AMENDING AGREEMENT
AMENDING AGREEMENT made the 12th day of September, 2000
B E T W E E N :
UPM-KYMMENE CORPORATION,
a corporation existing under the laws of Finland
("UPM")
- and -
REPAP ENTERPRISES INC.,
a corporation existing under the laws of Canada
("Repap").
RECITALS:
A. UPM and Repap have entered into an acquisition agreement made as of
August 28, 2000 (the "Acquisition Agreement").
B. The parties wish to amend the Acquisition Agreement on the terms set
out herein.
NOW THEREFORE, for good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged by each of the parties) the parties agree as
follows:
1. For the purposes of this Amending Agreement, capitalized terms not
otherwise defined in this Amending Agreement shall, unless inconsistent
with the context hereof, have the meaning set out in the Acquisition
Agreement.
2. Section 1.1 of the Acquisition Agreement is hereby amended by adding
the following definition immediately after the definition of "Amalco":
""Amalco Preferred Shares" means the Preferred Shares, Series
C and the Preferred Shares, Series F in the capital of Amalco,
which will contain the same terms as the Repap Preferred
Shares;"
3. The definition of "Amalco Special Shares" in Section 1.1 of the
Acquisition Agreement is hereby deleted in its entirety and replaced
with the following:
""Amalco Special Shares" means the special shares of Amalco
which pursuant to their terms shall be transferred, or deemed
to be transferred, to UPM or to a wholly-owned subsidiary of
UPM at the Call Price on the Effective Date;"
4. Section 1.1 of the Acquisition Agreement is hereby amended by adding
the following definition immediately after the definition of "Business
Day":
""Call Price" means Cdn. $0.20 per Amalco Special Share or
such greater amount established in accordance with Section
4.6;"
5. Section 1.1 of the Acquisition Agreement is hereby amended by deleting
in its entirety the definition of "Redemption Date".
6. Section 1.1 of the Acquisition Agreement is hereby amended by deleting
in its entirety the definition of "Redemption Price".
7. Section 3.2(d) of the Acquisition Agreement is hereby deleted in its
entirety and replaced with the following:
"(d) Necessary Funds. UPM has or has access to the funds
necessary to acquire the Amalco Special Shares pursuant to
their terms and the Amalco Preferred Shares as contemplated in
this Agreement."
8. Section 4.3(h) of the Acquisition Agreement is hereby deleted in its
entirety and replaced with the following:
"(h) acquire the Amalco Special Shares pursuant to their
terms at the Call Price and offer to purchase the
Amalco Preferred Shares at their redemption price of
Cdn. $25.00 per share on the Effective Date following
the completion of the Amalgamation."
9. Section 6.3(3)(c) of the Acquisition Agreement is hereby amended by
adding ")" immediately following the word "termination" in such
section.
10. Schedule A of the Acquisition Agreement is hereby deleted in its
entirety and replaced with Schedule A attached to this Amending
Agreement.
11. Schedule C of the Acquisition Agreement is hereby amended by deleting
in its entirety the fourth paragraph preceded by a "bullet" under the
heading "Canada" and replacing it with the following:
"approval of The Toronto Stock Exchange for the listing of the
Repap Common Shares issuable upon the exercise of the Option
and for the listing of the Amalco Special Shares"
12. All other provisions contained in the Acquisition Agreement and not
explicitly amended as provided for herein remain the same and are
hereby agreed to be in full force and effect.
13. For greater certainty and without limiting the generality of the
foregoing, this Amending Agreement shall terminate at the same time and
in the same manner as the Acquisition Agreement terminates as is
provided for in Section 6.3 of the Acquisition Agreement.
14. This Amending Agreement shall be binding upon and shall enure to the
benefit of the parties hereto and their respective successors and
permitted assigns and no third party shall have any rights hereunder.
15. This Amending Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Amending
Agreement as of the date first written above.
UPM-KYMMENE CORPORATION
By: /s/ Jaakko Palsanen
----------------------------------
Authorized Signing Officer
By: /s/ Sakari Lahdelma
----------------------------------
Authorized Signing Officer
REPAP ENTERPRISES INC.
By: /s/ Stephen C. Larson
----------------------------------
Authorized Signing Officer
<PAGE>
SCHEDULE A
AMALGAMATION AGREEMENT
THIS AMALGAMATION AGREEMENT is made as of o, 2000
BETWEEN:
REPAP ENTREPRISES INC.,
a corporation existing under the Canada Business
Corporations Act
("Repap")
- and -
3796477 CANADA INC.,
a corporation incorporated under the Canada Business
Corporations Act
("Acquireco").
RECITALS:
A. Repap and Acquireco have agreed to amalgamate pursuant to the Canada
Business Corporations Act and upon the terms and conditions set forth
in this Agreement;
B. The authorized capital of Repap consists of an unlimited number of
Repap Common Shares and an unlimited number of Preferred Shares of
which, as of the date hereof, there are 743,960,637 Repap Common Shares
(and no more) and 240,000 Preferred Shares, Series C and 400,000
Preferred Shares, Series F (and no more) and no Preferred Shares of any
other series, issued and outstanding;
C. The authorized capital of Acquireco consists of an unlimited number of
common shares; and
D. It is desirable that this amalgamation be effected.
NOW THEREFORE in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) the parties agree as follows:
1. Interpretation
In this Agreement:
"Acquireco Common Shares" means the common shares in the capital of
Acquireco;
"Act" means the Canada Business Corporations Act;
"Affiliate" means an affiliated body corporate within the meaning of
section 1(2) of the Act;
"Agreement" means this amalgamation agreement, and the expressions
"hereof", "herein", "hereto", "hereunder", "hereby" and similar
expressions refer to this agreement;
"Amalco" means the corporation continuing as a result of the
Amalgamation;
"Amalco Special Shares" means the special shares in the capital of
Amalco having the rights, privileges, restrictions and conditions set
forth in Schedule 1;
"Amalco Preferred Shares" means the preferred shares in the capital of
Amalco, issuable in series, having the rights, privileges, restrictions
and conditions set forth in Schedule 1;
"Amalco Preferred Shares, Series C" means the preferred shares, series
C in the capital of Amalco having the rights, privileges, restrictions
and conditions set forth in Schedule 1;
"Amalco Preferred Shares, Series F" means the preferred shares, Series
F in the capital of Amalco having the rights, privileges, restrictions
and conditions set forth in Schedule 1;
"Amalco Special Shares" means the special shares in the capital of
Amalco having the rights, privileges, restrictions and conditions set
forth in Schedule 1;
"Amalgamating Corporations" means Repap and Acquireco;
"Amalgamation" means the amalgamation of the Amalgamating Corporations
as contemplated in this Agreement;
"Business Day" means any day on which commercial banks are generally
open for business in Toronto, Ontario and Helsinki, Finland other than
a Saturday, a Sunday or a day observed as a holiday in Toronto, Ontario
or in Helsinki, Finland under applicable laws;
"Dissenting Shareholder" means a registered holder of Repap Shares who,
in connection with the special resolution of the shareholders which
approves and adopts this Agreement, has exercised the right to dissent
under section 190 of the Act in compliance with the provisions thereof
and thereby becomes entitled to receive the fair value of his or her
Repap Shares;
"Effective Date" means the date shown on the certificate of
amalgamation to be issued by the Director under the Act giving effect
to the Amalgamation;
"Record Date" means the record date for the Meeting;
"Redemption Consideration" means Cdn. $.20 per Amalco Special Share;
"Redemption Date" means the Effective Date;
"Repap Common Shares" means the common shares in the capital of Repap;
"Repap Meeting" means the special meeting of Repap shareholders to be
held to consider the approval of the special resolution which approves
and adopts this Agreement;
"Repap Preferred Shares, Series C" means the preferred shares, series C
in the capital of Repap ;
"Repap Preferred Shares, Series F" means the preferred shares, series F
in the capital of Repap; and
"Repap Shares" means the Repap Common Shares, Repap Preferred Shares,
Series C and Repap Preferred Shares, Series F.
Words and phrases used but not defined in this Agreement and defined in
the Act shall have the same meaning in this Agreement as in the Act unless the
context or subject matter otherwise requires.
2. Agreement to Amalgamate
The Amalgamating Corporations hereby agree to amalgamate as of the
Effective Date and to continue as one corporation on the terms and conditions
set out in this Agreement.
3. Name
The name of Amalco shall be 3796477 Canada Inc.
4. Registered Office
The registered office of Amalco shall be c/o Osler, Hoskin & Harcourt
LLP, P.O. Box 50, 1 First Canadian Place, Toronto, Ontario, M5X 1B8.
5. Authorized Capital
Amalco shall be authorized to issue an unlimited number of Amalco
Common Shares, an unlimited number of Amalco Special Shares and an unlimited
number of Amalco Preferred Shares, issuable in series. The rights, privileges,
restrictions and conditions attaching to each class of shares of Amalco shall be
as described in Schedule 1 to this Agreement.
6. Private Company Restrictions
Effective immediately upon UPM-Kymmene Corporation becoming the sole
holder of shares of Amalco:
(a) the right to transfer shares of Amalco shall be restricted in
that no share shall be transferred except with the consent of
the board of directors of Amalco, to be expressed either by a
resolution passed at a meeting of the board of directors or by
an instrument or instruments in writing signed by a majority
of the directors; and
(b) the number of shareholders of Amalco, exclusive of persons who
are in its employment or the employment of an affiliate and
exclusive of persons who, having been formerly in the
employment of Amalco were, while in that employment, and have
continued after the termination of that employment to be,
shareholders of Amalco, shall be limited to not more than
fifty. Two or more persons who are the joint registered owners
of one of more shares shall be counted as one shareholder.
(c) Any invitation to the public to subscribe for securities of
Amalco is prohibited. For the purposes hereof, the issuance of
Amalco Special Shares, Amalco Preferred Shares and Amalco
Common Shares upon the Amalgamation shall not constitute an
invitation to the public to subscribe for securities of
Amalco.
7. Restrictions on Business
There shall be no restrictions on the business which Amalco is
authorized to carry on.
8. Number of Directors
The board of directors of Amalco shall, until otherwise changed in
accordance with the Act, consist of a minimum number of one and a maximum number
of 5 directors. The number of directors of Amalco shall initially be 3 and the
directors of Amalco shall be empowered to determine from time to time the number
of directors of Amalco within the said minimum and maximum numbers provided for
in the Articles of Amalco, as the same may be amended from time to time.
9. Initial Directors
The first directors of Amalco shall be the persons whose names and
residential addresses appear below;
Name Municipality of Residence Resident Canadian
-- -- [yes/no]
Such directors shall hold office until the next annual meeting of
shareholders of Amalco or until their successors are elected or appointed.
10. By-Laws
The by-laws of Amalco, until repealed, amended or altered, shall be the
by-laws of Repap.
11. Amalgamation
On the Effective Date:
(a) each issued and outstanding Repap Common Share (other than
those held by Dissenting Shareholders and other than those
held by Acquireco, if any) will be converted into one Amalco
Special Share;
(b) each issued and outstanding Repap Common Share held by
Acquireco will be cancelled;
(c) each issued and outstanding Acquireco Common Share will be
converted into one Amalco Common Share;
(d) each issued and outstanding Repap Preferred Share, Series C
will be converted into one Amalco Preferred Share, Series C;
(e) each issued and outstanding Repap Preferred Share, Series F
will be converted into one Amalco Preferred Share, Series F;
and
(f) Dissenting Shareholders will be entitled to be paid the fair
value of their Common Shares.
12. Stated Capital Accounts
There shall be added to the stated capital account in the accounting
records of Amalco maintained for:
(a) the Amalco Special Shares, an amount equal to the number of
Amalco Special Shares issued on the Amalgamation multiplied by
Cdn. $.20;
(b) the Amalco Preferred Shares, Series C, an amount equal to the
aggregate stated capital of each Repap Preferred Share, Series
C changed into an Amalco Preferred Share, Series C on the
Amalgamation;
(c) the Amalco Preferred Shares, Series F, an amount equal to the
aggregate stated capital of each Repap Preferred Share, Series
F changed into an Amalco Preferred Share, Series F on the
Amalgamation; and
(d) the Amalco Common Shares, an amount equal to the amount by
which the aggregate stated capital attributable to the Repap
Common Shares (other than those held by Acquireco or any
Affiliate, if any) and the Acquireco Common Shares exceeds the
amount added to the stated capital account maintained for the
Amalco Special Shares in accordance with this section.
The amount of stated capital attributable to the Amalco Common Shares
shall be adjusted to reflect payments that may be made to Dissenting
Shareholders.
13. Share Certificates
No certificates shall be issued in respect of the Amalco Special Shares
and such shares shall be evidenced by the certificates representing Repap Common
Shares. No certificates shall be issued in respect of the Amalco Preferred
Shares, Series C or the Amalco Preferred Shares, Series F and such shares shall
be evidenced by certificates representing Repap Preferred Shares, Series C and
Repap Preferred Shares, Series F respectively.
14. Contribution of Assets
Each of Repap and Acquireco shall contribute to Amalco all its assets,
subject to its liabilities, as such exist immediately before the Effective Date.
15. Property of Amalco
Amalco shall posses all the property, rights, privileges and franchises
and shall be subject to all the liabilities, contracts, disabilities and debts
of each of the Amalgamating Corporations as such exist immediately before the
Effective Date.
16. Rights of Creditors
All rights of creditors against property, rights and assets of each of
the Amalgamating Corporations and all liens upon their property, rights and
assets shall be unimpaired by the Amalgamation and all debts, contracts,
liabilities and duties of each of the Amalgamating Corporations shall
thenceforth attach to Amalco and may be enforced against it.
17. General Conditions Precedent
The respective obligations of the parties hereto to consummate the
transactions contemplated hereby, and in particular the Amalgamation, are
subject to the satisfaction, on or before the Effective Date, of the following
conditions any of which may be waived by the mutual consent of such parties
without prejudice to their rights to rely on any other or others of such
conditions:
(a) this Agreement and the transactions contemplated hereby,
including in particular the Amalgamation, shall have been
approved by:
(i) the common shareholder of Acquireco; and
(ii) not less than two-thirds of the votes cast by the
holders of Repap Shares who, being entitled to do so,
vote in person or by proxy at the Repap Meeting in
accordance with the provisions of the Act and in
accordance with other applicable regulatory
requirements; and
(b) there shall not be in force any order or decree restraining or
enjoining the consummation of the transactions contemplated by
this Agreement, including, without limitation, the
Amalgamation.
18. Termination
This Agreement may, prior to the issuance of a certificate of
Amalgamation, be terminated by the board of directors of Repap or Acquireco
notwithstanding the approval thereof by the shareholders of Repap and Acquireco.
19. Dissenting Shareholders
Repap Shares which are held by a Dissenting Shareholder shall not be
converted into Amalco Special Shares. However, in the event that a holder of
Repap Shares fails to perfect or effectively withdraws such shareholder's claim
under section 190 of the Act or forfeits such shareholder's rights to make a
claim under section 190 of the Act or his rights as a shareholder of Repap are
otherwise reinstated, (i) such shareholder's Repap Common Shares shall thereupon
be deemed to have been converted as of the Effective Date into Amalco Special
Shares, (ii) such shareholder's Repap Preferred Shares, Series C shall thereupon
be deemed to have been converted as of the Effective Date into Amalco Preferred
Shares, Series C and (iii) such shareholder's Repap Preferred Shares, Series F
shall thereupon be deemed to have been converted as of the Effective Date into
Amalco Preferred Shares, Series F, in each case, on the basis set forth in
paragraph 11 hereof.
20. Filing Documents
Upon the shareholders of each of the Amalgamating Corporations
approving this Agreement by special resolution in accordance with the Act and
subject to the other provisions of this Agreement, the Amalgamating Corporations
shall jointly file with the Director under the Act articles of amalgamation and
such other documents as may be required.
21. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
22. Counterparts
This Agreement may be signed in counterparts and each such counterpart
shall constitute an original document and such counterparts, taken together,
shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement.
REPAP ENTERPRISES INC.
By:
----------------------------------
Authorized Signing Officer
3796477 CANADA INC.
By:
----------------------------------
Authorized Signing Officer
