EXHIBIT 4.18


 


 


AGREEMENT FOR THE SALE
AND PURCHASE


OF THE PAPER
MERCHANTING DIVISION OF


BUHRMANN N.V.


 


 


DATED 8 September 2003


 


 


BUHRMANN N.V.


 


 


and


 


 


PAPERLINX LIMITED


 





















 


CONTENTS


 


	
  Clause

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Interpretation

  	
   

  
	
  2.

  	
   

  	
  Sale And Purchase

  	
   

  
	
  3.

  	
   

  	
  Conditions

  	
   

  
	
  4.

  	
   

  	
  Completion

  	
   

  
	
  5.

  	
   

  	
  Purchase Price

  	
   

  
	
  6.

  	
   

  	
  Completion Balance Sheet

  	
   

  
	
  7.

  	
   

  	
  Deferred Consideration

  	
   

  
	
  8.

  	
   

  	
  Independent Accountants

  	
   

  
	
  9.

  	
   

  	
  Loans And Guarantees

  	
   

  
	
  10.

  	
   

  	
  Due Diligence
  investigation

  	
   

  
	
  11.

  	
   

  	
  Warranties

  	
   

  
	
  12.

  	
   

  	
  Warranties by Purchaser

  	
   

  
	
  13.

  	
   

  	
  Specific Indemnities

  	
   

  
	
  14.

  	
   

  	
  Pensions

  	
   

  
	
  15.

  	
   

  	
  Taxation

  	
   

  
	
  16.

  	
   

  	
  Protective Covenants

  	
   

  
	
  17.

  	
   

  	
  Confidentiality

  	
   

  
	
  18.

  	
   

  	
  Notices

  	
   

  
	
  19.

  	
   

  	
  Further Assurances

  	
   

  
	
  20.

  	
   

  	
  Transfer of
  rights and obligations

  	
   

  
	
  21.

  	
   

  	
  Grossing-up of
  Indemnity Payments

  	
   

  
	
  22.

  	
   

  	
  Payments

  	
   

  
	
  23.

  	
   

  	
  Default Interest

  	
   

  
	
  24.

  	
   

  	
  General

  	
   

  
	
  25.

  	
   

  	
  No Rescission

  	
   

  
	
  26.

  	
   

  	
  Whole Agreement

  	
   

  
	
  27.

  	
   

  	
  Governing Law

  	
   

  
	
  28.

  	
   

  	
  Arbitration

  	
   

  
	
  29.

  	
   

  	
  Language

  	
   

  



 


	
  Schedules

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Indirect Sellers

  	
   

  
	
  2.

  	
   

  	
  The Companies

  	
   

  
	
  3.

  	
   

  	
  The Subsidiaries of the Companies

  	
   

  
	
  4.

  	
   

  	
  Competition Authorities

  	
   

  
	
  5.

  	
   

  	
  Approvals

  	
   

  
	
  6.

  	
   

  	
  Pre-Completion Covenants

  	
   

  
	
  7.

  	
   

  	
  Allocation of Purchase Price

  	
   

  
	
  8.

  	
   

  	
  Guarantees and Indemnities

  	
   

  
	
  9.

  	
   

  	
  Warranties

  	
   

  
	
  10.

  	
   

  	
  Warranty Limits

  	
   

  
	
  11.

  	
   

  	
  Pensions

  	
   

  
	
  12.

  	
   

  	
  Completion

  	
   

  
	
  13.

  	
   

  	
  Policies for preparation of the Completion Accounts

  	
   

  
	
  14.

  	
   

  	
  Assets

  	
   

  
	
  15.

  	
   

  	
  Excluded Assets

  	
   

  
	
  16.

  	
   

  	
  Purchase price adjustment statement

  	
   

  
	
  17.

  	
   

  	
  Properties

  	
   

  



 





















 


	
  18.

  	
   

  	
  Third Party Agreements

  	
   

  
	
  19.

  	
   

  	
  Surplus Properties

  	
   

  
	
  20.

  	
   

  	
  Form of deed of adherence

  	
   

  
	
  21.

  	
   

  	
  Acquiring Entities

  	
   

  
	
  22.

  	
   

  	
  Warranted Information

  	
   

  
	
  23.

  	
   

  	
  Tax Covenant

  	
   

  
	
  24.

  	
   

  	
  Protective Covenants

  	
   

  
	
  25.

  	
   

  	
  Financial FaciliTies

  	
   

  
	
  26.

  	
   

  	
  Insurance Claims

  	
   

  
	
  27.

  	
   

  	
  Intellectual Property

  	
   

  
	
  28.

  	
   

  	
  Retirement Benefit Arrangements

  	
   

  
	
  29.

  	
   

  	
  Capital Recognised for article 3 of the Dutch Dividend
  Tax Act 1965

  	
   

  
	
  30.

  	
   

  	
  Goodwill on Tax Balance Sheet

  	
   

  
	
  31.

  	
   

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  



 





















 


THIS AGREEMENT is made the 8 September, 2003


 


BETWEEN:


 


(1)           Buhrmann N.V. a public limited liability company incorporated under
the laws of The Netherlands whose principal place of business is in Amsterdam,
The Netherlands (the Seller); and


 


(2)           PaperlinX Limited a public limited liability company incorporated under
the laws of Australia whose registered office is at 307 Ferntree Gully Road, Mt
Waverley, Victoria 3149, Australia (the Purchaser).


 


WHEREAS:


 


(A)          The Seller is the direct or indirect owner of all the
shares (other than as otherwise indicated in the schedule headed “The
Companies”) in the issued share capital of the companies set out in the schedule headed
“The Companies” (the Companies) and
of the assets set out in the schedule headed “Assets” (the Assets).


 


(B)           The Seller wishes to sell and the Purchaser wishes to
purchase all the issued share capital of the Companies and all the Assets free
of any Encumbrance (as defined hereinafter), other than those Encumbrances set
out in the schedule headed “Assets”, at Completion (as defined
hereinafter) on the terms set out in this agreement.


 


(C)           The Indirect Sellers (as defined hereinafter) have
acknowledged and agreed to the relevant terms of this agreement by executing
the schedule headed “Indirect Sellers” (Execution Page).


 


IT IS AGREED as follows:


 


1.             INTERPRETATION


 


1.1           In addition to terms defined
elsewhere in this agreement, the definitions and other provisions in the schedule headed
“Interpretation” apply throughout this agreement unless the contrary intention
appears.


 


1.2           In this agreement, unless the
contrary intention appears, a reference to a clause, subclause or schedule is
a reference to a clause, subclause or schedule of this agreement. The
schedules form part of this agreement.


 


1.3           The headings in this agreement
do not affect its interpretation.


 


2.             SALE AND
PURCHASE


 


2.1           By this agreement the Seller
sells (or will procure the sale by the Indirect Sellers) and the Purchaser or
its nominee listed in the schedule headed “Acquiring Entities” or other
Acceding Purchaser purchases the Shares and the Assets with full and good title
free from any Encumbrance as at Completion.


 


2.2           On Completion the Shares and
the Assets shall be transferred (geleverd) free
from Encumbrances together with all rights attaching to them at Completion.


 


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2.3           Those assets set out in the schedule headed
“Excluded Assets” (the Excluded Assets)
shall be excluded (together with any liabilities relating thereto) from the
sale and purchase of the Shares and Assets pursuant to this agreement.


 


2.4           The price for the Shares and
the Assets shall be determined in accordance with the clause headed “Purchase
Price”.


 


2.5           The Seller hereby accepts full
and unconditional responsibility that the Indirect Sellers will on Completion
transfer to the Purchaser full ownership in the Shares and the Assets free from
Encumbrances subject to and on the terms and conditions set out in this
agreement. The Purchaser hereby accepts full and unconditional responsibility
that the members of the Purchaser’s Group listed in the schedule headed “Acquiring
Entities” or any other Acceding Purchaser will on Completion take transfer of
the Shares and the Assets subject to and on the terms and conditions set out in
this agreement.


 


2.6           The Seller shall procure that
on or prior to Completion any and all rights of pre-emption, options or rights
of first refusal over the Shares or the Assets are waived irrevocably by the
persons entitled thereto.


 


3.             CONDITIONS


 


3.1           Completion is conditional on:


 


(a)           the approval by the general meeting of
shareholders of the Seller of the transactions contemplated by this agreement;


 


(b)           any competition authority referred to in
the schedule headed “Competition Authorities” (the Competition
Authorities):


 


(i)            taking a decision that the sale of all or
any of the Shares or the Assets to the Purchaser does not give rise to a
concentration falling within the scope of the relevant competition laws; or


 


(ii)           taking a decision approving the sale of all
or any of the Shares or the Assets to the Purchaser without imposing any
conditions or obligations that are not on terms satisfactory to the Purchaser;
or


 


(iii)          not taking a decision to oppose or approve
the transaction within the time limits as set by the relevant competition laws;
and


 


(c)           subject to clauses 4.2 and 4.4, the
licences, authorisations, orders, grants, confirmations, permissions,
registrations, consents and other approvals referred to in the schedule headed
“Approvals” (each an Approval)
having been obtained (either unconditionally or subject to the fulfilment of
certain conditions and commitments which the relevant party (acting reasonably)
considers acceptable) from the appropriate bodies and such Approvals remaining
in full force and effect at Completion.


 


The conditions
referred to under paragraphs (a), (b) and (c) above are collectively referred
to as the Conditions. Conditions 3.1(a) and
3.1(b) are for the benefit of both parties and may not be waived without the
consent of both the Seller and the Purchaser. 
Condition 3.1(c) is for the benefit of the Purchaser and may not, subject
to clause 4.2, be waived (in whole or in part) without the consent of the
Purchaser.


 


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3.2           With regard to Conditions
3.1(a) and 3.1(c), each party shall use its best efforts to procure that the
Conditions are satisfied on or before the date falling two months after signing
of this agreement.  Furthermore:


 


(a)           the Seller shall use all reasonable
endeavours to obtain the approval of its ordinary shareholders as soon as
reasonably practicable including, by convening a meeting of shareholders no
later than six weeks after signing this agreement and the giving by the members
of the Seller’s management and supervisory boards of positive recommendations
to the shareholders to vote in favour of the resolution approving the transactions
contemplated in this agreement, both at the time of convening the general
meeting of the shareholders and at the meeting itself;


 


(b)           the Purchaser shall, with respect to the
Condition contained in clause 3.1(b) make, or procure the making of, all
filings which it is obliged to make as soon as reasonably practicable after
execution of this agreement and shall use reasonable efforts and take all
reasonable steps to obtain:


 


(i)            in respect of the EU the approval of the
relevant Competition Authorities as soon as practicable within the first phase
of the review by the Competition Authorities; and


 


(ii)           in respect of the Czech Republic and
Slovakia the approval of the relevant Competition Authorities as soon as
practicable and within two months of signing of this agreement; and


 


(c)           the parties shall use all reasonable
endeavours to obtain the approvals referred to in the schedule headed “Approvals”
as soon as is reasonably practicable and the parties hereby agree that all
related enquiries and requests from any government, governmental, supranational
or trade agency, court, regulatory body or party or parties to the relevant
agreements shall be dealt with by the Seller and the Purchaser in consultation
with each other and the Seller and the Purchaser shall promptly co-operate with
and provide all necessary information and assistance reasonably required by
such government, agency, court, body or party or parties to the relevant
agreements upon being requested to do so by the other.


 


3.3           The Purchaser may voluntarily
make one or more offers or commitments to the relevant Competition Authorities
to remedy the concerns of such Competition Authorities, provided that such
offers and commitments do not in any way affect the Seller’s Group or its
business.


 


3.4           The Purchaser shall as soon as
is reasonably practicable provide the Seller with copies of all material
relevant correspondence, documents or other communications received from or
sent to any Competition Authority relating to Condition 3.1(b). The Purchaser
shall also as soon as is reasonably practicable inform the Seller of the
content of any meeting or material conversation which takes place between any
such Competition Authority and the Purchaser or any of its employees,
directors, officers or advisers in relation to Condition 3.1(b) and shall, if
requested by the Seller, provide a written summary thereof.


 


3.5           The Purchaser’s or any PMD
Group Company’s compliance with any condition, obligation or other requirement
imposed or contained in any decision by any relevant Competition Authority or
the implementation of any offer made by the Purchaser to any relevant
Competition Authority will not result in any change to the terms and conditions
(including the Purchase Price) of this agreement.


 


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3.6           The Seller shall provide the
Purchaser with any assistance reasonably requested by the Purchaser in relation
to its filings with the Competition Authorities, including providing copies of
all relevant previous market analyses and any other relevant data which the
Seller may have, together with copies of all relevant filings made by the
Seller to such Competition Authorities, and shall make such submissions to the
Competition Authorities in favour of the transactions contemplated by this
agreement as reasonably requested by the Purchaser.


 


3.7           If any Condition contained in
clause 3.1(b) or, if marked with a “à” in the schedule headed “Approvals”, clause 3.1(c), is not
fulfilled or waived on or before the Long Stop Date, and provided that the
Seller has not prevented, frustrated or interfered with the fulfilment of any
Condition, the Seller may resolve to terminate this agreement. If the Condition
contained in clause 3.1(a) is not fulfilled or waived within four weeks after
the date referred to in clause 3.2(a) or if a Condition contained in
clause 3.1(c) and marked with an “à” is not fulfilled or waived on or before the Long Stop Date, and
provided that the Purchaser has not prevented, frustrated or interfered with
the fulfilment of any Condition, the Purchaser may resolve to terminate this
agreement. Upon termination of this agreement pursuant to this clause:


 


(a)           save as provided in clauses 3.7(b), 3.7(c)
and 3.8 no party shall have any claim against any other party as a result of
such termination;


 


(b)           except for this clause, clause 3.8, the
clauses headed “Confidentiality, Notices”, “Assignments”, “Payments”, “General”,
“No Rescission”, “Whole Agreement”, “Governing Law”, “Arbitration” and “Language”,
together with the provisions of the clause and schedule headed “Interpretation”,
all the other clauses of this agreement shall lapse (vervallen)
and cease to have effect; and


 


(c)           the termination and the lapsing (vervallen) of these provisions shall not affect any rights
or liabilities of any party in respect of any previous breach of this
agreement.


 


3.8           Where this agreement is
terminated pursuant to a failure of a Condition contained in clause 3.1(a)
or a failure to obtain any of the Approvals marked with an “à”, the Seller shall reimburse the Purchaser’s
Third Party Costs, provided that the Purchaser has complied with its
obligations under clause 3.2. Where this agreement is terminated pursuant to a
failure of a Condition contained in clause 3.1(b), the Purchaser shall
reimburse the Seller’s Third Party Costs, provided that the Seller has complied
with its obligations under clause 3.2.


 


4.             COMPLETION


 


4.1           Completion shall take place at
the offices of the Purchaser’s Dutch Lawyers on the last Business Day of the
month in which (subject to clause 4.2) all the Conditions (other than those
which will be satisfied on Completion) are satisfied or, where permitted,
waived (provided that if all the Conditions are fulfilled or, where permitted,
waived less than ten Business Days prior to the last Business Day of such
month, Completion shall be delayed until the last Business Day of the next
month) or at such other place, time, or on such other date as the Seller and
the Purchaser may agree in writing.


 


4.2           If the Conditions set out in clause
3.1(a) and 3.1(b) have been satisfied and the Seller is reasonably capable of
providing each Approval marked “à” in the schedule headed “Approvals” on Completion, the Seller
may, subject to the remainder of this clause 4.2 and clause 4.4, elect for the
parties to proceed with Completion notwithstanding that the other Approvals may
not have been obtained (without prejudice to each party’s obligations under
clause 3.2(c) to use reasonable endeavours to obtain the other Approvals not
yet obtained


 


7





















 


after Completion). Whilst any Approval marked with a “*” in the schedule headed
“Approvals” remains outstanding, the Seller may only elect to proceed with
Completion under this clause 4.2 on the earlier of the date being two months
after both conditions 3.1(a) and 3.1(b) have been fulfilled and all Approvals
marked with a “à” have been, or are reasonably
capable of being, fulfilled, or 20 Business Days prior to the Long Stop Date.


 


4.3           On the Completion Date the
Purchaser will pay a sum equivalent to the Estimated Purchase Price plus an
amount equivalent to the net amount estimated to be owing to the Seller’s
Group, if any, under clauses 9.1 and 9.2, as the case may be, into the Notary’s
account in accordance with the clause headed “Payments”. The Notary will only
pay the applicable proportion of such amount to the Seller (or, at the
discretion of the Seller, the applicable Indirect Seller or any third party
that the Seller may direct) in accordance with this agreement after execution
of the applicable Local Transfer Documents.


 


4.4           At Completion each party shall
do, or procure to be done, those things respectively listed in relation to it
or its Group in the schedule headed “Completion” (save to the extent such
things have been done prior to Completion). If and to the extent that (a) the
Seller is unable to do or procure to be done those things marked “#” in the schedule headed
“Completion” but nonetheless elects to proceed with Completion, or (b) the
Seller has elected to proceed with Completion in accordance with clause 4.2,
the parties will proceed to Completion and the Seller shall, until such time as
any thing marked “#” in the schedule headed “Completion” is done or
procured or any outstanding Approval is obtained, indemnify the Purchaser and
keep the Purchaser fully indemnified against all Losses relating thereto or
arising out of or in connection therewith respectively.


 


4.5           The parties agree that as soon
as practicable following the obtaining of all Surplus Property Approvals in
relation to a Surplus Property, the Seller shall procure that such Surplus
Property is transferred to a member of the Seller’s Group by means of such
Local Transfer Documents as may be required. 
In the event that any Surplus Property has not been transferred out of
the PMD Group by Completion then the Purchaser shall or shall procure that the
relevant PMD Group Company shall transfer and the Seller shall procure that a
member of the Seller’s Group accepts the transfer of such Surplus Property upon
the earlier of:


 


(a)           the date on which the relevant Surplus
Property Approvals have been obtained; and


 


(b)           the date three months from the date of this
agreement (notwithstanding that such Surplus Property Approvals have not been
obtained).


 


4.6           At Completion the Seller will
provide the Purchaser with a bank guarantee in the amount of EUR25,000,000
(twenty five million Euro) in the Agreed Form (the Bank
Guarantee). The Bank Guarantee shall be valid for 2 years from the
Completion Date unless no later than 25 Business Days after the first
anniversary of the Completion Date the Seller notifies the Purchaser, which
notification shall include details of the underlying calculations, that the
Leverage Ratio is less than 3.00.  Within
5 Business Days of such notification, the Purchaser may instruct Independent
Accountants to review and confirm, within 5 Business Days of being instructed,
the accuracy of the calculation of the Leverage Ratio. If the Purchaser does
not require a review by the Independent Accountants, or, if such an instruction
is given, the Independent Accountants confirm that the Leverage Ratio has been
properly calculated, the Purchaser shall, within one Business Day of its
notifying the Seller that no review by the Independent Accountants is required
or, where the Independent Accountants have been instructed, of receipt of
confirmation from the Independent Accountants of the calculation of


 


8





















 


the Leverage Ratio (failing which the Seller shall be entitled to)
notify the bank issuing the Bank Guarantee that the Leverage Ratio is less than
3.00 in which case the Bank Guarantee shall terminate on the fifth Business Day
after the bank receives such notification and the Purchaser shall return the
Bank Guarantee to the bank issuing the Bank Guarantee. The Purchaser covenants
and agrees that any claim under the Bank Guarantee will be in accordance with
and limited to any rights of recovery under this agreement including, but not
limited to, the rights and limitations specified in the clause headed “Grossing-Up
of Indemnity Payments” and that the Purchaser will indemnify the Seller against
any recovery in excess of such rights and limits


 


4.7           The Notary is a civil law
notary with the Purchaser’s Dutch Lawyers. The Seller acknowledges that it is
aware of the provisions of the Ordinance Interdisciplinary Cooperation (Verordening Interdisciplinaire Samenwerking) of the Royal
Professional Organisation of Civil Law Notaries (Koninklijke
Notariële Beroepsorganisatie). The Seller acknowledges and agrees
that the Purchaser’s Dutch Lawyers may advise and act on behalf of the
Purchaser with respect to this agreement, and any agreements and/or any
disputes related to or resulting from this agreement.


 


4.8           Subject to clauses 4.2 and
4.4, neither of the parties shall be obliged to proceed with Completion unless
all those things set out in the schedule headed “Completion” are done or
become effective simultaneously or have been done prior to such Completion.
This clause shall not, however, prejudice any rights or remedies available to
any party in respect of any default on the part of any other party.


 


4.9           Prior to Completion (and
whether or not the Conditions are satisfied) the provisions of the schedule headed
“Pre-Completion Covenants” shall apply in respect of each PMD Group Company
and/or the Assets.


 


4.10         The Evelyn Street Property
will be sold at Completion with full title guarantee together with all
buildings and structures thereon.


 


4.11         If in respect of any Property
the Seller is required under any agreement, legislation, regulation or
otherwise to notify any person of a change of control of the relevant PMD Group
Company, the Seller shall, following Completion, make such notification in
accordance with the relevant agreement, legislation, regulation or otherwise.


 


4.12         Subject to clause 4.13 below,
prior to Completion the Seller shall use its best endeavours to transfer to the
Purchaser or such PMD Group Company as the Purchaser directs the Relevant
Employees employed by the Seller’s Group who work wholly or mainly for the
Business. To the extent that any Relevant Employee employed by the Seller’s
Group gives or is given notice of termination of employment prior to
Completion, the Seller shall procure that such Relevant Employee shall continue
to be employed by the Seller’s Group following Completion.


 


4.13         If at Completion George Dean
has not executed a new employment services agreement or agreed other
arrangements with the Purchaser the Seller will procure that he will continue
to be employed by the Seller’s Group.


 


5.             PURCHASE
PRICE


 


5.1           The price for the Shares and
the Assets (the Purchase  Price)
will be the total of:


 


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(a)           EUR706,000,000 (seven hundred and six
million Euro) (the Base  Amount);


 


(b)           plus a sum equal to the excess of the Net
Asset Value as at Completion over EUR631,700,000 (six hundred and thirty one
million, seven hundred thousand Euro) (provided that if the Net Asset Value at
Completion is less than EUR631,700,000 (six hundred and thirty-one million,
seven hundred thousand Euro), the difference will be deducted from the Base
Amount);


 


(c)           less the aggregate of any outstanding Debt
as at Completion (which aggregate for the purposes of this clause 5.1(c)
comprises any outstanding Debt owed by the PMD Group Companies and any Debt
owed by the Seller’s Group to the PMD Group);


 


(d)           less the aggregate NCLs as at Completion;


 


(e)           plus an amount equivalent to the Cash as at
Completion;


 


(f)            plus the Deferred Consideration.


 


5.2           The estimated price for the
Shares and the Assets (the Estimated Purchase Price)
payable at Completion shall be calculated as follows:


 


(a)           the Base Amount;


 


(b)           less EUR30,600,000 or such other amount as
the parties may agree (provided that the parties shall use their best
endeavours to agree an amended amount to be added to or deducted from the Base
Amount and which more closely correlates with the final amount under clause 5.1
(b) if Completion is delayed beyond the date anticipated by the parties);


 


(c)           less the estimated aggregate of any
outstanding Debt as at Completion as agreed between the parties (which
aggregate for the purposes of this clause 5.2(c) comprises any outstanding Debt
owed by the PMD Group Companies and any Debt owed by the Seller’s Group to the
PMD Group);


 


(d)           less the estimated NCLs as at Completion as
agreed between the parties;


 


(e)           plus the estimated Cash as at Completion as
agreed between the parties.


 


5.3           The Seller shall deliver to
the Purchaser its estimate of the Debt, NCLs and Cash as at Completion, 5
Business Days prior to the intended date of Completion.


 


5.4           The Purchase Price (other than
the Deferred Consideration) shall be determined following Completion in
accordance with clause 5.1 on the basis of the Net Asset Value, Debt, NCLs and
Cash as determined in the Completion Balance Sheet. The Purchase Price and the
Estimated Purchase Price shall be allocated between the Seller and the Indirect
Sellers in accordance with the schedule headed “Allocation of Purchase
Price”.


 


5.5           If the Purchase Price
(excluding for these purposes the Deferred Consideration) is greater than the
Estimated Purchase Price, the Purchaser shall pay to the Seller (or, at the
discretion of the Seller, the applicable Indirect Seller or any third party
that the Seller may direct) in cash, a sum equal to that increase together with
interest thereon calculated at a rate of 5 per cent. per annum from Completion
until the date of actual payment. If the Purchase Price (excluding for these
purposes the Deferred Consideration) is less than the Estimated Purchase Price,
the


 


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Seller shall pay to the Purchaser in cash, a sum equal to that
reduction together with interest thereon calculated at a rate of 5 per cent.
per annum from Completion until the date of actual payment. Any such payment
shall be made within 5 Business Days following the day on which the Completion
Balance Sheet is finally agreed or determined.


 


6.             COMPLETION
ACCOUNTS


 


6.1           Preparation of Drafts


 


(a)           Within 20 Business Days
following Completion, the Purchaser shall cause to be prepared and delivered to
the Seller Standard Hyperion Reports of the PMD Group Companies using the
Hyperion System of the Seller as it existed prior to Completion.


 


(b)           Within 40 Business Days
following Completion, the Purchaser shall cause to be prepared and delivered to
the Seller the draft Completion Accounts of the PMD Group Companies as at
Completion (the Draft Completion Accounts). The
Draft Completion Accounts shall be prepared in accordance with the schedule headed
“Policies for Preparation of the Completion Accounts”.


 


6.2           Notification of Disputed Items


 


(a)           Within 20 Business Days
following delivery of the Draft Completion Accounts to the Seller, in
accordance with clause 6.1, the Seller shall notify the Purchaser of any item
or items it wishes to dispute. Such notification shall include the reasons for
such dispute and a list of proposed adjustments, all substantiated in
sufficient detail so as to allow proper assessment thereof by the Purchaser.


 


(b)           If no such notice is received
by the Purchaser or the Seller has notified the Purchaser that there are no
items it wishes to dispute, the Draft Completion Accounts shall constitute the
Completion Accounts for the purposes of this agreement and shall be binding on
the parties. The Net Asset Value, Debt, NCLs and Cash as determined by
reference to the Completion Balance Sheet shall be utilised to determine the
Purchase Price (other than the Deferred Consideration).


 


(c)           Only discrepancies with an
impact of EUR100,000 or more on individual line items identified in the schedule headed
“Purchase Price Adjustment Statement” or individual line items in the
Completion Balance Sheet may be disputed by the Seller.


 


6.3           Resolution of Disputed Items


 


(a)           If a notice complying with the
provisions of the clause headed “Notification of Disputed Items” is received by
the Purchaser, the parties shall use their best endeavours to agree in writing
the item or items disputed by the Seller. If such item or items are not agreed
in writing between the parties within 20 Business Days following the delivery
of such notice the item or items in dispute shall be determined by the
Independent Accountants in accordance with the clause headed “Independent
Accountants”.


 


(b)           The Draft Completion Accounts
adjusted to reflect the item or items as agreed between the parties in writing
or as determined by the Independent Accountants shall constitute the Completion
Accounts for the purposes of this agreement. The Net Asset Value, Debt, NCLs
and Cash as determined by reference to the Completion Balance Sheet shall be
utilised to determine the Purchase Price (other than the Deferred
Consideration).


 


11





















 


6.4           Provision of information


 


(a)           The Purchaser shall and shall
procure that the PMD Group Companies and the Purchaser’s Accountants shall
provide the Seller, the Seller’s Accountants and the Independent Accountants
with all information, assistance and access to management of the PMD Group
Companies, books and records of account, documents, files and papers and
information stored electronically which they reasonably require including for
the purpose of enabling the Seller’s Accountants to carry out the procedure
described in the Seller’s Accountants Audit Letter within the periods referred
to in clauses 6.1 and 6.2, in respect of the Seller and the Seller’s
Accountants, for the purposes of this clause and, in respect of the Independent
Accountants, for the purposes of this clause and the clause headed “Independent
Accountants”.


 


(b)           The Purchaser will execute on
request of the Seller’s Accountant letters granting access to the PMD Group
Companies in the form set out in attachment B of the Seller’s Accountants Audit
Letter.


 


(c)           The Seller shall and shall
procure that the Seller’s Accountants shall provide the Purchaser and the
Purchaser’s Accountants with all information, assistance and access to books
and records of account, documents, files and papers and information stored
electronically which they reasonable require, in respect of the Purchaser and
the Purchaser’s Accountants, for the purpose of this clause and, in respect of
the Independent Accountants, for the purposes of this clause and the clause
headed “Independent Accountants”.


 


(d)           In addition, the Purchaser and
the Seller shall respectively procure that the Purchaser’s Accountants and the
Seller’s Accountants provide each other and, in respect of the Completion
Accounts, the Independent Accountants with the opportunity to review all of
their working papers in relation to the Completion Accounts.


 


7.             DEFERRED
CONSIDERATION


 


7.1           Deferred Consideration
Statement


 


If Completion
occurs prior to the last day of the Deferred Consideration Period, the
Purchaser shall procure that within 40 Business Days following the end of the
Deferred Consideration Period, there shall be drawn up and delivered to the
Seller a draft of the Deferred Consideration Statement (the Draft Deferred Consideration Statement) setting out the
EBITA for the Deferred Consideration Period.


 


If Completion
occurs on or after the last day of the Deferred Consideration Period, the
Seller shall procure that within 40 Business Days following the end of the
Deferred Consideration Period, there shall be drawn up and delivered to the
Purchaser the Draft Deferred Consideration Statement setting out the EBITA for
the Deferred Consideration Period.


 


The Draft
Deferred Consideration Statement shall:


 


(a)           be prepared on a basis consistent with that
adopted for the preparation of the Completion Accounts;


 


(b)           include such adjustments as are required to
ensure that the financial impact of changes to the PMD Group on or after
Completion outside the ordinary course of business (including, without limitation,
changes in the capital structure of any PMD Group Company and acquisitions or
disposals by a PMD Group Company of any


 


12





















 


company,
partnership, business or other venture and any reorganisation or restructuring)
are excluded or reversed from the Draft Deferred Consideration Statement;


 


(c)           exclude any management charge in excess of
the average monthly management charge charged by the Seller to the PMD Group
Companies in the period between the Latest Relevant Accounts Date and
Completion insofar as it effects EBITA;


 


(d)           exclude exceptional items;


 


(e)           exclude Rhosili, the Evelyn Street
Property, Berni and Expresso; and


 


(f)            exclude any financial impact related to the
transfer of the Surplus Properties.


 


7.2           Notification of Disputed Items


 


(a)           Within 10 Business Days following delivery
by (as the case may be) the Seller or the Purchaser (the Providing
Party) of the Draft Deferred Consideration Statement to (as the case
may be) the Seller or the Purchaser (the Receiving Party),
the Receiving Party shall notify the Providing Party of any item or items it
wishes to dispute. Such notification shall include the reasons for such dispute
and a list of proposed adjustments, all substantiated in sufficient detail so
as to allow proper assessment thereof by the Providing Party and the Providing
Party’s accountants.


 


(b)           If no such notice is received by the
Providing Party or the Receiving Party has notified the Providing Party that
there are no items it wishes to dispute, the Draft Deferred Consideration
Statement shall constitute the Deferred Consideration Statement for the
purposes of this agreement and shall be binding on the parties. The EBITA as
determined in the Deferred Consideration Statement shall be utilised to
determine the Deferred Consideration.


 


(c)           Only discrepancies with a
value of EUR100,000 or more in individual line items in the Draft Deferred
Consideration Statement may be disputed by the Receiving Party.


 


7.3           Resolution of Disputed Items


 


(a)           If a notice complying with the provisions
of the clause headed “Notification of Disputed Items” is received by the
Providing Party, the parties shall use their best endeavours to agree in
writing the item or items disputed by the Receiving Party. If such item or
items are not agreed in writing between the parties within 20 Business Days
following the delivery of such notice the item or items in dispute shall be
determined by the Independent Accountants in accordance with the clause headed “Independent
Accountants”.


 


(b)           The Draft Deferred Consideration Statement
adjusted to reflect the item or items as agreed between the parties in writing
or as determined by the Independent Accountants shall constitute the Deferred
Consideration Statement for the purposes of this agreement and shall be binding
on the parties. The EBITA as determined in the Deferred Consideration Statement
shall be utilised to determine the Deferred Consideration.


 


13





















 


7.4           Provision of Information


 


(a)           The Purchaser shall and, if applicable,
shall procure that the PMD Group Companies and the Purchaser’s Accountants
shall provide the Seller, the Seller’s Accountants and the Independent
Accountants with all information, assistance and access to books and records of
account, documents, files and papers and information stored electronically
which they reasonably require, in respect of the Seller and the Seller’s
Accountants, for the purposes of this clause and, in respect of the Independent
Accountants, for the purposes of this clause and the clause headed “Independent
Accountants”.


 


(b)           The Seller shall and, if applicable, shall
procure that the Seller’s Accountants shall provide the Purchaser and the
Purchaser’s Accountants with all information, assistance and access to books
and records of account, documents, files and papers and information stored
electronically which they reasonable require, in respect of the Purchaser and
the Purchaser’s Accountants, for the purpose of this clause and, in respect of
the Independent Accountants, for the purposes of this clause and the clause
headed “Independent Accountants”.


 


(c)           The Purchaser and the Seller shall
respectively procure that the Purchaser’s Accountants and the Seller’s
Accountants provide each other and the Independent Accountants with the
opportunity to review all of their working papers in relation to the Draft
Deferred Consideration Statement.


 


7.5           Deferred Consideration


 


(a)           Subject to clause 7.5(b), the Deferred
Consideration will be calculated in accordance with the following formula:


 


Deferred
Consideration = 10 multiplied by (EBITA for the Deferred Consideration Period
minus EUR63,000,000)


 


provided that
if the EBITA for the Deferred Consideration Period is less than EUR63,000,000,
the Deferred Consideration shall be zero.


 


(b)           The maximum Deferred Consideration payable
under this agreement is EUR26,000,000.


 


(c)           The Purchaser shall pay the Deferred
Consideration to the Seller on 1 July 2004.


 


7.6           Conduct of Business


 


(a)           If Completion occurs during the Deferred
Consideration Period, the Purchaser covenants with the Seller that from the
Completion Date to 31 December 2003:


 


(i)            it will not take any action intended to
frustrate the payment of, or which is primarily or substantially intended to
reduce the amount of, the Deferred Consideration;


 


(ii)           (with the intent of giving the Seller a
fair opportunity of receiving Deferred Consideration) the policy of each of the
PMD Group Companies and of the Purchaser in respect of the PMD Group shall be
to promote their profitability in that period consistent with sound commercial
and financial management and to promote the orderly and profitable development
of their business and


 


14





















 


the
generation of new business and the Purchaser will procure that each of the PMD
Group Companies will not take any action to benefit the long term profitability
of the PMD Group Companies primarily or substantially at the expense of
reducing the Deferred Consideration;


 


(iii)          none of the PMD Group Companies will carry
on any business other than that carried on by that PMD Group Company at
Completion and each PMD Group Company shall carry on its business in the
ordinary and proper course in the same way as it was carried on prior to Completion;


 


(iv)          none of the PMD Group Companies will make
any substantial change to the nature or scope of its business as carried on by
that PMD Group Company at Completion.


 


(b)           The Seller covenants with the Purchaser
that, prior to Completion and in the Deferred Consideration Period:


 


(i)            it will not take any action which is
primarily or substantially intended to increase the amount of the Deferred
Consideration;


 


(ii)           the Seller will procure that each of the
PMD Group Companies will not take any action primarily intended to benefit the
short term profitability of the PMD Group Companies primarily or substantially
for the purpose of increasing the Deferred Consideration;


 


(iii)          none of the PMD Group Companies will make
any substantial change to the nature or scope of its business as carried on by
that PMD Group Company as at the date of this agreement.


 


8.             INDEPENDENT
ACCOUNTANTS


 


8.1           If and whenever any item in
dispute relating to the draft Completion Accounts or the Draft Deferred
Consideration Statement falls to be referred, in accordance with the relevant
provision of this agreement, to Independent Accountants, it shall be referred
to such firm of registered accountants (registeraccountants):


 


(a)           as the Seller and the Purchaser may agree
in writing within 10 Business Days after expiry of the period allowed by the
relevant provision of this agreement for the Seller and the Purchaser to reach
agreement over the relevant item in dispute; or


 


(b)           failing such agreement, as shall be
appointed for this purpose on the application of the Seller or the Purchaser
(whichever applies first) by the President of the Dutch Institute for
Registered Accountants (Nederlands Instituut voor
Register Accountants (NIVRA)).


 


8.2           The Independent Accountants
shall act for the purposes of determining the Completion Accounts and the
Deferred Consideration Statement, on the following basis:


 


(a)           the Independent Accountants shall determine
the dispute by means of a binding advice (bindend advies);


 


(b)           the items or items in dispute, which shall
be limited to the items notified pursuant to clause 6.2 or 7.2 (Notification of
Disputed Items) shall be notified to the Independent


 


15





















 


Accountants
in writing, with a copy to the other party, by the Seller and/or the Purchaser
within 10 Business Days following the Independent Accountants’ appointment;


 


(c)           their terms of reference shall be to
determine the item or items in dispute and therefore the calculation of the Net
Asset Value, the Debt, the NCLs, the Cash, the EBITA and the amounts of any
adjustment to be made as a result of such calculation and to render their
decision within 25 Business Days of notice given under (b);


 


(d)           the Independent Accountants shall decide
the procedure to be followed in the determination, but shall allow the parties
to make written representations within a time period specified by the
Independent Accountants. Written representations made by either party shall be
sent to the other at the same time as the written representation is given to
the Independent Accountants; and


 


(e)           the costs of the determination, including
fees and expenses of the Independent Accountants shall be determined by the
Independent Accountants and be borne as the Independent Accountants direct.


 


8.3           The determination of the
Independent Accountants shall (i) be made in writing and made available for
collection by the parties at the offices of the Independent Accountants at such
time as they shall determine and (ii) unless otherwise agreed by the parties
include reasons for each relevant determination.


 


8.4           The
Independent Accountants shall act as experts and not as arbitrators and their
determination of any matter falling within their jurisdiction shall be final
and binding on the parties save in the event of manifest error (when the
relevant part of their determination shall be void and the matter shall be
remitted to the Independent Accountants for correction).


 


8.5           Subject to clause 6.4, nothing
in the clauses “Completion Accounts”, “Deferred Consideration” or “Independent
Accountants” shall entitle a party or the Independent Accountants access to any
information or document which is protected by legal professional privilege, or
which has been prepared by the other party or its accountants and other professional
advisers with a view to assessing the merits of any claim or argument.


 


8.6           Each party and the Independent
Accountants shall, and shall procure that its accountants and other advisers
shall, keep all information and documents provided to them pursuant to clauses “Completion
Accounts”, “Deferred Consideration” or “Independent Accountants” confidential
and shall not use the same for any purpose, except for disclosure or use in
connection with the preparation of the Completion Accounts, the Deferred
Consideration Statement or the proceedings of the Independent Accountants or
another matter arising out of this agreement or in defending any claim or
argument or alleged claim or argument relating to this agreement or its subject
matter.


 


8.7           Where the Independent
Accountants are called upon to confirm the Leverage Ratio under clause 4.6, the
provisions of clauses 8.1 (save that for the purposes of this clause 8.7, the
Seller and Purchaser shall agree within 2 Business Days of the Purchaser’s
request, the identity of the Independent Accountants, failing which clause
8.1(b) shall apply), 8.2(a), 8.3 (subject to the time limit set in clause 4.6),
8.4, 8.5 and 8.6 shall mutatis mutandis
apply.


 


16





















 


9.             LOANS
AND GUARANTEES


 


9.1           On Completion the Seller shall
(on behalf of the Seller’s Group) settle (by way of a payment to the Purchaser
on behalf of each PMD Group Company) all Debt due from the Seller’s Group to
each PMD Group Company in full (subject to any subsequent adjustments under
clause 9.7).


 


9.2           On Completion the Purchaser
shall settle all Debt due from each PMD Group Company to any member of the
Seller’s Group in full (subject to any subsequent adjustments under clause 9.7)
by way of a payment to the Seller (on behalf of the Seller’s Group).


 


9.3           The parties acknowledge that
the Purchase Price has been agreed on the basis that following Completion no
indebtedness of any kind (whether or not presently payable) is owed by any
member of the Seller’s Group to any PMD Group Company or by any PMD Group
Company to any member of the Seller’s Group other than:


 


(a)           any amounts which may be due or become due
by way of trade credit in the ordinary course of trading as a result of goods
or services supplied on normal arm’s length terms;


 


(b)           any amounts which may fall to be paid
pursuant to any express provision of this agreement or any of the documents
required to be executed or delivered pursuant to the provisions of this
agreement; or


 


(c)           any amounts provided for in the Completion
Accounts and due from any PMD Group Company under the Seller’s pension plan or
life assurance scheme in respect of contributions due in the ordinary way by
reason of the participation of the PMD Group Company in those schemes up to the
Completion.


 


9.4           The Seller shall procure that
on Completion the relevant PMD Group Company is released from the mortgage
listed in Part 1 of the schedule headed “Guarantees and Indemnities” and
use reasonable endeavours to procure that the guarantee to Mr van Herk listed
in Part 3 of the schedule headed “Guarantees and Indemnities”. The Seller
shall use reasonable endeavours to procure that as soon as practicable
following Completion each PMD Group Company is released from all other
Encumbrances affecting it and/or its Assets or Business in respect of any
liability or obligation of any member of the Seller’s Group.


 


9.5           The Purchaser shall procure
that on Completion each member of the Seller’s Group is released from the
guarantees and indemnities listed in Part 2 of the schedule headed “Guarantees
and Indemnities”. The Purchaser shall use reasonable endeavours to procure that
as soon as practicable following Completion, each member of the Seller’s Group
is released from all other Encumbrances affecting it and/or its Assets or
Business in respect of obligations of any PMD Group Company.


 


9.6           To the extent that the Seller
or the Purchaser is or will be unable to obtain any release required under
either clause 9.4 or clause 9.5, the Seller or the Purchaser (as the case may
be) shall use reasonable endeavours to procure that the underlying indebtedness
is settled and shall fully indemnify the other party in respect of any such
underlying indebtedness for the period commencing on the Completion Date. In
respect of the guarantee to Mr Van Herk referred to in clause 9.4, the
Purchaser shall (without derogation from any of its obligations under clause
13.2) (a) only claim under any indemnity given by the Seller after having first
exhausted any claims it may have against Mr van Herk or Marflex B.V., and (b)
where any


 


17





















 


indemnification claims is made, cede all rights of recourse against
third parties to the Seller upon settlement of any indemnity claims. Seller
shall also be entitled to use its best endeavours to procure an amendment to
such guarantee and, following Completion, the Purchaser shall provide its
reasonable co-operation in this regard.


 


9.7           If the net amount paid at
Completion under clauses 9.1 and 9.2 (as required by clause 4.3) is different
from the net amount which should have been paid as determined by reference to
the Completion Balance Sheet, either the Purchaser shall pay to the Seller or
the Seller shall pay to the Purchaser (as appropriate) in cash, the sum
necessary to ensure that the correct net payment as required under clauses 9.1
and 9.2 is made. Such amount shall be increased by interest thereon calculated
at a rate of 5 per cent. per annum from Completion until the date of actual
payment.


 


10.          DUE
DILIGENCE INVESTIGATION


 


10.1         The Purchaser acknowledges and
agrees that:


 


(a)           it has performed, with the assistance of
professional advisers, a due diligence investigation with respect to the
Shares, the Assets, the PMD Group Companies and their businesses on the basis
of the information provided by the Seller, the senior management of the PMD
Group Companies, the PMD Group Companies and their advisers (the Due Diligence Investigation); and


 


(b)           the Purchaser has raised with the Seller
issues which the Purchaser considered relevant on the basis of the information
so provided in connection with the transactions contemplated hereby.


 


10.2         The Purchaser represents and
warrants to the Seller that as at the date of this agreement the Purchaser is
not actually aware of any matter (other than matters contained in the
Disclosure Letter) which clearly constitutes or will at Completion clearly
constitute a breach of any Warranty or which will after Completion clearly give
rise to a breach of any Warranty.  With a
view to identifying such matters, the Purchaser has prior to signing this
agreement considered (to the extent that the Purchaser at the date of this
agreement is able to appreciate the impact thereof on the Business or the PMD
Group Companies) all matters arising out of the Due Diligence Investigation
(including matters contained in the due diligence reports prepared for it by
its professional advisers) or contained in the Disclosure Letter.  The fact that certain matters have been
presented or referred to by the Seller in draft versions of the Disclosure
Letter does not create awareness as referred to in this clause 10.2.


 


11.          WARRANTIES


 


11.1         Incorporation of Warranty
Schedule


 


(a)           The Seller warrants and represents (garandeert) to the Purchaser that each and every statement
set out in the schedule headed “Warranties” is true and accurate on the
date hereof except to the extent properly and fairly disclosed in the Disclosure Letter.


 


(b)           The Seller acknowledges that the Purchaser
has entered into this agreement in reliance upon, amongst other things, the
Warranties and the Indemnities and on the undertakings contained in the clause
headed “Protective Covenants”.


 


18





















 


11.2         Updating to Completion


 


(a)           The Seller further warrants and undertakes
to and with the Purchaser that:


 


(i)            subject to matters properly and fairly
disclosed in the Disclosure Letter, unless expressly only given at a date other
than Completion, the Warranties will be fulfilled down to, and will be true and
accurate at Completion as if they had been given again at Completion; and


 


(ii)           subject to clause 11.2(b), if after the
signing of this agreement and before Completion any event shall occur or matter
shall arise which results or may result in any of the Warranties not being true
or accurate at Completion, the Seller shall immediately after having acquired
knowledge thereof notify the Purchaser in writing fully thereof and the Seller
(at its own cost) shall make any investigation concerning the event or matter
which the Purchaser may reasonably require.


 


(b)           The Seller is not required to notify the
Purchaser pursuant to clause 11.2(a)(ii) of any event which results or may
result in any of the Warranties not being true or accurate at Completion in
respect of which damages to which the Purchaser would be entitled do not exceed
EUR100,000.


 


11.3         Allocation of Risk


 


The Seller acknowledges that the Warranties
are material and the accuracy of the Warranties is relevant to the Purchaser’s
decision to enter into this agreement and pay the Purchase Price. The
Warranties (subject to the Disclosure Letter and any limitations thereon under
this agreement) and clause 10.2 allocate between the Seller and the Purchaser
the risks and costs relating to facts or circumstances which may cause any of
the Warranties to be untrue or inaccurate.


 


11.4         Limitation of Liability


 


(a)           The liability of the Seller in
connection with a breach of Warranty shall be subject to the limitations
contained in, and to the other provisions of, the schedule headed “Warranty
Limits” and any Warranty Claim shall be subject to the provisions of that
schedule.


 


(b)           None of the limitations
contained in schedule headed “Warranty Limits” shall apply to any claim
which arises or is increased, or to the extent to which it arises or is
increased, as a consequence of, or which is delayed as a result of any wilful
act or omission (opzet) or gross negligence (grove  nalatigheid) of
the Seller or any officer or employee of any member of the Seller’s Group.


 


11.5         Effect of Completion


 


The Warranties and all other provisions of
this agreement insofar as the same shall not have been performed at Completion
shall not be extinguished or affected by Completion, or by any other event or
matter whatsoever (including, without limitation, any satisfaction and/or
waiver of any Condition), except by a specific and duly authorised written
waiver or release by the Purchaser.


 


19





















 


11.6         Right of Termination


 


(a)           The Purchaser shall be
entitled (in lieu of the right to claim under any Indemnity or make any
Warranty Claim) by notice in writing to the Seller to terminate this agreement
(other than the clauses specified in clause 3.7(b)), if between the date of
this agreement and Completion:


 


(i)            it becomes apparent that prior
to the date of this agreement Seller has failed to disclose any material breach
of any Competition Rule; and


 


(ii)           the Seller was at the date of
this agreement actually aware of such breach; and


 


(iii)          evidence (including any
written declarations) in relation to such breach has been discovered or made
available to the Competition Authority concerned which evidence prima facie alone or in conjunction with other evidence
allows the Competition Authority to take a decision which frustrates fulfilment
of Condition 3.1(b); and


 


(iv)          as a result of such breach of
a Competition Rule, the Purchaser is unable to procure fulfilment of Condition
3.1(b) of this agreement.


 


For the purposes of this clause 11.6(a) Seller’s awareness shall be
limited to the actual awareness of the members of the PMD Group head office
management team based in Amsterdam, each managing director of those PMD Group
Companies, and those employees of the Seller’s Group, listed in the schedule headed
“Consulted Personnel” to the Disclosure Letter.


 


(b)           The Purchaser shall prior to
giving a notice under clause 11.6 which terminates (or purports to terminate)
this agreement consult with the Seller in good faith for a reasonable period in
connection with the taking by the Seller of all such steps as may be possible
(and which cannot be or have not been taken by the Purchaser) to procure the
fulfilment of Condition 3.1(b) and for this purpose the Seller and the
Purchaser shall provide each other with such information as reasonably
requested; and


 


(c)           A notice under clause 11.6(a)
must be accompanied by a written legal opinion by an independent Queens Counsel
in the United Kingdom appointed by the Purchaser that due to the occurrence of
the material breach referred to in clause 11.6(a)(i) and based on the evidence
which has been discovered by or made available to the Competition Authority as
contemplated under clause 11.6(a)(iii) there is a reasonable chance that the
Competition Authority will take a decision which frustrates fulfilment of
condition 3.1(b).


 


(d)           Any termination pursuant to
such a notice shall become effective 10 Business Days after receipt of such
notice by the Seller, unless prior to the end of such period, the Seller has
notified the Purchaser in writing that it disputes the Purchaser’s right to
terminate the agreement under this clause 11.6. 
Should parties be unable to agree any dispute in this regard within 10
Business Days after the Seller’s notification of such dispute to Purchaser, the
parties may refer the matter to arbitration under the provisions of the clause
headed “Arbitration” of this agreement.


 


(e)           The Purchaser shall have no
right to terminate this agreement by reason of, and this clause 11.6 shall not
apply to, any investigations by Competition Authorities or other matters which
have been disclosed to the Purchaser, which shall include those investigations
and matters disclosed in the Data Room or in discussions between the parties.


 


20





















 


A failure to
exercise this right shall not constitute a waiver of any other rights of the
Purchaser to claim under any Indemnity or make any Warranty Claim.


 


11.7         Waiver


 


The Seller undertakes to the Purchaser not
to make or pursue any claim against any PMD Group Company or its respective
officers, employees or agents in connection with assisting the Seller in giving
the Warranties, preparing the Disclosure Letter and/or entering into this
agreement and the documents entered into pursuant to this agreement except in
the case of any criminal proceedings initiated by the Seller against the
aforementioned.


 


11.8         Basis of Damages/Undertaking
to Pay


 


(a)           The Seller agrees and undertakes with the
Purchaser, in the case of a breach of any Warranty, to pay in cash to the
Purchaser (or at the election of the Purchaser to any of the PMD Group
Companies) a sum equal to the damages and losses suffered by the Purchaser
and/or the PMD Group Companies attributable (toerekenbaar)
to the Seller’s breach of Warranty. Such damages and losses shall be calculated
as the amount necessary to put the PMD Group Companies and the Purchaser into
the position which would have existed had the Warranty been true and accurate.
In addition to such damages and losses, the Seller agrees and undertakes to pay
all reasonable costs incurred by the Purchaser and/or the PMD Companies
relating to the prevention or limitation of any loss or damage resulting from
or arising as a result of the breach of the Warranty and in particular, but
without limitation, shall include all reasonable legal and other similar costs
incurred in instructing and retaining professional advisers. This clause does
not limit the Purchaser’s rights in relation to any claim under this agreement
which is not a breach of Warranty.


 


(b)           For the purpose of assessing the damages
for any breach of Warranty, the Seller acknowledges that the Purchaser is
entering into this agreement with the intention that each business comprised
within the PMD Group Companies will be continued as a going concern.


 


11.9         Reduction of Purchase Price


 


Any payment made by the Seller in respect
of a Warranty Claim shall be deemed to be a reduction of that part of the
Purchase Price that the Seller or an Indirect Seller has received hereunder.


 


11.10       Information


 


Without prejudice to the validity of the
Warranty Claim in question, the Purchaser shall allow, and shall procure that
the relevant PMD Group Companies allow, the Seller to investigate the matter or
circumstance alleged to give rise to a Warranty Claim and for such purpose the
Purchaser shall give, and shall procure that the relevant PMD Group Companies
give, subject to being paid all reasonable costs and expenses, all such
information and assistance as the Seller may reasonably request, provided that (i)
the Seller shall not be permitted access to any information or document which
is protected by privilege or which has been prepared with a view to assessing
the merits or quantum of any Warranty Claim, and (ii) the Seller agrees to keep
all information confidential and only to use it for the purpose of the Warranty
Claim in question.


 


21





















 


12.          WARRANTIES
BY PURCHASER


 


12.1         The
Purchaser warrants and represents (garandeert) to
the Seller for itself and for each Acquiring Entity or other Acceding Purchaser
that as at the date of this agreement and at Completion each and every of the
following statements is true and accurate:


 


(a)           the Purchaser and each Acquiring Entity or
other Acceding Purchaser has the legal right and full power and authority to
enter into and perform this agreement and all other documents entered into
pursuant to this agreement.


 


(b)           the Purchaser and each Acquiring Entity or
other Acceding Purchaser has or will at Completion have the legal right and
full power and authority to enter into and perform any Local Transfer Document
to which it is a party and any other documents to be executed by it pursuant to
or in connection with this agreement or any Local Transfer Document.


 


(c)           the Purchaser and each Acquiring Entity or
other Acceding Purchaser has taken all corporate action required by it to
authorise it to enter into and to perform this agreement.  The Purchaser or where appropriate an
Acquiring Entity or other Acceding Purchaser, has (or will prior to Completion
have) taken all corporate action required by it to authorise it to enter into
and to perform any Local Transfer Document to which it is a party and any other
documents to be executed by it pursuant to or in connection with this agreement
or any Local Transfer Document.


 


(d)           the execution and delivery of and the
performance by the Purchaser or, where relevant, an Acquiring Entity or other
Acceding Purchaser of its obligations under this agreement, any Local Transfer
Document to which it is a party and any other documents to be executed by it
pursuant to or in connection with this agreement or any Local Transfer Document
will not:


 


(i)            result in a breach of any provision of the
constitutional documents of the Purchaser or, where relevant, an Acquiring
Entity or other Acceding Purchaser; or


 


(ii)           result in a breach of any order, judgment
or decree of any court, governmental agency or regulatory body to which the
Purchaser or, where relevant, an Acquiring Entity or other Acceding Purchaser
is a party or by which the Purchaser or, where relevant, an Acquiring Entity or
other Acceding Purchaser.


 


13.          SPECIFIC
INDEMNITIES


 


13.1         The Seller shall indemnify the
Purchaser as trustee for itself and the PMD Group Companies (together, the Indemnified Parties), and keep the Indemnified Parties fully
indemnified against, all Losses, relating to or arising out of or in connection
with:


 


(a)           Reorganisation


 


(i)            implementing the
Reorganisation (including in relation to any act, matter or thing done or
omitted to be done in relation thereto);


 


(ii)           breach of applicable laws or
regulations or the constitutional documents of any Reorganisation Company in
relation to the Reorganisation;


 


22





















 


(iii)          the failure of any PMD Group
Company to have absolute legal and beneficial ownership, free from
Encumbrances, of any of the shares and/or assets transferred (or purported to
be transferred) to it as part of the Reorganisation and which are now the
subject of this agreement;


 


(iv)          all assets and liabilities
transferred or purported to be transferred out of any PMD Group Company as part
of the Reorganisation;


 


(v)           breach of Warranties 1.1 (The Shares and PMD Group Companies), 1.2 (Subsidiaries, Associates and Branches) and 8.1 (Ownership and Sufficiency of Assets) arising in connection
with the Reorganisation (and any disclosure against these Warranties in the
Disclosure Letter shall be disregarded for these purposes);


 


(vi)          any attempted or actual
challenge or reversal of any of the transactions undertaken or to be undertaken
pursuant to the Reorganisation.


 


(b)           Employees


 


(i)            the transfer (or purported transfer) of
employment, prior to the date of this agreement, of any employee not employed
by a PMD Group Company whose employment was so transferred (or purportedly
transferred) to a PMD Group Company and who did not prior to such transfer (or
purported transfer) wholly or mainly provide his services to a PMD Group
Company and/or the failure of the Seller, at or prior to Completion to transfer
any employee not employed by a PMD Group Company but who otherwise wholly or
mainly provides their services to a PMD Group Company;


 


(ii)           any claim or allegation by any person not
employed by a PMD Group Company that his or her employment transferred to a PMD
Group Company or to a member of the Purchaser’s Group by operation of law
(including but not limited to, any claim for unfair dismissal, redundancy,
continued employment, reinstatement or reengagement and any claim for a failure
to inform and/or consult with such an employee);


 


(iii)          breach of any legally
enforceable obligation of the Seller, or, to the extent that this should have
been completed prior to Completion, breach of any legally enforceable
obligation of a PMD Group Company, to inform or consult with any Relevant
Employee, Consultant, works council, economic committee or other staff
representative organisation, arising out of or in connection with the
transaction contemplated by this agreement; and


 


(iv)          any claim or allegation arising
out of (i) any breach of paid holidays regulations, (ii) any breach of
regulations concerning collective redundancies and company restructuring
including in the case of modification of the contracts of employment referred
to in the minutes of the Works Council of Buhrmann France Image entitled “Proces
Verbal de la Reunion du 24 Juin 2003” and “Additif au Proces Verbal de la
Reunion du 24 Juin 2003” prepared at Croissy Beauborg on 30 June, 2003 and 28
July, 2003 respectively.


 


(c)           Competition


 


(i)            any breach of any Competition
Rule (Breach) or any investigation, finding
or action by any Competition Authority or a court, tribunal or arbitrator in
relation to the


 


23





















 


conduct of the Business prior to Completion (Inquiry),
subject to the Purchaser taking reasonable steps to mitigate the liability of
the Business;


 


(ii)           for the purposes of clause
13.1(c)(i) and without prejudice to paragraph 2 of the schedule headed “Warranty
Limits”, the Purchaser shall give the Seller written notice of any such Breach
or Inquiry or Loss as soon as possible and the Seller will indemnify the
Purchaser within 10 Business Days of any Loss being paid by any PMD Group
Company; and


 


(iii)          in relation to discussions and
negotiations with and investigations and proceedings by any Competition
Authority and further in relation to any proceedings before any court, tribunal
or arbitrator and any discussions or negotiations with any party in connection
with any actual or anticipated litigation (the Procedure):


 


(A)          any Procedure relating to
activities of the Business ongoing as at Completion shall be exclusively
controlled by the Purchaser and shall be compromised, disposed of or settled by
the Purchaser exclusively;


 


(B)           any Procedure relating to
activities of the Business discontinued prior to Completion or disclosed in the
Data Room shall be exclusively controlled by the Seller and shall be
compromised, disposed of or settled by the Seller exclusively;


 


(C)           the party controlling any
Procedure shall be entitled at its own expense and discretion to take such
action as shall in it’s exclusive judgement be necessary to avoid, contest,
dispute, deny, defend, resist, appeal, admit or compromise any Procedure,
liability or alleged liability relating to the Business, provided that (i) the
Seller will not be entitled to make any undertakings in relation to the future
conduct of the Business without the Purchaser’s consent (such consent not to be
unreasonably withheld or delayed) and (ii) the interests of the other party are
taken into account and (iii) the other party is consulted prior to and informed
as soon as reasonably practicable of all material steps to be taken by the
party controlling proceedings in relation thereto and in relation to any appeals
arising therefrom;


 


(D)          both parties will give and
procure that any member of their respective Groups will give, all such
reasonable information and assistance, including access to premises and
personnel, and the right to examine and copy or photograph any assets,
accounts, documents and records, for the purpose of any Procedure or any appeal
relating thereto as the other party or its professional advisers reasonably
request; and


 


(E)           the indemnification given in
clause 13.1(c)(i) shall be the exclusive remedy of the Purchaser and any PMD
Group Company in respect of the Losses which result directly or indirectly from
any Breach or Inquiry or related Procedure.


 


This clause
13.1 (c) shall apply notwithstanding the provisions of paragraph 5 of the schedule headed
“Warranty Limits”.


 


24





















 


(d)           Securitisation Release


 


(i)            implementing the Securitisation Release
(including in relation to any act, matter or thing done or omitted to be done
in relation thereto);


 


(ii)           the failure or partial failure of the
Securitisation Release to fully and effectively discharge and release each PMD
Group Company from all liabilities and obligations arising out of the
Securitisation;


 


(iii)          the failure of any PMD Group Company to have
absolute legal and beneficial ownership, free from Encumbrances, of any
receivables which, as at the date of the Securitisation Release, are the
subject of the Securitisation;


 


(iv)          breach of applicable laws or regulations or
the constitutional documents of any PMD Group Company in relation to the
Securitisation Release; and


 


(v)           any attempted or actual challenge or
reversal of any of the transactions undertaken or to be undertaken pursuant to
the Securitisation Release.


 


(e)           Property


 


(i)            the Surplus Properties;


 


(ii)           the dispute with Marie Černáková
relating to the ownership of the following plots of land and buildings located
in the registration area of Přízřenice in Brno:


 


(A)          plot no: 816/1;


 


(B)           plot no: 817;


 


(C)           plot no: 818;


 


(D)          plot no: 819/2;


 


(E)           plot no: 822;


 


(iii)          the fact that the main warehouse facility
in Prague does not enjoy rights of access or rights to run service media across
the lands of Čechofracht; and


 


(iv)          the fact that leasehold
Properties in Settimo Torinese, Ancona and Pescara are used for business
purposes without the necessary permission (Agibilita).


 


(f)            Litigation


 


the litigation
or threatened litigation referred to in the following paragraphs of the
Disclosure Letter:


 


(i)            Warranty 1.3.6;


 


(ii)           Warranty 10.1.3; and


 


(iii)          Warranty 10.3.


 


25





















 


(g)           Dormant or Liquidated PMD
Group Companies


 


all PMD Group
Companies which are dormant (as defined in Section 249AA(4) of the
Companies Act 1985 (UK) or any corresponding provisions under the legislation
or laws of any jurisdiction) and the following PMD Group Companies that are in
liquidation or receivership:


 


(i)            Proost & Brandt EA; and


 


(ii)           Broadworth Limited.


 


(h)           IT


 


(i)            any material business disruption or loss of
data resulting from the failure of Deutsche Papier Vertriebs GmbH, Buhrmann
France Image SAS and Kelly Paper Company’s Business IT due to there not being
procedures adequate to the risks facing such companies for back up of data,
disaster recovery and security;


 


(ii)           the inability of Polyedra SpA to adequately
support and maintain SEAP because of the absence of technical documentation;


 


(iii)          the inability of Buhrmann France Image SAS
and the other PMD Group Companies which currently use the GINE and Magsim
applications because of the absence of documentation; and


 


(iv)          the reliability of the current automatic
warehouse system used by Buhrmann France Image SAS because of mechanical or
software problems.


 


(i)            Environment


 


any liability
or obligation under or breach of Environmental Law as a result of the presence
of, or consequences of the presence of, Hazardous Substances in soil,
groundwater or surface water in, on or under the Proost en Brandt B.V. property
in the Netherlands as referred to in the paragraph in the Disclosure Letter
relating to Warranty 13.1.4 (the Dutch Property)
prior to or at Completion including without limitation the off-site migration
of such Hazardous Substances prior to or after Completion.


 


13.2         Limitations
relating to Indemnities


 


(a)           The Seller shall not be liable under the
clause headed “Specific Indemnities” or under any other indemnity provided
under this agreement to the extent that:


 


(i)            specific adjustment, provision or reserve
for such liability is made in the Completion Accounts;


 


(ii)           the Purchaser receives a payment from the
Seller in respect of a Warranty Claim arising out of the same circumstances
that give rise to a claim under this clause 13;


 


(iii)          it relates to a Loss under clause 13.1(h)
which arose out of events which occurred more than 6 months after Completion or
which could have been avoided through the compliance with the applicable or
appropriate IT procedures; or


 


26





















 


(iv)          any liability for Loss which if it were a
liability under a Warranty Claim would not be recoverable under paragraphs 3
(other than 3(c)), 4, 6, 8 or 9 of the schedule headed “Warranty Limits”;


 


(v)           in relation to a Loss under clause 13.1(i)
if it is caused or increased by:


 


(A)          any negligent act or omission of any of the
Indemnified Parties;


 


(B)           any material change of use of the Dutch
Property (or part thereof) after Completion to a materially different use, that
is a use which is not the continued operation of the Dutch Property as it was
operated prior to Completion;


 


(C)           any construction, development or demolition
works at the Dutch Property other than any works undertaken for the continued
operation of the Dutch Property as it was operated prior to Completion; or


 


(vi)          in relation to the Indemnity in clause 13.1(i),
any Loss arising after the tenth anniversary of Completion.


 


(b)           The Seller shall have no liability for any
Loss under the Indemnities in clauses 13.1(b)(iv), 13.1(e)(ii) and (iii),
13.1(f) and 13.1(h)(i), (ii) and (iii) to the extent that a claim is less than
EUR150,000 (and claims relating to a series of connected matters shall be
aggregated for this purpose).


 


13.3         Any payment made by the Seller
in respect of an Indemnity shall be deemed to be a reduction of that part of
the Purchase Price that the Seller or Indirect Seller has received hereunder.


 


14.          PENSIONS


 


Subject to
Completion, the Seller and the Purchaser shall observe and perform those
provisions of the schedule headed “Pensions” as are expressed to be
observed and performed by each of them respectively.


 


15.          TAXATION


 


15.1         The provisions of the schedule headed
“Tax Covenant” shall apply in respect of Taxation.


 


15.2         The Seller and, if Completion
occurs prior to the filing of the Seller’s 2003 Tax Return, the Purchaser will
procure that Buhrmann II B.V. (being the parent of the Seller’s Dutch tax
group) and Motif Paper Company (Europe) B.V. execute a joint request to the
Relevant Tax Authorities for the transfer of the tax loss carry forward
attributable to Motif Paper Company (Europe) B.V. to Motif Paper Company
(Europe) B.V. to be filed together with the Seller’s 2003 Tax Return. The
amount of the tax loss carry forward to be transferred will be no less than
EUR930,000 which will, provided that the Business is conducted in the ordinary
course, result in a tax gain of not less than EUR300,000.


 


16.          PROTECTIVE
COVENANTS


 


The provisions
of the schedule headed “Protective Covenants” shall apply from Completion.


 


27





















 


17.          CONFIDENTIALITY


 


17.1         The parties acknowledge that
the Confidentiality Agreement shall cease to have force or effect from the date
of this agreement.


 


17.2         Subject to clause 17.5,
neither the Seller nor the Purchaser shall make (or permit any other member of
the Seller’s Group or the Purchaser’s Group to make) any announcement
concerning this sale and purchase or any ancillary matter before, on or after
Completion.


 


17.3         The Purchaser shall and shall
procure that:


 


(a)           each member of the Purchaser’s Group from
time to time shall keep confidential all information provided to it by or on
behalf of the Seller or otherwise obtained by or in connection with this
agreement which relates to any member of the Seller’s Group or until Completion
the PMD Group Companies; and


 


(b)           if after Completion any PMD Group Company
holds confidential information relating to the Seller’s Group, it shall keep
that information confidential and, to the extent reasonably practicable, shall
return that information to the Seller or destroy it, in each case without retaining
copies.


 


17.4         The Seller shall and shall
procure that:


 


(a)           the Seller’s Group from time to time shall
keep confidential all information provided to it by or on behalf of the
Purchaser or otherwise obtained by or in connection with this agreement which
relates to any member of the Purchaser’s Group; and


 


(b)           if after Completion the Seller holds
confidential information relating to any PMD Group Company, it shall keep that
information confidential and, to the extent reasonably practicable, shall return
that information to the Purchaser or destroy it, in each case without retaining
copies.


 


17.5         Nothing in this clause
prevents any announcement being made or any confidential information being
disclosed:


 


(a)           with the written approval of the other party,
which in the case of any announcement shall not be unreasonably withheld or
delayed;


 


(b)           to the extent required by law or any
applicable regulation;


 


(c)           to the extent the disclosure or use is
required for the purpose of any judicial proceedings arising out of this
agreement or any other agreement entered into under or pursuant to this
agreement or the disclosure is reasonably required to be made to a Tax
Authority in connection with the Taxation affairs of the disclosing party,


 


but a party
required to disclose any confidential information (except in the case of
disclosure to a Tax Authority) shall promptly notify the other party, where
practicable and lawful to do so, before disclosure occurs.


 


17.6         Nothing in this clause
prevents disclosure of confidential information by either party:


 


(a)           to the extent that the information is in or
comes into the public domain other than as a result of a breach of any
undertaking or duty of confidentiality by any person;


 


28





















 


(b)           to that party’s professional advisers,
auditors or bankers, but before any disclosure to any such person the relevant
party shall procure that he is made aware of the terms of this clause and shall
use its best endeavours to procure that each such person adheres to those terms
as if he were bound by the provisions of this clause; or


 


(c)           to the extent that the disclosure or use is
required to vest the full benefit of this agreement in the Seller or the
Purchaser, as the case may be.


 


18.          NOTICES


 


18.1         Any notice or other formal
communication given under this agreement (which includes fax, but not email)
must be in writing and may be delivered in person, or sent by post or fax to
the party to be served at as follows:


 


(a)           to the Seller at:


Buhrmann N.V.


Hoogoorddreef 62


1101 BE Amsterdam ZO


The Netherlands


Fax: +31 20 651 1011


marked for the attention of: Floris Waller
and Heidi van der Kooij


 


(b)           to the Purchaser at:


PaperlinX Limited


307 Ferntree Gully Road


Mt. Waverley


Victoria 3149


Australia


Fax: +613 8540 2255


marked for the attention of: Darryl
Abotomey


 


with a copy to:


PaperlinX Investments (Europe) Limited

Units 1 & 2

Bricklayers Arms


Mandela Way


London

SE1 5SP


Fax: +44 20 7394 3131


marked for the attention of: Mark Smitheram


 


or at such
other address or fax number as it may notify to the other party under this
clause.  Any notice or other document
sent by post shall be sent by recorded delivery post (aangetekende
post met ontvangstbevestiging) (if the place of destination is the
same as its country of origin) or by courier (if its destination is elsewhere).


 


18.2         Any notice or other
communication shall be deemed to have been given:


 


(a)           if delivered in person, at the time of
delivery; or


 


29





















 


(b)           if sent by post, at 10.00 a.m. on the fifth
Business Day after it was put into the post or at 10.00 a.m. (local time at the
place of destination) on the third Business Day after it was put into the post
by courier; or


 


(c)           if sent by fax, on the date and time
received (local time at the place of destination) if that time falls between
9am and 5pm on a Business Day in the place of receipt and if not, the next
Business Day.


 


18.3         In proving the giving of a
notice or other communication it shall be sufficient to prove that delivery in
person was made or that the envelope containing the communication was properly
addressed and posted, either by recorded delivery post or by prepaid airmail,
as the case may be), or that the fax was properly addressed and transmitted, as
the case may be.


 


19.          FURTHER
ASSURANCES


 


19.1         On or after Completion each
party shall, at its own cost and expense, execute and do (or procure to be
executed and done by any other necessary party) all such deeds, documents, acts
and things as the other party may from time to time require in order give full
effect to this agreement.


 


19.2         Both parties will use all
reasonable endeavours to promote the benefits of the transactions contemplated
in this agreement to all interested parties including employees, customers and
suppliers.


 


19.3         The Purchaser will procure
that within 90 days of Completion the PMD Group Companies cease all use of the
Buhrmann name or logo and the Corporate Express name and any other intellectual
property included in the schedule headed “Excluded Assets”, including
without limitation the use of any letterheads or other stationary including
such names, logo or other intellectual property. With regard to any vehicles,
buildings or marketing brochures on which the Buhrmann name or logo or the
Corporate Express name and any other intellectual property included in the schedule headed
“Excluded Assets” is displayed, the Purchaser shall procure that such display
shall be removed within 12 months of Completion. This clause shall not apply to
any intellectual property registered in the name of a PMD Group Company or
which forms part of the Assets (including without limitation the name
Bührmann-Ubbens B.V.).


 


19.4         The Purchaser shall procure
that each PMD Group Company whose registered name incorporates “Buhrmann” or “Corporate
Express” takes all necessary steps to remove reference to “Buhrmann” or “Corporate
Express” from its registered name (other than the name of Bührmann-Ubbens) as
soon as possible following Completion and by no later than 90 days thereafter.


 


19.5         The Purchaser and the Seller
shall use their best endeavours to develop:


 


(a)           a strategic relationship for the supply of 6000 tonnes
of copy paper from the Purchaser’s Group to the Seller’s Group in Canada per
annum in addition to any existing volumes as at the date of this agreement; and


 


(b)           a supply relationship for the supply of 5000 of tonnes
copy paper from the Purchaser’s Group to the Seller’s Group in the United
States per annum in addition to any existing volumes as at the date of this
agreement.


 


30










 













 


19.6         Following the determination of
any reviewed rent in respect of a Property after Completion, if the Completion
Accounts have not already apportioned liability in accordance with the
principles of this clause then the Seller and the Purchaser shall share
liability for all costs and expenses (including any increases of rent) in
connection with such review in proportion according to the relationship between
the length of that part of the relevant review period falling before Completion
and the length of that part falling after Completion (the former being borne by
the Seller and the latter being borne by the Purchaser) and the Seller shall
indemnify the Purchaser accordingly.


 


20.          TRANSFER
OF RIGHTS AND OBLIGATIONS


 


20.1         If at any time after the date
of this agreement but before Completion, a member of the Purchaser’s Group
(each an Acceding Purchaser) agrees with the
Purchaser that in place of the Purchaser, it will accept the transfer of some
or all of the Shares and/or the Assets, the Purchaser will notify the Seller
and upon such notice, the Seller and the Purchaser shall enter into, and the
Purchaser shall procure that the member of the Purchaser’s Group enters into, a
deed of adherence in the form as set out in the schedule headed “Form of
Deed of Adherence”.


 


20.2         None of the rights or
obligations under this agreement may be assigned or transferred (by way of
succession or otherwise) to a third party by the Seller without the prior
consent of the Purchaser, or by the Purchaser without the prior consent of the
Seller.  In the event any third party
stipulation (derdenbeding) contained in this
agreement is accepted by any third party, such third party will not become a
party to this agreement.


 


20.3         The Seller acknowledges that if the
Purchaser transfers Shares or Assets to a third party purchaser after
Completion pursuant to a condition or obligation stipulated by a Competition
Authority to which notification has been made in compliance with clause 3.1(b),
the Purchaser may be required to give representations, warranties and/or
indemnities to the third party purchaser in relation to such Shares or Assets
and the PMD Group Company so transferred. The Seller acknowledges that any such
representations, warranties and/or indemnities will be provided by the Purchaser
in reliance upon the Warranties and Indemnities. The Seller’s defences
against any claim by the Purchaser arising pursuant to a claim against the
Purchaser by a third party purchaser will not be diminished or increased by
reason of such reliance or by reason of any difference between the Warranties
and Indemnities and the representations, warranties and indemnities provided by
the Purchaser to that third party or by any difference in the knowledge of the
Purchaser and a third party purchaser.


 


21.          GROSSING-UP
OF INDEMNITY PAYMENTS 


 


21.1         Where any payment is made
under this agreement pursuant to an Indemnity, compensation or reimbursement
provision (including, for the avoidance of doubt, the Tax Covenant) and that
sum is subject to a charge to Taxation in the hands of the recipient the sum
payable shall be increased to such sum as will ensure that after payment of
such Taxation (and after giving credit for any Taxation Benefit available to
the recipient in respect of the matter giving rise to the payment) the
recipient shall be left with a sum equal to the sum that it would have received
in the absence of such a charge to Taxation.


 


21.2         Where any sum (the Indemnity Sum) constituting an indemnity, compensation or
reimbursement to any party to this agreement (the Party)
is paid to a person other than the Party but is treated as taxable in the hands
of the Party, the payer shall promptly pay to the


 


31





















 


Party such sum as shall reimburse the Party for all Taxation suffered
by it in respect of the payment (after giving credit for any Taxation Benefit
available to the Party in respect of the matter giving rise to the payment).


 


22.          PAYMENTS


 


22.1         Unless otherwise expressly
stated all payments to be made under this agreement shall be made in Euro to
the Seller, the Purchaser or, where required to be transferred into the Notary’s
third party account, as follows:


 


	
  (a)

  	
  to
  the Seller at:

  	
   

  	
   

  
	
   

  	
  bank:

  	
   

  	
  Deutsche Bank Amsterdam

  
	
   

  	
   

  	
   

  	
  Herengracht 450-454, 1017CV

  
	
   

  	
   

  	
   

  	
  Amsterdam, The Netherlands

  
	
   

  	
  account number:

  	
   

  	
  26.54.43.016

  
	
   

  	
  IBAN:

  	
   

  	
  NL92DEUT0265443016

  
	
   

  	
  BIC Code:

  	
   

  	
  DEUTNL2A

  
	
   

  	
   

  	
   

  	
   

  



 


or such
other account as the Seller may specify; and


 


	
  (b)

  	
  to
  the Purchaser:

  	
   

  	
   

  
	
   

  	
  name:

  	
   

  	
  Paper Australia P/L

  
	
   

  	
  bank:

  	
   

  	
  National Australia Bank Ltd.

  
	
   

  	
   

  	
   

  	
  271 Collins Street

  
	
   

  	
   

  	
   

  	
  Melbourne, Vic 3000

  
	
   

  	
  sort code:

  	
   

  	
  PAPAUEURO1

  
	
   

  	
  IBAN:

  	
   

  	
  NATAAU3303M

  



 


or such other
account as the Purchaser may specify;


 


(c)           to the third party bank account of the
Notary at Deutsche Bank Amsterdam (which the Purchaser shall procure that the
Notary open) to be notified by the Purchaser’s Dutch Lawyers following the date
of this agreement.


 


Payment of
such sum shall be a good discharge to the payer of its obligation to make such
payment.


 


22.2         If any party is required by
law to make a deduction or withholding in respect of any sum payable under this
agreement, such party shall, at the same time as the sum which is the subject
of the deduction or withholding is payable, pay to the receiving party such
additional amount as shall be required to ensure that the net amount received
by the receiving party will equal the full amount which would have been
received by the receiving party had no such deduction or withholding been
required to be made.


 


23.          DEFAULT
INTEREST


 


Save as
otherwise provided in this agreement, if the Seller or the Purchaser default in
the payment when due of any sum payable under this agreement (howsoever
determined) the liability of the Seller or the Purchaser (as the case may be)
shall be increased to include interest on such sum from the date when such
payment is due until the date of actual payment


 


32





















 


(as well after
as before judgment) at a rate of 5 per cent. per annum. Such interest shall
accrue from day to day.


 


24.          GENERAL


 


24.1         The receipt of the Seller’s
Lawyers or the Purchaser’s Lawyers of any sum or document to be paid or
delivered to the Seller or the Purchaser respectively shall discharge the
Purchaser’s or the Seller’s obligation to pay or deliver it to the Seller or
the Purchaser.


 


24.2         Each of the obligations,
Warranties and undertakings set out in this agreement (excluding any obligation
which is fully performed at Completion) shall continue to be in force after
Completion. 


 


24.3         Save as otherwise provided in
this agreement, or as otherwise specifically agreed in writing by the parties
after the date of this agreement, each party will pay the Third Party Costs
incurred by it (and, in the case of the Purchaser, incurred by each member of
the Purchaser’s Group and, in the case of the Seller, incurred by each member
of the Seller’s Group including the PMD Group Companies), including without
limitation, in respect of their obligations in satisfying the Conditions and
the other requirements for transferring the Shares and the Assets which will
include but not be limited to the payment of fees for the services of any
brokers, finders, financial advisers, lawyers and accountants engaged by the
parties. If the parties agree any change to the Agreed Capital Structure prior
to Completion, the party proposing such change shall bear any increase in Third
Party Costs unless otherwise agreed.


 


24.4         All stamp and transfer taxes
and duties attributable to the transfer of the Shares and the Assets to the
Purchaser on Completion will be paid by the Purchaser other than:


 


(a)           the increase in stamp or transfer tax or
duty arising from or attributable to the transfer of the Evelyn Street Property
over the stamp or transfer tax or duty which would be payable on the transfer
of shares in Exploitatie Maatschappij Union B.V. (assuming that such company
sole asset is the Evelyn Street Property); 


 


(b)           any stamp or transfer tax or duty in
Denmark, France or Germany arising from or attributable to the assumption,
transfer or capitalisation of debt on Completion; and


 


(c)           any stamp duty or transfer tax or duty
arising from or attributable to the Reorganisation.


 


24.5         The costs and expenses arising
or attributable to the transfer prior to Completion of Assets to the
Subsidiaries or to new companies, and the stamp or transfer tax or duty
referred to in clause 24.4 (a) and (b), will be paid by and shall be for the
account of the Seller.


 


24.6         This agreement may be executed
in any number of counterparts.  This has
the same effect as if the signatures on the counterparts were on a single copy
of this agreement.


 


24.7         The rights of each party under
this agreement:


 


(a)           may be exercised as often as necessary;


 


(b)           are cumulative and not exclusive of rights
and remedies provided by law; and


 


(c)           may be waived only in writing and
specifically.


 


33





















 


Delay in
exercising or non-exercise of any such right is not a waiver of that right.


 


24.8         If at any time any provision
of this agreement is or becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction, this shall not affect or impair:


 


(a)           the legality, validity or enforceability in
that jurisdiction of any other provision of this agreement; or


 


(b)           the legality, validity or enforceability
under the law of any other jurisdiction of that or any other provision of this
agreement.


 


25.          NO RESCISSION



 


The parties
waive their rights, if any, to in whole or in part annul, rescind or dissolve
(including any gehele dan wel partiële ontbinding en
vernietiging) this agreement. In the event of a breach of this
agreement, the only remedy shall be a claim for specific performance (nakoming) or damages.


 


26.          WHOLE
AGREEMENT


 


26.1         This agreement contains the
whole agreement between the parties relating to the transactions contemplated
by this agreement and supersedes all previous agreements, whether oral or in
writing, between the parties relating to these transactions.


 


26.2         The Purchaser hereby excludes
or (if incapable of exclusion) irrevocably waives (afstand van
recht) the right to invoke any additional protection which may exist
under Article 7:17 of the Dutch Civil Code, and the Seller hereby accepts
such waiver.


 


26.3         Each party acknowledges that
in agreeing to enter into this agreement it has not relied on any
representation, warranty, collateral contract or other assurance (except those
set out in this agreement and any other agreement entered into on the date of
this agreement between the parties) made by or on behalf of any other party before
the signature of this agreement.  Each
party waives all rights and remedies which, but for this subclause, might
otherwise be available to it in respect of any such representation, warranty,
collateral contract or other assurance.


 


26.4         Nothing in the preceding
subclause limits or excludes any liability for fraud.


 


26.5         This agreement may only be
amended in writing and where such amendment is signed by all the parties.


 


27.          GOVERNING LAW


 


27.1         This agreement is governed by
and shall be construed in accordance with the laws of The Netherlands.


 


27.2         Any power of attorney or other
document executed in connection with this agreement or the transactions
provided for in this agreement will be governed by and construed in accordance
with the laws of The Netherlands.


 


34





















 


28.          ARBITRATION 


 


28.1         Save as otherwise set out in
this agreement, any dispute arising out of or in connection with this agreement
(including questions in respect of the authority of the arbitrators) will be
finally settled by arbitration in accordance with the rules of The Netherlands
Arbitration Institute (Nederlands Arbitrage
Instituut).  The arbitral
tribunal will be composed of three arbitrators appointed in accordance with
those rules.  The place of the
arbitration will be Amsterdam, The Netherlands. The language of the arbitration
will be English.  The arbitrators will
decide according to the rules of law. The arbitral tribunal shall not be
entitled to publish any arbitrary judgment. This shall not preclude either
party from seeking injunctive or other interim relief. The parties submit to
the jurisdiction of the courts of Amsterdam, The Netherlands for such purposes.


 


28.2         This clause shall also apply
to disputes arising in relation to agreements which are connected with this
agreement, unless the relevant agreement expressly provides otherwise.


 


29.          LANGUAGE


 


The language
of this agreement and the transactions envisaged by it is English and all
notices, demands, requests, statements, certificates or other documents or
communications shall be in English unless otherwise agreed.


 


35





















 


SIGNATORIES


 


This agreement
has been signed by the parties (or their duly authorised representatives) on
the date stated at the beginning of this agreement.


 


	
  SIGNED BY: /s/ F.F. Waller

  	
  )

  	
   

  
	
  For and on behalf of the Seller:

  	
  )

  	
   

  
	
  By: F.F. Waller

  	
  )

  	
   

  
	
  Title: CFO

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED BY: /s/ D.G. Abotomey

  	
  )

  	
   

  
	
  For and on behalf of the Purchaser:

  	
  )

  	
   

  
	
  By: D.G. Abotomey

  	
  )

  	
   

  
	
  Title: CFO

  	
  )

  	
   

  



 


36





















 


SCHEDULE 9


 


WARRANTIES


 


1             Corporate
Information


 


1.1         The Shares and PMD Group Companies


 


1.1.1      Each
Indirect Seller, in respect of the Shares set out under its name in the schedule headed
“Indirect Sellers”, is:


 


(i)           the sole
legal and beneficial owner of the applicable Shares; and


 


(ii)          has the
right to exercise all voting and other rights of ownership over the applicable
Shares.


 


1.1.2      The
Shares comprise the whole of the issued and allotted share capital of each
Company (other than as set out in the schedule headed “The Companies”),
have been properly and validly issued and allotted and are each fully paid.


 


1.1.3      The
shareholders specified in the schedule headed “The Companies”:


 


(i)           are the
sole legal and beneficial owners of the shares in the Subsidiaries; and


 


(ii)          have the
right to exercise all voting and other rights of ownership over such shares.


 


1.1.4      The
shares in the Subsidiaries comprise the whole of the issued and allotted share
capital of the Subsidiaries, have been properly and validly issued and allotted
and each are fully paid.


 


1.1.5      No person
(other than the shareholders specified in the schedule headed “The
Companies”) has the right (whether exercisable now or in the future and whether
contingent or not or direct or indirect) to call for the allotment, conversion,
issue, registration, sale or transfer, amortisation or repayment of any
share capital of any Company or Subsidiary under any option, agreement or other
arrangement (including conversion rights and rights of pre-emption).


 


1.1.6      At
Completion there will be no Encumbrances affecting any of the Shares or the
shares of any Subsidiary.


 


1.1.7      Save for
those consents, approvals and authorisations set out in the clause headed “Conditions”,
all necessary consents, approvals and authorisations for the transfer of the
Shares have been obtained or will have been obtained by Completion.


 


1.1.8      The
Shares and the shares in the Subsidiaries are not listed on any stock exchange
or regulated market.


 


1.1.9      The
particulars contained in the schedules headed “The Companies” and “The
Subsidiaries of the Companies” are true and accurate.


 


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1.2         Subsidiaries, Associates and Branches


 


1.2.1      No PMD
Group Company:


 


(i)           is the
holder or beneficial owner of, or has agreed to acquire, any share or loan
capital of any other company other than the Subsidiaries; or


 


(ii)          has any
branch, division or establishment outside the jurisdiction in which it is incorporated.


 


1.3         Corporate registers and minute books


 


1.3.1      The
constitutional documents delivered to the Purchaser are true and accurate
copies of the constitutional documents of each of the PMD Group Companies.  No PMD Group Company is currently in breach
of its constitutional documents other than breaches which would have no
significant effect on the PMD Group Company.


 


1.3.2      The
registers, minute books, books of account and other records of whatsoever kind
of each PMD Group Company which are required to be maintained under applicable
law:


 


(i)           are
up-to-date; and


 


(ii)          are
maintained in accordance with applicable law on a proper and consistent basis,


 


other
than where a failure to do so would have no significant effect on the PMD Group
Company and no notice or allegation that any of such books and/or records are
incorrect or should be rectified has been received.


 


1.3.3      All
registers and books referred to in Warranty 1.3.2 and all documents of title
which are the property of each PMD Group Company are in the possession or under
the control of the relevant PMD Group Company.


 


1.3.4      All
corporate filings, publications, registrations and other formalities required
by applicable law to be delivered or made by each PMD Group Company in each
relevant jurisdiction have been duly delivered or made on a timely basis other
than where a failure to do so would have no significant effect on the PMD Group
Company.


 


1.3.5      At all
times when a PMD Group Company has been a subsidiary of the Seller or an
Indirect Seller, all resolutions of each PMD Group Company were, when adopted,
valid and binding resolutions other than where a failure to be so would have no
significant effect on the PMD Group Company.


 


1.3.6      No PMD
Group Company has given a power of attorney or other authority (express,
implied or ostensible) which is still outstanding or effective to any person to
enter into any contract or commitment or to do anything on its behalf, other
than any authority to Relevant Employees to enable them to exercise their
duties in the normal course.


 


38





















 


2             Authority
and Capacity


 


2.1         The Seller has the legal right and full power and
authority to enter into and perform this agreement and all other documents
entered into pursuant to this agreement.


 


2.2         The Seller and each member of the Seller’s Group has or
will at Completion have the legal right and full power and authority to enter
into and perform any Local Transfer Document to which it is a party and any
other documents to be executed by it pursuant to or in connection with this
agreement or any Local Transfer Document.


 


2.3         The Seller or, where relevant, the appropriate member
of the Seller’s Group, has taken all corporate action required by it to
authorise it to enter into and to perform this agreement, The Seller, or where
relevant, the appropriate member of the Seller’s Group, has (or will prior to
Completion have) taken all corporate action required by it to authorise it to
enter into and to perform any Local Transfer Document to which it is a party
and any other documents to be executed by it pursuant to or in connection with
this agreement or any Local Transfer Document.


 


2.4         The execution and delivery of and the performance by
the Seller or, where relevant, a member of the Seller’s Group of its
obligations under this agreement, any Local Transfer Document to which it is a
party and any other documents to be executed by it pursuant to or in connection
with this agreement or any Local Transfer Document will not:


 


2.4.1      result in
a breach of any provision of the constitutional documents of the Seller or,
where relevant, the member of the Seller’s Group or any of the PMD Group
Companies; or


 


2.4.2      result in
a breach or withdrawal of or is likely to result in a breach or withdrawal of,
or give any third party a right to terminate or modify, or result in the
creation of any Encumbrance under, any agreement, licence or other instrument
to which the PMD Group Company is a party; or


 


2.4.3      result in
a breach of any order, judgment or decree of any court, governmental agency or
regulatory body to which the Seller or, where relevant, a member of the Seller’s
Group or any of the PMD Group Companies is a party or by which the Seller or,
where relevant, any member of the Seller’s Group or any of the PMD Group
Companies is bound; or


 


2.4.4      relieve
any person from any material obligation to a PMD Group Company or provide
grounds for the termination by any party of any agreement with a PMD Group
Company.


 


3             Reorganisation


 


With
the exception of the Reorganisation, no PMD Group Company or member of the
Seller’s Group has been involved in any corporate or group restructuring,
including by way of merger, sale of shares, demergers or hive-down of assets,
during the last 6 years as a result of which any PMD Group Company will have
any liability or obligation following Completion to any person other than
another PMD Group Company except where any liability or obligation is provided
for in the Completion Accounts.


 


39





















 


4             Accuracy
and Adequacy of Information Disclosed to the Purchaser


 


4.1         All information contained in the schedule headed “Warranted
Information” was when and in the context in which it was given true and
accurate in all material respects and save for those emails listed at numbers
10 (excluding the response provided to question 543, which is complete), 12,
13, 14, 16 (excluding the response provided to the question regarding accounts
receivable, which is complete), 17 (excluding the response provided to the
question regarding bad debts, which is complete) and 18, complete provided that
insofar as the warranted information is a response to a question or forms part
of any correspondence any related questions or correspondence shall be read
together with the response for the purpose of this Warranty.


 


4.2         The Seller is not aware of any material fact, matter or
circumstance not properly and fairly disclosed in writing to the Purchaser
which renders the information contained in the schedule headed “Warranted Information”
untrue or inaccurate in any material respect as at the date that it was given,
or the disclosure of which might reasonably affect the willingness of a
reasonably experienced purchaser operating in the same industry and assisted by
professional advisers to purchase the Shares and the Assets or the price at or
terms upon which the Purchaser would be willing to purchase them.


 


5             Accounts


 


5.1         Relevant Accounts


 


The Relevant Accounts for the twelve month
period ended on the Relevant Accounts Date:


 


5.1.1      have been
prepared:


 


(i)           in
accordance with applicable law;


 


(ii)          in
accordance with accounting principles, standards and practices generally
accepted at the Relevant Accounts Date in the Netherlands;


 


(iii)         in accordance with
the accounting principles set out in the Buhrmann Group Finance Manual; and


 


(iv)         on a basis
consistent with that adopted for the previous twelve month period.


 


(Items
(i) through (iv) are referred to collectively as the Accounting
Method).


 


5.1.2      give a
true and fair view in accordance with the Accounting Method of the assets,
liabilities, the liquidity and solvency and state of affairs of each of the PMD
Group Companies and of the PMD Group as a whole as at that date and of the
profits or losses of the PMD Group as a whole for the period concerned and as
at that date make:


 


(i)           full
provision for actual liabilities;


 


(ii)          proper
provision (or note in accordance with good accountancy practice) for contingent
liabilities;


 


(iii)         provision reasonably
regarded as adequate for bad and doubtful debts; and


 


(iv)         provision reasonably
regarded as adequate for obsolete or slow moving stock.


 


40





















 


5.2         Management Accounts


 


5.2.1      The
Management Accounts have been prepared in accordance with the accounting
policies used in preparing the Relevant Accounts applied on a consistent basis.


 


5.2.2      The
Management Accounts are true and fair and do not materially misstate the
aggregate assets and liabilities of the PMD Group Companies as at the Relevant
Management Accounts Date nor the aggregate profits and losses of the PMD Group
Companies for the period ended on such date.


 


5.3         Valuation of Stock and Work-in-progress


 


The stock and work-in-progress
were included in the Relevant Accounts and Management Accounts at figures not
exceeding the lower of cost and net realisable value or to the extent that this
is not the case, the Relevant Accounts and/or Management Accounts include
adequate provision for any losses which can reasonably be expected in respect of
such stocks and work-in-progress at the time of their preparation.


 


5.4         Depreciation of Fixed Assets


 


In the Relevant Accounts and
Management Accounts the depreciation methods and policies applied to the fixed
assets of each PMD Group Company are in accordance with the Accounting Method
and are consistent with the methods and policies applied in the previous 24
month period.


 


5.5         Exceptional Items etc.


 


The combined profits of the PMD
Group Companies for each of the 3 years ended on the Latest Relevant Accounts
Date as shown by the Relevant Accounts (and by the Management Accounts for the
period between the Latest Relevant Accounts Date and the Relevant Management
Accounts Date) and the trend of profits thereby shown (but only until the
Relevant Management Accounts Date) are calculated in accordance with the
Accounting Method and have not (except as fairly disclosed in such accounts)
been affected (in an aggregate amount of more than EUR150,000) by changes or
inconsistencies in accounting treatment, by any exceptional items of income or
expenditure, by transactions of an abnormal or unusual nature or entered into
otherwise than on normal commercial terms or by any other factors rendering
such profits for all or any of such periods exceptionally high or low.


 


5.6         Taxation


 


5.6.1      All
actual tax liabilities at the applicable dates have been included in the
Relevant Accounts and the Management Accounts in accordance with the Accounting
Method.


 


5.6.2      Except as
disclosed by the Relevant Accounts and save in so far as full provision is made
in them in a deferred taxation account for Taxation in respect of any balancing
charges which would arise or accrue in respect of any such machinery and plant
on disposal thereof at the value at which the machinery and plant is included
in the Relevant Accounts, the machinery and plant is not included in the
Relevant Accounts at such value that if it were obtained on the disposal or
deemed disposal of the machinery and plant as a whole a balancing charge would
arise or accrue.


 


5.6.3      Proper
provision or reserve for deferred taxation in accordance with the Accounting
Method has been made in the Relevant Accounts and Management Accounts.


 


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5.7         Changes since Latest Relevant Accounts Date


 


Since the Latest Relevant Accounts
Date (and, other than in respect of sub-clauses 5.7.1 and 5.7.3, until the date
of this agreement) as regards each PMD Group Company and save to the extent
properly and fairly disclosed in the Management Accounts or otherwise:


 


5.7.1      there has
been no material adverse change in its financial or trading position or
turnover, and no event, fact or matter has occurred which will give rise to any
such change other than any event, fact or matter which has an impact on the paper
merchanting industry in the territories in which the Business is currently
conducted as a whole;


 


5.7.2      its
business has been carried on in the ordinary course, without any interruption
or alteration in its nature, scope or manner, and so as to maintain the same as
a going concern;


 


5.7.3      its
business has not been materially and adversely affected by the loss of any
important customer or, other than a deliberate termination by the Seller or a
PMD Group Company for a valid business reason, source of supply, or by any
abnormal factor not affecting similar businesses to a like extent and there are no facts which are likely to give rise to any
such effects. For these purposes, an important customer or source of supply
means one which in either of the 2 financial periods immediately preceding the
Latest Relevant Accounts Date accounted for 3 per cent. or more (in the case of
a customer) of the aggregate amount of all sales made by that PMD Group Company
during such periods or 10 per cent. (in the case of a source of supply) of the
aggregate amount of all purchases made by that PMD Group Company during such
periods;


 


5.7.4      there has
been no material increase or decrease in the level of its stock other than
increases or decreases consistent with the prior annual trading cycles of the
PMD Group Companies or required in the ordinary course of business;


 


5.7.5      no share
or loan capital or any other security giving rise to a right over the capital
has been allotted or issued or agreed to be allotted or issued;


 


5.7.6      it has
not redeemed or purchased or agreed to redeem or purchase any of its share
capital;


 


5.7.7      it has
not made or received any surrender relating to group relief or any surrender of
a tax refund;


 


5.7.8      no
insurance claims have been refused or settled below the amount claimed in a
manner inconsistent with past practice; and


 


5.7.9      all
creditors have been paid in a manner consistent with past practice.


 


5.8         Properties


 


All the freehold Properties are
shown in the Relevant Accounts and Management Accounts at their original cost,
or have been written down to a value, in either case which is an amount not
exceeding an independent estimate of the open market value of the freehold
Properties (on the basis of a willing seller/willing buyer) and assuming that
the buyer would use the property for a similar use to its current business use
as at the date of this agreement.


 


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6             Financial
Obligations


 


6.1         Financial Facilities


 


6.1.1      Details
of all financial facilities which remain in place on Completion (including
loans, debentures, overdrafts, obligations under finance leases, foreign
exchange contracts, derivatives and hedging arrangements but excluding
arrangements which are part of commercial agreements or arrangements and are
not in the nature of financial indebtedness) outstanding or available to the
PMD Group Companies listed in the schedule headed “Financial Facilities”
(the Facilities) are given in such schedule and,
so far as Seller is aware, there are no circumstances, other than the
transaction contemplated by this agreement, whereby the continuation of any
such Facilities might cease or be prejudiced, or which may give rise to any
alteration in the terms and conditions of any of the Facilities.


 


6.1.2      There are,
as at the date of this agreement, no liabilities of the PMD Group Companies
other than:


 


(i)           liabilities
disclosed or provided for in the Latest Relevant Accounts; or


 


(ii)          liabilities
incurred in the ordinary course of business as a paper merchanting business
since the Latest Relevant Accounts Date, none of which will result in a
material adverse change in the financial or trading position or turnover of the
PMD Group Companies.


 


6.2         Guarantees


 


Other than in the ordinary course of business and save as disclosed in
the schedules headed “Assets” and “Guarantees and Indemnities” there is no
outstanding guarantee, indemnity, surety or security given:


 


6.2.1      by any
PMD Group Company; or


 


6.2.2      for the
benefit of any PMD Group Company.


 


7             Insolvency


 


For
the purposes of this Warranty 7, references to each PMD Group
Company shall be deemed to include references to each Reorganisation
Company.


 


7.1         No PMD Group Company is insolvent under the laws of its
jurisdiction of incorporation (save for any PMD Group Companies which may be
technically insolvent because their liabilities exceed their assets but are
financially supported by the Seller’s Group) or unable to pay its debts as they
fall due.


 


7.2         There are no proceedings in relation to any compromise
or arrangement with creditors or any winding up, bankruptcy or other insolvency
proceedings concerning any PMD Group Company and no events have occurred which
would justify such proceedings.


 


7.3         No steps have been taken to enforce any security over
any assets of any PMD Group Company and, so far as the Seller is aware, no
event has occurred to give the right to enforce such security.


 


43





















 


7.4         There are no transactions capable of being set aside,
stayed reversed, avoided or affected in whole or in part by any insolvency
proceedings in relation to any PMD Group Company whether as transactions at an
undervalue, in fraud of or against the interest of creditors or preferences or
Paulian actions or similar concepts or legal principles.


 


8             Assets


 


8.1         Ownership and Sufficiency of Assets


 


8.1.1      All
assets included in the Latest Relevant Accounts or acquired by any of the PMD
Group Companies since the Latest Relevant Accounts Date, other than the
Properties (to which Warranty 12 applies), the Business IPR (to which Warranty
14 applies) and any assets disposed of or realised in the ordinary and usual
course of business:


 


(i)           are or
will at Completion be legally and beneficially owned by the PMD Group
Companies;


 


(ii)          are,
where capable of possession, in the possession or under the control of the
relevant PMD Group Company; and


 


(iii)         are free from
Encumbrances other than those arising in the ordinary course of business.


 


8.1.2      Following
Completion, the PMD Group Companies will own or licence or have other legal
rights to all the property, rights and assets necessary (including the
Properties, the Business IPR and Business IT, but other than the Excluded
Assets) for the carrying on of the business of the Group in the manner in, and
to the extent to, which it is presently conducted.


 


8.2         Plant and Machinery


 


8.2.1      The plant
and machinery, vehicles and other equipment owned or used by the PMD Group
Companies:


 


(i)           subject
to normal wear and tear, are in standard repair and condition and reasonable
working order taking into account ageing and write-off;


 


(ii)          have in
the ordinary course of business been adequately maintained; and


 


(iii)         are not in a
dangerous (with the exception of dangers inherent therein) or obsolete state or
condition.


 


8.3         Stock


 


8.3.1      Save to
the extent that any specific allowance or provision has been made in the Latest
Relevant Accounts or the Management Accounts, the stock-in-trade held by each
PMD Group Company is not excessive but is adequate in relation to the current
trading requirements of that PMD Group Company, is in good, undamaged and
merchantable condition, is not obsolete, slow-moving or inappropriate and is
capable of being sold without incurring a loss in the ordinary and usual course
of business in accordance with current practice.


 


44





















 


8.3.2      The
levels of stock-in-trade are not materially different from those which each PMD
Group Company normally has at this stage in their trading year except where
this is necessary to conduct the business in the ordinary course.


 


8.4         Debts


 


Save to the extent that specific provision has been made in the
Relevant Accounts or Management Accounts:


 


8.4.1      no PMD
Group Company has lent any money which has not been repaid, nor owns the
benefit of any debts (whether or not due for payment), other than trading debts
which have arisen in the ordinary course of business;


 


8.4.2      no PMD
Group Company has made any loan or quasi-loan contrary to applicable
legislation or its constitutional documents;


 


8.4.3      none of
the debts receivable or due to any PMD Group Company which are included in the
Relevant Accounts or which have subsequently arisen:


 


(i)           have been
released on terms that the debtor has paid less than the full value of his debt
other than in the ordinary course of business;


 


(ii)          have been
deferred, subordinated or written off or has proved to be irrecoverable to any
extent;


 


(iii)         are subject to any
set-off (or other right of retention) or counter-claim other than against or in
respect of any obligation included in the Relevant Accounts or the Management
Accounts; or


 


(iv)         will at Completion
be factored or assigned;


 


and such debts have in aggregate realised or will in aggregate realise
within 12 months their full value as included in the Latest Relevant Accounts
or in the books of the relevant PMD Group Company after taking into account the
provision for bad and doubtful debts as provided for in accordance with the
Accounting Method.


 


8.5         Diminution of Assets


 


There has been no impairment in
the values of the underlying assets of Rhosili, Berni and Expresso and the
Evelyn Road Property shown in the schedule headed “Purchase Price
Adjustment Statement” as against the values set out against each of those
Assets shown in such schedule other than depreciation.


 


8.6         Cash extraction


 


All cash held in bank accounts of
the PMD Group Companies is capable of being paid by way of dividend or loan
without any penalty being incurred, other than standard withholding or similar
taxes (where applicable).


 


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9             Contracts


 


9.1         General


 


As at the date of this agreement,
no PMD Group Company is a party to or subject to any contract, transaction,
arrangement, understanding, obligation or liability which:


 


9.1.1      is not in
the ordinary and usual course of a paper merchanting business (or an office
products business not significant in relation to the Business of the PMD Group
Companies);


 


9.1.2      is not
wholly on an arm’s length basis;


 


9.1.3      is of a
long term nature that is unlikely to have been fully performed, in accordance
with its terms, more than 12 months after the date on which it was entered into
or undertaken other than employment agreements, car leases, property leases or
other agreements related to facility or equipment;


 


9.1.4      restricts
its freedom to carry on its business in any part of the world in such manner as
it thinks fit other than any restrictions contained in the standard terms and
conditions of contractual counterparties; or


 


9.1.5      involves,
or is likely to involve, the supply of goods and services, the aggregate sales
value of which (exclusive of VAT) will be more than 5 per cent. of turnover of
the PMD Group Company (exclusive of VAT) for the preceding financial year.


 


For the purposes of this schedule,
“arm’s length” shall mean commercial terms and conditions which could
reasonably be agreed between parties with no connection to one another other
than a commercial relationship.


 


9.2         Substantial Dependence


 


In the 2 financial periods immediately
preceding the Latest Relevant Accounts Date no person has:


 


(i)            purchased from any PMD Group Company more than 3 per
cent. of the aggregate amount of all sales made by that PMD Group Company
during such periods; or


 


(ii)           sold to any PMD Group Company more than 10 per cent. of
the aggregate amount of all purchases made by that PMD Group Company during
such periods.


 


9.3         Capital Commitments


 


As at the date of this agreement
there are no material capital commitments
entered into by any of the PMD Group Companies. For these purposes, a material
capital commitment is one involving capital expenditure of over EUR500,000
exclusive of VAT.


 


9.4         Joint Ventures etc.


 


As at the date of this agreement,
no PMD Group Company is or has agreed (or proposes) to become a member of any
joint venture, consortium, partnership, other unincorporated association or a
party to any arrangement or agreement in respect of any of which any profit
sharing has been agreed or is proposed.


 


46





















 


9.5         Agreements with Connected Persons


 


9.5.1      There are
no existing contracts or arrangements between, on the one hand, any PMD Group
Company and, on the other hand, the Seller, any member of the Seller’s Group or
any director (or relative of a director) of the Seller or any member of the
Seller’s Group other than normal trade contracts.


 


9.5.2      Other
than pursuant to employment contracts, there is no indebtedness (actual or
contingent) between, on the one hand, a PMD Group Company and, on the other hand,
any current or former employee, director or Consultant of any such PMD Group
Company or any relative of any of such persons.


 


9.6         Compliance with Agreements


 


9.6.1      All the
material contracts to which any of the PMD Group Companies are a party are
valid and binding obligations of the parties thereto and the relevant PMD Group
Company and, so far as the Seller is aware, each other party to such contracts
is in current material compliance with the terms of such contracts.


 


9.6.2      No notice
of termination or of intention to terminate has been received in respect of any
material contracts and, so far as the Seller is aware, there are no grounds for
rescission, avoidance or repudiation (or comparable rights arising in any other
jurisdiction) of any of such material contracts.


 


9.6.3      For the
purposes of this Warranty, a contract is a material contract
if it satisfies the criteria set out in Warranty 9.1.5 or is a material
Business IT agreement.


 


10          Legal
Compliance and Litigation


 


10.1       Licences and Consents


 


10.1.1    All licences,
consents, authorisations, orders, warrants, confirmations, permissions,
certificates, approvals, registrations and authorities necessary or appropriate
for carrying on the Business have been obtained, are in force, do not contain
conditions which would hinder the ordinary course of business, and are being
complied with in all material respects.


 


10.1.2    There is no
investigation, enquiry or proceeding outstanding or, so far as the Seller is
aware, anticipated which is likely to result in the suspension, cancellation,
material modification or revocation of any of the licences or other matters
referred to in Warranty 10.1.1.


 


10.1.3    None of the licences
or other matters referred to in Warranty 10.1.1 have been breached (other than
a breach which has subsequently been rectified) or, so far as the Seller is
aware, are likely to be suspended, cancelled, refused, materially modified or
revoked.


 


10.2       Compliance with Laws


 


10.2.1    Each PMD Group
Company is validly existing and is a company duly incorporated under applicable
law.


 


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10.2.2    The business of each
PMD Group Company is being carried on so that there are not any breaches of
applicable laws and regulations in each country in which the business is or has
been carried on other than breaches which would have no significant effect on
the PMD Group Company.


 


10.2.3    No PMD Group Company
has received any notice or other communication (official or otherwise) from any
court, tribunal, arbitrator, governmental agency or regulatory body with
respect to an alleged actual or potential violation and/or failure to comply
with any such applicable law, regulation, bye-law or constitutional document,
or requiring it to take or omit any action.


 


10.2.4    None of the directors,
officers, agents, employees or other persons acting on behalf of any PMD Group
Company has been party to the use of any of the assets of the PMD Group
Companies for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity or to the making of any direct or
indirect unlawful payment to government officials or employees from such
assets; to the establishment or maintenance of any unlawful or unrecorded fund
of monies or other assets; to the making of any false or fictitious entries in
the books or records of any PMD Group Company or to the making of any unlawful
or undisclosed payment.


 


10.3       Litigation


 


10.3.1    No PMD Group Company
(or any person for whose acts or defaults a PMD Group Company may be vicariously
liable) is involved whether as claimant or defendant or other party in any
claim, legal action, proceeding, suit, litigation, prosecution, mediation,
investigation or arbitration (other than as claimant in the collection of debts
arising in the ordinary course of its business) (together, Proceedings).


 


10.3.2    No Proceedings are
pending or, so far as the Seller is aware, threatened by or against any PMD
Group Company.


 


10.3.3    There are no
disciplinary proceedings or, so far as the Seller is aware, investigations or
other circumstances likely to lead to any Proceedings.


 


10.3.4    No execution or
other enforcement process has been levied in respect of a PMD Group Company and
there is no judgment or court order outstanding against a PMD Group Company.


 


11          Anti-Competitive
Agreements and Practices


 


11.1       Anti-Competitive Acts


 


11.1.1    Save as disclosed in
the Data Room no PMD Group Company or employee, director or officer of any PMD
Group Company is a party to any agreement, arrangement or, so far as the Seller
is aware, concerted practice or is carrying or has carried on any practice:


 


(i)           which in
whole or in part may contravene or may be invalidated by any anti-trust, fair
trading, dumping, state and consumer protection or similar legislation in any
jurisdiction and in particular and without prejudice to the generality of the
foregoing, which in whole or in part may contravene any Competition Rule;


 


48





















 


(ii)          in
respect of which any filing, registration, approval or notification may be
required or may be advisable pursuant to the legislation referred to in
Warranty 11.1.1 (i) (whether or not the same has in fact been made);


 


(iii)         which is subject to
any application (either pending or granted, whether formally or informally) for
negative clearance or exemption made to the Commission of European Communities
or any competition authority under any applicable national competition law;


 


(iv)         which is void or
unenforceable (whether in whole or in part) or may render any of the PMD Group
Companies liable to proceedings under any such legislation as is referred to in
Warranty 11.1.1(i) above.


 


11.1.2    Save as disclosed in
the Data Room, no PMD Group Company, nor, so far as the Seller is aware, any
employee, director or officer of any PMD Group Company, has received any formal
or, so far as the Seller is aware, informal communication or notification that
any proceedings under any applicable anti-trust, fair trading, consumer
protection or similar legislation in any relevant jurisdiction have been
initiated, nor are any such proceedings contemplated by any PMD Group Company,
nor has any claim been made or, so far as the Seller is aware, threatened
alleging any contravention of any such legislation.


 


11.1.3    No PMD Group Company
has given any undertaking and no order has been made against or in relation to
any such PMD Group Company pursuant to any anti-trust or similar legislation in
any jurisdiction in which the PMD Group Company carries on business or has
assets or sales.


 


12          Property


 


12.1       The Properties


 


12.1.1    As at the date of
this agreement, the Properties comprise all of the premises and land owned,
occupied or otherwise used in connection with the Business or in which the PMD
Group Companies have an interest;


 


12.1.2    No PMD Group Company
has any continuing liability in respect of any property other than the
Properties;


 


12.1.3    True and accurate
details of the Properties have been completed in the schedule headed “Properties”.


 


12.1.4    The Surplus
Properties are not used in connection with the Business.


 


12.2       Title


 


In relation to each Property:


 


12.2.1    the PMD Group
Company or the relevant member of the Seller’s Group named in the schedule headed
“Properties” as owner of the Property is the legal owner of and beneficially
entitled to the whole of the proceeds of sale of and has a good and marketable
title to the whole of the Property;


 


49





















 


12.2.2    with the exception
of the Surplus Properties and the Third Party Agreements set out in the schedule headed
“Third Party Agreements” the relevant PMD Group Company or the relevant member
of the Seller’s Group is in physical possession and actual occupation of the
Property.


 


12.2.3    the PMD Group
Company or the relevant member of the Seller’s Group has in its possession, or
unconditionally held to its order all the necessary documents to establish
title to the Property;


 


12.2.4    there are no
mortgages, charges (whether legal or equitable and whether fixed or floating)
or debentures, rent charges, liabilities to maintain roadways, liens (whether
for costs or to an unpaid seller or otherwise), annuities or other unusual
outgoings, or trusts (or comparable instruments in other jurisdictions)
(whether for securing money or otherwise), affecting the Property or the
proceeds of sale thereof;


 


12.2.5    save as to any
matter arising from applicable local legislation the Property is not subject to
any adverse estate, right, interest, covenant, restriction, stipulation,
easement, wayleave, licence or other right or informal arrangement in favour of
any third party (whether in the nature of a public or private right or
obligation) which would affect the conduct of business at the Property in the
ordinary course nor is there any agreement to give or create any of the
foregoing;


 


12.2.6    the Property is not
subject to any option, right of pre-emption or sale contract nor is there any
agreement to give or create any of the foregoing;


 


12.2.7    the Property enjoys
access to and egress from roads over which there is a public right of way and
the Property has all facilities, easements and rights necessary for the
enjoyment and present use of the Property on terms which do not entitle any
person to terminate or curtail the same;


 


12.2.8    there are no
outstanding actions, disputes, claims or demands between the PMD Group Company
or the relevant member of the Seller’s Group and any third party affecting the
Property or any neighbouring property which would affect the conduct of
business at the Property in the ordinary course or the title to or the value of
the Property;


 


12.2.9    there has been no
material breach of any covenants, obligations, title conditions, restrictions,
stipulations, easements, servitudes or other matters relating to the Property;


 


12.2.10  there are no consents
required by or restrictions contained in any title document or elsewhere which
would affect the Property as a result of a change in control of the PMD Group
Company;


 


12.2.11  where the Property
is being transferred by way of asset sale, there are no consents required by or
restrictions contained in any title document or otherwise which would affect
the transfer of the Property.


 


12.3       Planning


 


In relation to each Property:


 


12.3.1    All planning
authorisations:


 


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(i)           have been
obtained;


 


(ii)          are in
force;


 


(iii)         have been and are
being complied with; and


 


(iv)         are capable of being
complied with in the future.


 


12.3.2    So far as the Seller
is aware, no circumstances exist which could result in a planning authorisation
either (i) being revoked, suspended, varied or limited or which may prejudice
its renewal or (ii) requiring variation or amendment to enable the continued
operation of the business of any PMD Group Company or the relevant member of
the Seller’s Group.


 


12.4       State and Condition of the Properties


 


In relation to each of the Properties:


 


12.4.1    the buildings and
other structures on the Property are not subject to any structural or material
other defects which could adversely affect the present use and enjoyment of the
Property;


 


12.4.2    the buildings and
other structures on the Property are fit for the purposes for which they are
presently used and all obligations relating to repair contained in any
agreement relating to the Property have been complied with save for fair wear
and tear.


 


12.5       Leasehold Properties


 


Where the interest of the PMD
Group Company or the relevant member of the Seller’s Group in any Property is
leasehold (including without limitation occupational leases) true and accurate
details have been completed in the schedule headed “Properties” and other
than as reflected in that schedule:


 


12.5.1    any consent
necessary for the grant of the lease under which the PMD Group Company or the
relevant member of the Seller’s Group holds its interest in the Property (the Lease) was duly obtained;


 


12.5.2    there is no material
subsisting breach, nor any material non-observance of any covenant, condition
or agreement contained in the Lease on the part of either the relevant landlord
or the PMD Group Company or the relevant member of the Seller’s Group;


 


12.5.3    there are no
restrictions in the Lease which prevent the Property being used now or in the
future for the present use;


 


12.5.4    the Lease is not
subject to any rights of early termination except for non-payment of rent or
breach of covenant by the tenant;


 


12.5.5    no alterations have
been made to the Property at the expense of the PMD Group Company or the
relevant member of the Seller’s Group without all necessary consents and
approvals;


 


51





















 


12.5.6    the tenant can,
subject to applicable local legislation, assign or underlet the whole of the
Property subject only to obtaining the landlord’s consent (such consent not to
be unreasonably withheld);


 


12.5.7    as at the date of
this agreement all steps in rent reviews have been duly taken and no rent
reviews are outstanding; and


 


12.5.8    the Lease does not
contain any unusual or objectionable covenants or agreements (including without
prejudice to the foregoing any rent review provisions which are not in
accordance with standard market practice in the relevant jurisdiction) having
regard to the use to which the Property is currently put.


 


12.6       Properties subject to Third Party Agreements


 


Where any Property is as at the
date of this agreement subject to any lease or other occupational agreement (a Third Party Agreement) for the benefit of any person other
than the PMD Group Company true and accurate details have been completed in the
schedule headed “Third Party Agreements” and:


 


12.6.1    there is no material
subsisting breach or material non-observance of any covenant, condition or
agreement contained in any such Third Party Agreement;


 


12.6.2    there are no
provisions in any such lease or licence that entitle the undertenant to
compensation on leaving the Property at the end of the lease term;


 


12.6.3    all consents
necessary for the creation of such Third Party Agreement were obtained;


 


12.6.4    the PMD Group
Company or the relevant member of the Seller’s Group can terminate each such
Third Party Agreement in cases of bankruptcy or the liquidation or winding-up
of the undertenant as well as for any breach of the undertenant’s obligations;


 


12.6.5    as at the date of
this agreement all steps in rent reviews have been duly taken and no rent
reviews are outstanding; and


 


12.6.6    no such Third Party
Agreement contains any unusual or objectionable covenants or agreements adverse
to the interests of the PMD Group Company or the relevant member of the Seller’s
Group.


 


12.7       Specific Property Warranties


 


12.7.1    No PMD Group Company
holds in perpetual usufruct any real property in Poland.


 


12.7.2    In relation to any
freehold Property located in Austria, the superstructure (superädifikat)
on the Property is owned by the relevant PMD Group Company or the relevant
member of the Seller’s Group (as the case may be).


 


13          Environment


 


13.1       Environmental, Health and Safety and Products Liability


 


13.1.1    Each PMD Group
Company is conducting, and has conducted, its business in compliance with
Environmental Law and any material permits or licences issued thereunder.


 


52










 













 


13.1.2    No PMD Group Company
has received notice of any civil, criminal, regulatory or administrative
action, claim, investigation or other proceeding or suit arising from or
relating to Environmental Law or in respect of any pollution or harm to the
Environment and no such actions, claims, investigations, proceedings or suits
are pending or, so far as the Seller is aware, threatened.


 


13.1.3    There is no
pollution or contamination of soil, surface water or groundwater at or
emanating from any of the Properties for which any PMD Group Company could
incur liability under Environmental Law.


 


13.1.4    There is no asbestos
in the fabric of any building or other man-made structure at any Property in a
condition that constitutes a breach of or liability under Environmental Laws or
is such as to require remedial works or other action to bring into compliance
with Environmental Laws.


 


14          Intellectual
Property and Information Technology


 


14.1       All rights in and to Business IPR (other than any which
forms part of the Excluded Assets) which have been, are, or are capable of,
being used in or in relation to or which are necessary for the conduct and
operation of the Business are:


 


14.1.1    legally and
beneficially owned by a PMD Group Company or lawfully used with the consent of
the owner under a licence;


 


14.1.2    valid, enforceable
in the territories to which they relate and free from Encumbrances;


 


14.1.3    not being infringed
or attacked or opposed by any person;


 


14.1.4    in the case of
material rights in Registered Group IPR, listed and described in the schedule headed
“Intellectual Property” and all renewal fees which are due and steps which are
required for their maintenance, have been paid; and


 


14.1.5     no claims have been
made, which if pursued, might be material to the truth and accuracy of any of
the above.


 


14.2       So far as the Seller is aware, the processes employed
and the products dealt in by the PMD Group Companies at the date of this
agreement do not infringe any rights or interests of third parties in
Intellectual Property and no claims of infringement of any such rights or
interests have been made by any third party.


 


14.3       All material Business IPR Licences:


 


14.3.1    have been disclosed
to the Purchaser, are in full force and effect and no notice has been given on
either side to terminate them;


 


14.3.2    so far as the Seller
is aware, have been fully complied with and no disputes have arisen or are
foreseeable in respect of them.


 


14.4       Information Technology


 


14.4.1    The Business IT is
owned by or licensed to the relevant PMD Group Company.


 


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14.4.2    In all material
respects, the Business IT is in good working order. The present capacity and
performance of the Business IT is sufficient to satisfy the current and
reasonably projected business requirements (including requirements as to data
volumes) of the PMD Group Companies.


 


14.4.3    If the Business IT
is operated in accordance with current projected requirements, it will not
require investment in the 12 month period following the date of this agreement
which would be materially disproportionate compared to the average investment
in the 36 months prior to the date of this agreement.


 


14.4.4    There are, and in
the past two years there have been, no performance reductions or breakdowns of,
or logical or physical intrusions to, any Business IT or loss of data which
have had (or are having) a material adverse effect on the business of any PMD
Group Company and the Seller is not aware of any fact or matter which may give
rise to such a material adverse effect.


 


14.4.5    Each PMD Group
Company has in place procedures which are reasonably adequate:


 


(i)           to
prevent unauthorised access to and the introduction of viruses and other
contaminants into the Business IT;


 


(ii)          to take
and store on-site and off-site back-up copies of the software and data in the
Business IT; and


 


(iii)         given the risks
facing such companies, to ensure that the business of the PMD Group Companies
can continue without material disruption in the event of breakdown of performance
reduction of the Business IT or loss of data, whether due to natural disaster,
power failure or otherwise.


 


14.4.6    In the event that
the persons providing maintenance or support services for the Business IT cease
or are unable to do so, the PMD Group Companies have the necessary rights,
expertise and information to continue to maintain and support or have a third
party maintain and support the Business IT in a manner which allows the
business to continue its ordinary course.


 


14.4.7    The Business IT of
all PMD Group Companies incorporated in countries in which the Euro is the
official currency or where it is planned to be adopted as such within the next
2 years is capable in all material respects of handling operations in the Euro
and accurately converting data in connection with the introduction of the Euro
and complying with the rules on conversion and rounding set out in EC
Regulation number 1103/97 or any legislation adopting or incorporating that
regulation.


 


15          Employees
and Employee Benefits


 


15.1       Employees and Terms of Employment


 


15.1.1    The Management
Accounts contain details, in relation to each PMD Group Company, of the
approximate total number of Relevant Employees employed by each PMD Group
Company as at the date of this agreement (including those who are on maternity
or paternity or parental leave or absent on the grounds of disability or other
long-term leave of absence, and have or may have a statutory or contractual
right to return to work in the PMD Group Company).


 


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15.1.2    As at the date of this agreement there are no
Senior Employees or Consultants who are subject to terms and conditions of
employment or engagement (as the case may be), including amendments yet to take
effect, other than terms and conditions disclosed to the Purchaser.


 


15.1.3    As at the date of this agreement there are no
Relevant Employees (other than Senior Employees) in Germany, the Netherlands,
France and the UK who are subject to terms and conditions of employment that
are materially different from the specimen terms and conditions for employees
of the same grade or category which have been disclosed to the Purchaser.


 


15.1.4    As at the date of this agreement there are no
Relevant Employees (other than Senior Employees or Relevant Employees in
Germany, the Netherlands, France and the UK) whose terms and conditions of
employment are not standard industry terms and conditions in the particular
jurisdiction in which such an employee is employed and which are such as to
have a material and adverse effect on a PMD Group Company (either in respect of
a term or condition of an individual Relevant Employee, or with respect to the
cumulative effect of a term or condition which is common to more than one
Relevant Employee).


 


15.1.5    As at the date of this agreement there are no
employees or contractors who wholly or mainly provide their services to a PMD
Group Company who are not themselves employed or engaged by a PMD Group Company
and who, if they were so employed or engaged, would be Senior Employees or
Consultants (as the case may be).


 


15.1.6    No legally
enforceable liability which remains undischarged (and which has a material and
adverse effect on a PMD Group Company, either of itself or cumulative with any
other such liability of the same nature arising out of the same facts and
circumstances) has been or may be incurred by any PMD Group Company for any
obligation owed to any Relevant Employee, Consultant, Works Council, Economic
Committee or other staff representative organisation.


 


15.2       Termination of Employment


 


As at the date of this agreement
and except as detailed in the Data Room in respect of reorganisation
redundancies:


 


15.2.1    notice has not been
given and since 31 March 2003 there have been no proposals to terminate
the employment or consultancy (as relevant) of:


 


(i)           any
Senior Employee;


 


(ii)          more than
20 Relevant Employees in any one location; or


 


(iii)         any Consultant.


 


15.3       Disputes


 


15.3.1    No PMD Group Company
is, or has in the 2 years preceding the date of this agreement been involved in
any industrial or trade dispute or any dispute or negotiation regarding a claim
of material importance with any trade union or other body representing
employees or former employees of the Seller.


 


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15.3.2    No PMD Group Company
is as at the date of this agreement involved in any dispute or negotiation
regarding a claim of material importance with any Relevant Employee or
Consultant, or with any former employee or consultant who, if still employed,
would be a Relevant Employee or Consultant.


 


16          Retirement
Benefit Arrangements


 


16.1       Retirement Benefit Arrangements


 


There are no arrangements or promises other than the Retirement Benefit
Arrangements listed in the schedule headed “Retirement Benefit
Arrangements” under which the PMD Group Companies make or could become liable
to make payments for providing retirement, ill-heath or injury, death or life
assurance benefits which would result in an economic loss for the PMD Group
Companies, except for arrangements under public law, statute or regulation to
which any of the PMD Group Companies contribute in compliance with the
applicable law or regulations (the State Schemes).


 


16.2       Disclosure


 


16.2.1    The Data Room, the
files made available in the office of the Seller’s Human Resources Director
providing employment contracts for a number of senior employees or provided to
the Purchaser contains copies of all material agreements, deeds, declarations,
insurance contracts, employee booklets and announcement and other relevant
documents creating or otherwise relating to the Retirement Benefit Arrangements
and necessary information to establish the entitlements to benefits.


 


16.2.2    The documents and
data referred to in Warranty 16.2.1 are true and accurate in all material
respects and contain material details of all benefits payable under the
Retirement Benefit Arrangements and the circumstances in which such benefits
are payable.  No power to increase those
benefits or to provide different benefits has been exercised and there are no
circumstances in which there is a practice of exercising such a power under the
Retirement Benefit Arrangements to any material extent on the Retirement
Benefit Arrangement. 


 


16.2.3    There is attached to the Disclosure Letter as schedule 7 a true
and complete copy of the most recent actuarial valuation in respect of each of
the Retirement Benefit Arrangements where there is a legal requirement to have
an actuarial valuation. Each actuarial valuation describes the financial
position of the relevant Retirement Benefit Arrangements at its effective date.
Since that date contributions have been paid at the rate recommended by the
actuary where such a recommendation is required by law or by the governing
documentation of the Retirement Benefit Arrangement. No assets have been
withdrawn (except to pay benefits) from the effective date of the actuarial
valuation. 


 


16.3       Regulations


 


Since inception, the Retirement Benefit Arrangements have been operated
in compliance with their terms and with all applicable laws, regulations and
Government taxation or funding requirements other than those which would have
no significant effect on the Retirement Benefit Arrangement and all regulatory
approvals necessary or desirable for tax purposes have been obtained. In
particular, but without limitation, the Seller is not aware of any failure to
comply with any applicable law, regulation or


 


56





















 


requirement, or any other circumstance, which would or might result in
the loss of tax approval or qualification of any of the Retirement Benefit
Arrangements.


 


16.4       The Financial Status of the Retirement Benefit Arrangements


 


 


16.4.1    Each of the
Retirement Benefit Arrangements (except the Robert Horne Group Pension Scheme
(UK) and the Stichting Pensioenfonds Buhrmann (NL)) is fully funded or provided
for in accordance with GAAP.


 


16.4.2    If the Retirement
Benefit Arrangements (except the Robert Horne Group Pension Scheme (UK) and the
Stichting Pensioenfonds Buhrmann (NL)) provide benefits calculated by reference
to a formula under which the amount of benefit is linked to the years of
service of the employee to retirement and to salary of the employee at or near
to retirement or averaged over a period of his service (a Salary
Related Scheme) the liabilities of such Salary Related Scheme for
the purposes of Warranty 16.4.1 above are estimated by reference to the
completed service of the employee at Completion and an estimate of the future
salary (to the extent required by GAAP) of the employee at the date of his
retirement based on assumptions consistent with GAAP.


 


16.4.3    Except as provided
for in the Relevant Accounts of the relevant PMD Group Company or the
Completion Accounts, no PMD Group Company has any outstanding liability
(including, without limitation, liability for unpaid benefits, contributions or
insurance premiums) with respect to any of the Retirement Benefit Arrangements
or the State Schemes.


 


16.4.4    The Seller has
provided to the Purchaser in the Data Room or otherwise the rate at which the
contributions to the Retirement Benefit Arrangements are being paid, the basis
on which they are calculated and whether they are paid in advance or in
arrears. No PMD Group Company has announced proposals to cease making
contributions to the Retirement Benefit Arrangements.


 


16.5       Termination Payments


 


The sale of the PMD Group contemplated by this agreement will not
trigger any termination or severance payment obligations to any employee of the
PMD Group Companies.


 


16.6       Disputes


 


As at the date of this agreement there are no material disputes about
the benefits payable under the Retirement Benefit Arrangements and no material
claim by or against the trustees or managers of the Retirement Benefit
Arrangements or any of the PMD Group Companies has been made or threatened.


 


16.7       Contribution Holidays


 


Contributions or premiums payable to the Retirement Benefit
Arrangements (except the Robert Horne Group Pension Scheme (UK) and the
Stichting Pensioenfonds Buhrmann (NL)) have been and are being paid at or above
the full amount required by local law and in accordance with the governing
documentation of the relevant Retirement Benefit Arrangement and are not
discounted, either fully or partially due to surplus in that or


 


57





















 


any other Retirement Benefit Arrangement or otherwise. These
contributions or premiums are fully reflected in the Relevant Accounts


 


16.8       Risk Benefits


 


All risk benefits connected to death or disability payable by the PMD
Group Companies and/or the Retirement Benefit Arrangements (except the Robert
Horne Group Pension Scheme (UK) and the Stichting Pensioenfonds Buhrmann
(NL))are insured in accordance with standard industry practice, if any, in the
relevant jurisdiction and no premiums in respect of such insurance are
outstanding.


 


17          Insurance


 


17.1       Existing Policies


 


17.1.1    All the tangible
assets of each PMD Group Company which are capable of being insured (being the
buildings, machines, inventory, hardware and stocks) are at the date of this
agreement (and will immediately prior to Completion be) insured to their full
replacement value (subject to reasonable industry standard deductibles) against
perils that are normally insured against by companies in similar types of
business such as fire, lightning, explosion, aircraft, burglary and water
damage (with restricted cover for flood damages).


 


17.1.2    Each PMD Group
Company is at the date of this agreement (and will immediately prior to
Completion be) adequately covered against accident, physical loss or damage,
third party liability claims (including product liability), environmental
liability (to the extent that claims are the consequence of a sudden and
accidental incident not being the consequence of a gradual process) and against
business interruption losses that are directly and immediately resulting from
insured property claims (subject to reasonable industry standard deductibles).


 


17.2       Further Details on Policies


 


In respect of the insurances
referred to in Warranty 17.1 but only to the extent that such insurances are
continued after Completion:


 


17.2.1    all premiums have
been duly paid to date;


 


17.2.2    all the policies are
in full force and effect and are in the name of the relevant PMD Group Company;


 


17.2.3    no act, omission,
misrepresentation or non-disclosure by or on behalf of any PMD Group Company
has occurred which makes any of these policies voidable;


 


17.2.4    no circumstances
have arisen, so far as the Seller is aware, which would render any of the
policies void or unenforceable for illegality or otherwise;


 


17.2.5    there has been no
breach of the terms, conditions and warranties of any of the policies that
would entitle insurers to decline to pay all or any part of any claim made
under the policies or to terminate any policy;


 


17.2.6    there are no special
or unusual limits, terms, exclusions or restrictions in any of the policies;
and


 


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17.2.7    the premiums payable
are not in excess of the normal rates and, so far as the Seller is aware, no
circumstances exist which are likely to give rise to any increase in premiums.


 


17.3       Insurance Claims


 


17.3.1    Details of all
insurance claims made during the period of 3 years preceding the date of this
agreement are contained in the schedule headed “Insurance Claims”.


 


17.3.2    Save as detailed in
the schedule headed “Insurance Claims”, no material insurance claim is
outstanding as at the date of this agreement and, so far as the Seller is
aware, no circumstances exist which are likely to give rise to any insurance
claim.


 


18          Taxation
Matters


 


18.1       Returns, Information and Clearances


 


18.1.1    All returns,
computations, notices and information which are or have been required to be
made or given by each PMD Group Company for any Taxation purpose (i) have been
made or given within the requisite periods and on a proper basis and are
up-to-date and correct and (ii) none of them is, or so far as the Seller should
reasonably be aware is likely to be, the subject of any material dispute with
any Tax Authority.


 


18.1.2    Each PMD Group
Company has paid or will provide for in the Completion Acounts all Taxation
which it has become liable to pay and is under no liability to pay any penalty
or interest in connection with any claim for Taxation.


 


18.1.3    Each PMD Group
Company is in possession of sufficient information or has access to such
information to enable it to compute its liability to Taxation insofar as it
depends on any Transaction occurring on or before Completion.


 


18.2       Taxation Claims, Liabilities and Taxation Benefits


 


18.2.1    No Taxation Benefit
has been claimed and/or given to any PMD Group Company which could be
effectively withdrawn, postponed, restricted, clawed back or otherwise lost as
a result of any act, omission, event or circumstance arising or occurring in
the ordinary course of business.


 


18.2.2    No PMD Group Company
has voluntarily taken any action which has had, or will have, the result of
altering, prejudicing or in any way disturbing any arrangement or agreement
which it has previously had with any Tax Authority.


 


18.2.3    Each PMD Group
Company has made and submitted each claim, disclaimer, election, notice and
consent assumed to have been made and submitted for the purposes of the
Completion Acounts.


 


18.3       Compliance with Regulations


 


18.3.1    Each PMD Group
Company has complied in all material respects with all relevant statutory
requirements, orders, provisions, directions or conditions relating to
Taxation, including (for the avoidance of doubt) the terms of any agreement
reached with any appropriate Tax Authority.


 


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18.3.2    No PMD Group Company
has entered into any Transaction within the last 6 years which would require
any clearance, consent, ruling, licence or election from any Tax Authority,
except where such clearance, consent, licence or election has been validly
obtained from the Tax Authority.


 


18.3.3    If exemption from
any Taxation has been claimed by any PMD Group Company, such PMD Group Company
has followed the correct procedure to obtain the exemption.


 


18.4       Special Regimes/Elections/Rulings


 


There are no agreements,
arrangements or elections between any PMD Group Company and any Tax Authority
permitting the non-compliance by the relevant PMD Group Company with its
statutory obligations.


 


18.5       Tax Audits


 


No PMD Group Company has been the
subject of any audit or investigation by any Tax Authority during the 6 years
preceding Completion which has resulted in a material adjustment to Taxation
payable by that PMD Group Company. So far as the Seller should reasonably be
aware, no audit or investigation is planned in relation to any PMD Group
Company which could result in a material adjustment to Taxation payable by that
PMD Group Company.


 


18.6       Company Residence


 


18.6.1    Each PMD Group
Company has been resident for tax purposes in its country of incorporation and
has not been resident anywhere else at any time since its incorporation and
will be so resident at Completion.


 


18.6.2    No Tax Authority
(other than a Tax Authority in the country of incorporation of the PMD Group
Company) has claimed that a PMD Group Company is resident for tax purposes or
has a permanent establishment in its country.


 


18.7       Double Tax Treaties


 


Each PMD Group Company is a
resident for the purposes of any double taxation agreement or convention
entered into between the jurisdiction in which it is resident and any other
relevant jurisdiction.


 


18.8       Transactions not at Arm’s Length


 


18.8.1    No PMD Group Company
has entered into any Transaction otherwise than on an arm’s length basis.


 


18.8.2    Without prejudice to
the generality of the preceding paragraphs, no PMD Group Company is or could be
treated as thinly capitalised for any Tax purpose.


 


18.9       Deductible Payments


 


There are no circumstances which
could cause any Tax Authority to deny relief for material payments of interest
(or any other material tax deductible payment) paid by any PMD Group Company,
and no such relief has been denied in fact.


 


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18.10     Tax Avoidance


 


No PMD Group Company has been a
party to or otherwise been involved in any transaction which may be disregarded
or reconstructed or taxed in a way which is otherwise than as reported by the
PMD Group Company in its financial statements by reason of a tax avoidance
motive.


 


18.11     Intragroup Transactions


 


None of the PMD Group Companies
has entered into any transaction with another company which at that time was a
member of the same group either on a tax-neutral basis or otherwise prior to
Completion which could result in material Taxation payable by the PMD Group
Companies.


 


18.12     Transfer Taxes and Capital Duty


 


18.12.1  All documents to
which any PMD Group Company is a party, or which form part of the title to any
asset owned or possessed by any PMD Group Company, or which any PMD Group
Company or the Purchaser may need to enforce or produce in evidence in any
court of law, have been duly stamped and (where required by law) adjudicated
and any applicable stamp duties or similar duties or charges in respect of such
documents have been duly accounted for and paid.


 


18.12.2  All duties, fees and
penalties payable in respect of the capital of each PMD Group Company
(including any premium over nominal value at which any share was issued) have
been duly accounted for and paid and there are no circumstances under which any
relief obtained against payment of any such amount could be withdrawn.


 


18.13     VAT and Turnover Tax


 


Each PMD Group Company and any
other company which has been treated as a PMD Group Company for the purposes of
VAT and (where relevant) turnover taxes has complied fully with all statutory
requirements, orders, provisions, directions or conditions relating to VAT or
such turnover taxes, including (for avoidance of doubt) the terms of any
agreement reached with any appropriate Tax Authority.


 


18.14     Taxation of Employees


 


18.14.1  Each PMD Group
Company has complied with all requirements in relation to the Taxation of
employees (including, without limitation, taxes on income and social security
taxes) including by making such deductions as are required by law from all
payments made or deemed to be made by it or on its behalf, and duly accounting
to the appropriate Tax Authority for all sums deducted and for all other
amounts for which it is required to account in respect of any Taxation relating
to employees.


 


18.14.2  All payments to
employees are made through the payroll.


 


18.14.3  All employee share
options have been administered through the payroll and are recorded at such
value as required by the relevant legislation.


 


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18.15     UK


 


18.15.1  In respect of each
PMD Group Company marked with an “*” listed in the schedule headed “The
Subsidiaries of the Companies”:


 


(i)         each such PMD Group Company is dormant; and


 


(ii)        each such PMD Group Company has not received notice from
the Inland Revenue regarding the returns and computations which have been
required to be made and these returns and computations are not subject to any
disputes which have not been resolved.


 


18.15.2  Save for borrowings
to fund working capital, all debts owed by Group Companies resident in the UK
for Tax purposes are owed to companies which are not and have not at any time
been a member of a group of which the PMD Group Company has at any time been a
member.


 


18.15.3  There has been no
material change to the nature, scope or conduct of the business of each PMD
Group Company resident in the UK for Tax purposes, since the date on which the
PMD Group Company was acquired by the Seller’s Group.


 


18.16     The Netherlands


 


18.16.1  The Dutch fiscal
unities in which a PMD Group Company is included have not and will not file for
an extension of two years of the old fiscal unity regime.


 


18.16.2  Each PMD Group
Company resident in the Netherlands for Tax purposes has paid the fixed expense
allowances in accordance with social security regulations.


 


18.16.3  Each PMD Group
Company resident in the Netherlands for Tax purposes has properly recorded in
its VAT returns any VAT in relation to rebates.


 


18.16.4  None of the PMD
Group Companies resident in the Netherlands for Tax purposes has acted during
the last six years as contractor or subcontractor as defined in the Chain
Liability Act (“Wet Ketenaansprakelijkheid”) of
the Dutch Collection Act 1990 (“Invorderingswet”).


 


18.16.5  The capital
recognised for Tax purposes within the meaning of article 3a of the Dutch
Dividend Tax Act 1965 (“Wet op de dividend
belasting 1965”) of each PMD Group Company resident in the
Netherlands for Tax purposes is equal to the amounts stated in the schedule headed
“Capital Recognised for article 3 of the Dutch Dividend Tax Act 1965”.


 


18.16.6  None of the PMD
Group Companies resident in the Netherlands for Tax purposes has written off
receivables on affiliated entities (within the meaning of article 10a,
paragraph 4 of the Dutch Corporate Income Tax Act 1969) against taxable income.


 


18.16.7  None of the PMD
Group Companies resident in the Netherlands for Tax purposes has a shareholding
in another PMD Group Company to which the Dutch participation exemption applies
and which runs foreign business operations which were formerly operated by
affiliated entities within the meaning of article 10a, paragraph 4 of the
Dutch Corporate Income Tax Act 1969.


 


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18.16.8  Velpa Enveloppen BV, Bührmann-Ubbens B.V. and Proost en Brandt B.V. will
have an amount of goodwill on their tax balance sheet on Completion as set out
and allocated in schedule headed “Goodwill on Tax Balance Sheet” and, for
Dutch corporate income tax purposes, such amount of goodwill (i) will be
recorded in its entirety as a separate balance sheet item for each such company
(ii) shall not be allocable to any of the separate assets held or owned by each
such company. Notwithstanding any other provision of this agreement (including
the Tax Covenant) the Purchaser shall have no claim under this Warranty 18.16.8
unless the Loss suffered is greater than EUR250,000 per Bührmann-Ubbens B.V.
and Proost en Brandt B.V.


 


18.17     Italy


 


All outstanding liabilities to Taxation of each PMD Group Company
resident in Italy for Tax purposes will be satisfied by amnesties from Tax.


 


18.18     France


 


There are no liabilities to Taxation arising from the failure of any
PMD Group Company resident in France for Tax purposes to submit the relevant
documentation in respect of the Tax exempt treatment of the merger of Pioger
Distribution SA into Carper ADP on 31 July 1999.


 


18.19     Germany


 


The transactions below, whether individually or in any combination,
will not give rise to any profit or gain which is either subject to Tax in the
hands of a PMD Group Company resident in Germany for Tax purposes or which will
reduce the Tax losses available to such PMD Group Company.


 


18.19.1  Buhrmann
International B.V. contributes EUR27,000,000 to the share premium account
(Kapital Rücklage) of Deutsche Papier Holding GmbH;


 


18.19.2  Deutsche Papier
Holding GmbH converts EUR18,000,000 of its receivable on Deutsche Papier
Vertriebs GmbH into share premium (Kapital Rücklage);


 


18.19.3  Deutsche Papier
Holding GmbH contributes EUR7,000,000 to the share premium account (Kapital
Rücklage) of Deutsche Papier Vertriebs GmbH;


 


18.19.4  Deutsche Papier
Holding GmbH converts EUR1,000,000 of its receivable on Deutsche adp Wilhelm
GmbH into share premium (Kapital Rücklage);


 


18.19.5  Deutsche Papier
Holding GmbH converts EUR500,000 of its receivable Klinger GmbH Handel für
Siebdruck und Werbetechnik into share premium (Kapital Rücklage);


 


18.19.6  Deutsche Papier
Holding GmbH converts EUR500,000 of its receivables on Dirimex
Handelsgesellschaft GmbH into share premium (Kapital Rücklage).


 


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SCHEDULE 10


 


WARRANTY LIMITS


 


1.             Acknowledgement


 


The Purchaser
acknowledges and agrees that:


 


(a)           the Warranties are the only representations,
warranties or other assurances of any kind given by or on behalf of the Seller
or any member of the Seller’s Group, and, also in view of article 7:17
Dutch Civil Code, collectively and exhaustively reflect all of the
characteristics the Purchaser may reasonably expect the Shares, the Assets, the
PMD Group Companies and the Business to have;


 


(b)           notwithstanding any other provision of this agreement,
no other statement, promise or forecast (written or oral) made by or on behalf
of the Seller or any member of the Seller’s Group may form the basis of, or be
pleaded in connection with, any claim by the Purchaser under or in connection
with this agreement, whether based on article 7:17 Dutch Civil Code or
otherwise; and


 


(c)           the Seller does not, nor does any member of the Seller’s
Group (or any of the Seller’s advisers), make any representation or warranty as
to the accuracy of, without limitation, forecasts, estimates, projections,
statements of intent or statements of opinion provided to the Purchaser or its
advisers on or prior to the date of this agreement (whether this constitutes
disclosed information or otherwise) or contained in the Disclosure Letter.


 


2.             Limits


 


The liability
of the Seller in respect of any Warranty Claim shall be limited as follows:


 


(a)           the provisions of the schedule headed “Tax
Covenant” shall apply to claims under the Tax Warranties as if such Warranty
Claim was a claim under paragraph 2 of the Tax Covenant and the remainder of schedule 10
shall not apply to such claims or to claims under the Tax Covenant;


 


(b)           to the extent that the
Purchaser receives a payment from the Seller in respect of a claim under an
Indemnity arising out of the same circumstances that give rise to a Warranty
Claim;


 


(c)           there shall be disregarded for all purposes
any breach of Warranty in respect of which the amount of the damages to which
the Purchaser would otherwise be entitled is:


 


(i)            in respect of a Warranty Claim in relation to each of
the PMD Group Companies marked with a “#” in the schedule headed the “The
Companies” and the “The Subsidiaries of the Companies”, less than EUR250,000
(and claims relating to a series of connected matters shall be aggregated for
this purpose);


 


(ii)           in respect of a Warranty Claim in relation to other
PMD Group Companies, less than EUR150,000 (and claims relating to a series of
connected matters shall be aggregated for this purpose);


 


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(iii)          in respect of a Warranty Claim in relation to the line
items in the Relevant Accounts relating to “inventory after provisions”, “accounts
receivable after provisions”, “accounts payable”, “tangible fixed assets” and “deferred
tax”, irrespective of (i) and (ii) above, less than EUR500,000 (and claims
relating to a series of connected matters shall be aggregated for this
purpose), provided that this threshold of EUR500,000 shall also apply to
Warranty Claims in relation to line items called “Deferred Tax” in underlying
schedules which are included in the line items headed “Provisions” and “Financial
Fixed Assets” in the Relevant Accounts (and claims relating to a series of
connected matters shall be aggregated for this purpose).


 


(d)           the Purchaser shall not be entitled to
recover any damages in respect of any one or more breach of Warranty unless the
aggregate amount of damages in respect of such breach or breaches of Warranty
exceeds EUR7,000,000 in which case the excess over EUR5,000,000 may be
recovered;


 


(e)           the maximum aggregate liability of the
Seller in respect of all and any breaches of Warranty shall not exceed
EUR350,000,000; and


 


(f)            save in respect of any claim of which the
Purchaser gives written notice to the Seller before the relevant dates in (i)
and (ii) below , the Seller shall cease to have any liability under or in
respect of the Warranties:


 


(i)            in relation to a claim under paragraph 13
(Environmental) of the schedule headed “Warranties” 30 Business Days after
the fifth anniversary of the end of the accounting period of the PMD Group
Company concerned in which Completion occurs; and


 


(ii)           in respect of any other Warranties on 31 July 2005;


 


except there
shall be no time limit in relation to any claim under Warranties 1.1 (The
Shares and PMD Group Companies), 1.2 (Subsidiaries, Associates and Branches), 2
(Authority and Capacity), 3 (Reorganisation) or 7 (Insolvency) of the schedule headed
“Warranties”.


 


(g)           The liability of the Seller in respect of
any Warranty Claim shall in any event terminate if proceedings in respect of it
have not been commenced within 9 months of service of notice of that Warranty
Claim unless the Seller shall have assumed conduct of a Third Party Claim (as
defined below) in question in accordance with the provision of this schedule (in
which case the liability of the Seller in respect of any Warranty Claim
relating to the Third Party Claim conducted by the Seller shall only terminate
if proceedings in respect of it have not been commenced within 9 months of the
resolution of such Third Party Claim).


 


3.             Exclusions


 


The Seller
shall not be liable in respect of a Warranty Claim if and to the extent that it
relates to any liability or obligation on the part of a PMD Group Company:


 


(a)           for which a specific provision, accrual, reserve or
allowance is made or falls to be made, or of which the payment or discharge is
reflected, in the Completion Acounts to the extent of the provision;


 


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(b)           subject to paragraph (c) below, which would not have
arisen but for a change in legislation or regulations, or a change in the
interpretation or implementation thereof by any Governmental Body or by reason
of development in case law, made after Completion or any amendment to or the
withdrawal after Completion of any practice previously published by or any
extra-statutory concession previously made by a Tax Authority (whether or not
the change purports to be effective retrospectively in whole or in part);


 


(c)           solely for the purposes of determining the scope of
the Purchaser’s obligations in respect of Condition 3.1(b), which would not
have arisen but for a change in legislation or regulations or a change in the
interpretation or implementation thereof by any Governmental Body or by reason
of development in case law, made after the date of this agreement;


 


(d)           which would not have arisen but for a change after
Completion in the accounting bases on which any PMD Group Company values its
assets or a change in the tax structure or corporate structure of the PMD Group
Companies;


 


(e)           which arises as a result of any change after
Completion of the date to which a PMD Group Company makes up its accounts or in
the bases, methods or policies of accounting of the PMD Group Company;


 


(f)            occasioned by any act or omission of the Purchaser or
any PMD Group Company after Completion otherwise than in the ordinary course of
business;


 


(g)           which would not have arisen but for a cessation, or
any change in the nature or conduct, of any trade carried on by any PMD Group
Company at Completion, being a cessation or change occurring on or after
Completion.


 


4.             Net Financial Benefit


 


The Seller
shall not be liable in respect of any Losses suffered by the Purchaser or any
of the PMD Group Companies to the extent of any corresponding savings realised
or quantifiable net financial benefit received by the Purchaser or any PMD
Group Company arising from such Losses or the facts giving rise to such Losses
(for example, without limitation, where the amount (if any) by which any
Taxation for which the Purchaser or any PMD Group Company would otherwise have
been accountable or liable to be assessed is actually reduced or extinguished
as a result of the matter giving rise to such liability).


 


5.             Conduct of Third Party Claims


 


If the matter
or circumstance that may give rise to a claim against the Seller under this
agreement is a result of or in connection with a claim by or liability to a
third party (a Third Party Claim) and does not
arise out of the ordinary course of business of the PMD Group, then, without
prejudice to the rights of the insurers of the Purchaser’s Group, the Seller
may elect to assume the conduct of any appeal, dispute, compromise or defence
of the Third Party Claim and of any incidental negotiations on the following
terms:


 


(a)           the Seller shall indemnify the Purchaser or other
member of the Purchaser’s Group concerned, against all Losses connected with
the Seller’s conduct of such Third Party Claim;


 


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(b)           the Purchaser shall, or the Purchaser shall procure
that any other members of the Purchaser’s Group shall, take such action as the
Seller may reasonably request to avoid, dispute, deny, defend, resist, appeal,
compromise or contest such claim save that neither the Purchaser nor any other
member of the Purchaser’s Group shall be required to take any action which the
Purchaser or other member of the Purchaser’s Group concerned reasonably
considers may be unduly onerous or materially prejudicial to it or to its
business;


 


(c)           the Purchaser shall, or the Purchaser shall procure
that any other members of the Purchaser’s Group shall not admit, compromise,
dispose of or settle such Third Party Claim; and


 


(d)           on request by the Seller, the Purchaser shall, and the
Purchaser shall procure that any other members of the Purchaser’s Group shall,
take all reasonable steps to procure that the Seller is provided on reasonable
notice with all material correspondence and documentation and other information
relating to the Third Party Claim as the Seller may
reasonably request subject to the Seller agreeing in such form as the Purchaser
may reasonably require to keep all such correspondence and information
confidential and to use it only for the purpose of dealing with the relevant
Third Party Claim;


 


In all other
cases or where the Seller does not elect to assume the conduct of the Third
Party Claim, the Purchaser shall procure that the relevant PMD Group Company
consult with the Seller in relation to the conduct of any appeal, dispute,
compromise or defence of the Third Party Claim and the Purchaser shall, and
shall procure that the relevant PMD Group Company shall, keep the Seller
informed of the progress of the Third Party Claim. The Purchaser shall, and
shall procure that the relevant PMD Group Company shall, before making any
admission of liability, agreement, settlement or compromise with any third
party in relation to any such claim or adjudication first take into account the
reasonable interests of the Seller (to the extent this does not unreasonably
prejudice the interests of the PMD Group Company).


 


Nothing in
this paragraph 5 shall affect the conduct of claims under clause 13.1(c) or
under the schedule headed “Tax Covenant”.


 


6.             Mitigation


 


Nothing in
this agreement shall be deemed to relieve the Purchaser or the Seller from any
duty under applicable law to mitigate any loss or damage incurred by it as a
result of any breach of Warranty.


 


Nothing in
this paragraph 6 shall oblige the Purchaser to take any action which may be
unduly onerous or materially prejudicial to it or its business (including the
Business).


 


7.             Recovery from third parties


 


If:


 


(a)           the Seller makes a payment in respect of a Warranty
Claim (the Damages Payment); and


 


(b)           any PMD Group Company or the Purchaser receives any
sum (or makes any savings or receives any quantifiable financial benefit) which
would not have been received


 


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but for the
circumstances which gave rise to that Warranty Claim (the Third Party
Sum); and


 


(c)           the receipt of that sum was not taken into account in
calculating the Damages Payment; and


 


(d)           the aggregate of the Third Party Sum and the Damages
Payment exceeds the amount required to compensate the Purchaser in full for the
loss or liability which gave rise to the Warranty Claim in question, such
excess being the Excess Recovery;


 


then the
Purchaser shall, promptly on receipt of the Third Party Sum by it or the
relevant PMD Group Company, repay to the Seller an amount equal to the lower of
(i) the Excess Recovery and (ii) the Damages Payment, after deducting (in
either case) all costs incurred by the Purchaser or the relevant PMD Group
Company in recovering that sum and any taxation payable by the Purchaser or any
PMD Group Company by virtue of its receipt.


 


If, before the
Seller pays any amount in respect of any claim under this agreement, the
Purchaser or any PMD Group Company is entitled to recover (whether by payment,
discount, credit, relief, insurance or otherwise) from a third party a sum
which indemnifies or compensates the Purchaser or the PMD Group Company (in
whole or in part) in respect of the loss or liability which is the subject
matter of the claim, the Purchaser shall procure that all reasonable steps are
taken to enforce recovery against the third party and any actual recovery shall
reduce or satisfy, as the case may be, after deducting all costs incurred by
the Purchaser or the relevant PMD Group Company in receiving that sum and any
Taxation payable by the Purchaser or any PMD Company, such claim to the extent
of such recovery. The Seller shall be subrogated to all rights that the
Purchaser has or would otherwise have in respect of the claim against the third
party.


 


8.             Insurance


 


Without
prejudice to the Purchaser’s duty to mitigate any loss in respect of any breach
of Warranty, if in respect of any matter which would otherwise give rise to a
breach of Warranty one of the PMD Group Companies is entitled to claim under
any policy of insurance (or would have been so entitled had it maintained its
insurance cover at the levels current at Completion), the amount of insurance
monies which that PMD Group Company recovers (or would have been entitled to
recover had it maintained its insurance cover at the levels current at the date
of signing this agreement) (after taking account of Taxation on the insurance
proceeds but giving credit in calculating such Taxation for any tax relief
realised) shall reduce pro tanto or
extinguish the Warranty Claim.


 


9.             Double recovery


 


The Purchaser
shall not be entitled to recover damages from the Seller more than once in
respect of any one matter even if more than one Warranty is breached.


 


The Purchaser
shall not be entitled to make any Warranty Claim in relation to matters taken
into account in agreeing the reduction of the purchase price contained in the
Heads of Terms dated 17/18 June 2003 to the purchase price as set out in
the Extension to the Heads of Terms dated 7 August 2003, which matters
(and, in some cases, the related amounts) include: the Dutch pensions holiday
(EUR4,500,000), the understatement of Non-Dutch pension costs (EUR800,000),
salary bonuses (EUR1,500,000), the release of inventory provision (EUR700,000),
recurring/non recurring items, the loss of Sericol and Kappa ink contracts and


 


68





















 


the Robert
Horne Pension Fund. This paragraph shall not preclude any Warranty Claim in
respect of new information not taken into account in such price reduction.


 


69





















 


SCHEDULE 24


 


PROTECTIVE COVENANTS


 


1             Seller’s
Restrictive Covenants


 


1.1         Non-compete


 


The Seller covenants and
undertakes with and for the benefit of the Purchaser and each PMD Group Company
that neither the Seller nor any member of the Seller’s Group will during the
Restricted Period:


 


(a)            carry on,
or engage or become economically interested in any business which is of the
same or similar type to and is in competition with any part of the paper
merchanting business of any PMD Group Company, except for the ordinary course
of business activities of an Existing Business (any such competing business,
excluding an Existing Business, is referred to as a Competing
Business);


 


(b)           other than in course of carrying on an
Existing Business, in competition with any part of the paper merchanting
business of any PMD Group Company, canvass or solicit the custom of any person,
firm or company who has within 2 years prior to Completion been a customer of
any PMD Group Company.


 


1.2         Acquisition of business


 


The restrictions in clause 1.1
shall not operate to prohibit the Seller or any member of the Seller’s Group
from:


 


(a)            subject
to paragraph 1.2(b) acquiring any business carrying on a business similar to an
Existing Business as part of the aggregate business conducted; or


 


(b)            acquiring
a business which includes a Competing Business provided that the Seller offers
(or procures that the relevant member of the Seller’s Group offers) the
Competing Business to the Purchaser on terms and conditions (including as
regards the purchase price) equivalent to those under which the Seller or any
member of the Seller’s Group acquired the entire business.


 


1.3         Preferred Supplier


 


Should the Seller acquire any
Existing Business pursuant to clause 1.2(a), the Seller will offer the
Purchaser the option to have such Existing Business included in the preferred
supplier arrangements agreed under the Merchanting Agreement. Should such an
offer be accepted by the Purchaser, the Seller and the Purchaser will use their
best endeavours to agree the terms of a preferred supplier arrangement,
provided that these terms shall neither be materially different from those
contained in the Merchanting Agreement nor be economically less attractive to
the Seller than the existing supplier arrangements at the acquired Existing
Business.


 


1.4         Employment Restriction


 


Neither the Seller nor any member
of the Seller’s Group will for 2 years following Completion induce or seek to
induce any Restricted Employee to become employed (whether as employee,
consultant or otherwise) by the Seller or any member of the Seller’s Group,
whether or not such Restricted Employee would thereby commit a breach of his
contract of service. However, this restriction shall not operate to prohibit
the Seller or any member of the


 


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Seller’s Group from placing an
advertisement of a post available to a member of the public generally and
recruiting a person through an employment agency, provided that neither the
Seller nor any member of the Seller’s Group shall be permitted to encourage or
advise such agency to approach any Restricted Employee.


 


1.5         Reasonableness of Restrictions


 


The Seller confirms that it has
received independent legal advice relating to all the matters provided for in
this agreement, including the provisions of this clause. The Seller agrees that
the restrictions contained in this clause are no greater than are reasonable
and necessary for the protection of the interest of the Purchaser, but if any
such restriction shall be held to be void but would be valid if deleted in part
or reduced in application, such restriction shall apply with such deletion or
modification as may be necessary to make it valid and enforceable.


 


2             Purchaser’s
Restrictive Covenants


 


2.1         Restrictions on the Purchaser and members of the Purchaser’s Group


 


The Purchaser covenants and
undertakes with and for the benefit of the Seller and each member of the Seller’s
Group that neither the Purchaser nor any member of the Purchaser’s Group, will
for a period of 2 years following Completion induce or seek to induce any
employee of the Seller or any member of the Seller’s Group to become employed
(whether as employee, consultant or otherwise) by the Purchaser or any member
of the Purchaser’s Group, whether or not such employee would thereby commit a
breach of his contract of service. However, this restriction shall not operate
to prohibit the Purchaser or any member of the Purchaser’s Group from placing
an advertisement of a post available to a member of the public generally and
recruiting a person through an employment agency, provided that neither the
Purchaser nor any member of the Purchaser’s Group shall be permitted to
encourage or advise such agency to approach any such employee.


 


2.2         Access to people and information


 


Until the seventh anniversary of
Completion, the Purchaser shall, and shall procure that the relevant member of
the PMD Group Companies shall, make available to the Seller or any member of
the Seller’s Group such persons and such information as the Seller or any
member of the Seller’s Group may reasonably require for the purposes of matters
relating to taxation, merger control or law (in particular in relation to
Indemnities or Warranty Claims in relation thereto).


 


Until the seventh anniversary of
Completion, the Seller shall, and shall procure that each member of the Seller’s
Group shall, make available to the Purchaser or any member of the PMD Group
Companies such persons and such information as the Purchaser or any member of
the PMD Group Companies may reasonably require for the purposes of matters
relating to taxation, merger control or law (in particular in relation to
Indemnities or Warranty Claims in relation thereto).


 


3             Interpretation


 


The following terms shall have the
following meanings respectively in this clause 3:


 


Existing Business means any business conducted by a member of the Seller’s
Group in the 12 months preceding the date of this agreement where, by reference
to the product assortments, the services and the types of customers, there is
an overlap with the business of any PMD


 


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Group Company provided that
the parties agree that printers shall not constitute a customer of the Existing
Business for the purpose of this definition;


 


Restricted Employee means any Relevant Employee who (a) has access to trade
secrets or other confidential information of any PMD Group Company; (b) has
participated in discussions relating to the transaction pursuant to this
agreement; or (c) is a Senior Employee;


 


Restricted Period means 3 years commencing on Completion or such shorter
period of time recognised by applicable law as being binding on the Seller or
any member of the Seller’s Group or the Purchaser or any member of the
Purchaser’s Group, as appropriate.


 


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SCHEDULE 31


 


INTERPRETATION


 


(1)           Terms Defined:


 


In this agreement and the schedules hereto, where the context admits:


 


Acceding
Purchaser has the meaning given to it in clause 20.1;


 


Acquired
Rights Directive means Council Directive 2001/23EC of 12 March 2001
consolidating Directive 98/50/EC of 29 June 1998 which amended Directive
77/187/EEC;


 


Affiliate means in relation to any
person, any subsidiary or direct or indirect holding company of that person and
any other subsidiary of that holding company;


 


Agreed
Capital Structure means the capital structure in the Agreed Form;


 


Agreed
Form
means, in relation to any document, such document in the terms or form agreed
between the Seller and the Purchaser which has been initialled for the purpose
of identification by the Seller and the Purchaser with such alterations as may
be agreed in writing between the Seller and the Purchaser from time to time;


 


Amsterdam
Lease Agreement means a lease agreement in the Agreed Form to take effect
on Completion between Buhrmann Stafdiensten B.V. and an Affiliate of the
Purchaser whereby office space on the first floor of the Centerpoint office
building is leased to such Affiliate;


 


Approval
has
the meaning set out in clause 3.1(c);


 


Assets means the items in the schedule headed
“Assets”;


 


Balance
Sheet
means the balance sheets as at the Relevant Accounts Date for the year ended on
that date of the PMD Group Companies (including the combined balance sheet as
at that date);


 


Bank
Guarantee has the meaning set out in clause 4.6;


 


Base
Amount
has the meaning set out in clause 5.1(a);


 


Berni
means
Augusto Berni Carta Cancelleria A.B.C.C.D. S.p.A.;


 


BITE
System means
the ecommerce system known as BITE produced by Cap Gemini Ernst and Young
Nederland B.V. (including all software in object code and source code format)
whether produced under the “Framework Agreement Informatics Service” with
Buhrmann Nederland B.V. dated 13 March 2001 or otherwise;


 


Breach
has
the meaning set out in clause 13.1(c)(i);


 


Buhrmann
Group Finance Manual means the finance manual prepared by the Seller for
the purpose of preparing the Relevant Accounts on the basis of each Group
Company’s audited accounts, as annexed to this agreement in the Agreed Form;


 


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Business means the business carried on
by the PMD Group Companies;


 


Business
Day
means a day (other than a Saturday or Sunday) on which banks are generally open
in The Netherlands, London and Australia for normal business;


 


Business
IPR means
the Group IPR and the Shared IPR;


 


Business
IPR Licences means licences and agreements (including all amendments, novations,
supplements or replacements to those licences and agreements) granted in
respect of Business IPR by or to the Seller’s Group and the PMD Group
Companies;


 


Business
IT
means the computer systems, communications systems, software, hardware and
databases used by the PMD Group Companies;


 


Cash means the cash held by the
PMD Group Companies and included in the line item “Cash & Cash at Bank” in
the schedule headed “Purchase Price Adjustment Statement”;


 


Claim means a claim for damages
resulting from a breach of an obligation under this agreement, which includes a
Warranty Claim;


 


Companies has the meaning set out in
recital (A) and Company means any of them;


 


Competition
Authorities has the meaning set out in the Conditions 3.1(b);


 


Competition
Rule
means Article 81(1) or 82 of the Treaty of Rome or any corresponding
provisions under the domestic legislation of any jurisdiction;


 


Completion means completion of the sale
and purchase of the Shares and the Assets in accordance with the clause headed “Completion”;


 


Completion
Accounts means
the Completion Balance Sheet and any supporting hyperion balance sheet
schedules, insofar as relevant to to the preparation of the Completion Balance
Sheet, to be prepared in accordance with the clause headed “Completion Accounts”;


 


Completion
Balance Sheet means the balance sheet of the PMD Group drawn up in the form of and
including the line items included in the schedule headed “Purchase Price
Adjustment Statement” and prepared in accordance with the schedule headed “Policies
for Preparation of the Completion Accounts”;


 


Completion
Date
means the date on which Completion is effected;


 


Conditions means the conditions (opschortende voorwaarden) to Completion of the sale and
purchase of the Shares and the Assets set out in the clause headed “Conditions”
and Condition means any of them;


 


Confidentiality
Agreement
means the confidentiality undertaking agreement dated 10 April, 2003 between
the Seller and the Purchaser;


 


Consultancy
Agreement
means an agreement other than a contract of employment with a PMD Group Company
pursuant to which an individual provides services (including any individual
agency arrangement);


 


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Consultant
means
an individual providing services to a PMD Group Company pursuant to a
Consultancy Agreement on a fee which (if it were a full time consultancy) would
be in excess of EUR120,000 per annum or local equivalent;


 


Damages
Payment
has the meaning set out in paragraph 7(a) of the schedule headed “Warranty
Limits”;


 


Danish
Partnership Agreement means the agreement in the Agreed Form to take effect
on Completion between Corporate Express Europe B.V. and CC&CO. Holdings ApS
whereby the parties establish a partnership for the distribution and/or
delivery of office supplies, computer supplies and related services to
customers in Denmark;


 


Data
Room
means the data room prepared by the Seller for the Purchaser located at The
Atrium, Strawinskylaan 3051, Amsterdam, between 30 June 2003 and 18 July 2003
(inclusive) together with any subsequent agreed additions thereto, the contents
of which are contained in the data room index in the Agreed Form;


 


Debt means any inter-company or
third party financial indebtedness, other than indebtedness owed by any PMD
Group Company to another PMD Group Company, which is included in the line item
headed “Debt” in the schedule headed “Purchase Price Adjustment Statement”;


 


Deferred
Consideration means the amount (if any) calculated in accordance with the clause
headed “Deferred Consideration”;


 


Deferred
Consideration Period means the calendar year from the Latest Relevant
Accounts Date until 31 December 2003;


 


Deferred
Consideration Statement means the statement to be prepared by the Purchaser
in accordance with the clause headed “Deferred Consideration”;


 


Disclosure
Letter
means the letter of the same date as this agreement from the Seller to the
Purchaser disclosing information constituting exceptions to the Warranties;


 


Draft
Completion Accounts has the meaning set out in clause 6.1(b);


 


Draft
Deferred Consideration Statement has the meaning set out in clause 7.1


 


Due
Diligence Investigation has the meaning set out in clause 10.1;


 


EBITA means the combined earnings
before exceptional items, interest, taxation, amortisation and impairment of
goodwill of the PMD Group Companies calculated in accordance with the clause
headed “Deferred Consideration Statement” and set out in the Deferred
Consideration Statement;


 


EBITDA means operating result before
exceptional items, depreciation of tangible fixed assets, amortisation and
impairment of goodwill, interest and taxation;


 


Encumbrance
means
any claim, charge, mortgage, pledge, fees, option, equity, power of sale,
hypothecation, usufruct, retention of title, right of pre-emption, right of
first refusal or other third party rights or security in interest of any kind
or agreement to create any of the foregoing;


 


75





















 


Environment means all or any of the following media (alone or in
combination): air (including the air within buildings and the air within other
natural or man-made structures whether above or below ground); water (including
water under or within land or in drains or sewers); soil and land and any
ecological systems and living organisms supported by these media, including man
and his property;


 


Environmental Law means all European Union, national, federal, provincial,
state or local statutes, the common law, codes of law (having legal effect),
regulations, statutory guidance notes and final and binding court and other
tribunal decisions of any relevant jurisdiction in force in the relevant
jurisdiction at Completion concerning:


 


(i)            protection, or pollution of, or compensation of damage or
harm to, the Environment; and/or


 


(ii)           emissions, discharges, or releases of Hazardous
Substances into, or the presence in, the Environment, or the use, treatment,
storage, burial, disposal, transport or handling of Hazardous Substances;
and/or


 


(iii)          workers’ health and safety,


 


and
all bye-laws, codes, regulations, decrees or orders issued or promulgated or
approved thereunder or in connection therewith;


 


Estimated
Purchase Price has the meaning set out in clause 5.2;


 


Excess
Recovery
has the meaning set out in paragraph 7(d) of the schedule headed “Warranty
Limits”;


 


Expresso means Expresso Paper Platform
B.V.;


 


Excluded
Assets has
the meaning set out in clause 2.3;


 


Evelyn
Street Property means the Property marked with a “*” in the schedule headed
“Properties”;


 


GAAP means generally accepted
accounting principles and practices in The Netherlands;


 


Governmental
Body
means any: (a) nation, country, city, town, village, district, or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or
other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal); (d) multinational organisation or
body; or (e) body exercising, or entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature;


 


Group means, in relation to any
person, such person and its Affiliates;


 


Group
IPR means
all rights in and to Intellectual Property owned by the Seller’s Group and/or
the PMD Group Companies, and used exclusively in the Business;


 


Hazardous
Substances means any wastes, pollutants, contaminants and any other natural or
artificial substance of any nature whatsoever (whether in the form of a solid,
liquid, gas or


 


76





















 


vapour, alone or in combination with any other substance) which is
capable of causing harm or damage to the Environment or a nuisance to any
person;


 


Hyperion
System means
the accounting systems known as the Hyperion Model that is currently used by
the Seller including in relation to the PMD Group Companies;


 


IBM
Licensing Agreement means the trademark license agreement entered into
between International Business Machines Corporation and the Seller with an
effective date of 1 April 1998 as amended by three amendment agreements
entered into between International Business Machines Corporation and the
Seller;


 


Indemnified
Parties
has the meaning set out in the clause headed “Specific Indemnities”;


 


Indemnities means the indemnities set out
in the clause headed “Specific Indemnities”;


 


Indemnity
Sum
shall have the meaning set out in clause 21.2;


 


Independent
Accountants means such firm of chartered accountants (registeraccountants)]
as may be appointed under the clause headed “Independent Accountants”;


 


Indirect
Seller
means the companies listed in the schedule headed “Indirect Sellers”;


 


Inquiry shall have the meaning set
out in clause 13.1(c)(i);


 


Intellectual
Property means
trade marks, domain names, get-up, logos, patents, design rights, copyrights,
database rights and all other similar rights in any part of the world
(including Know-How) including any registration of such rights or applications
and rights to apply for such registrations;


 


Intellectual
Property Licence Agreement means the licence in the Agreed Form to take effect on
Completion between the Seller and the Purchaser whereby the Seller licenses or
procures the license to the Purchaser of Intellectual Property rights and
interests owned by the Seller and/or the Seller’s Group and used on a
non-exclusive basis in the Business;


 


Intellectual
Property Assignment means the agreement in the Agreed Form to take effect
on Completion effecting the assignment of the Business IPR owned by the Seller’s
Group and used exclusively in the Business (but excluding any Registered Group
IPR);


 


IT
Services Assignment Agreement means the agreement in the Agreed Form to take effect
on Completion whereby Buhrmann Stafdiensten B.V. and other members
of the Seller’s Group agree to assign to Buhrmann Shared Services B.V. the
rights, title, interests and obligations of Buhrmann Stafdiensten B.V. which arise
under an agreement dated 1 January 2002 for the provision of IT services;


 


Know-How means confidential and
proprietary industrial and commercial information and techniques in any form
including, without limitation, drawings, formulas, test results, reports,
instruction and training manuals, market forecasts and particulars of customers
and suppliers;


 


Latest
Relevant Accounts means the Relevant Accounts of each PMD Group Company
for the twelve month period ending on the Latest Relevant Accounts Date;


 


Latest
Relevant Accountants Date means 31 December 2002;


 


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Leverage
Ratio
means Net Debt at the end of the financial quarter which ends prior to or on
the first anniversary of the Completion Date, divided by EBITDA for the Seller
for the preceding 12 month period;


 


Local
Transfer Documents means such
agreements, transfers, conveyances, notarial deeds and other documents (subject
to the relevant local law and otherwise as may be agreed between the Seller and
the Purchaser) to implement the transfer of (i) the Shares or (ii) the Assets
on Completion or (iii) the Surplus Properties, whether before or after
Completion;


 


Long
Stop Date means 17 June 2004;


 


Losses means all losses,
liabilities, fines, penalties, damages, costs (including without limitation
legal costs and experts’ and consultants’ fees), charges, expenses, actions,
proceedings, claims and demands;


 


Management
Accounts
means the unaudited management accounts relating to each PMD Group Company for
any period or drawn up as at any date since the Latest Relevant Accounts Date
(the Relevant Management Accounts Date) and
initialled by the parties as in the Agreed Form;


 


Management
Services Termination Agreement means the agreement in Agreed Form to take effect on
Completion whereby Buhrmann Stafdiensten B.V. and other members of the Seller’s
Group agree to terminate all versions of the management services agreements
that exist between them;


 


Merchanting
Agreement means an agreement in the Agreed Form to take effect on Completion
between the Seller, Corporate Express Europe B.V. and the Purchaser in relation
to the ongoing relationship between the Seller’s Group and the Purchaser’s
Group;


 


Microsoft
Agreement
means the licences granted pursuant to the Microsoft Select Agreement (ref
52S50349) between Buhrmann N.V. and Microsoft Ireland Operations Limited dated
2 July 2002;


 


Net
Asset Value means the value of the net assets of the PMD Group Companies
calculated in accordance with the calculation set out in the schedule headed
“Purchase Price Adjustment Statement”;


 


Net
Debt
means in respect of the Seller’s Group, their long term liabilities plus loans
plus amounts outstanding to credit institutions minus cash and deposits;


 


Netstat
Agreement
means the agreement between Buhrmann N.V. and Nedstat B.V. dated 23 August 2001;


 


Notary means a civil law notary (notaris) of Loyens & Loeff, Amsterdam;


 


NCL means any item included in
the items identified as “non-current liabilities” in the schedule headed “Purchase
Price Adjustment Statement”;


 


Oracle Agreement
means the licence agreement between Corporate Express Inc. and Oracle
Corporation dated 30 May 2003;


 


Party shall have the meaning set
out in clause 21.2;


 


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PMD
Group Companies means the Companies and the Subsidiaries and PMD Group shall be construed accordingly;


 


Procedure has the meaning set out in
clause 13.1(c)(iii);


 


Proceedings shall have the meaning set
out in paragraph 10.3.1 in the schedule headed “Warranties”;


 


Properties means the freehold and
leasehold properties, details of which are set out in the schedules headed “Properties”
and “Third Party Agreements” and includes each and every part of them and Property means any one of them;


 


Providing
Party
has the meaning set out in clause 7.2(a);


 


Purchase
Price
means the total price (taking account of any adjustments or further amount
payable following Completion) payable by the Purchaser to the Seller in respect
of the Shares and the Assets under this agreement;


 


Purchaser means PaperlinX Limited and
includes all Acceding Purchasers to the extent of the Relevant Shares and/or
Assets (as defined in the Deed of Adherence);


 


Purchaser’s
Accountants means Ernst & Young of Becket House, 1 Lambert Palace Road, London
SE1 7EU or such other accountants as the Purchaser may engage in relation to
this agreement;


 


Purchaser’s
Group
means the Purchaser and its Affiliates;


 


Purchaser’s
Lawyers means
Linklaters of One Silk Street, London EC2Y 8HQ and Purchaser’s
Dutch Lawyers means Loyens & Loeff of Fred. Roeskestraat 100,
1076 ED Amsterdam;


 


Registered
Group IPR
means the Group IPR as is registered or the subject of an application for
registration with any patent, domain name, trade mark or other intellectual
property registry anywhere in the world;


 


Relevant
Accounts means
the Hyperion accounts of each PMD Group Company, and the combined Hyperion
accounts of the PMD Group, in each case for the twelve month period ending on a
Relevant Accounts Date and initialled by the parties as in the Agreed Form;


 


Relevant
Accounts Date means 31 December 2000, 31 December 2001 and 31 December 2002
respectively;


 


Relevant
Employees means those employees of the PMD Group Companies or a member of the
Seller’s Group who are as at the date of this agreement engaged in the Business
(other than any specifically excluded by agreement with the Purchaser);


 


Receiving
Party
has the meaning set out in clause 7.2(a);


 


Reorganisation means the transactions
described in the Reorganisation Steps Plan;


 


Reorganisation
Companies
means any party to the Reorganisation;


 


Reorganisation
Steps Plan means the plan in Agreed Form to effect the Reorganisation;


 


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Retirement
Benefit Arrangements means the benefit schemes or arrangements (other than
state or mandatory social security arrangements or mandatory collective
bargaining arrangements or mandatory industry wide arrangements) in respect of
Relevant Employees operated by the PMD Group Companies or in which a PMD Group
Company participates which are in force at Completion and which provide
benefits on retirement, ill-health or injury, death, voluntary withdrawal from
or involuntary termination of employment and post-retirement medical benefits
as listed in the schedule headed “Retirement Benefit Arrangements”;


 


Rhosili means Rhosili Amsterdam C.V.;


 


Ruling
Exchange Rate means the exchange rate of the European Central Bank’s daily closing
mid-rates (as downloaded from Reuters);


 


Securitisation means the EUR800,000,000 (eight
hundred million) Asset-Backed Euro Medium Term Programme and all series issued
thereunder and Securitisation Programme relating to the trade receivables of a
PMD Group Company;


 


Securitisation
Amendment Documents means the documents effecting
the Securitisation Release to take effect on Completion;


 


Securitisation
Programme means the Seller’s securitisation programme, established in September 2000
for the securitisation of receivables arising from contracts for the sale and
supply of paper, office products and related services to which those PMD Group
Companies listed in paragraph 8 of the schedule headed “Approvals” are
parties;


 


Securitisation Release
means the repurchase by each PMD Group Company of any trade receivables that
are the subject of the Securitisation and the release of each such PMD Group
Company from all liabilities and obligations arising out of the Securitisation
which shall be conditional on and become effective on Completion;


 


Seller means Buhrmann N.V.;


 


Seller’s
Accountants means PricewaterhouseCoopers of Amsterdam, Prins Bernhardplein 200 or
such other accountants as the Seller may engage in relation to this agreement;


 


Seller’s
Accountants Audit Letter means the letter of engagement of the Seller’s
Accountants in the Agreed Form;


 


Seller’s
Group
means the Seller, the Indirect Sellers and any and all of their Affiliates but
excluding the PMD Group Companies;


 


Seller’s
Lawyers
means Allen & Overy of Apollolaan 15, 1077 AB Amsterdam, The Netherlands;


 


Senior
Employee
means (i) each member of the PMD Group head office management team based in
Amsterdam; (ii) each managing director of each PMD Group Company; and (iii)
each employee employed or engaged in relation to the PMD Group on an annual
base salary (on the basis of full-time employment) in excess of EUR120,000 or
local equivalent;


 


Shared
IPR
means all rights in and to Intellectual Property owned by the Seller’s Group
and/or the PMD Group Companies, and used on a non-exclusive basis in the
Business;


 


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Shares
means
all the issued ordinary shares and all the issued preference shares in the
capital of the Companies identified as owned by the Seller’s group in the schedule headed
“The Companies”;


 


Standard
Hyperion Reports means the financial reports of the PMD Group set out
in the schedule headed “Policies for Preparation of the Completion
Accounts” prepared using the Hyperion System;


 


Subsidiaries means all the companies
mentioned in the schedule headed “The Subsidiaries of the Companies” and
Subsidiary means any of them;


 


Surplus
Properties means the properties, details of which are set out in the schedule headed
“Surplus Properties” and includes each and every part of them;


 


Surplus
Property Approval means all licences, consents or approvals necessary to
transfer a Surplus Property;


 


Taxation or Tax
means all forms of taxation, whether direct or indirect and whether levied by
reference to income, profits, gains, net wealth, asset values, turnover, added
value, any Transaction or other reference and statutory, governmental, state,
provincial, local governmental or municipal impositions, duties (including,
without limitation, all transfer and registration taxes and capital duties,
contributions, rates and levies (including, without limitation, social security
contributions and any other payroll taxes)), whenever and wherever imposed
(whether imposed by way of a withholding or deduction for or on account of tax
or otherwise) and whether chargeable directly or primarily against or attributable
directly or primarily to a Group Company or any other person and in respect of
any person and all penalties, surcharges, charges, costs and interest relating
thereto (save to the extent such penalties, surcharges, charges, costs or
interest are attributable to unreasonable delay by the Purchaser);


 


Tax
Authority
means any taxing or other authority competent to impose any liability in
respect of Taxation or responsible for the administration and/or collection of
Taxation or enforcement of any law in relation to Taxation;


 


Taxation
Benefit
means any Taxation benefit or advantage including any loss, relief, allowance,
exemption, set-off, deduction, reduction, postponement, roll-over, hold-over,
repayment or credit available in respect of any Taxation or in the computation
of any liability to Taxation;


 


Tax
Covenant
has the meaning given to it in the schedule headed “Tax Covenant”;


 


Third
Party Claim has the meaning set out in paragraph 5 of the schedule headed “Warranty
Limits”;


 


Tax
Return
means any return, declaration, claim for refund, or information return or
statement relating to Taxation, including any schedule or attachment
thereto;


 


Third
Party Costs means any fees, commissions, costs, expenses and disbursements
incurred by or on behalf of a party and payable to a third party (including,
without limitation, advisory fees payable for legal, accounting and financial
advice, broking and underwriting fees and commissions, travel, accommodation
and other out-of-pocket costs and expenses) in


 


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connection with the negotiation, financing, entering into and
completion of this agreement and other documentation in relation thereto;


 


Third
Party Sum has the meaning set out in paragraph 7(b) of the schedule headed “Warranty
Limits”;


 


Transaction means any transaction,
circumstance, act, event or omission of whatever nature and includes without
limitation, any change in the residence of any person for Tax purposes;


 


Transitional
Services Agreement means the agreement in the Agreed Form to take effect
on Completion whereby the Seller will provide or procure the provision of
certain services to the PMD Group Companies;


 


Warranty Claim
means a claim by the Purchaser for any breach or alleged breach of any of the
Warranties;


 


Warranties means the representations and
warranties made by the Seller contained in the schedule headed “Warranties”;


 


Webmethods Agreements
means the licence agreement (together with all relevant addenda) between
Corporate Express Inc. and Webmethods Inc. dated 30 August 2000 together
with the professional services agreements between Corporate Express Inc. and
Webmethods Inc dated August 2000;


 


Winpac shall have the meaning set
out in clause 1.1 of the schedule headed “Approvals”.


 


(2)           Any express or implied reference to an enactment
(which includes any legislation in any jurisdiction) includes references to:


 


(a)           that enactment as amended, extended or applied by or
under any other enactment before or after the date of this agreement;


 


(b)           any enactment which that enactment re-enacts (with or
without modification); and


 


(c)           any subordinate legislation (including regulations)
made (before or after signature of this agreement) under that enactment, as
re-enacted, amended, extended or applied as described in paragraph (a) above,
or under any enactment referred to in paragraph (b) above.


 


(3)           In this agreement references to a natural person
include his estate and personal representatives.


 


(4)           References to a company shall be construed so as to
include any company, corporation or other body corporate or other legal entity,
wherever and however incorporated or established.


 


(5)           For the purposes of this agreement, a company is a
subsidiary of another company, its holding company, if that other company:


 


(a)           holds a majority of the voting rights in it; or


 


(b)           has the right, either alone or pursuant to an
agreement with other shareholders or members, to appoint or remove a majority
of its management board or its supervisory board (if any); or


 


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(c)           is a shareholder or member of it and controls alone or
together with other persons, pursuant to an agreement with other shareholders
or members, a majority of the voting rights in it,


 


or if it is a
subsidiary of a company which is itself a subsidiary of that other company.


 


(6)           For the purposes of this agreement, a company is a
wholly-owned subsidiary of another company if it has no members except that
other and that other’s wholly-owned subsidiaries.


 


(7)           References to a person shall be construed so as to
include any individual, firm, company, government, governmental authority, tax
authority, state or agency of a state or any joint venture, association,
partnership (whether or not having separate legal personality).


 


(8)           An action taken by a person will be deemed to have
been taken in the ordinary course of business only where such action is
consistent with the past practices (if any) of such person and is taken in the
ordinary course of the normal day-to-day operations of such person.


 


(9)           Where any obligation is qualified or phrased by
reference to use reasonable endeavours, best efforts or wording of a similar
nature, it means the efforts that a person desirous of achieving a result would
use in similar circumstances to ensure that such result is achieved as
expeditiously as possible and, regard shall be had, among other factors, to (i)
the price, financial interest and other terms of the obligation; (ii) the
degree of risk normally involved in achieving the expected result; and (iii)
the ability of an unrelated person to influence the performance of the
obligation.


 


(10)         The singular shall include the plural and vice versa
and references to words importing one gender will include both genders.  Notwithstanding the clause headed “Language”,
where in this agreement a Dutch term is given in italics or in italics and in
brackets after an English term and there is any inconsistency between the Dutch
and the English, the meaning of the Dutch term shall prevail.


 


(11)         All submissions made, notice given or documents
produced pursuant to or in connection with this agreement shall be made in
English.


 


(12)         References to any Dutch legal term shall, in respect
of any jurisdiction other than the Netherlands, be construed as references to
the term or concept which most nearly corresponds to it in that jurisdiction.


 


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