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EXHIBIT 99.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 15 , 1998, by and between Repap Enterprises Inc., a
Canadian corporation (the "Company"), and Enron Capital & Trade Resources Corp.
("Shareholder").
This Agreement is made pursuant to a Purchase Agreement between the
Company and Shareholder dated as at May 15, 1998 (the "Purchase Agreement").
Pursuant to the Purchase Agreement, Shareholder will become the owner of U.S.
$45,000,000 principal amount of 6% Convertible Subordinated Debentures due 2005
(the "Debentures") which are convertible into 128,571,429 shares, subject to
adjustment as set forth in the Indenture (the "Shares"), of the common shares,
no par value, of Company (the "Common Shares").
To induce Shareholder to enter into the Purchase Agreement, the Company
has agreed to provide the U.S. registration, Canadian prospectus qualification,
and other rights set forth in this Agreement. The Company acknowledges that in
order to provide Shareholder with necessary marketing flexibility for
dispositions of Shares: i) Shareholder will have the option to utilize the U.S.
registration rights and/or the Canadian prospectus qualification rights on the
terms set forth herein, and ii) if at the time Shareholder exercises a demand
U.S. registration right (whether singularly or in combination with Canadian
prospectus qualification rights) the Company is qualified to utilize the
Multijurisdictional Disclosure System implemented in Canada pursuant to National
Policy 45 ("MJDS"), the Company shall effect such U.S. registration using MJDS.
The execution and delivery of this Agreement is a condition to the
Closing (as defined in the Purchase Agreement) under the Purchase Agreement.
The parties agree as follows:
ARTICLE I
1.1 Definitions. The terms set forth below are used herein as so defined:
"HOLDER" means the record holder of any Registrable Securities or Debentures
representing Registrable Securities, as the case may be.
"INDENTURE" means the Trust Indenture dated May 15, 1998 between the Company and
Montreal Trust Company, as trustee.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, business trust,
trust or unincorporated entity.
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"REGISTRABLE SECURITIES" means the Shares (including Shares acquired upon
conversion of Debentures) until such time as such securities cease to be
Registrable Securities pursuant to Section 1.2 hereof.
"SELLING HOLDER" means a Holder who is selling Registrable Securities pursuant
to a Registration Statement (as defined herein).
1.2 Registrable Securities
Any Registrable Security will cease to be a Registrable Security when
(i) a Registration Statement (as defined in Section 2.1(b)) covering such
Registrable Security has been declared effective by the United States Securities
and Exchange Commission (the "Commission") and such Registrable Security has
been issued, sold or disposed of pursuant to such effective Registration
Statement, (ii) such Registrable Security is disposed of pursuant to Rule 144
(or any similar provision then in force) under the Securities Act of 1933, as
amended (the "Securities Act"), (iii) such Registrable Security is eligible to
be, and at the time of determination can be, disposed of pursuant to paragraph
(k) of Rule 144 (or any similar provision then in force) under the Securities
Act, provided the Holder can, in its reasonable opinion, dispose of Shares
pursuant to such exemption on equivalent terms and within a comparable timeframe
to that achievable through a sale of Shares otherwise completed using a
registration right as provided herein, or (iv) such Registrable Security is held
by the Company or one of its subsidiaries.
ARTICLE II
2.1 Demand Registration
(a) Any time after the date of this Agreement any Holder or
Holders may request (a "Request Notice") the Company to:
(i) register under the Securities Act, provided either
(i) at that time the Common Shares are registered
with the Commission under Section 12 of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the Company is otherwise subject
to reporting requirements under the Exchange Act; or
(ii) the Company is otherwise required to register
under the Securities Act in order for the Company to
effect a distribution in Canada;
(ii) file and obtain a receipt for a preliminary
prospectus in all provinces in Canada in respect of;
or
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(iii) register as described in (i) above and file a
prospectus as described in (ii) above, in respect of;
all or any portion (provided that such portion represents at
least 22% of all of the Registrable Securities at the date
hereof) of the Registrable Securities that are held by such
Holder or Holders (collectively, the "Requesting Holder") for
sale in the manner specified in the Request Notice.
(b) Following receipt of a Request Notice, the Company shall
promptly notify each Holder (except the Requesting Holder) of
the receipt of a Request Notice and shall use its best efforts
to
(i) file a registration statement under the Securities
Act (each such registration statement is hereinafter
referred to as a "Registration Statement") effecting
the registration under the Securities Act;
(ii) file a preliminary short form prospectus in all
provinces of Canada (each such preliminary short form
prospectus is hereinafter referred to as a "Canadian
Prospectus") qualifying the relevant Registrable
Securities; or
(iii) file both a Registration Statement and a Canadian
Prospectus as described in (i) and (ii) above;
for public sale in accordance with the method of disposition
specified in such Request Notice, the Registrable Securities
specified in the Request Notice (and in any notices received
from other Holders no later than the 15th day after receipt of
the notice sent by the Company) (such other Holders and the
Requesting Holder are hereinafter referred to as the
"Requesting Holders"). If such method of disposition shall be
an underwritten public offering, the Company may designate the
managing underwriter of such offering, subject to the approval
of the Requesting Holders holding a majority of the
Registrable Securities to be registered, which approval shall
not be withheld unreasonably.
(c) The Company shall be obligated to register (pursuant to
Section 2.1(b)(i)), file a qualifying prospectus in respect of
Registrable Securities (pursuant to Section 2.1(b)(ii)), or
register and file a qualifying prospectus (pursuant to Section
2.1(b)(iii)), on three occasions only.
A request pursuant to Section 2.1(a)(i), (ii) or (iii) shall
be counted as one of the three required registrations,
prospectus filings or combined registration and prospectus
filings only when (i) all the Registrable Securities requested
to be included in any such registration or prospectus filing
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have been so included, (ii) the corresponding Registration
Statement has become effective under the Securities Act,
and/or a receipt for a final prospectus has been issued by the
Ontario Securities Commission, as applicable, and (iii) the
public offering has been consummated and the Registrable
Securities have been sold on the terms and conditions
specified therein unless the offering is not consummated or
any Registrable Securities have not been sold as a result of a
default by a Requesting Holder or any underwriter or the
Company shall have no further obligation pursuant to Section
2.3(g).
(d) The Company shall be entitled to include in any Registration
Statement or Canadian Prospectus filed pursuant to this
Section 2.1, for sale in accordance with the method of
disposition specified by the Requesting Holder, securities of
the Company entitled to vote generally in the election of
directors (or any securities convertible into or exchangeable
for or exercisable for the purchase of securities so entitled
generally to vote in the election of directors) (collectively,
"Voting Securities") to be sold by the Company for its own
account, except as and to the extent that, in the opinion of
the managing underwriter (if such method of disposition shall
be an underwritten public offering), such inclusion would
materially jeopardize the successful marketing of the
Registrable Securities to be sold. Any Person other than a
Holder entitled to piggy-back registration rights with respect
to a Registration Statement or Canadian Prospectus filed
pursuant to this Section 2.1 may include Voting Securities of
the Company with respect to which such rights apply in such
Registration Statement or Canadian Prospectus for sale in
accordance with the method of disposition specified by the
Requesting Holder, except and to the extent that, in the
opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering) such
inclusion would materially jeopardize the successful marketing
of the Registrable Securities to be sold. Except as provided
in this subsection (d), the Company will not effect any other
registration, or file a preliminary prospectus in respect of,
its Voting Securities (except with respect to Registration
Statements on Form S-4 or S-8, or the equivalent form for
foreign private issuers, for purposes permissible under such
forms as of the date hereof), whether for its own account or
that of any other security holder, from the date of receipt of
a Request Notice requesting the registration of or prospectus
filing in respect of a firm commitment underwritten public
offering until the completion of the distribution by the
underwriters of all securities thereunder.
(e) Until no Registrable Securities remain outstanding, the
Company shall not issue any demand registration rights or
Canadian prospectus qualification rights to any person or
entity without the prior written consent of Shareholder, which
consent
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shall not be unreasonably withheld, provided always that
notwithstanding any such issue Shareholder shall remain
entitled to exercise the registration rights as set forth in
Section 2.2 in respect of a demand registration or prospectus
qualification by any such person or entity and demand
registration rights as set forth in Section 2.1.
2.2 Piggy-Back Registration.
If the Company proposes to register any Voting Securities under the
Securities Act for sale to the public for cash or to file with one or more
Canadian provincial securities commissions a preliminary prospectus relating to
an offering of Voting Securities for sale to the public for cash, whether for
its own account or for the account of other security holders or both (except
with respect to Registration Statements on Forms S-4 or S-8 for purposes
permissible under such forms as of the date hereof), each such time it will give
written notice to all Holders of its intention to do so no less than 20 days
prior to the anticipated filing date. Upon the written request of any Holder,
received by the Company no later than the 10th day after receipt by such Holder
of the notice sent by the Company, to register or include in the securities
offered by the preliminary prospectus, on the same terms and conditions as the
securities otherwise being sold pursuant to such registration or preliminary
prospectus, any of its Registrable Securities (which request shall state the
intended method of disposition thereof), the Company will use its best efforts
to cause the Registrable Securities as to which such request relates to be
included in the securities to be covered by the Registration Statement or
preliminary prospectus proposed to be filed by the Company, on the same terms
and conditions as any similar securities included therein, all to the extent
requisite to permit the sale or other disposition by each Holder (in accordance
with its written request) of such Registrable Securities; provided, however,
that the Company may at any time prior to the effectiveness of any such
Registration Statement or the filing of a final prospectus, in its sole
discretion and without the consent of any Holder, abandon the proposed offering
in which any Holder had requested to participate. The number of Registrable
Securities to be included in such a registration statement or preliminary
prospectus may be reduced or eliminated if and to the extent that, in the case
of an underwritten offering, in the opinion of the managing underwriter such
inclusion would materially jeopardize the successful marketing of the securities
(including the Registrable Securities) proposed to be sold therein; provided,
however, that such number of Registrable Securities shall not be reduced if any
securities included in such registration are included other than for the account
of the Company. From and after the date of this Agreement and until no
Registrable Securities remain outstanding, the Company shall not grant any
piggy-back registration rights to any Person unless such rights are expressly
made subject to the prior right of Holders to include any or all of their
Registrable Securities before such other Person includes any shares in any
registration statement or preliminary prospectus relating to an underwritten
public offering with respect to which, in the opinion of the managing
underwriter, the inclusion in the offering of all shares requested to be
registered or included in the preliminary prospectus by all Persons holding
registration rights would materially jeopardize the
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successful marketing of the securities (including the Registrable Securities) to
be sold. In the event that the number of Registrable Securities to be included
in a registration statement or preliminary prospectus is to be reduced as
provided above, within 10 days after receipt by each Holder proposing to sell
Registrable Securities pursuant to the offering of the opinion of such managing
underwriter, all such Selling Holders may allocate among themselves the number
of shares of such Registrable Securities which such opinion states may be
distributed without adversely affecting the distribution of the securities
covered by the Registration Statement or the preliminary prospectus, and if such
Holders are unable to agree among themselves with respect to such allocation,
such allocation shall be made in proportion to the respective numbers of shares
specified in their respective written requests.
2.3 Registration and Prospectus Filing Procedures.
If and whenever the Company is required pursuant to this Agreement to
effect the registration of any of the Registrable Securities, the Company will,
as expeditiously as possible:
(a) following each receipt of a Request Notice pursuant to section
2.1(a):
(i) prepare, file with and obtain a receipt from the
securities commissions in all provinces of Canada:
(I) a preliminary short form prospectus relating
to such securities (which filing shall be
made within 45 days after the receipt by the
Company of a Request Notice) and use its
best efforts to cause such preliminary
prospectus to be cleared for filing of a
final prospectus; and
(II) a final short form prospectus relating to
such securities; or
(ii) prepare and file with
(I) the Commission a Registration Statement, on
a form available to the Company, with
respect to such securities (which filing
shall be made within 45 days after the
receipt by the Company of a Request Notice)
and use its best efforts to cause such
Registration Statement to become and remain
effective for the period of the distribution
contemplated thereby (determined pursuant to
subparagraph 2.3(g) below); and
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(II) file with the Commission such amendments and
supplements to such Registration Statement
and the prospectus used in connection
therewith as may be necessary to keep such
Registration Statement effective for the
period specified in subsection (g) below
and as may be necessary to comply with the
provisions of the Securities Act with
respect to the disposition of all
securities covered by such Registration
Statement in accordance with the sellers'
intended method of disposition set forth in
such Registration Statement for such
period; or
(iii) prepare and file the prospectuses and registration
statement (including amendments and supplements) as
described in subsections (a) and (b) above;
in accordance with the instructions set forth in the Request
Notice.
Provided, however, that, if the Company is in possession of
material information that has not been disclosed to the public
and the Company reasonably deems it to be advisable not to
disclose such information in a registration statement or a
Canadian Prospectus, then the period after the receipt by the
Company of a Request Notice in which it must comply with this
Section 2.3(a) shall be extended for such time (but in no case
longer than 90 days commencing on the date of receipt by the
Company of a Request Notice) during which such information
remains non-public;
(b) furnish to each Selling Holder and to each underwriter such
number of copies of the Canadian preliminary and final
prospectuses and/or the Registration Statement and the
prospectus included therein (including each preliminary
prospectus and each document incorporated by reference therein
to the extent then required by the rules and regulations of
the Commission) as such Persons may reasonably request in
order to facilitate the public sale or other disposition of
the Registrable Securities covered by such Canadian prospectus
or Registration Statement;
(c) use its best efforts to register or qualify the Registrable
Securities covered by such Registration Statement under the
securities or blue sky laws of such jurisdictions as the
Selling Holders or, in the case of an underwritten public
offering, the managing underwriter, shall reasonably request,
provided, however, that the Company shall not be required for
any such purpose to (A) qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of
this Section 2.3(c), (B) consent
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to general service of process in any such jurisdiction, or
(C) subject itself to taxation in any jurisdiction wherein
it would not otherwise be subject to taxation but for the
requirements of this Section 2.3(c);
(d) notify each Selling Holder and each underwriter, at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a
result of which the Canadian final prospectus or the
prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading
and as promptly as practicable amend the Canadian final
prospectus or the Registration Statement or supplement the
prospectus or take other appropriate action so that the
Canadian and U.S. prospectuses do not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
(e) in the case of an underwritten public offering, furnish, (i)
on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such Registration Statement,
an opinion of counsel for the Company dated as of such date
and addressed to the underwriters and to the Selling Holders,
stating that such Registration Statement has become effective
under the Securities Act and that (A) the Registration
Statement, the related prospectus, and each amendment or
supplement thereof, appear on their face to be appropriately
responsive in all material respects to the requirements of the
Securities Act and the applicable rules and regulations
thereunder of the Commission (except that such counsel need
express no opinion as to the financial statements or any
engineering report contained or incorporated therein) and (B)
to such other effects as may reasonably be requested by
counsel for the underwriters, and (ii) on the effective date
of the Registration Statement and the date of the Canadian
final prospectus and on the date that Registrable Securities
are delivered to the underwriters for sale pursuant to such
Registration Statement or Canadian final prospectus, a letter
dated such dates from the independent accountants retained by
the Company, addressed to the underwriters and to the Selling
Holders, stating that they are independent public accountants
within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements of the
Company and the schedules thereto that are included or
incorporated by reference in the Registration Statement or the
Canadian Prospectus, or any amendment or supplement thereof,
comply as to form in all material respects with the applicable
requirements of the Securities
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Act and the published rules and regulations thereunder and
all applicable Canadian requirements, and such letter shall
additionally address such other financial matters (including
information as to the period ending no more than five
Business Days prior to the date of such letter) included in
the Registration Statement in respect of which such letter is
being given as the underwriters may reasonably request;
(f) make available for inspection by one representative of the
Selling Holders designated by a majority thereof, any
underwriter participating in any distribution pursuant to such
Registration Statement, and any attorney, accountant or other
agent retained by such representative of the Selling Holders
or underwriter (the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by
any such Inspector in connection with such Registration
Statement or Canadian final prospectus. For purposes of
subsections (a) and (b) above and of Section 2.1(c) of this
Agreement, the period of distribution of Registrable
Securities in a firm commitment underwritten public offering
shall be deemed to extend until each underwriter has completed
the distribution of all securities purchased by it, and the
period of distribution of Registrable Securities in any other
registration shall be deemed to extend until the earlier of
the sale of all Registrable Securities covered thereby or 90
days;
(g) use its best efforts to keep effective and maintain for the
period specified in subparagraph (g) a registration,
qualification, approval or listing obtained to cover the
Registrable Securities or a Canadian final prospectus as may
be necessary for the Selling Holders to dispose thereof and
shall from time to time amend or supplement any prospectus
used in connection therewith to the extent necessary in order
to comply with applicable law;
(h) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Selling
Holders to consummate the disposition of such Registrable
Securities; and
(i) enter into customary agreements (including, if requested, an
underwriting agreement in customary form) and take such other
actions as are reasonably requested by the Selling Holders or
the underwriters, if any, in order to expedite or facilitate
the disposition of such Registrable Securities.
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Upon the occurrence of any event contemplated by Section 2.3(d), the
Company shall, as soon as reasonably practicable, prepare and furnish
to each Selling Holder and underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of the Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each Selling
Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind
described in Section 2.3(d), such Selling Holder shall forthwith
discontinue the disposition of Registrable Securities pursuant to the
registration statement or Canadian Prospectus applicable to such
Registrable Securities until such Selling Holder receives copies of
such amended or supplemented registration statement or prospectus, and
if so directed by the Company, such Selling Holder shall deliver to
the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Selling Holders' possession of the
prospectus covering such Registrable Securities at the time of
receipt of such notice.
The Company may require each Selling Holder as to which any
registration statement or Canadian Prospectus is being effected to
furnish to the Company such information regarding such holder and the
distribution of such Registrable Securities as the Company may from
time to time reasonably request in writing, but only to the extent that
such information is required in order to comply with the Securities Act
or any relevant Canadian or state securities or blue sky law or
obligation. Each Selling Holder as to which any registration statement
or Canadian Prospectus is being effected agrees to notify the Company
as promptly as practicable of any inaccuracy or change in information
previously furnished by such Selling Holder to the Company or of the
happening of any event in either case as a result of which any
prospectus relating to such registration contains an untrue statement
of a material fact regarding such Selling Holder or the distribution of
such Registrable Securities or omits to state any material fact
regarding such Selling Holder or the distribution of such Registrable
Securities required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and to furnish promptly to the Company any
additional information required to correct and update any previously
furnished information or required so that such prospectus shall not
contain, with respect to such Selling Holder or the distribution of
such Registrable Securities, an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
In connection with each registration or filing of a Canadian prospectus
hereunder with respect to an underwritten public offering, the Company
and each Selling Holder shall use
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their commercially reasonable efforts to enter into a written
agreement with the managing underwriter or underwriters selected in
the manner herein provided in such form and containing such provisions
as are customary in the securities business for such an arrangement
between underwriters and companies of the Company's size and
investment stature, provided that such agreement shall not contain any
such provision applicable to the Company or the Selling Holders that
is inconsistent with the provisions hereof; and further provided, that
the time and place of the closing under such agreement shall be as
mutually agreed upon among the Company, the Selling Holders and such
managing underwriter.
2.4 MJDS
At any time the Company is a "foreign private issuer" within the
meaning of Rule 405 under the Securities Act and is qualified to utilize the
MJDS, the Company agrees to utilize MJDS following receipt of a Request Notice
for a demand registration as described in section 2.1(a)(i) or (iii).
2.5 Expenses
(a) All expenses incident to the Company's performance under or
compliance with this Agreement, including without limitation,
all registration and filing fees, blue sky fees and expenses,
printing expenses, listing fees, fees and disbursements of
counsel and independent public accountants for the Company,
fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and
reasonable out-of-pocket expenses (including, without
limitation, reasonable legal fees of one counsel for all
Selling Holders) of the Selling Holders, but excluding any
Selling Expenses (as defined below), are herein called
"Registration Expenses." All underwriting fees, discounts and
selling commissions allocable to the sale of the Registrable
Securities are herein called "Selling Expenses."
(b) Except as provided below, the Company will pay all
Registration Expenses in connection with each Registration
Statement or Canadian preliminary or final prospectus filed
pursuant to this Agreement, whether or not the Registration
Statement becomes effective, and the Selling Holders shall pay
Selling Expenses in connection with any Registrable Securities
registered pursuant to this Agreement. Notwithstanding the
foregoing, on the third occasion of the exercise of demand
registration rights pursuant to Section 2.1 hereof, each of
the Selling Holders (as a group) and the Company shall pay
one-half of all Registration Expenses except for any
Registration Expenses attributable to the inclusion in such
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registration or prospectus of any Voting Securities by the
Company or any other Person that is not a Holder.
2.6 Indemnification
(a) In the event of a registration pursuant to this Agreement of
any Registrable Securities under the Securities Act or the
filing pursuant to this Agreement of a Canadian prospectus
offering any Registrable Securities, the Company will
indemnify and hold harmless each Selling Holder thereunder and
each underwriter of Registrable Securities thereunder and each
Person, if any, who controls such Selling Holder or
underwriter within the meaning of the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), against any losses, claims, damages or liabilities
(including reasonable attorneys' fees) ("Losses"), joint or
several, to which such Selling Holder or underwriter or
controlling Person may become subject under the Securities
Act, the Exchange Act, any applicable Canadian federal or
provincial securities legislation or otherwise, insofar as
such Losses, (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration
Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this
Agreement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or
in any Canadian prospectus offering such securities, or arise
out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
and will reimburse each such Selling Holder, each such
underwriter and each such controlling Person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such Loss or actions;
provided, however, that the Company will not be liable in any
such case if and to the extent that any such Loss arises out
of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in
conformity with information furnished by such Selling Holder,
such underwriter or such controlling Person in writing
specifically for use in such Registration Statement or
prospectus.
(b) Each Selling Holder agrees to indemnify and hold harmless the
Company, its directors, officers, employees and agents and
each Person, if any, who controls the Company within the
meaning of the Securities Act or of the Exchange Act to the
same extent as the foregoing indemnity from the Company to
such Selling Holder, but only with respect to information
regarding such Selling Holder furnished in writing by or on
behalf of such Selling Holder expressly for inclusion in any
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Registration Statement or prospectus relating to the
Registrable Securities, or any amendment or supplement
thereto;
(c) Each Selling Holder agrees to indemnify and hold harmless each
other Selling Holder, their directors, officers, employees and
agents and each Person, if any, who controls a Selling Holder
within the meaning of the Securities Act or of the Exchange
Act to the same extent as the foregoing indemnity from the
Company to the Selling Holders, but only with respect to
information regarding such Selling Holder furnished in writing
by or on behalf of such Selling Holder expressly for inclusion
in any Registration Statement or prospectus relating to the
Registrable Securities, or any amendment or supplement
thereto; provided, however, that the liability of each Selling
Holder pursuant to all indemnities given by such Selling
Holder pursuant to this Section 2.6 shall not be greater in
aggregate amount than the dollar amount of the proceeds (net
of any Selling Expenses) received by such Selling Holder from
the sale of the Registrable Securities giving rise to all such
indemnifications.
(d) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other
than under this Section 2.6. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to
the extent it shall wish, to assume and undertake the defense
thereof with counsel reasonably satisfactory to such
indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume
and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this
Section 2.6 any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with
counsel so selected; provided, however, that:
(i) if the indemnifying party has failed to assume the
defense and employ counsel or
(ii) if the defendants in any such action include both the
indemnified party and the indemnifying party and
counsel to the indemnified party shall have concluded
that there may be reasonable defenses available to
the
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indemnified party that are different from or
additional to those available to the indemnifying
party or if the interests of the indemnified party
reasonably may be deemed to conflict with the
interests of the indemnifying party, then the
indemnified party shall have the right to select a
separate counsel and to assume such legal defense and
otherwise to participate in the defense of such
action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying
party as incurred.
(e) If the indemnification provided for in this Section 2.6 is
unavailable to the Company or the Selling Holders or is
insufficient to hold them harmless in respect of any losses,
claims, damages, liabilities or expenses referred to herein,
then each such indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such
losses, claims, damages, liabilities and expenses as between
the Company on the one hand and each Selling Holder on the
other, in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of each
Selling Holder on the other in connection with the statements
or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one
hand and each Selling Holder on the other shall be determined
by reference to, among other things, whether the untrue or
alleged untrue statements of a material fact or the omission
or alleged omission to state a material fact has been made
by, or relates to, information supplied by such party, and
the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission.
(f) No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who is not guilty of
such fraudulent misrepresentation.
2.7 Covenant.
Until no Registrable Securities remain outstanding the Company shall
use its best efforts to maintain the listing of the Common Shares on each of The
Toronto Stock Exchange and the Montreal Exchange.
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2.8 Certain Events.
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Registrable Securities, to any and all shares
of equity capital of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) which may by
issued in respect of, in exchange for, or in substitution of the Registrable
Securities, in each case as the amounts of such securities outstanding are
appropriately adjusted for any equity dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date of this
Agreement.
ARTICLE III
3.1 Communications.
All notices and other communications provided for or permitted
hereunder shall be made in writing by telecopy, courier service or personal
delivery:
(a) if to a Holder of Registrable Securities, at the most current
address given by such Holder of the Company in accordance with
the provisions of this Section 3.1, which address initially
is, with respect to the Shareholder, the address set forth in
the Purchase Agreement, and
(b) if to the Company, initially at its address set forth in the
Purchase Agreement and thereafter at such other address,
notice of which is given in accordance with the provisions of
this Section 3.1.
All such notices and communications shall be deemed to have been
received at the time delivered by hand, if personally delivered; when
receipt is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
3.2 Successor and Assigns.
The rights of any Holder under this Agreement may be assigned to any
Person who acquires any Registrable Securities. Any assignment of registration
rights pursuant to this Section 3.2 shall be effective only upon receipt by the
Company of written notice from such assigning Holder stating the name and
address of any assignee. All the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be enforceable by the
respective successors of the parties hereto and the respective successors and
permitted assigns (as described therein) of the parties to the Purchase
Agreement under which such Registrable
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Securities are to be or have been purchased. If any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be entitled to receive the
benefits of and be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement.
3.3 Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
3.4 Headings.
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
3.5 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
3.6 Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting or impairing the validity or enforceability of
such provision in any other jurisdiction.
3.7 Entire Agreement.
This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the securities
sold pursuant to the Purchase Agreement. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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3.8 Attorneys' Fees.
In any action or proceeding brought to enforce any provision of this
Agreement, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other available
remedy.
3.9 Amendment.
This Agreement may be amended only by means of a written amendment
signed by the Company and by the Holders of a majority of the Registrable
Securities at the time of amendment.
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3.10 Registrable Securities Held by the Company or Its Affiliates.
In determining whether the Holders of the required amount of
Registrable Securities have concurred in any direction, amendment, supplement,
waiver or consent, Registrable Securities owned by the Company or one of its
Affiliates shall be disregarded.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
REPAP ENTERPRISES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
ENRON CAPITAL & TRADE RESOURCES CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Vice President
By:
-------------------------------------
Name:
Title:
