Document:

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 OfficerSeptember 12, 2000

TO:      UPM-KYMMENE CORPORATION
         ETELAESPLANADI 2
         FIN - 00101
         HELSINKI, FINLAND

Dear Sirs:

RE:      ACQUISITION OF REPAP ENTERPRISES INC.

In  consideration  of  UPM-Kymmene  Corporation  ("UPM-KYMMENE")  agreeing in an
acquisition  agreement dated as of August 28, 2000, as amended (the "Acquisition
Agreement"): (i) to cause its wholly-owned subsidiary, Acquireco, to participate
in an amalgamation  with Repap Enterprises Inc.  ("REPAP") (the  "Transaction"),
and (ii)  thereafter,  on the  Effective  Date of the  Transaction,  to acquire,
directly or through a wholly-owned subsidiary, the Amalco Special Shares and the
Amalco  Preferred  Shares,  George S. Petty  Management Ltd. and 1211423 Ontario
Inc. (collectively, the "SHAREHOLDER") undertakes to take certain actions and do
certain  things in  respect  of the  Transaction  on the terms set forth in this
letter agreement (the "Agreement").

The terms of the  Transaction  are summarized in the  Acquisition  Agreement and
terms used herein and not otherwise defined shall have the meanings set forth in
the  Acquisition  Agreement.  A copy of the  Acquisition  Agreement  is attached
hereto as Schedule 1.

1.   REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER AND UPM-KYMMENE

1.1  The  Shareholder  hereby  represents and warrants to you (and  acknowledges
     that you are relying upon such representations and warranties):

     (a)  that the common  shares  and the  preferred  shares in the  capital of
          Repap set forth on Schedule 2 to this Agreement (the "SHARES") include
          all common  shares and preferred  shares held of record,  beneficially
          owned by, or for which voting or  dispositive  power is granted to the
          Shareholder  or to any trust or  associate  thereof for the benefit of
          the  Shareholder.  The Shareholder has sole voting power,  and, unless
          otherwise stated, has exclusive right of disposition and sole power to
          agree  to all  of  the  matters  set  forth  in  this  Agreement.  The
          Shareholder  or other  owners of such  Shares has good and  marketable
          title to its Shares,  free and clear of any and all liens,  hypothecs,
          pledges, mortgages, charges, restrictions, security interests, adverse
          claims  and  demands  or  rights  of  others  of any  nature  or  kind
          whatsoever  ("ENCUMBRANCES"),  except as otherwise noted on Schedule 2
          (which Encumbrances will be fully and completely  discharged as of the
          Effective Date).  Other than the Shares, no common shares or preferred
          shares  or  securities  of Repap  convertible  into  common  shares or
          preferred  shares are  beneficially  owned or controlled,  directly or
          indirectly, by the Shareholder;

     (b)  the  Shareholder  has the legal  capacity to execute and deliver  this
          Agreement and to consummate the transactions contemplated hereby. This
          Agreement  has been duly  executed and  delivered by the  Shareholder,
          and,  assuming  the  due  authorization,  execution  and  delivery  by
          UPM-Kymmene,  this Agreement  constitutes the legal, valid and binding
          obligation of the  Shareholder,  enforceable  against it in accordance
          with its terms, subject to laws of general application and bankruptcy,
          insolvency  and  other  similar  laws  affecting   creditors'   rights
          generally and general principles of equity;

     (c)  neither  the  execution   and  delivery  of  this   Agreement  by  the
          Shareholder,  the  consummation by the Shareholder of the transactions
          contemplated  hereby nor the compliance by the Shareholder with any of
          the  provisions  hereof  shall:  (i)  result  in  any  breach  of,  or
          constitute  a default  (or an event which with notice or lapse of time
          or both would become a default) (or give rise to any third party right
          of termination,  cancellation,  material modification or acceleration)
          under any of the terms,  conditions or  provisions  of any note,  loan
          agreement, bond, mortgage,  indenture,  contract,  license, agreement,
          lease,   permit  or  other  instrument  or  obligation  to  which  the
          Shareholder  is a party  or by  which  the  Shareholder  or any of its
          properties or assets (including its Shares) may be bound, (ii) require
          on the part of the Shareholder any filing with (other than pursuant to
          the requirements of applicable  securities  legislation (which filings
          the Shareholder will undertake)) or permit, authorization,  consent or
          approval of, any Governmental  Entity,  or (iii) subject to compliance
          with any orders or laws  contemplated  by the  Acquisition  Agreement,
          violate  any  order,  writ,  injunction,  decree,  judgment,  or  Laws
          applicable  to the  Shareholder  or any of its  properties  or assets,
          excluding from the foregoing such  violations,  breaches,  defaults or
          failures  to make any filing or to obtain any  permit,  authorization,
          consent or approval which would not, individually or in the aggregate,
          impair the ability of the  Shareholder to consummate the  transactions
          contemplated hereby;

     (d)  that there is no private or  governmental  action,  suit,  proceeding,
          claim,  arbitration or  investigation  pending before any Governmental
          Entity,  or, to the knowledge of the Shareholder,  threatened  against
          the Shareholder or any of its properties that,  individually or in the
          aggregate,  could  reasonably  be expected to have a material  adverse
          effect on the  Shareholder's  ability to consummate  the  transactions
          contemplated by this Agreement.  There is no judgment, decree or order
          against  the  Shareholder  that  could  prevent,   enjoin,   alter  or
          materially  delay  any  of  the  transactions   contemplated  by  this
          Agreement,  or that could  reasonably  be  expected to have a material
          adverse  effect  on  the  Shareholder's   ability  to  consummate  the
          transactions contemplated by this Agreement; and

     (e)  the  Shareholder  has not  previously  granted  or agreed to grant any
          proxy or other right to vote in respect of its Shares or entered  into
          any voting trust,  nor pooling or other  agreement with respect to the
          right to vote, to call meetings of shareholders or to give consents or
          approvals  of any kind as to its  Shares  except  those  which  are no
          longer of any force or effect.

1.2  UPM-Kymmene   hereby  represents  and  warrants  to  the  Shareholder  (and
     acknowledges that the Shareholder is relying upon such  representations and
     warranties):

     (a)  that  UPM-Kymmene is a company duly  incorporated and validly existing
          under the laws of Finland; and

     (b)  that  UPM-Kymmene  has the requisite power and authority to enter into
          this Agreement and to consummate the transactions contemplated hereby,
          and that this Agreement  constitutes the valid and binding  obligation
          of UPM-Kymmene. This Agreement has been duly executed and delivered by
          UPM-Kymmene  and,  assuming  the due  execution  and  delivery  by the
          Shareholder,  is enforceable  against it in accordance with its terms,
          subject to laws of general application and bankruptcy,  insolvency and
          other similar laws affecting  creditors'  rights generally and general
          principles of equity.

2.   VOTING RIGHTS

2.1  The  Shareholder  hereby  represents and warrants to you and covenants with
     you that,  between the date of this  Agreement  and the earlier of: (a) the
     date of termination  of the  Acquisition  Agreement in accordance  with its
     terms, (b) the date of termination of this Agreement in accordance with its
     terms;  and (c) the Effective  Date of the  Transaction  (such earlier date
     being the "EXPIRY DATE"),  the Shareholder  shall not: (i) sell,  transfer,
     gift, assign, pledge, hypothecate,  encumber or otherwise dispose of any of
     its Shares or enter into any  agreement,  arrangement or  understanding  in
     connection  therewith,  without  having first  obtained  the prior  written
     consent of UPM-Kymmene,  or (ii) except as contemplated  herein,  grant any
     proxies or powers of  attorney,  deposit its Shares into a voting  trust or
     enter into a voting agreement, understanding or arrangement with respect to
     such Shares,  without  having first  obtained the prior written  consent of
     UPM-Kymmene.

2.2  The Shareholder  agrees that, until the Expiry Date, it shall not, directly
     or indirectly, negotiate with, solicit, initiate or encourage submission of
     proposals  or offers from,  or provide  information  to, any other  person,
     entity or group relating to an Acquisition Proposal or any Shares.

2.3  The Shareholder hereby irrevocably undertakes, until the Expiry Date:

     (a)  to vote (or cause to be voted)  all the  Shares at any  meeting of the
          shareholders  of Repap,  and in any action by  written  consent of the
          shareholders  of  Repap:  (i)  in  favour  of the  approval,  consent,
          ratification and adoption of the Transaction (and any actions required
          in  furtherance  thereof);  and (ii)  against  any  action  that would
          impede, interfere or discourage the Transaction (including for greater
          certainty in favour of any Superior  Proposal)  and against any action
          that would  result in any breach of any  representation,  warranty  or
          covenant  of  Repap in the  Acquisition  Agreement.  Upon the  written
          request or direction of UPM-Kymmene,  the Shareholder  shall execute a
          form of proxy (effective only until the Expiry Date) in respect of any
          such  resolution  appointing such person or persons as UPM-Kymmene may
          request  or direct as proxy for such  Shareholder,  with full power of
          substitution,  to attend,  vote and otherwise act for and on behalf of
          the  Shareholder  in  respect of all Shares and in respect of all such
          matters which may come before a meeting of the  shareholders  of Repap
          relating to the Transaction (other than any change in the terms of the
          Transaction  which would decrease the value of the consideration to be
          received by the  Shareholder)  including any action that would impede,
          interfere or discourage the Transaction and the Shareholder  shall not
          be responsible for the voting under such proxy; and

     (b)  not to, without the prior written consent of UPM-Kymmene,  requisition
          or join in the requisition of any meeting of the shareholders of Repap
          for the purpose of considering  any resolution  with respect to any of
          the matters referred to in subsection 2.3(a).

3.   SUPERIOR PROPOSAL

3.1  In the event that a  Superior  Proposal  is made,  announced  or  otherwise
     disclosed  to  Repap's  shareholders  on or prior to the Expiry  Date,  and
     either:

     (a)  the Match  Period (as  defined in  Section  4.6(1) of the  Acquisition
          Agreement) has expired without UPM-Kymmene having offered to amend the
          terms of the  Acquisition  Agreement as contemplated by Section 4.6(2)
          of the Acquisition Agreement; or

     (b)  the Match Period has expired,  and the Board of Directors of Repap has
          rejected an offer to amend the terms of the Acquisition Agreement made
          by UPM-Kymmene in accordance  with the provisions of Section 4.6(2) of
          the Acquisition Agreement;

     the  Shareholder  shall have the right to  terminate  this  Agreement  upon
     notice to UPM-Kymmene.

4.   COVENANTS

4.1  The Shareholder agrees:

     (a)  to details of this Agreement being set out in any information circular
          produced  by,  or any  filing  to be made  with the OSC or the SEC by,
          Repap and/or UPM-Kymmene in connection with the Transaction;

     (b)  to this Agreement being filed as an exhibit to any document filed with
          the OSC or the SEC or otherwise  being available for inspection to the
          extent required by Law; and

     (c)  that an award of monetary  damages would not be an adequate remedy for
          any loss incurred by reason of any breach of this  Agreement and that,
          in the event of any breach or threatened  breach of this  Agreement by
          the  Shareholder,  UPM-Kymmene  will be entitled to equitable  relief,
          including  injunctive relief and specific  performance.  Such remedies
          will not be the exclusive remedies for any breach or threatened breach
          of this  Agreement by the  Shareholder  but will be in addition to all
          other remedies available at law or in equity to UPM-Kymmene.

4.2  UPM-Kymmene  agrees not to amend the definition of the term "Outside Date",
     section 2.4,  subsection  6.3(1),  subsection  6.3(2),  clause 6.3(3)(d) or
     subsection  6.3(4) of the Acquisition  Agreement  without the prior written
     consent  of the  Shareholder,  which  consent  shall  not  be  unreasonably
     withheld.

4.3  The Shareholder  agrees,  until the Expiry Date, not to exercise any rights
     of dissent.

5.   SALE OF PREFERRED SHARES

5.1  If the Transaction is consummated, UPM-Kymmene or a wholly-owned subsidiary
     of UPM-Kymmene  will offer to purchase and the  Shareholder  agrees to sell
     the Amalco  Preferred  Shares which it will receive on the  amalgamation of
     Acquireco and Repap to UPM-Kymmene,  or a wholly-owned  subsidiary thereof,
     at a price of Cdn. $25.00 per share, as provided in paragraph 4.3(h) of the
     Acquisition Agreement.

6.   MISCELLANEOUS

6.1  The headings in this  Agreement are for reference only and shall not affect
     the meaning or interpretation of this Agreement.

6.2  This Agreement  (including the Schedules  attached hereto)  constitutes the
     entire  agreement and supersedes all prior  agreements and  understandings,
     both oral and written, among the parties with respect to the subject matter
     hereof.

6.3  Any  provision in this  Agreement may be amended or waived if, and only if,
     such  amendment  or  waiver is in  writing  and  signed,  in the case of an
     amendment,  by the  Shareholder and UPM-Kymmene or in the case of a waiver,
     by the party  against  whom the  waiver is to be  effective.  No failure or
     delay by any party in exercising  any right,  power or privilege  hereunder
     shall operate as a waiver thereof nor shall any single or partial  exercise
     thereof preclude any other or further exercise.

6.4  Any date,  time or period  referred  to in this  Agreement  shall be of the
     essence except to the extent to which UPM-Kymmene and the Shareholder agree
     in writing  to vary any date,  time or  period,  in which  event the varied
     date, time or period shall be of the essence.

6.5  Each of  UPM-Kymmene  and  the  Shareholder  shall  bear  its own  expenses
     incurred  in  connection   with  this   Agreement   and  the   transactions
     contemplated hereby.

6.6  All notices,  requests,  claims, demands and other communications hereunder
     shall be in  writing  and shall be given  (and shall be deemed to have been
     duly given upon receipt) by delivery in person, by telecopy,  or facsimile,
     or by a nationally  recognized courier service to the respective parties at
     their addresses as specified in Schedule 3 hereto.

6.7  If any term or other  provision of this  Agreement  is invalid,  illegal or
     incapable of being enforced by any rule of law or public policy,  all other
     conditions and provisions of this Agreement  shall  nevertheless  remain in
     full force and effect so long as the  economic or legal  substance  of this
     Agreement  is not affected in any manner  materially  adverse to any party.
     Upon  such  determination  that  any term or other  provision  is  invalid,
     illegal or incapable of being enforced,  the parties hereto shall negotiate
     in good faith to modify this Agreement so as to effect the original  intent
     of the parties as closely as possible  in a mutually  acceptable  manner in
     order that the terms of this Agreement remain as originally contemplated to
     the fullest extent possible.

6.8  The  provisions  of this  Agreement  shall be binding upon and enure to the
     benefit of the parties hereto and their respective successors and permitted
     assigns,  provided that no party may assign, delegate or otherwise transfer
     any of its rights,  interests or obligations  under this Agreement  without
     the  prior  written  consent  of  the  other  party  hereto,   except  that
     UPM-Kymmene may assign,  delegate or otherwise  transfer any of its rights,
     interests or obligations under this Agreement to a wholly-owned subsidiary,
     without reducing its own obligations hereunder,  without the consent of the
     Shareholder.

6.9  This  Agreement  is governed by the laws of the Province of Ontario and the
     federal  laws  of  Canada  applicable   therein.   The  Shareholder  hereby
     irrevocably  attorns to the  jurisdiction  of the Courts of the Province of
     Ontario and  irrevocably  agrees that the Courts of the Province of Ontario
     are to have  jurisdiction  to settle any disputes which may arise out of or
     in connection with this Agreement and that,  accordingly,  any suit, action
     or proceeding  ("PROCEEDINGS")  arising out of or in  connection  with this
     Agreement may be brought in such Courts.  The Shareholder hereby waives any
     objection  which  it  may  have  now  or  hereafter  to  the  venue  of any
     Proceedings in the Courts of the Province of Ontario and any claim that any
     Proceedings  have  been  brought  in  an  inconvenient  forum  and  further
     irrevocably agrees that a judgment in any Proceedings brought in the Courts
     of the  Province  of  Ontario  shall be  conclusive  and  binding  upon the
     Shareholder and may be enforced in the courts of any other jurisdiction.

6.10 This   Agreement   may  be  executed  by  facsimile  and  in  one  or  more
     counterparts, all of which shall be considered one and the same agreement.

This Agreement has been agreed and accepted this 12th day of September, 2000.

                                   GEORGE S. PETTY MANAGEMENT LTD.

                                   By:   /s/ George S. Petty
                                      --------------------------------------
                                      Name:  George S. Petty
                                      Title: President

                                   1211423 ONTARIO INC.

                                   By:   /s/ George S. Petty
                                      --------------------------------------
                                      Name:  George S. Petty
                                      Title: Authorized Signing Officer

                                   UPM-KYMMENE CORPORATION

                                   By:   /s/ Jaakko Palsanen
                                      --------------------------------------
                                      Name:  Jaakko Palsanen
                                      Title: V.P. Business Development

                                   By:   /s/ Sakari Lahdelma
                                      --------------------------------------
                                      Name:  Sakari Lahdelma
                                      Title: Authorized Signing Officer
<PAGE>

                                   SCHEDULE 1

                              ACQUISITION AGREEMENT

Please see the attached.

<PAGE>

                                   SCHEDULE 2

       SHAREHOLDER                           NUMBER AND TYPE OF SHARES
       -----------                           -------------------------

George S. Petty Management Ltd.              18,412,255 Common Shares
                                        240,000 Preferred Shares, Series C
                                        400,000 Preferred Shares, Series F

1211423 Ontario Inc.                          9,000,000 Common Shares

TOTAL                                        27,412,255 Common Shares
                                        240,000 Preferred Shares, Series C
                                        400,000 Preferred Shares, Series F

ENCUMBRANCES

The 18,412,255 Common Shares,  the 240,000  Preferred Shares,  Series C, and the
400,000 Preferred Shares,  Series F, are subject to moveable hypothecs in favour
of the Royal Bank of Canada and the  Canadian  Imperial  Bank of  Commerce  as a
result of the hypothecation of securities  agreements bearing the formal date of
June 12, 1998.
<PAGE>

                                   SCHEDULE 3

ADDRESS

UPM-Kymmene Corporation
Etelaesplanadi 2
FIN - 00101
Helsinki, Finland

Attention:          Reko Aalto-Setala
Telecopier No.:     (358) 204 15 0304

with a copy to:

Osler, Hoskin & Harcourt LLP
100 King Street West, Suite 6100
First Canadian Place
Toronto, Ontario  M5X 1B8

Attention:          Dale R. Ponder
Telecopier No.:     (416) 862-6666

White & Case LLP
1155 Avenue of the Americas
New York, New York
10036-2787

Attention:          Timothy B. Goodell
Telecopier No.:     (212) 354-8113

George S. Petty Management Ltd. and
1211423 Ontario Inc.
3442 Redpath
Montreal, Quebec H3G 2G3

Attention:          George S. Petty
Telecopier No.:     (514) 934-2214

 with a copy to:

Hart, Saint-Pierre
1 Place Ville-Marie
Suite 2125
Montreal, Quebec H3B 2C6

Attention:          Michel St-Pierre
Telecopier No.:     (514) 866-8323

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]