Securities Law & Instruments

Headnote

MRRS Decision - Acquiror corporation to acquire common shares of reporting issuercorporation by way of amalgamation - Common shares to be converted into specialshares of corporation to be formed by the amalgamation of acquiring corporation withacquired corporation - Terms of special shares to provide for transfer of special sharesto parent (or a wholly-owned subsidiary) of acquiror upon "call" notice by acquiror -Transfer by holders of special shares to acquiror (or a wholly-owned subsidiary)exempted from registration requirement.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am, s. 25, 35(1) 17, 74(1).

Applicable Ontario Rules

Ontario Securities Commission Rule 45-501: Exempt Distributions


IN THE MATTER OF THE SECURITIES LEGISLATION OFBRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, NEW BRUNSWICK, PRINCE EDWARD ISLAND,NOVA SCOTIA, NEWFOUNDLAND, THE YUKON TERRITORY, THE NORTHWEST TERRITORIES AND NUNAVUT

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
UPM-KYMMENE CORPORATION AND REPAP ENTERPRISES INC.

MRRS DECISION DOCUMENT


WHEREAS the securities regulatory authority or regulator (collectively, the"Decision Makers") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, the Yukon Territory,the Northwest Territories and Nunavut (collectively, the "Jurisdictions") has received anapplication from UPM-Kymmene Corporation ("UPM-Kymmene") for a decision, pursuantto the securities legislation (the "Legislation") of each of the Jurisdictions, that theregistration requirement (the "Registration Requirement"), as such term is defined inNational Instrument 14-101, shall not apply to certain trades in securities made by theholders in connection with the acquisition by UPM-Kymmene of Repap Enterprises Inc.("Repap");

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS UPM-Kymmene has represented to the Decision Makers that:

1. Repap, a corporation incorporated under the laws of Canada, is a reporting issuer(or the equivalent) in each of the provinces of Canada. Common shares of Repapare listed on The Toronto Stock Exchange. The principal executive offices ofRepap are located in Stamford, Connecticut, U.S.A.

2. UPM-Kymmene is a corporation incorporated under the laws of Finland and has itsprincipal executive offices located in Helsinki, Finland.

3. UPM-Kymmene and Repap have entered into an acquisition agreement (the"Acquisition Agreement") pursuant to which UPM-Kymmene will acquire Repap ina transaction to be effected by way of an amalgamation (the "Amalgamation")between 3796477 Canada Inc. ("Acquireco"), a wholly-owned subsidiary of UPM-Kymmene, and Repap.

4. The Amalgamation requires the approval of 66 2/3 per cent of the votes cast byshareholders of Repap, for which a meeting of shareholders is scheduled to be heldon October 16, 2000. Upon completion of the Amalgamation, among other things,each issued and outstanding common share of Repap (other than those held bydissenting shareholders and other than those held by Acquireco, if any) will beconverted into one special share (collectively, the "Amalco Special Shares") of thecorporation ("Amalco") formed by the amalgamation of Acquireco and Repap.

5. The terms of the Amalco Special Shares require holders of the Amalco SpecialShares to transfer the Amalco Special Shares to UPM-Kymmene, or its wholly-owned subsidiary, upon notice being delivered by Amalco to those holders.Holders of Amalco Special Shares will be paid $0.20 for each such Amalco SpecialShare transferred.

6. The Acquisition Agreement provides that, on the effective date of the Amalgamationand following completion of the Amalgamation, UPM-Kymmene will acquire theAmalco Special Shares pursuant to their terms at $0.20 per share.

7. Following completion of the Amalgamation, the acquisition by UPM-Kymmene of theSpecial Shares and other transactions in connection therewith, Amalco will be awholly-owned subsidiary of UPM-Kymmene.

AND WHEREAS pursuant to the System, this MRRS Decision Document evidencesthe decision of each of Decision Makers (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that thetransfer by holders of their Amalco Special Shares to UPM Kymmene, or its wholly-ownedsubsidiary, pursuant to their terms, as described above, shall not be subject to theRegistration Requirement of the Legislation.

October 16th, 2000.

"Morley P. Carscallen"      "Robin W. Korthals"