<PAGE>
================================================================================
BLUE STAR GROUP PTY LIMITED
ACN 074 868 901
BLUE STAR CORPORATE PTY LIMITED
ACN 074 810 905
BOOKLAND PTY LIMITED
ACN 008 736 801
AUSTRALIAN TONER CARTRIDGE CO. PTY LIMITED
ACN 007 345 084
BLUE STAR GROUP LIMITED
AK 192289
VENDORS
BOISE CASCADE OFFICE PRODUCTS (NZ) LIMITED
WN 1018908
BOISE CASCADE OFFICE PRODUCTS (AUSTRALIA) PTY LIMITED
ACN 073 257 379
NATIONAL OFFICE PRODUCTS LIMITED
ACN 064 777 224
PURCHASERS
US OFFICE PRODUCTS COMPANY
USOP
BOISE CASCADE OFFICE PRODUCTS CORPORATION
BOISE
-----------------------------------------------------------------
MASTER SALE AND PURCHASE AGREEMENT
-----------------------------------------------------------------
Solicitors to US Office Products Ltd Solicitors to Boise Cascade Office
& Others Products Corporation & Others
Quigg Partners & Norton Gledhill
Russell McVeagh Wellington & Melbourne, Australia
Auckland
================================================================================
<PAGE>
i
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PARTIES.......................................................................................................1
INTRODUCTION..................................................................................................1
1. INTERPRETATION...........................................................................................4
2. CONDITION................................................................................................9
3. NON-COMPETITION..........................................................................................9
4. WARRANTY CLAIM PROVISIONS...............................................................................13
5. ESCROW FUNDS............................................................................................18
6. POST COMPLETION PURCHASE PRICE ADJUSTMENTS..............................................................29
7. CONDITIONS PRECEDENT....................................................................................26
7A RELEASE OF GUARANTEES...................................................................................27
8. DEFAULT.................................................................................................28
9. EXCLUSIVITY.............................................................................................28
10. SUPERANNUATION..........................................................................................29
11. USE OF BLUE STAR AND WHITCOULLS NAMES...................................................................31
12. GUARANTEE OF USOP.......................................................................................31
13. GUARANTEE OF BOISE USA..................................................................................31
14. OPERATIONAL ARRANGEMENTS FOLLOWING COMPLETION...........................................................32
15. MISCELLANEOUS PROVISIONS................................................................................32
SIGNATURES...................................................................................................36
FIRST SCHEDULE...............................................................................................38
LAST BALANCE SHEETS*...................................................................................38
SECOND SCHEDULE..............................................................................................39
INVENTORY COST MATRIX*.................................................................................39
THIRD SCHEDULE...............................................................................................42
MATERIAL BUSINESS CONTRACTS*...........................................................................42
FOURTH SCHEDULE..............................................................................................43
ESCROW AGREEMENT*......................................................................................43
FIFTH SCHEDULE...............................................................................................44
BLANK* (no document included)..........................................................................44
SIXTH SCHEDULE...............................................................................................45
LICENCES*..............................................................................................45
<PAGE>
ii
SEVENTH SCHEDULE.............................................................................................62
LIST OF GUARANTEES.....................................................................................62
* Omitted - will furnish to the Commission upon request.
</TABLE>
<PAGE>
AGREEMENT dated 2000
PARTIES
BLUE STAR GROUP PTY LIMITED ACN 074 868 901
BLUE STAR CORPORATE PTY LIMITED ACN 074 810 905
BOOKLAND PTY LIMITED ACN 008 736 801
AUSTRALIAN TONER CARTRIDGE CO. PTY LIMITED ACN 007 345 084
BLUE STAR GROUP LIMITED AK 192289
("together referred to as VENDORS")
BOISE CASCADE OFFICE PRODUCTS (NZ) LIMITED WN 1018908, BOISE CASCADE
OFFICE PRODUCTS (AUSTRALIA) PTY LIMITED ACN 073 257 379, NATIONAL
OFFICE PRODUCTS LIMITED CAN 064 777 224 (together referred to as
"PURCHASERS")
U.S. OFFICE PRODUCTS COMPANY ("USOP")
BOISE CASCADE OFFICE PRODUCTS CORPORATION ("BOISE USA")
INTRODUCTION
A. The Vendors have entered into agreements relating to the sale to the
Purchasers of certain assets and shares.
B. The Vendors and Purchasers wish to record certain matters which have
been agreed between them with respect to the sale of those assets and
shares.
C. USOP, a Delaware corporation, is the ultimate holding company of the
Vendors and has entered into this agreement solely for the purpose of
providing the undertakings in sections 3 and 12.
D. Boise USA, a Delaware corporation, is the ultimate holding company of
the Purchasers and has entered into this agreement solely for the
purposes of providing the guarantee in section 13.
<PAGE>
(4)
AGREEMENT
1. INTERPRETATION
1.1 DEFINITIONS: In this agreement, unless the context otherwise requires:
"AUSTRALIAN COMPANY" means Filing Efficiency Pty Limited ACN 001 386
689.
"AUTHORITY" means any regulatory body, court or administrator of any
legislation or regulation.
"BOISE" means Boise Cascade Office Products (NZ) Limited WN 1018908.
"BSG" means Blue Star Group Limited AK 192289.
"BUSINESSES" means the businesses which are the subject of the
Australian Asset Sale Agreement.
"COMPANY" means any of the New Zealand Companies or the Australian
Company, and "COMPANIES" means all of them.
"COMPLETION BALANCE SHEET" means:
(a) the pro forma consolidated balance sheet prepared by Boise in
respect of the Assets and Assumed Liabilities of the
Businesses being acquired or assumed respectively by the
Purchasers;
(b) the pro forma consolidated balance sheet prepared by Boise in
respect of the Australian Company and its wholly owned
subsidiary;
(c) the pro forma consolidated balance sheet prepared by Boise of
the New Zealand Companies and their subsidiaries;
in each case, referred to in section 6.
"CONFIDENTIAL INFORMATION" means all oral and written information
relating to the business or affairs of the New Zealand Companies, the
Australian Company and the Businesses, in whatever form held.
<PAGE>
(5)
"CONTRACT STATIONERY" means the supply of stationery and office
products (including packaging, computer consumables and furniture and
related products) through outside sales representatives on a contract
basis to corporate or commercial customers (other than by normal retail
sale arrangements).
"DISCLOSURE SCHEDULES" means the disclosure schedules in each of the
Sale and Purchase Agreements.
"EXISTING BUSINESS ACTIVITIES" means:
(a) online and offline retailing of books, magazines, stationery,
office products and other related products (including
software, videos and other media) in New Zealand and
Australia;
(b) full service and print management activities including graphic
design, online data management, printing, copying, contract
distribution, mailing, data processing and facilities
management (including outsourcing and procurement) in New
Zealand and Australia;
(c) sales of office automation equipment (including telephone
systems, facsimiles, photocopiers and computer equipment) and
related services (including help desk services, equipment
maintenance, project management, training and consulting) in
New Zealand and Australia;
(d) equipment financing and rental;
(e) existing business forms business,
provided that, for the avoidance of doubt, the existing activities
described in paragraphs (a) and (d) above do not include employment of
outside sales representatives or the provision of delivery services.
"GAAP" means accounting principles which are generally accepted in
Australia or New Zealand, to the intent that in relation to:
(a) the Australian Asset Sale Agreement and Australian Share Sale
Agreement, it means Australian GAAP;
(b) the New Zealand Share Sale Agreement, means NZ GAAP,
applied consistently in respect of each Company, and for each Business
but not between the Businesses.
<PAGE>
(6)
"LAST BALANCE DATE" means 29 April 2000.
"LAST BALANCE SHEET" means:
(a) the pro forma consolidated balance sheet in respect of the
assets and liabilities of the Businesses being acquired and
assumed by the Purchasers as at the Last Balance Date;
(b) the pro forma consolidated balance sheet of the Australian
Company and its wholly owned subsidiary as at the Last Balance
Date;
(c) the pro forma consolidated balance sheet of the New Zealand
Companies and their subsidiaries as at the Last Balance Date
(denominated in Australian dollars on the basis that the New
Zealand dollar balances have been converted into Australian
dollars at the rate of NZ$1.00 = $0.80);
which are set out in the first schedule.
"LICENCES" means the licences described in the sixth schedule.
"MATERIAL BUSINESS CONTRACTS" means those contracts or arrangements
specified in the third schedule.
"NEW ZEALAND COMPANIES" means New Zealand Office Products Limited and
Croxley Stationery Limited.
"PURCHASE PRICE" means $213,100,000.
"SALE AND PURCHASE AGREEMENTS" means the sale and purchase agreements
entered into on or about the date of this agreement between:
(a) Blue Star Group Pty Limited, Blue Star Corporate Pty Limited,
Bookland Pty Limited and Australian Toner Cartridge Co. Pty
Limited and National Office Products Limited in relation to
the assets and undertaking of certain businesses ("AUSTRALIAN
ASSET SALE AGREEMENT");
(b) Blue Star Group Limited and the Purchasers in relation to the
shares of New Zealand Office Products Limited and Croxley
Stationery Limited ("NEW ZEALAND SHARE SALE AGREEMENT");
<PAGE>
(7)
(c) Blue Star Group Pty Limited and Boise Cascade Office Products
(Australia) Pty Limited in relation to the shares of Filing
Efficiency Pty Limited ("AUSTRALIAN SHARE SALE AGREEMENT");
"SPECIFIED BUSINESS" means:
(a) in relation to the Businesses the activities referred to in
paragraph A of the Introduction to the Australian Asset Sale
Agreement;
(b) in relation to the New Zealand Companies:
(i) Contract Stationery;
(ii) the importation, manufacture and wholesale
distribution of stationery and related office
products;
(c) in relation to the Australian Company, the business of sale
and distribution of lateral filing systems and related
technology and products.
"TAXATION" means all forms of taxation and all other statutory
governmental or local governmental impositions, duties, levies,
charges, withholdings, tariffs and rates, whether imposed or payable in
Australia, New Zealand or elsewhere, and includes any reassessment
thereof, and all penalties, fines, interests, s whether in respect of
income, profits, gains, supplies, consumption or otherwise, provision
withholding or otherwise and additional statutory charges in connection
with any of the foregoing, and "TAX" and "TAXES" have a corresponding
meaning.
"TITLE AND TAX WARRANTIES" means:
(a) in respect of the New Zealand Share Sale Agreement second
schedule clauses 1(a), 1(b), 2(a), 2(b), 2(c), 2(d), 2(e),
2(f), 2(g), 2(h) and clause 16 as warranted pursuant to clause
7 of that agreement;
(b) in respect of the Australian Asset Sale Agreement fifth
schedule clauses 1(a) and (b) and clause 15 as warranted
pursuant to clause 9 of that agreement;
(c) in respect of the Australian Share Sale Agreement second
schedule clauses 1(a), 1(b), 2(a), 2(b), 2(c), 2(d), 2(e),
2(f), 2(g) and 2(h) and clause 16 as warranted pursuant to
clause 7 of that agreement.
<PAGE>
(8)
1.2 INTERPRETATION: In this agreement, unless the context otherwise
requires: (a) words and expressions defined in the Sale and Purchase
Agreements have the same meanings when used in this agreement;
(b) words importing one gender include the other genders;
(c) the singular includes the plural and vice versa;
(d) references to a month or a year are references to a calendar
month or year, as the case may be;
(e) references to dates and times are to dates and times in New
Zealand;
(f) references to currency are to the currency of Australia;
(g) a reference to the Vendors is a reference to each of the
companies within the term Vendors on a joint and several basis
and all warranties, representations, indemnities, covenants,
agreements and obligations given or entered into by each
company is given jointly and severally PROVIDED THAT where one
of the Vendors is a "shell" company and wishes to be released
from obligations hereunder to effect a dissolution or winding
up, then the relevant Vendor may request a release from the
Purchasers and the Purchasers may not unreasonably withhold
the granting of such release on the condition that there is at
least one Vendor of substance remaining and that the release
will not prejudice the position of the Purchasers;
(h) a reference to the Purchasers is a reference to each of the
companies within the term Purchasers on a joint and several
basis and all covenants, agreements and obligations given or
entered into by each company is given jointly and severally.
1.3 FURTHER INTERPRETATION: In this agreement:
(a) a reference to a Vendor, USOP or a Purchaser is a reference
also to their respective successors, and also, in the case of
a Purchaser, to the permitted assigns of a Purchaser under any
of the Sale and Purchase Agreements;
<PAGE>
(9)
(b) a reference to a "PERSON" includes an individual, firm,
company, corporation or unincorporated body of persons, or any
state, department of state or other statutory body, in each
case whether or not having separate legal personality, and a
reference to a "COMPANY" includes a person;
(c) headings are for convenience only and do not affect
interpretation;
(d) references to sections, clauses and schedules are references
to sections, clauses and schedules of this agreement unless
specifically stated otherwise;
(e) a reference to a statute or other law includes regulations and
other instruments under it and consolidations, amendments,
re-enactments or replacements of any of them.
2. CONDITION
2.1 OBLIGATIONS OF PARTIES ARE CONDITIONAL: The rights and obligations
of the Vendors and the Purchasers under this agreement (other than
clause 7.2 and sections 8 and 9) are conditional upon the Sale and
Purchase Agreements being contemporaneously completed in accordance
with their terms. Should there be any breach of any of the Sale and
Purchase Agreements it shall be deemed to be a breach of this agreement
and each of the other Sale and Purchase Agreements and any termination
of any of the Sale and Purchase Agreements shall be deemed to be a
termination of this agreement and each of the other Sale and Purchase
Agreements.
3. NON-COMPETITION
3.1 RESTRAINT: Each of the Vendors and USOP covenants jointly and
severally with the Purchasers that, within any of the periods
and in any of the areas specified in clause 3.2, it shall not,
and shall procure that no Related Company of that Vendor or
USOP as at the date hereof (each of the Vendors, USOP and
Related Companies referred to as "the Restrained Parties")
will, except with the written consent of the Purchasers:
(a) be directly or indirectly interested, engaged,
concerned in, advise or assist financially, any
business the same as or similar to any Specified
Business on its own account or as a consultant to or
a partner, agent, shareholder, owner, part owner
(including by way of option, deferred purchase or
security interest, other
<PAGE>
(10)
than retention of title arrangements in the ordinary course
of business), trustee, member of any other person, or in any
other way whatsoever;
(b) call upon or offer employment to any person who is,
at the date of Completion, within the areas specified
in clause 3.2, an employee of the relevant Company or
Business (as the case requires) including where such
call or offer is for the purpose or with the intent
of soliciting or enticing such employee away from or
out of the employ of that Company or the Purchasers,
as the case may be but this restriction shall not
apply (except to directors of the Companies or
employees whose base remuneration exceeds $100,000
per annum) to any solicitation or offer of a general
nature, made through a widely circulated publication
or the internet that is not directed specifically at
employees of any of the Companies or Businesses;
(c) at any time disclose or use any Confidential
Information relating to that Vendor's Business or its
Assets, or the relevant Company, except as may be
required by law, regulation, order or demand of an
Authority;
(d) on their own account or as an agent of any person
canvass or solicit, accept orders for any goods or
services similar to or competing with the services
which have been sold or supplied in the normal course
of the Business or in the normal course of the
business or operations of either of the Companies
PROVIDED THAT it is acknowledged that this
restriction does not apply to the supply of goods and
services made outside the areas specified in clause
3.2(b);
(e) directly or indirectly for themselves or on behalf of
or in conjunction with any person solicit or induce
any existing customer of the Business or either of
the Companies to cease to be a customer of the
Business or either of the Companies;
(f) represent themselves as being in any way connected
with or interested in the affairs of the Business, or
either of the Companies.
For the purposes of this section 3:
(a) persons with a shareholding interest in USOP shall
not be included in the definition of Restrained
Parties;
(b) on the precondition that the Related Company of USOP
or any of the Vendors ("Member") has executed a deed
of covenant in favour of the Purchasers and an
original of the same has been delivered to Boise then
if the Member breaches this section 3 and at that
time of breach the Member is no longer a Related
<PAGE>
(11)
Company of USOP or any of the Vendors then the rights
of the Purchasers for such breach shall be limited to
making a claim, taking proceedings, or seeking an
injunction pursuant to this Agreement against the
Member only.
3.2 RESTRAINT PERIODS AND AREAS:
(a) The periods referred to in clause 3.1 are:
(i) a period of one year after the Completion
Date;
(ii) a period of two years after the Completion
Date;
(iii) a period three years after the Completion
Date.
(b) The areas referred to in clause 3.1 are:
(i) New South Wales;
(ii) Victoria;
(iii) Queensland;
(iv) Australian Capital Territory;
(v) Western Australia;
(vi) Northern Territory;
(vii) Tasmania;
(viii) South Australia;
(ix) New Zealand
(x) Fiji/Samoa/other South Pacific Islands.
16 September 2000
<PAGE>
(12)
3.3 UNDERTAKINGS ARE SEVERAL: This section 3 has effect as if it consisted
of separate provisions, each being severable from the other, each
separate provision consisting of the covenant set out in clauses 3.1
and 3.4 relevant to separate businesses comprising the Specified
Business combined with the period referred to in clause 3.2(a) combined
with the area referred to in clause 3.2(b). If any of those separate
provisions (in respect of business type, time period or area) is
invalid or otherwise unenforceable for any reason, the invalidity or
unenforceability shall not affect the validity or enforceability of any
of the other separate provisions.
3.4 EXCEPTIONS: The provisions of clause 3.1 do not apply to:
(a) the Existing Business Activities in New Zealand provided that,
while any of the Restrained Parties owns or controls the
Whitcoulls retail chain or a substantial part thereof in New
Zealand, it shall procure, for the periods and the areas
described in clause 3.2(a) and (b) respectively, that such
retail chain does not carry out Contract Stationery, and that
such covenant shall be enforceable by each of the Purchasers
under the Contracts (Privity) Act 1982;
(b) the Existing Business Activities in Australia provided that,
while any of the Restrained Parties owns or controls the Angus
& Robertson retail chain or a substantial part thereof in
Australia, it shall procure, for the periods and the areas
described in clause 3.2(a) and (b) respectively, that such
retail chain (excluding franchisees only) does not carry out
Contract Stationery, and that such covenant shall be
enforceable by each of the Purchasers under the Contracts
(Privity) Act 1982;
(c) any of the Restrained Parties holding up to 5 percent of the
issued share capital, or any debentures or other securities,
of any company the shares of which are listed on a recognised
stock exchange;
(d) the acquisition by any of the Restrained Parties of another
company or business or group of companies or businesses
("Acquisition") carrying on any business the same as or
similar to a Specified Business as one of its or their
businesses ("ONSALE BUSINESS") provided that:
(i) such business is not the principal business or a
major part of that business;
(ii) the relevant Restrained Party can reasonably
demonstrate that the principal purpose of the
acquisition is to acquire the company or companies or
business or businesses concerned for other reasons;
and
<PAGE>
(13)
(iii) the Restrained Party undertakes to sell the OnSale
Business as soon as is practically possible and the
following procedure shall apply in respect of that
sale:
(aa) The relevant Restrained Party ("ACQUIRING
PARTY") shall as soon as is practicable
after the Acquisition, provide written
notification to Boise of the Acquisition
including a fair and reasonable description
of the OnSale Business, its possible sale to
Boise and reference to the provision of this
clause in the Agreement (including notice of
the deadline application under subclause
(bb) and Boise shall, within 20 Business
Days of receipt of that notice, provide
written notification to the Acquiring Party
as to whether or not it wishes to enter into
negotiations to purchase the OnSale
Business.
(bb) If Boise does not give the written
notification referred to in sub-clause (aa)
within the required time period, the
relevant Restrained Party shall have no
further obligations to Boise and Boise shall
be deemed to have consented to the
Acquisition.
(cc) If the Purchasers does give the written
notification referred to in sub-clause (aa)
within the required time period that it
wishes to enter into discussions to purchase
the relevant part of the business, then at
the commencement of the sale process as
described in subclause (d)(iii) above Boise
and the Acquiring Party shall enter into
good faith negotiations on an exclusive
basis with respect to the sale of the OnSale
Business to Boise or its nominee.
(dd) If after 30 days from the commencement of
the negotiations referred to in sub-clause
(cc), no formal sale and purchase agreement
has been concluded the relevant Restrained
Party shall be entitled to sell the OnSale
Business to any person on such terms as it
thinks fit.
(e) the facilities management and procurement business
activities of the Blue Star Print Division in
Australia and New Zealand ("PRINT Division") under
which that division as a contractor, sub-contractor
or joint venturer tenders for the supply of
stationery and office products (including packaging,
computer consumables and furniture) and related
office supplies to commercial customers PROVIDED THAT
Print Division must not physically stock inventory
(other than customer-specific stocking (being stock
with a customer specific logo or get up imprinted
thereon)) of the Specified Businesses for sale
PROVIDED
<PAGE>
(14)
FURTHER THAT this restriction on stocking inventory
is subject to a de minimis exception on stocking for
the Print Division to the extent that:
(i) paper is kept as part of a normal and current
business procedure; or
(ii) this is incidental to an order assembly and delivery
activity that the Print Division handles to provide a
customer with printed materials and other products in
a single delivery.
3.5 MODIFICATION IF NECESSARY: While the covenants contained in clauses 3.1
and 3.9 are considered by the parties to be reasonable in all the
circumstances if one or more should be held invalid as an unreasonable
restraint of trade or for any other reason whatsoever but would have
been valid if part of the wording thereof had been deleted or the
period thereof reduced or the range of activities or area dealt with
thereby reduced in scope such covenants shall apply with such
modifications as may be necessary to make them valid and effective.
3.6 INJUNCTIVE RELIEF: Irreparable damage may result to a Purchaser in the
event of a breach of clauses 3.1 and 3.9 and in such event the
Purchasers shall be entitled, in addition to any other remedy
available, to an injunction to restrain any breach or reasonably
anticipated breach by any of the Restrained Parties and any person or
company acting for or through or with any of the Restrained Parties.
3.7 SALE OF RETAIL BUSINESS: If BSG or any of its Related Companies sells
or otherwise disposes of shares in any company, or the business assets
of any business division, which carries on the Whitcoulls retail
business, the relevant Vendor shall procure prior to the sale the
execution of a deed of covenant in favour of the Purchasers from the
acquirer of those shares or that business division, as the case may be
(including Related Companies of the acquirer), under which the acquirer
warrants and undertakes that it is prohibited from carrying out
Contract Stationery using the "Whitcoulls" name and that such covenant
shall be enforceable by the Purchasers under the Contracts (Privity)
Act 1982 and original of the deed of covenant shall be immediately
given by the Vendors to Boise PROVIDED THAT where the acquirer:
(a) is not currently carrying out Contract Stationery anywhere in
the world;
(b) has not formerly carried out Contract Stationery anywhere in
the world;
(c) has not announced its intent to carry out Contract Stationery
anywhere in the world,
<PAGE>
(15)
then the Vendor's obligation to procure the covenant from the acquirer
is a best commercial efforts only covenant. Such covenant may expressly
exclude all activities that fall within the scope of the Existing
Business Activities and the exceptions included within clause 3.4
above. For the avoidance of doubt, the covenant shall not prohibit the
acquirer from carrying out Contract Stationery using a trade name that
does not include the word "Whitcoulls".
3.8 PROTECTION OF GOODWILL: The parties to this Agreement acknowledge that
the Purchase Price was assessed and accepted by the Purchasers being
dependent upon the Vendors giving the covenants in this section 3 in
that the provisions contained in this section 3 are solely for the
protection of each of the Purchasers in respect of the goodwill of the
Business.
3.9 ASSIGNMENT: The benefit of the covenants contained in this section 3
may be assigned in whole or in part by the relevant Purchaser in
connection with the sale by the relevant Purchaser of any of the
Companies or Businesses to a bona fide third party and for the
protection solely of the relevant Company or Business.
3.10 SALE OF PRINT BUSINESS: If BSG or any of its Related Companies sells or
otherwise disposes of shares in any company, or the business assets of
any business division, which carries on the Blue Star print business,
the relevant Vendor shall procure prior to the sale the execution of a
deed of covenant in favour of the Purchasers from the acquirer of those
shares or that business division, as the case may be (including Related
Companies of the acquirer), under which the acquirer warrants and
undertakes that it is prohibited from carrying out Contract Stationery
using the "Blue Star" name and that such covenant shall be enforceable
by the Purchasers under the Contracts (Privity) Act 1982 and original
of the deed of covenant shall be immediately given by the Vendors to
Boise PROVIDED THAT where the acquirer:
(a) is not currently carrying out Contract Stationery anywhere in
the world;
(b) has not formerly carried out Contract Stationery anywhere in
the world;
(c) has not announced its intent to carry out Contract Stationery
anywhere in the world,
then the Vendor's obligation to procure the covenant from the acquirer
is a best commercial efforts only covenant. Such covenant may expressly
exclude all activities that fall within the scope of the Existing
Business Activities and the exceptions included within clause 3.4
above. For the avoidance of doubt, the covenant shall not prohibit the
acquirer from carrying out Contract Stationery using a trade name that
does not include the words "Blue Star".
<PAGE>
(16)
4. WARRANTY CLAIM PROVISIONS
4.1 QUALIFICATIONS: The Warranties and the obligations of the Vendors under
this agreement and the Sale and Purchase Agreements (excluding clause
8.5(b) of the Australian Asset Sale Agreement) are given subject to:
(a) any exception or qualification fairly disclosed in the
Disclosure Schedules or expressly stated in the relevant Sale
and Purchase Agreement or this agreement;
(b) any matter expressly provided for under the terms of the
relevant Sale and Purchase Agreement or this agreement;
(c) any matter or thing done or refrained from as required by a
relevant Sale and Purchase Agreement or this agreement or at
the written request, or with the prior written approval, of
any of the Purchasers.
4.2 DISCLOSURE SCHEDULES EXHAUSTIVE:
(a) No letter, document or other communication constitutes a
disclosure for the purposes of the Disclosure Schedules unless
it is expressly set out in, annexed to, or referred to in, a
Disclosure Schedule.
(b) A Disclosure Schedule will only be effective to qualify any of
the Warranties and the obligations of the Vendors under this
agreement and the Sale and Purchase Agreements to the extent
it:
(i) fairly discloses any fact relating to the relevant
Warranties and the obligations of the Vendors under
this agreement or the Sale and Purchase Agreements
(as the case requires); or
(ii) refers to a specific list and bundle of identified
written material, the contents of which are deemed to
be fairly disclosed to the Purchasers;
(c) None of the Warranties and obligations of the Vendors under
this agreement and the Sale and Purchase Agreements will be
deemed in any way modified or discharged by reason of
investigation or inquiry made or to be made by or on behalf of
any of the Purchasers.
(d) No information about the Shares, Assets, the businesses of the
Companies, or the Businesses of which any of the Purchasers
have knowledge (actual or constructive) other than by reason
of it being disclosed
<PAGE>
(17)
in the Disclosure Schedules will prejudice any claim which
any of the Purchasers will be entitled to bring or will
operate to reduce any amount recoverable by the Purchasers.
4.3 LIABILITY LIMITATIONS: The Purchasers have no claim against any Vendor
in respect of the Warranties or any indemnification covenants in
relation to the Warranties (each such covenant to be deemed included in
the expression "Warranty") (excluding in respect of Title and Tax
Warranties):
(a) to the extent that the relevant circumstance or amount has
been or is made good, or recovered by or paid to any of the
Purchasers or the Companies subsequent to Completion without
cost, liability or loss to the Purchasers or the Companies;
(b) to the extent that the relevant event, circumstance, loss,
liability, cost or expense to which the claim relates would
not have arisen but for:
(i) any act or omission by any of the Purchasers or any
of the Companies subsequent to Completion;
(ii) an obligation or commitment entered into or made
after Completion by any of the Purchasers or any of
the Companies subsequent to Completion;
(c) to the extent that such claim arises as a result of any
legislation not in force at the date of this agreement which
takes effect retrospectively or arises as a result only of any
increase in the rates of taxation in force at the date of this
agreement;
(d) to the extent that such claim arises as a result of a change
after the date of this agreement in any law or interpretation
of any law, including GAAP;
(e) unless the aggregate of the amount claimed and of all other
claims made by any of the Purchasers (excluding any legal or
other professional costs incurred in respect of the claims) or
which would but for the provisions of this subclause have
previously been made, when aggregated with all the amounts
claimed by any of the Purchasers under the provisions of this
Agreement or any of the Sale and Purchase Agreements, exceeds
$1,000,000 ("CLAIM THRESHOLD"), after which the relevant
Vendor shall be required, on demand by Boise, to pay the
aggregate of the amounts so claimed exceeding $1,000,000;
<PAGE>
(18)
(f) unless the Claim Threshold has been reached and the relevant
amount claimed (excluding any legal or other professional
costs incurred in respect of the claim) exceeds $10,000 in
respect of any individual claim or series of related claims;
(g) to the extent that the amount of such claim and the aggregate
amount of all other claims by the Purchasers would, when
aggregated with all the amounts claimed by any of the
Purchasers under the provisions of the Sale and Purchase
Agreements, exceed the Purchase Price;
(h) unless notice of the claim ("CLAIM NOTICE") (other than
pursuant to any Tax Deed or otherwise in respect of
Taxation)has been given to that Vendor by Boise in good faith
and in reasonable detail within 24 months after Completion;
(i) to the extent of any Taxation saving or Taxation benefit which
arises to the Purchasers and its Related Companies in Taxation
as a result of the relevant event, circumstances, loss,
liability, cost or expense to which the claim relates;
(j) to the extent that provision has been made in any Completion
Balance Sheet in respect of the subject of the claim but only
to the amount so provided in the Completion Balance Sheet, but
not in respect of any excess over that provision and the
amount of each claim shall reduce the amount of the provision
available for other claims;
For the purposes of determining whether the Claim Threshold referred to
in clauses 4.3(e) and (f) has been reached:
(a) If, within 10 Business Days of receiving a Claim Notice, the
relevant Vendor provides written notification to Boise that it
irrevocably accepts that claim referred to in that Claim
Notice, the amount of that claim shall be excluded from the
determination of whether the Claim Threshold has been reached.
(b) If the relevant Vendor elects not to accept the claim referred
to in a Claim Notice, the amount of that claim shall be
included in the determination of whether the Claim Threshold
has been reached.
(c) To the extent that any claim made by any of the Purchasers has
been satisfied out of the Escrow Funds, it shall be excluded
from the determination of whether the Claim Threshold has been
reached.
<PAGE>
(19)
4.4 VENDOR'S RIGHT TO DEFEND CLAIMS: If a Purchaser makes, or may seek to
make, any claim against a Vendor in respect of any other obligations of
that Vendor expressed or implied in this agreement or any Sale and
Purchase Agreement or otherwise in relation to the sale of the
Businesses and Assets, or Shares, as the case may be, to the relevant
Purchaser and which relates to a claim by, or liability to, any third
party ("THIRD PARTY CLAIM"), the following provisions shall apply:
(a) The relevant Purchaser shall forthwith give notice thereof
(including reasonable details) to that Vendor ("Notice of
Claim").
(b) If within 30 days of receipt by that Vendor of the Notice of
Claim such Vendor agrees in writing to the relevant Purchaser
that it is liable for the claim and shall indemnify the
Purchasers accordingly ("Acceptance") then the Purchasers
shall ensure that Purchaser nor any of the Companies makes any
payment or admission of liability in respect of the Third
Party Claim, or takes any other steps which may in any way
prejudice the defence of the Third Party Claim, without the
prior written consent of that Vendor.
(c) Subject to Acceptance the Vendor may, at its election, in the
name of the Purchasers or the Company concerned, but subject
to prior consultation with the relevant Purchaser and so that
the reputation of the relevant Purchaser and the relevant
Company is not unreasonably harmed, conduct all negotiations
and prosecute or defend any proceedings relating to the Third
Party Claim. For such purpose the relevant Purchaser shall
make available to that Vendor all such information, books and
records, and give such other co-operation (including making
available employees as witnesses), as that Vendor may
reasonably require for the purpose.
4.5 PAYMENT FROM THIRD PARTIES: If the relevant Purchaser recovers from any
third party any amount to which a payment made by that Vendor to the
relevant Purchaser under the relevant Sale and Purchase Agreement or
this agreement relates, the relevant Purchaser shall procure that the
amount so recovered by the relevant Purchaser or any of the Companies
(net of the costs of recovery and not exceeding the amount paid by that
Vendor) shall forthwith be reimbursed to that Vendor.
4.6 ACTION AGAINST THIRD PARTIES: If the relevant Purchaser or any of the
Companies subsequent to Completion have a claim against a third party
in relation to a matter which gives rise to a claim in respect of which
a Vendor has paid to the Purchasers the amount of such claim the
Purchasers shall (at the cost and expense of that
<PAGE>
(20)
Vendor) assign, or procure the relevant Company to assign, to that
Vendor or its nominee all rights to the claim against the third party,
provided that in taking any action to pursue any claim against the
third party:
(a) that Vendor shall not do any act or thing which may
unreasonably be expected to damage the relevant Purchaser or
any of the Companies subsequent to Completion or unreasonably
affect the goodwill associated with, and/or the reputation of,
the relevant Purchaser or any of the Companies subsequent to
Completion or the Business, or the value of the Shares without
prior consultation with and the agreement of the relevant
Purchaser (which agreement may not be unreasonably withheld);
(b) the Vendor shall indemnify the relevant Purchaser and any of
the relevant Companies against any costs, charges, liabilities
and expenses that they may incur as a result of the Vendor
taking such action.
If the rights to any claim against the third party cannot be assigned
to that Vendor, the relevant Purchaser shall, at the request of that
Vendor, comply, and cause the relevant Company to comply with all
reasonable directions of that Vendor in pursuing such claim, provided
that that Vendor shall indemnify the relevant Purchaser and the
relevant Company against any costs, charges, liabilities and expenses
that they may incur as a result of their complying with that Vendor's
directions.
4.7 ACKNOWLEDGEMENT BY PURCHASERS: The Purchasers acknowledge that, except
for the Warranties and other obligations of a Vendor expressly provided
in the Sale and Purchase Agreements or this agreement:
(a) they have made their own independent enquiry and
investigations in relation to the Business and Assets, or
Companies, as the case may be, and has entered into this
agreement and the Sale and Purchase Agreements in reliance
solely on their own judgment and not in reliance on any
representations of any Vendor or USOP, including, without
limitation, any representation as to any financial projections
or forecasts in respect of the Business or the Companies, as
the case may be, or the future prospects of the Business or
the Companies, as the case may be;
(b) all express or (to the extent permitted by law) implied, or
other representations or warranties of such Vendor or USOP in
relation to the sale of the Business and Assets, or Companies,
as the case may be, are excluded;
<PAGE>
(21)
(c) no Vendor nor USOP nor their representatives have made or make
any representation, or have given or give any warranty
(express or implied), as to the accuracy, content,
completeness, value or otherwise of, nor have any liability in
respect of, any information directly or indirectly provided,
or made available to, or used by the Purchasers in connection
with, the Transactions, and the Purchasers unconditionally
waive any claim (whether arising in tort, in contract, by
operation of law or otherwise) they may have against any of
them in respect of such information;
(d) the provisions of this clause 4.7 confer a benefit upon the
representatives of that Vendor, USOP and their employees and
officers and, accordingly, the provisions of the Contracts
(Privity) Act 1982 apply to each of them.
4.8 PURCHASERS' FURTHER ACKNOWLEDGEMENT: The Purchasers undertake to the
Vendors that, based on their actual knowledge as at the date of this
agreement, they have no present intention to make a claim against any
of the Vendors for a breach of any of the Warranties.
4.9 APPLICATION OF LIABILITY LIMITATIONS TO TAX DEEDS AND PRE-COMPLETION
COVENANTS: The provisions of clauses 4.1, 4.2, 4.3(a), 4.3(b), 4.3(c),
4.3(d), 4.3(i), 4.3(j), 4.4, 4.5 and 4.6 shall apply with all necessary
modifications to any claims made under the Tax Deed (except to the
extent that any Tax Deed provides an alternative procedure) or under
any of the pre-completion covenants in section 5 of the Sale and
Purchase Agreements.
5. ESCROW FUNDS
5.1 ESCROW FUNDS AMOUNT: The Escrow Funds under each of the Sale and
Purchase Agreements shall be held in aggregate (not as separate
amounts) for the interests of both the Vendors and the Purchasers by
The New Zealand Guardian Trust Company Limited (or such other party as
may be agreed by BSG and Boise) ("ESCROW AGENT") in an interest bearing
account, in the currency in which those funds have been paid, and be
dealt with in accordance with the provisions of this section 5. The
costs of the Escrow Agent shall be paid by the relevant Vendors (as to
half) and the relevant Purchaser (as to half).
5.2 APPLICATION OF ESCROW FUNDS: The Escrow Funds are to be available only
to satisfy:
<PAGE>
(22)
(a) claims made by any of the Purchasers for breaches of the
Warranties or the obligations of the Vendors under this
agreement and the Sale and Purchase Agreements (subject to the
limitations in, and in compliance with, section 4);
(b) any purchase price adjustments under clause 6.7;
(c) the amount of any Book Debts to be assigned by any of the
Purchasers to the relevant Vendor under clauses 6.13 to 6.15
(inclusive),
each a "CLAIM" (each Claim shall be denominated in Australian
currency), and the balance of any Escrow Funds which have not been
applied to any of those claims shall be paid to the relevant Vendors in
accordance with clause 5.4. The Escrow Funds shall be applied to Claims
as the obligation to meet each respective Claim as it becomes due and
payable under this agreement.
5.3 NOTICE OF CLAIM: If a Purchaser makes a Claim of the kind referred to
in clause 5.2(a) in accordance with the relevant
Sale and Purchase Agreement and this agreement:
(a) the relevant Vendor may, by written notice to the relevant
Purchaser within 20 Business Days of receipt of written notice
from the relevant Purchaser of that Claim, dispute the claim
("DISPUTE NOTICE");
(b) if that Vendor does not give a Dispute Notice within the
required time that Vendor shall be deemed to have accepted and
agreed to the Claim and the Escrow Agent shall pay to the
relevant Purchaser the amount of the Claim together with
interest referable to that amount (less any withholding
taxes);
(c) if that Vendor does give a Dispute Notice in respect of that
Claim within the required time, the Escrow Agent shall not pay
out any amount of the Escrow Funds to the relevant Purchaser
until the dispute in respect of that Claim has been resolved:
(i) by agreement between the parties, who shall use their
reasonable endeavours to resolve the dispute acting
in good faith; or
(ii) failing resolution under clause 5.3(c)(i), by a final
court order in respect of which any rights of appeal
have expired or been exhausted and if, within 20
Business Days after the date which is six months
after Completion, proceedings have not been commenced
by the Purchasers in respect
<PAGE>
(23)
of any Claim, the relevant Purchaser shall no longer
have any of the Escrow Funds in respect of such
Claim.
5.4 PAYMENT OF ESCROW FUNDS: At the date which is six months after
Completion, the balance of the Escrow Funds together with interest less
any withholding taxes shall be paid to the relevant Vendor subject to
retention of any amount claimed in accordance with the procedure
referred to in clause 5.3, and that subsequently after 20 Business Days
(in respect of any Claim which has no entitlement to the Escrow Funds
under clause 5.3(c)(ii)) and on each occasion where a Claim (or part
thereof) is resolved in favour of the relevant Vendor, any amount
previously retained referable to that Claim (excluding part thereof for
which the claim has not been resolved in favour of the relevant
Vendor), together with interest referable to that amount (less any
withholding taxes), shall be paid to the relevant Vendor. On each
occasion where a Claim (or part thereof) is resolved in favour of any
of the Purchasers, any amount previously retained referable to that
Claim, together with interest referable to that amount (less any
withholding taxes) shall be paid to the relevant Purchaser.
5.5 UNDERTAKING: The Vendors and the Purchasers shall irrevocably instruct
the Escrow Agent to hold the Escrow Funds in accordance with this
agreement, and on Completion the parties shall enter into an agreement
with the Escrow Agent in a form agreed on or before Completion.
5.6 Should either of the calculations of the amounts described in clause
6.7 (purchase price adjustment) or clause 6.15 (book debt adjustment)
not be available until after the date six months after Completion the
date "six months after Completion" in clauses 5.3(c)(ii) and 5.4 shall
be replaced by the date that is one month from the latest date that
either of the above two calculations if finally determined.
6. POST COMPLETION PURCHASE PRICE ADJUSTMENTS
6.1 COMPLETION BALANCE SHEETS: Boise shall, following the Completion Date,
prepare Completion Balance Sheets for the Businesses (as one entity),
the Australian Company, and the New Zealand Companies (each a "BALANCE
SHEET ENTITY") as at the Completion Date in accordance with clause 6.2.
6.2 BASIS OF PREPARATION: The Completion Balance Sheets shall be prepared
on the following basis:
(a) Subject to the provisions of this clause 6.2, the Completion
Balance Sheet for each Balance Sheet Entity shall be prepared
in accordance with GAAP consistently applied for each Balance
Sheet Entity and each
<PAGE>
(24)
Business, adjusted to eliminate unrealised inter-company
profits involving inventory, except to the extent expressly
otherwise provided in this agreement.
(b) Stock shall be verified by a physical stocktaking at specified
locations on the Completion Balance Date (or such other date
as BSG and Boise shall agree) and BSG and the Purchasers shall
be entitled to be represented at such stocktaking.
(c) Stock shall be valued in accordance with the provisions of the
second schedule. (d) The component accounts for each Balance
Sheet Entity shall be prepared as follows:
(i) in respect of the Assets and Assumed Liabilities of
the Businesses in the Australian Asset Sale
Agreement, in Australian Dollars;
(ii) in respect of the Australian Company in the
Australian Share Sale Agreement, in Australian
dollars;
(iii) in respect of the New Zealand Companies in the New
Zealand Share Sale Agreement, in Australian dollars
(on the basis that the New Zealand dollar balances
shall be converted into Australian dollars at the
rate of NZ$1.00 = $0.80).
(e) Except for depreciation and discrepancies in physical count,
none of the fixed assets to be acquired by National Office
Products Limited under the Australian Asset Sale Agreement,
and none of the fixed assets of any of the Companies or their
subsidiaries, shall be revalued upwards or downwards.
(f) For the avoidance of any doubt, the Completion Balance Sheets
shall, in respect of the Businesses, contain only those Assets
being acquired and Assumed Liabilities being assumed, by
National Office Products Limited under the Australian Asset
Sale Agreement.
6.3 CONSULTATION ON DRAFT BALANCE SHEETS: Boise shall prepare the
Completion Balance Sheets in reasonable consultation with BSG and shall
provide BSG with drafts of the Completion Balance Sheets and working
papers within 75 days after Completion, to enable BSG a reasonable
opportunity to comment on the drafts. The Parties acknowledge that the
consultation process shall not delay the Purchaser's preparation of the
Completion Balance Sheets within the 75 day period and, for the
avoidance of doubt, Boise shall finalise the draft Completion Balance
<PAGE>
(25)
Sheets irrespective of matters arising during the consultation process
but without derogating from the subsequent dispute resolution rights
set out in clause 6.11.
6.4 VENDOR AND PURCHASERS COMMENTS: BSG may, within 30 days after receipt
of the draft Completion Balance Sheets (time being of the essence),
provide written comments thereon to Boise.
6.5 FINAL COMPLETION BALANCE SHEETS: Within 35 days after provision of the
draft Completion Balance Sheets and working papers to BSG, Boise shall:
(a) complete the Completion Balance Sheets;
(b) prepare a statement as to:
(i) any adjustment required to the aggregate purchase
price of the Assets and Shares pursuant to clause
6.6; and
(ii) the book value of Plant and Equipment;
(iii) the book value of Vehicles;
(iv) the book value of Stock;
(v) the amount of Book Debts;
(vi) the amount of Prepayments;
(vii) the amount of Other Receivables;
(viii) the amount of Assumed Liabilities,
in each case for the purposes of section 3 of the Australian
Asset Sale Agreement, and state that the Completion Balance
Sheets have been prepared in accordance with the provisions of
this section;
(c) provide a copy of the Completion Balance Sheets to BSG;
<PAGE>
(26)
(d) the delivery of the documents referred to in this clause shall
not prevent the subsequent exercise of any rights under clause
6.11.
6.6 PURCHASE PRICE ADJUSTMENT: If:
(a) the net tangible assets (being total assets (other than
intangible assets) less total liabilities) of a Balance Sheet
Entity disclosed by the relevant Completion Balance Sheet are
less than the net tangible assets of that Balance Sheet Entity
as disclosed by that entity's Last Balance Sheet, the purchase
price under the relevant Sale and Purchase Agreement for the
relevant Assets or Shares, as the case may be, shall be
reduced by the amount of the shortfall;
(b) the net tangible assets (being total assets (other than
intangible assets) less total liabilities) of a Balance Sheet
Entity disclosed by the relevant Completion Balance Sheet are
more than the net tangible assets of that Balance Sheet Entity
as disclosed by that entity's Last Balance Sheet, the purchase
price under the relevant Sale and Purchase Agreement for the
relevant Assets or Shares, as the case may be, shall be
increased by the amount of the excess.
6.7 PAYMENT OF PURCHASE PRICE ADJUSTMENT: Within five Business Days after
completion of the Completion Balance Sheets and provision of them to
BSG pursuant to clause 6.5(c), or, if any matter is referred for
determination by an expert pursuant to clause 6.12, within five
Business Days of the expert giving written notice of his or her
determination to BSG, the relevant Purchaser shall pay to the relevant
Vendor the amount by which the purchase price of the relevant Assets or
Shares, as the case may be, is increased pursuant to clause 6.6, or the
relevant Vendor, to the extent that that amount has not been satisfied
out of the Escrow Funds, shall pay to the relevant Purchaser in each
case, the amount by which the aggregate purchase price of the Assets,
or Shares, as the case may be, is reduced pursuant to clause 6.6 (as
the case may be), together with interest in each case at the Agreed
Rate calculated on a daily basis (after deduction of any interest
received by the relevant Purchaser in respect of any payment from the
Escrow Funds pursuant to this clause) on the amount payable from the
Completion Date until the date of payment provided that if monies are
owed to the relevant Purchaser pursuant to this clause 6.7 the Vendors
shall at the written request of the Purchasers irrevocably instruct the
Escrow Agent to pay, without deduction, an amount equal to the monies
owed from the Escrow Funds, together with interest referable to that
amount (less any withholding taxes) to the relevant Purchaser
immediately.
<PAGE>
(27)
6.8 DEFAULT INTEREST: If any Vendor or any of the Purchasers defaults for
any reason in payment of any amount payable by it pursuant to clause
6.7, the party in default shall pay to the other interest at the
Default Rate calculated on the amount so unpaid from the date payment
was due until payment in full is made. Interest payable under this
clause shall accrue on a daily basis and shall be capitalised every 30
days.
6.9 INCREASE OR REDUCTION THE PURCHASE PRICE: Any payment made pursuant to
clause 6.7 shall be treated as an increase or reduction (as the case
may be) in the respective purchase prices of the Assets and Shares and
shall be allocated by each Vendor and each Purchaser to the purchase
prices of the different Assets and Shares acquired pursuant to the Sale
and Purchase Agreements in a manner which fairly reflects the events or
circumstances giving rise to the adjustment, to be determined in the
event of disagreement between BSG and Boise in accordance with clause
6.12.
6.10 BEST ENDEAVOURS: The parties shall use their best endeavours to ensure
that the provisions of this clause are implemented within the time
frames specified and shall co-operate with, and provide to, each other
such information, access to personnel and premises and such other
assistance as may be necessary or required to fulfil their obligations
under this section 6.
6.11 DISPUTE PROCEDURE: If BSG disputes any matter relating to any of the
Completion Balance Sheets prepared by Boise under clause 6.5(a) or the
statement and other matters provided pursuant to clause 6.5:
(a) BSG and Boise shall consult in good faith with each other with
a view to resolving the dispute;
(b) failing resolution under clause 6.11(a) within 10 Business
Days after written notification to a party of the issue in
dispute, the dispute shall be determined in accordance with
clause 6.12.
6.12 APPOINTMENT OF EXPERT: Any dispute of the kind referred to in clauses
6.9 or 6.11 ("DISPUTE") shall be immediately referred to, and finally
resolved by, an expert who shall be appointed by BSG and Boise. The
following provisions shall apply to the referral:
(a) It shall commence on the date that a written request from a
party for the Dispute to be referred to an expert is received
by the other party. The request must be served within five
Business Days (time being of the essence) after provision of
the Completion Balance Sheet and statement to BSG pursuant to
clause 6.5(c) or the date upon which a dispute arises under
clause 6.9.
<PAGE>
(28)
(b) Failing agreement within 10 Business Days after the date of
receipt of written request, the expert shall be appointed at
the request of a party by the president or vice-president for
the time being of the Institute of Chartered Accountants of
New Zealand or his or her nominee.
(c) BSG and Boise shall each bear their own costs and expenses in
connection with the referral, and all costs and expenses of
the expert in determining the Dispute shall be borne 50% by
BSG and 50% by the Purchasers.
(d) A determination of any matter pursuant to this clause shall
be final and binding on the parties and Boise shall adjust the
Completion Balance Sheet and statement and other matters in
clause 6.5 (and any purchase price allocation under
clause 6.9) to reflect any such determination.
6.13 DEFINITIONS: In clauses 6.14 and 6.15 the following definitions shall
apply:
(a) "COMPLETION BOOK DEBTS" means book debts of the Business or a
Company included in a Completion Balance Sheet.
(b) "OUTSTANDING BOOK DEBTS" means Completion Book Debts which
remain unpaid at the Specified Date.
(c) "SPECIFIED DATE" means the date which is six months after
Completion.
(d) "BOOK DEBT PROVISION" in relation to a Completion Balance
Sheet and in relation to Completion Book Debts, means the
amount of the book debt provision included in the relevant
Completion Balance Sheet in respect of the relevant Completion
Book Debts.
6.14 BOOK DEBT COLLECTION: The Purchasers shall use all reasonable
commercial efforts and follow normal collection procedures relating to
each Business and Company and its subsidiaries to ensure that, from
Completion, all Completion Book Debts are promptly collected, but the
Purchasers shall not be required to take legal proceedings for recovery
of those amounts unless so requested in writing by the relevant Vendor
and subject to payment by the relevant Vendor of all costs and expenses
(including legal costs) in connection with such proceedings. The
relevant Purchaser shall keep each Vendor reasonably informed of
progress in relation to the collection of Completion Book Debts. All
payments made by Debtors will be applied by the relevant Purchaser or
the relevant Company (or its subsidiaries) to Completion Book Debts of
the relevant Vendor or Company (or its subsidiaries) oldest in time
unless a debtor allocates a payment to specific debts. Neither the
Purchasers nor any Company (or
<PAGE>
(29)
its subsidiaries) shall seek to influence any debtor as to the manner
of payment which would adversely affect any Vendor, provided the
Purchasers shall be permitted to contact debtors regarding their
intended application of payments.
6.15 BOOK DEBT ADJUSTMENTS: Within 15 days after the Specified Date:
(a) each Vendor shall pay to the relevant Purchaser the amount by
which the value of Outstanding Book Debts exceeds the relevant
Book Debt Provision ("Book Debt Difference") or the Vendors at
the written request of any Purchaser shall irrevocably
instruct the Escrow Agent to pay, without deduction, an amount
equal to the Book Debt Difference from the Escrow Funds,
together with interest referable to that amount (less any
withholding taxes), to the Purchasers immediately;
(b) on receipt of the Book Debt Difference the relevant Purchaser
shall assign, or cause to be assigned, to the relevant Vendor
all Outstanding Book Debts (the cost of such assignment
including stamp duty to be paid by the relevant Vendor);
(c) the relevant Purchaser shall pay to each Vendor the amount (if
any) by which the relevant Book Debt Provision exceeds the
Outstanding Book Debts of that Vendor;
(d) the relevant Purchaser shall provide to each Vendor reasonable
access to records and information relating to Outstanding Book
Debts assigned to the relevant Vendor for the purpose of
enabling such Vendor to undertake collection procedures in
relation to the Outstanding Book Debts.
7. CONDITIONS PRECEDENT
7.1 CONDITIONS: Completion of each of the Sale and Purchase Agreements, and
this agreement, is conditional upon the following:
(a) Approval of the boards of each of the Purchasers and USOP, and
USOP obtaining a fairness opinion as required by USOP's bank
credit agreement.
<PAGE>
(30)
(b) Consent being given under the Overseas Investment Regulations
1995 to the transfer of the Shares and the Assets to Boise
under those agreements.
(c) The Treasurer of the Commonwealth of Australia ("TREASURER"):
(i) becoming precluded from making an order under the
Foreign Acquisitions and Takeovers Act 1975
(Australia) prohibiting the acquisition of the Shares
the subject of the Australian Share Sale Agreement
and Businesses under the Australian Asset Sale
Agreement;
(ii) notifying either the relevant Purchaser or the
relevant Vendors that no objection is made against
the acquisition of the Shares the subject of the
Australian Share Sale Agreement and Businesses under
the Australian Asset Sale Agreement, subject to
conditions to which neither the relevant Purchaser
nor the relevant Vendors has or have any reasonable
objection, provided that if a party upon whom
conditions are imposed does not within 5 Business
Days after receiving notice of the conditions notify
the other party that it objects to the conditions, it
is deemed to have accepted them.
(d) The relevant Purchaser receiving a written notice from the
Australian Competition and Consumer Commission ("ACCC") to the
effect that it has no objection to, or does not propose to
take any action in respect of, the acquisition by the
Purchasers of the Shares the subject of the Australian Share
Sale Agreement and Businesses under the Australian Asset Sale
Agreement, under section 50 of the Trade Practices Act 1974,
either unconditionally or on conditions that do not impose
unduly onerous obligations upon the relevent Purchaser or the
relevant Vendors or any of their Related Companies.
(e) [No clause]
(f) [No clause]
(g) All other necessary approvals being given to the Transactions
and this agreement by any governmental or regulatory
authority, agency or instrumentality in Australia, New Zealand
or the United States.
(h) Consent being given by the other parties to the Material
Business Contracts to the extent that such consent is required
under the terms of the relevant Material Business Contracts in
order to give effect to the Transactions.
<PAGE>
(31)
7.2 ENDEAVOURS TO FULFIL: Each of the parties shall use all reasonable
endeavours to procure the fulfilment of the conditions contained in
clause 7.1, it being acknowledged that:
(a) The Purchasers shall have primary responsibility for
fulfilling the conditions contained in clause 7.1(b), (c),
(d), and (g) but the relevant Vendors shall provide on request
all such information as the Purchasers may require for those
purposes;
(b) The relevant Vendors shall have primary responsibility for
fulfilment of the condition in clause 7.1(h) but the
Purchasers shall promptly supply to the relevant Vendors such
information as those Vendors may reasonably require for such
purpose.
7.3 WAIVER AND INDEMNITY: The Vendors acknowledge that the condition
contained in clauses 7.1(d) and (h) has been inserted solely for the
protection of the Purchasers and Boise may waive any and all of those
conditions.
7.4 NON-SATISFACTION: Subject to clause 7.3, if any of the conditions in
clause 7.1 are not fulfilled by two months after the date of this
agreement then this agreement shall be voidable by notice in writing
given by any party affected and in all other circumstances by any party
and if so avoided this agreement and each Sale and Purchase Agreement
shall be of no further force or effect and all parties shall be
released from their obligations under this agreement and the Sale and
Purchase Agreements.
7A RELEASE OF GUARANTEES
7A.1 The Purchasers use their best endeavours to produce the release from
Completion Date of the relevant Vendor from all liability as guarantors
of the Company's obligations under any and all guarantees are listed in
the Seventh Schedule and will do such things and provide such
substituted guarantees by the Purchasers as may be reasonably required
by such contracting parties with the Company. Where a release cannot be
obtained the Purchasers shall, subject to the terms of this Agreement,
hold the relevant Vendor indemnified against liability under those
guarantees (including in respect of all expenses, costs, losses,
liabilities and damages referable to such guarantees and indemnities)
and only to the extent that the Vendor's liability arises due to any
default by a Company occurring after Completion.
<PAGE>
(32)
8. DEFAULT
8.1 PURCHASERS DEFAULT: If any Purchaser defaults in any material respect
in the performance of any of its obligations under the relevant Sale
and Purchase Agreement, prior to or on the Completion Date the relevant
Vendor may, in the case of a default which is capable of remedy, after
giving to the relevant Purchaser not less than 10 Business Days'
written notice of such default requiring the relevant Purchaser to
remedy the same and such default not having been remedied within that
period or, in respect of a default not capable of remedy, immediately,
exercise all or any of the following, without prejudice to any other
rights which the relevant Vendor may have:
(a) Cancel the relevant Sale and Purchase Agreement by written
notice to the relevant Purchaser and sue the relevant
Purchaser for damages.
(b) Sue the Purchasers for specific performance.
8.2 VENDOR DEFAULT: If any Vendor defaults in any material respect in the
performance of any of its obligations under the relevant Sale and
Purchase Agreement, prior to or on the Completion Date the relevant
Purchaser may, in the case of a default which is capable of remedy,
after giving to the relevant Vendor not less than 10 Business Days
written notice of such default requiring the relevant Vendor to remedy
the same and such default not having been remedied within that period
or, in the case of a default not capable of remedy, immediately
exercise all or any of the following, without prejudice to any other
rights which the relevant Purchaser may have:
(a) Cancel the relevant Sale and Purchase Agreement by written
notice to the relevant Vendor and sue the relevant Vendor for
damages.
(b) Sue the Vendors for specific performance.
8.3 CANCELLATION: Cancellation by a Vendor or a Purchaser of a Sale and
Purchase Agreement shall also constitute the cancellation of all Sale
and Purchase Agreements and this agreement as if the relevant Vendors,
or the Purchasers, had exercised their rights of cancellation in
respect of those other agreements under this section 8.
<PAGE>
(33)
9. EXCLUSIVITY
9.1 AGREEMENT TO BE EXCLUSIVE: For the period from execution of the Sale
and Purchase Agreements until Completion or termination of those
agreements and this agreement, whichever is the earlier, none of the
Vendors, USOP or none of the Purchasers or the officers, directors or
employees of USOP, the Vendors or the Purchasers ("Restricted Persons")
shall enter into negotiations or undertake or continue discussions with
any other party or parties with respect to the sale, disposition,
transfer or similar transaction involving the Businesses (or any part
thereof) or Shares (or any part thereof) , as the case may be. It is
agreed by the Vendors, USOP and the Purchasers that their respective
Restricted Persons shall not, without consultation with other parties,
disclose the terms of, or make any other disclosure in relation to,
this agreement and the Sale and Purchase Agreements to any other
persons other than on a "need to know" basis, except as required by
law, regulation or the rules of any stock exchange, in which event the
party required to make the disclosure shall immediately notify the
other party as to the nature of the disclosure and the information to
be disclosed. The Vendors, USOP and the Purchasers agree that any
violation of this clause 9.1 would cause significant and irreparable
harm to the others and therefore agree that the each of them shall be
entitled to injunctive relief upon any such violation.
10. SUPERANNUATION
10.1 DEFINITIONS: In this section:
"ATC SCHEMES" means collectively the superannuation plans to which
Australian Toner Cartridge Co Pty Limited contributes including:
(a) Lifetrack Superannuation Fund, and
(b) MLC Limited Scheme Employee Retirement Plan.
"BOOKLAND SCHEMES" means collectively the superannuation plans to which
Bookland Pty Limited contributes including:
(a) AMP Life Custom;,
(b) AMP Retirement Savings;,
<PAGE>
(34)
(c) Ash Superannuation Fund;,
(d) Asgard Capital Management;,
(e) West Scheme, AMP Mobile Superannuation Investment;,
(f) Colonial Policy;,
(g) B&P Cannon Superannuation Fund;,
(h) Lifetrack Superannuation PlanFund;,
(i) MLC Employment Retirement Plan; and
(j) Westpac Personal Superannuation Fund.
"FILING EFFICIENCY SCHEMES" means collectively the superannuation plans
to which the Australian Company contributes to including:
(a) Lifetrack Superannuation Fund;,
(b) MCL Limited Scheme Employee Retirement Plan; and
(c) Construction and Business.
"NEW ZEALAND SCHEMES" means the Croxley Stationery Limited
Superannuation Plan established by deed dated 27 September 1994 and the
New Zealand Retirement Trust.
10.2 BUSINESSES: In respect of the Businesses the Purchasers shall, no later
than ten days before the Completion Date, identify a superannuation
scheme, for membership by the employees of the Businesses, who are
members of the Bookland Schemes and the ATC Schemes which will provide
benefits no less favourable than those provided to the employees of the
Businesses under the Bookland Schemes and the ATC Schemes respectively
immediately prior to Completion Date.
<PAGE>
(35)
10.3 Both parties shall co-operate to ensure all necessary matters that
arise in respect of the Whitcoulls Pension Fund as a consequence of the
transfer of ownership of the New Zealand Companies to ensure that the
employees of the New Zealand Companies who are members of the
Whitcoulls Pension Fund ("Employees") continue to receive their
existing superannuation benefits to a date which is 90 days after the
Completion Date ("Transfer Date") and the Purchaser shall use all
reasonable endeavours to implement a transfer of the Employees to a
comparable superannuation scheme by the Transfer Date.
10.4 On the Transfer Date the participation of the New Zealand Companies in
the Whitcoulls Pension Fund shall cease.
10.5 During the period from and including the Completion Date until the
Transfer Date the Purchaser shall procure the employer of each Employee
to contribute to the Whitcoulls Pension Fund such amount or amounts for
which the Employee is entitled under their employment contract and as
shall be determined by the actuary to the Whitcoulls Pension Fund to
fund the costs of the benefits of the Employees accruing between the
Completion Date and the Transfer Date and which cost is not funded by
the Employees.
10.6 The Purchaser shall indemnify and hold the Vendor indemnified against
any cost, loss, liability or expense the Vendor may suffer as a result
or consequence of the implementation of clause 10.5.
11. USE OF BLUE STAR AND WHITCOULLS NAMES
11.1 Subject to clauses 3.10 and 11.2, the Purchasers acknowledge and agree
that they shall not acquire, and that the Companies do not have and
will not acquire, any right, title or interest in or to, and that the
Companies shall after the Completion Date cease the use of the names
"Blue Star" and "Whitcoulls", the Blue Star symbol, or any elements of
trade dress that incorporate or use the name "Blue Star" and the Blue
Star symbol.
11.2 The Vendors and the Purchasers shall enter into a licence agreement in
the form set out in the sixth schedule under which the Companies and
the Businesses shall be permitted to use the mark "Blue Star" and the
Blue Star symbol, and the "Whitcoulls" name, free of royalty or
consideration whatsoever.
<PAGE>
(36)
12. GUARANTEE OF USOP
12.1 UNCONDITIONAL GUARANTEE AND INDEMNITY: In consideration of the
Purchasers agreeing to acquire the Shares and the Businesses, USOP
unconditionally and irrevocably guarantees by way of continuing
obligation to each of the Purchasers as primary obligor, and not merely
as surety, the due performance by the Vendors of all of their
obligations under this agreement and any of the Sale and Purchase
Agreements, the Tax Deed and the Licences ("CONTRACTS").
12.2 NO DISCHARGE: Subject to clause 12.4 the obligations of USOP under this
clause will not be discharged, released or otherwise affected by any
delay, grant of time, release, compromise, forbearance (whether partial
or otherwise) or other indulgence granted (as the case may be) by the
relevant Purchaser to any one of the Vendors or any other person or by
the relevant Purchaser exercising or refraining from exercising any
rights against any of the Vendors.
12.3 RIGHTS CUMULATIVE: The rights of the Purchasers under this clause are
cumulative and not exclusive of any rights provided by law and are to
remain in full force until the discharge by the Vendors of all of their
obligations under any of the Contracts.
12.4 OBLIGATIONS QUALIFIED: The obligations of USOP under this clause are
subject to all provisions of the Contracts, including without
limitation the rights of the Vendors under the Contracts. Clause 12.2
above shall not be interpreted to restrict or conflict with this clause
12.4.
13. GUARANTEE OF BOISE USA
13.1 UNCONDITIONAL GUARANTEE AND INDEMNITY: In consideration of the Vendors
agreeing to sell the Shares and the Businesses, Boise USA
unconditionally and irrevocably guarantees by way of continuing
obligation to the Vendors as primary obligor, and not merely as surety,
the due performance by the Purchasers of all of its obligations under
any of the Contracts.
13.2 NO DISCHARGE: subject to clause 13.4 the obligations of Boise USA under
this clause will not be discharged, released or otherwise affected by
any delay, grant of time, release, compromise, forbearance (whether
partial or otherwise) or other indulgence granted (as the case may be)
by the Vendors to the Purchasers or any other person or by the Vendors
exercising or refraining from exercising any rights against the
Purchasers.
<PAGE>
(37)
13.3 RIGHTS CUMULATIVE: The rights of the Vendors under this clause are
cumulative and not exclusive of any rights provided by law and are to
remain in full force until the discharge by the Purchasers of all their
obligations under any of the Contracts.
13.4 OBLIGATIONS QUALIFIED: The obligations of Boise USA under this clause
are subject to all provisions of the Contracts, including without
limitations the rights of the Purchasers under the Contracts. Clause
13.2 above shall not be interpreted to restrict or conflict with this
clause 13.4.
14. OPERATIONAL ARRANGEMENTS FOLLOWING COMPLETION
14.1 The Vendors and the Purchasers shall, following Completion, use their
reasonable endeavours, which shall include entering into, and
executing, all documents necessary to effect:
(a) the transfer of the leasing arrangements in respect of
vehicles used exclusively by the New Zealand Companies in
their respective Businesses to the relevant Purchaser;
(b) transitional arrangements to enable the relevant Purchasers to
have the benefit of the Peoplesoft licence arrangements
between BSG and Peoplesoft.
15. MISCELLANEOUS PROVISIONS
15.1 INCONSISTENCY: In the event of any inconsistency between a provision in
this agreement and a provision in any of the Sale and Purchase
Agreements, the provisions of this agreement will prevail except in
relation to governing law and jurisdiction.
15.2 NOTICES: If any party wishes to give to another party any notice,
claim, demand or other communication ("NOTICE") under or in connection
with this agreement, the Notice is sufficiently given or served (but
without prejudice to any other mode of service) if addressed to that
party and delivered to the address of that party stated below (or to
any other address notified by that party for purposes of receiving
Notices):
<PAGE>
(38)
VENDORS AND USOP: Blue Star Group Limited
Level 37, ANZ Tower
Albert Street
Auckland
New Zealand
ATTENTION: General Counsel
Copy to: US Office Products Company
1025 Thomas Jefferson Street, NW
Suite 600 East
Washington, DC 20007
United States of America
Attention: General Counsel
PURCHASERS & BOISE USA: Boise Cascade Office Products
Corporation
800 W. Bryn Mawr
Itasca, Illinois 60143
United States of America
ATTENTION: Chief Financial Officer
Copy to: Legal Department
Boise Cascade Corporation
111 W. Jefferson Street
PO Box 50
Boise, Idaho 83728-0001
United States of America
Attention: General Counsel
<PAGE>
(39)
15.3 NO MERGER: The obligations under this agreement, to the extent not
already performed at Completion, will not merge on Completion, or on
the execution and delivery of any document pursuant to this agreement,
but will remain enforceable to the fullest extent, notwithstanding any
rule of law to the contrary.
15.4 COSTS: Except as otherwise expressly provided in this agreement, each
party shall bear its own costs and expenses incurred in connection with
the negotiation, preparation and implementation of this agreement.
15.5 NO ASSIGNMENT: No party may assign or otherwise transfer any of its
rights or obligations under this agreement without the prior written
consent of the other parties PROVIDED THAT Purchaser may assign the
same to any, direct or indirect, wholly owned subsidiary subject to
such subsidiary entering into documentation reasonably satisfactory to
the Vendors whereby the subsidiary agrees to be bound by this
agreement. Notwithstanding any assignment by the relevant Purchaser
pursuant to this clause, the Purchasers remains bound by the terms and
conditions of this agreement and shall as a principal obligor perform
and observe all the obligations of the Purchasers expressed or implied
in this agreement. The Vendor may grant any time or other indulgence
to, or compound with or release, the relevant Purchaser's assignee from
payment or performance under this agreement without affecting the
liability of the relevant Purchaser nor does the amalgamation, death or
winding up of any assignee affect such liability.
15.6 GOVERNING LAW: This agreement is governed by, and construed in
accordance with, the laws of New Zealand (without giving effect to the
principles of conflicts of law). The Vendors and the Purchasers submit
to the non-exclusive jurisdiction of the courts of New Zealand in
respect of all matters arising out of this agreement.
15.7 COUNTERPARTS: This agreement may be executed in two or more
counterparts, each of which is deeded an original and all of which
constitute one and the same agreement. This agreement will be effective
upon the exchange by facsimile executed signature pages.
15.8 ENTIRE AGREEMENT: This agreement and the Sale and Purchase Agreements
record the entire agreement between the parties, and prevails over any
earlier agreement, relating to the Transactions (and the
Confidentiality Agreement dated November 10, 1999 shall be deemed
terminated with effect from the Completion Date).
15.9 FURTHER ASSURANCE: Each party shall promptly do everything reasonably
required to give effect to this agreement according to its spirit and
intent.
<PAGE>
(40)
15.10 WARRANTY BY PARTIES: Each of the Parties warrants to the others that:
(a) it has full corporate power to enter into this agreement and
(b) this agreement has been duly executed by it and is fully
binding on it;
(c) the performance by a party under this agreement does not and
will not exceed any power granted to it by, or violate any
provisions of:
(i) any law or any rule or directive of any court or
governmental or regulatory action or authority to
which the Party is subject; or
(ii) the constitutional documents of the party;
(iii) any mortgage, charge or encumbrance to which the
Party is a party or which is binding on it or on any
of its assets or revenues.
15.11 EXECUTION BY USOP AND BOISE USA: The execution of this agreement by
USOP and BOISE USA is solely for the purpose of reflecting their
respective agreement to the terms of their respective guarantees, as
reflected in clauses 12 (USOP) and 13 (Boise USA), as well as their
agreement to those portions of clauses 15.1 - 15.10 that apply by their
terms to all parties to this agreement. In addition, the execution by
USOP reflects its agreement to the restraints set forth in clause 3
above.
SIGNATURES
<PAGE>
(41)
BLUE STAR GROUP PTY LIMITED
by:
/s/ David Ballantyne /s/ Joseph T. Doyle
----------------------------------------- ------------------------------
Signature of director Signature of Authorised Person
DAVID BALLANTYNE JOSEPH T. DOYLE
----------------------------------------- ------------------------------
Name of director Name of Authorised Person
BLUE STAR CORPORATE PTY
LIMITED by:
/s/ David Ballantyne /s/ Joseph T. Doyle
----------------------------------------- ------------------------------
Signature of director Signature of Authorised Person
DAVID BALLANTYNE JOSEPH T. DOYLE
----------------------------------------- ------------------------------
Name of director Name of Authorised Person
BOOKLAND PTY LIMITED by:
/s/ David Ballantyne /s/ Joseph T. Doyle
----------------------------------------- ------------------------------
Signature of director Signature of Authorised Person
DAVID BALLANTYNE JOSEPH T. DOYLE
----------------------------------------- ------------------------------
Name of director Name of Authorised Person
<PAGE>
(42)
AUSTRALIAN TONER
CARTRIDGE CO. PTY LIMITED by:
/s/ David Ballantyne /s/ Joseph T. Doyle
----------------------------------------- ------------------------------
Signature of director Signature of Authorised Person
DAVID BALLANTYNE JOSEPH T. DOYLE
----------------------------------------- ------------------------------
Name of director Name of Authorised Person
BLUE STAR GROUP LIMITED by:
/s/ David Ballantyne
-----------------------------------------
Signature of director
DAVID BALLANTYNE
-----------------------------------------
Name of director
<PAGE>
(43)
BOISE CASCADE OFFICE
PRODUCTS (NZ) LIMITED by:
/s/ Darrell R. Elfeldt
-----------------------------------------
Signature of Authorised signatory
DARRELL R. ELFELDT
-----------------------------------------
Name of Authorised signatory
NATIONAL OFFICE PRODUCTS
LIMITED by:
/s/ Darrell R. Elfeldt /s/ Matthew R. Broad
----------------------------------------- --------------------------
Signature of director Signature of director
DARRELL R. ELFELDT MATTHEW R. BROAD
----------------------------------------- --------------------------
Name of director Name of director
<PAGE>
(44)
US OFFICE PRODUCTS
COMPANY by:
/s/ Joseph T. Doyle
-----------------------------------------
Signature of Authorised signatory
JOSEPH T. DOYLE
-----------------------------------------
Name of Authorised signatory
BOISE CASCADE OFFICE
PRODUCTS CORPORATION by:
/s/ Darrell R. Elfeldt
-----------------------------------------
Signature of Authorised signatory
DARRELL R. ELFELDT
-----------------------------------------
Name of Authorised signatory
