Exhibit 10.4

 

Execution Version

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

This AMENDMENT NO. 2 TO CREDIT AGREEMENT (this “Amendment”), dated as of
February 2, 2016 is made by and among STAPLES, INC., a Delaware corporation (the
“Borrower”), BANK OF AMERICA, N.A. (“Bank of America”), in its capacity as
administrative agent for the Lenders (defined below) (in such capacity, the
“Administrative Agent”), and each of the Lenders signatory hereto.  Capitalized
terms used but not otherwise defined herein have the respective meanings
ascribed to them in the Credit Agreement as defined below.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, Bank of America, as Administrative Agent, as the lender
of Swing Line Loans and as an Issuing Bank, Barclays Bank PLC and HSBC Bank USA,
National Association, as Issuing Banks and the lenders from time to time party
thereto (collectively, the “Lenders”) have entered into that certain Credit
Agreement dated as of May 31, 2013 (as hereby amended and as from time to time
hereafter further amended, modified, supplemented, restated, or amended and
restated, the “Credit Agreement”), pursuant to which the Lenders have made
available to the Borrower a revolving credit facility, including a letter of
credit facility and a swing line facility;

 

WHEREAS, pursuant to an Agreement and Plan of Merger dated as of February 4,
2015 (together with all exhibits, annexes, schedules and other disclosure
letters thereto, collectively, as modified, amended, supplemented, consented to
or waived, the “Acquisition Agreement”), by and among the Borrower, Office
Depot. and Staples AMS, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Borrower (“Merger-Sub”), Borrower has agreed (a) to acquire
100% of the equity interest in Office Depot, Inc., a Delaware corporation (the
“Office Depot”, such transaction, the “Office Depot Acquisition”) and (b) to
consummate certain other transactions in connection with the Office Depot
Acquisition;

 

WHEREAS, the Borrower has advised the Administrative Agent and the Lenders that
it intends to finance the Office Depot Acquisition with, among other sources, up
to $2,500,000,000 of borrowings under a senior secured term loan facility (the
“Acquisition Term Loan”);

 

WHEREAS, the Borrower has advised the Administrative Agent and the Lenders that
pursuant to the proposed terms of the Acquisition Term Loan the commitments made
by the lenders under the Acquisition Term Loan will expire at 5:00 p.m. New York
City time on February 4, 2016 (the “Commitment Termination”);

 

WHEREAS, the Borrower has advised the Administrative Agent and the Lenders that
the Office Depot Acquisition may not be consummated on or prior to February 4,
2016;

 

WHEREAS, in order to avoid the occurrence of the Commitment Termination, the
Borrower, or its wholly-owned subsidiary, intends to make a borrowing under the
Acquisition Term Loan and to place the proceeds therefrom into one or more
escrow accounts (the “Escrow

 

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Account”) held by JPMorgan Chase Bank, N.A., as escrow agent (the “Acquisition
Escrow Arrangement”); and

 

WHEREAS, in connection with the foregoing, the Borrower has advised the
Administrative Agent and the Lenders that it desires to amend certain provisions
of the Credit Agreement, and the Administrative Agent and the Lenders signatory
hereto are willing to effect such amendments on the terms and conditions
contained in this Amendment;

 

NOW, THEREFORE, in consideration of the premises and further valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.            Amendments to Credit Agreement.  Subject to the terms and
conditions set forth herein, the Credit Agreement is hereby amended as follows:

 

(a)                                 The following definitions are hereby added
to §1.1 of the Credit Agreement in the proper alphabetical order:

 

“Acquisition Escrow Agreement.  The escrow arrangement between the Borrower and
JPMorgan Chase Bank, N.A., as escrow agent (the “Escrow Agent”), pursuant to
which the Escrow Agent will hold the proceeds of the Acquisition Term Loan in an
escrow account (the “Escrow Account”) until the proceeds are applied towards the
Office Depot Acquisition, which escrow agreement will be in form and substance
reasonably acceptable to the Administrative Agent.”

 

“Acquisition Term Loan.  A senior secured term loan facility in the amount of up
to $2,500,000,000, incurred by the Borrower for the purpose of financing the
Office Depot Acquisition.”

 

“Amendment No. 2 Effective Date.  February 2, 2016.”

 

“Office Depot Acquisition.  The merger of Office Depot, Inc., a Delaware
corporation (“Office Depot”) with Staples AMS, Inc., a Delaware corporation and
a wholly owned Subsidiary of the Borrower (“Merger-Sub”), with Office Depot as
the surviving entity and new wholly owned Subsidiary of the Borrower, pursuant
to that certain Agreement and Plan of Merger, dated as of February 4, 2015,
among Office Depot, Merger-Sub and the Borrower.”

 

(b)                                 Section 1.1 of the Credit Agreement is
hereby further amended by amending the following definitions in their entirety
as follows:

 

“Consolidated Total Funded Debt.  With respect to the Borrower and its
Subsidiaries, as at any date of determination, on a consolidated basis, the
aggregate (without duplication) of (a) all outstanding Indebtedness of the
Borrower and its Subsidiaries relating to or in respect of (i) the borrowing of
money or the obtaining of credit, including the issuance of notes or

 

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bonds and standby letters of credit outstanding but excluding documentary
letters of credit, (ii) the deferred purchase price of assets (other than
(i) accounts payable and accrued expenses and (ii) earnouts or other earned
deferred payment obligations measured in whole or in part by events or
performance occurring after the purchase, to the extent such obligations have
not yet been recorded as liabilities on the consolidated balance sheet of the
Borrower), (iii) any Synthetic Leases or any Capitalized Leases, and (iv) the
Permitted Securitization Transactions, plus (b) all Indebtedness of the type
referred to in clause (a) of another Person guaranteed by the Borrower or any of
its Subsidiaries, provided that for the purpose of calculating the Adjusted
Funded Debt to Total Capitalization Ratio, Consolidated Total Funded Debt shall
not include any debt incurred by the Borrower or any Subsidiary pursuant to the
Acquisition Term Loan.”

 

“Consolidated Total Interest Expense.  For any period, the aggregate amount of
interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of Capitalized Leases and Synthetic
Leases, and including facility fees, commitment fees, usage fees, agency fees,
balance deficiency fees, and similar fees or expenses in connection with the
borrowing of money, as determined in accordance with GAAP, provided that for the
purpose of calculating the Fixed Charge Coverage Ratio, Consolidated Total
Interest Expense shall not include any interest payable under the Acquisition
Term Loan from the period commencing on the Amendment No. 2 Effective Date and
ending on September 10, 2016.”

 

(c)                                  Section 7.1 of the Credit Agreement is
hereby amended by (i) deleting the word “and” at the end of subsection (o),
(ii) deleting the period at the end of subsection (p) and replacing it with “;
and”, and (iii) adding the following new subsection (q) immediately after
subsection (p):

 

“(q)         Indebtedness of the Borrower or any Subsidiary in respect of the
Acquisition Term Loan.”

 

(d)                                 Section 7.2 of the Credit Agreement is
hereby amended by (i) deleting the word “and” at the end of subsection (xiv),
(ii) deleting the period at the end of subsection (xv) and replacing it with “;
and”, and (iii) adding the following new subsection (xvi) immediately after
subsection (xv):

 

“(xvi)      liens arising under the Acquisition Escrow Agreement.”

 

(e)                                  Section 7.3 of the Credit Agreement is
hereby amended by (i) deleting the word “and” at the end of subsection (o),
(ii) deleting the period at the end of subsection

 

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(p) and replacing it with “; and”, and (iii) adding the following new subsection
(q) immediately after subsection (p):

 

“(q)         Investments with respect to the Acquisition Term Loan proceeds in
the Escrow Account.”

 

2.             Conditions Precedent.  The effectiveness of this Amendment and
the amendments to the Credit Agreement herein provided are subject to the
satisfaction of the following conditions precedent (the first date on which such
conditions have been satisfied, the “Amendment Effective Date”):

 

(a)                                 the Administrative Agent shall have received
each of the following documents or instruments in form and substance reasonably
acceptable to the Administrative Agent:

 

(i)                                     one or more counterparts of this
Amendment, duly executed by the Borrower, the Administrative Agent and the
Required Lenders; and

 

(ii)                                  such other documents, instruments,
opinions, certifications, undertakings, further assurances and other matters as
the Administrative Agent shall reasonably require; and

 

(b)                                 all legal fees and expenses of the
Administrative Agent’s Special Counsel in connection with this Amendment shall
have been paid in full (without prejudice to final settling of accounts for such
fees and expenses).

 

3.                                      Representations and Warranties.  In
order to induce the Administrative Agent and the Lenders to enter into this
Amendment, the Borrower represents and warrants to the Administrative Agent and
the Lenders as follows:

 

(a)                                 After giving effect to this Amendment,
(i) the representations and warranties contained in §5 of the Credit Agreement
and in each other Loan Document are true and correct on and as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that the representations and warranties
contained in subsections (a) and (b) of §5.4 of the Credit Agreement shall be
deemed to refer to the most recent consolidated balance sheet and the related
consolidated statements of income and cash flows furnished pursuant to
subsections (a) and (b), respectively, of §6.4 of the Credit Agreement, and
(ii) no Default exists.

 

(b)                                 Since January 31, 2015, there has been no
change in the operations, business, properties, assets or financial condition of
the Borrower and its Subsidiaries as shown on or reflected in such consolidated
balance sheet or the consolidated statements of income and cash flows for the
fiscal year then ended, other than changes that could not reasonably be expected
to have a materially adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries taken as a whole.

 

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(c)                                  This Amendment has been duly authorized,
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, except as may be limited by general
principles of equity or by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors’ rights generally.

 

4.                                      Entire Agreement.  This Amendment
constitutes a Loan Document and, together with all other Loan Documents
(collectively, the “Relevant Documents”), sets forth the entire understanding
and agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relating to
such subject matter.  No promise, condition, representation or warranty, express
or implied, not set forth in the Relevant Documents shall bind any party hereto,
and no such party has relied on any such promise, condition, representation or
warranty.  Each of the parties hereto acknowledges that, except as otherwise
expressly stated in the Relevant Documents, no representations, warranties or
commitments, express or implied, have been made by any party to any other party
in relation to the subject matter hereof or thereof.  None of the terms or
conditions of this Amendment may be changed, modified, waived or canceled orally
or otherwise, except in writing and in accordance with §24 of the Credit
Agreement.

 

5.                                      Full Force and Effect of Agreement. 
Except as hereby specifically amended, modified or supplemented, the Credit
Agreement and all other Loan Documents are hereby confirmed and ratified in all
respects and shall be and remain in full force and effect according to their
respective terms.

 

6.                                      Counterparts.  This Amendment may be
executed in any number of counterparts, each of which shall be deemed an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument.  Delivery of an executed
counterpart of a signature page of this Amendment by telecopy, facsimile or
other electronic imaging means (e.g., “pdf” or “tif”) will be effective as
delivery of a manually executed counterpart of this Amendment.

 

7.                                      Governing Law.  This Amendment shall in
all respects be governed by, and construed in accordance with, the laws of the
State of New York applicable to contracts executed and to be performed entirely
within such State and shall be further subject to the provisions of §19 and §23
of the Credit Agreement.

 

8.                                      Enforceability.  Should any one or more
of the provisions of this Amendment be determined to be illegal or unenforceable
as to one or more of the parties hereto, all other provisions nevertheless shall
remain effective and binding on the parties hereto.

 

9.                                      References.  All references in any of
the Loan Documents to the “Credit Agreement” shall mean the Credit Agreement, as
amended hereby.

 

10.                               Successors and Assigns.  This Amendment shall
be binding upon and inure to the benefit of the Borrower, the Administrative
Agent and each of the Lenders, and their respective

 

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successors, legal representatives, and assignees to the extent such assignees
are permitted assignees as provided in §17.2 of the Credit Agreement.

 

11.                               FATCA.  Solely for purposes of determining
withholding Taxes imposed under FATCA, from and after the Amendment Effective
Date, the Borrower and the Administrative Agent shall treat (and the Lenders
hereby authorize the Administrative Agent to treat) the Credit Agreement as not
qualifying as a “grandfathered obligation” within the meaning of Treasury
Regulation Section 1.1471-2(b)(2)(i).

 

12.                               No Waiver.  The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender or the
Administrative Agent under any of the Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Credit
Agreement to be made, executed and delivered by their duly authorized officers
as of the day and year first above written.

 

 

STAPLES, INC.

 

 

 

 

 

 

 

By:

/s/ Christine T. Komola

 

 

Name:

Christine T. Komola

 

 

Title:

Executive Vice President and

 

 

 

Chief Financial Officer

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

 

 

By:

/s/ Liliana Claar

 

 

Name:

Liliana Claar

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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BANK OF AMERICA, N.A., as an Issuing Bank, lender of Swing Line Loans and a
Lender

 

 

 

 

 

 

 

By:

/s/ Carlos Medina

 

 

Name:

Carlos Medina

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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BARCLAY BANK PLC, as an Issuing Bank and a Lender

 

 

 

 

 

 

 

By:

/s/ Ronnie Glenn

 

 

Name:

Ronnie Glenn

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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HSBC BANK USA, NATIONAL ASSOCIATION, as an Issuing Bank and a Lender

 

 

 

 

 

 

 

By:

/s/ Catherine Dong

 

 

Name:

Catherine Dong

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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JPMORGAN CHASE BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ Lauren Baker

 

 

Name:

Lauren Baker

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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WELLS FARGO BANK, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Denis Waltrich

 

 

Name:

Denis Waltrich

 

 

Title:

Director

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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CITIBANK, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Alejandro Romero

 

 

Name:

Alejandro Romero

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender

 

 

 

 

 

 

 

By:

/s/ Ming K. Chu

 

 

Name:

Ming K. Chu

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

By:

/s/ Virginia Cosenza

 

 

Name:

Virginia Cosenza

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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GOLDMAN SACHS BANK USA, as a Lender

 

 

 

 

 

 

 

By:

/s/ Jerry Li

 

 

Name:

Jerry Li

 

 

Title:

Authorized Signatory

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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PNC BANK, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By:

/s/ Michael Richards

 

Name:

Michael Richards

 

Title:

Managing Director, Senior Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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SANTANDER BANK, N.A., as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ William Maag

 

 

Name:

William Maag

 

 

Title:

Managing Director

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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U.S. BANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Conan Schleicher

 

 

Name:

Conan Schleicher

 

 

Title:

Senior Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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MUFG UNION BANK, N.A., as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Katie Cunningham

 

 

Name:

Katie Cunningham

 

 

Title:

Vice President

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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NATIONAL AUSTRALIA BANK LIMITED, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Jane Macdonald

 

 

Name:

Jane Macdonald

 

 

Title:

Associate Director

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Mauricio Saishio

 

 

Name:

Mauricio Saishio

 

 

Title:

Director

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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WESTPAC BANKING CORPORATION, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Stuart Brown

 

 

Name:

Stuart Brown

 

 

Title:

Director

 

Staples, Inc.

Amendment No. 2

Signature Page

 

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