms as the Bank of
Montreal Preferred Share Option;

WHEREAS, the grant of the Option herein is subject to the receipt of all
regulatory approvals in respect of the granting thereof, including approval of
the relevant Stock Exchanges;

WHEREAS, the relevant Stock Exchanges have approved the granting of the Option
subject to certain amendments thereto (the "Amendments");

WHEREAS, the parties have agreed to amend this Agreement to include the
Amendments;

WHEREAS, this Agreement supersedes and replaces the Bank of Montreal Common
Share Option Agreement dated as of January 23, 1998; and



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