Exhibit 10.3

 

Execution Version

 

ESCROW AGREEMENT

 

ESCROW AGREEMENT (this “Agreement”), dated as of February 2, 2016, among
JPMorgan Chase Bank, N.A., as escrow agent, securities intermediary and
depositary bank (in each such capacity, the “Escrow Agent”), Barclays Bank PLC,
as administrative agent (in such capacity, the “Administrative Agent”) and
collateral agent (in such capacity, the “Collateral Agent” and, together with
the Administrative Agent, the “Agents” and each an “Agent”) under the Credit
Agreement (as defined herein), and Staples Escrow, LLC, a Delaware limited
liability company (the “Borrower”, and together with the Agents, sometimes
referred to individually as “Party” and collectively as the “Parties”).

 

All capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Credit Agreement; provided the Escrow Agent shall not be
deemed to have any knowledge of nor obligation to ascertain the meaning of any
capitalized term not defined herein.

 

R E C I T A L S

 

WHEREAS, this Agreement is being entered into in connection with that certain
Term Loan Credit Agreement (the “Credit Agreement”) dated as of the date hereof,
by and among the Borrower, as borrower, the lenders from time to time party
thereto (the “Lenders”), the Administrative Agent, the Collateral Agent and the
other parties thereto, pursuant to which the Lenders will make term loans to the
Borrower in an aggregate principal amount of $2,500,000,000 (the “Term B
Loans”);

 

WHEREAS, the Borrower intends to use the net proceeds from the Term B Loans to
finance the Transactions (including payment of the cash purchase price for the
Acquisition) and for general corporate purposes;

 

WHEREAS, the Borrower currently does not expect to consummate the Acquisition
contemporaneously with the making of the Term B Loans, and has agreed with the
Agents and the Lenders in the Credit Agreement to enter into this Agreement and
to deposit into escrow the net proceeds from the Term B Loans and other funds as
provided herein;

 

WHEREAS, concurrently with the borrowing of the Term B Loans on the date hereof,
the Borrower will deposit or cause to be deposited the Borrower’s Deposit (as
defined below) with the Escrow Agent, as hereinafter provided;

 

WHEREAS, in the event that the Borrower is deemed to have an ownership interest
in the Escrow Account (other than the limited contractual right to receive the
Escrow Property (as defined below)), then as security for the Obligations under
the Credit Agreement, the Borrower hereby grants to the Collateral Agent, for
the sole and exclusive benefit of the Secured Parties, a first priority security
interest in and lien on the Escrow Account and the other Collateral; and

 

WHEREAS, the parties have entered into this Agreement in order to set forth the
conditions upon which, and the manner in which, funds will be held in and
disbursed from the Escrow Account and released from the security interest and
lien described above.

 

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A G R E E M E N T

 

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

 

1.                                      Defined Terms.  In addition to any other
defined terms used herein, the following terms shall constitute defined terms
for purposes of this Agreement and shall have the meanings set forth below:

 

“Acquisition Effective Date” has the meaning set forth in Section 3(b).

 

“Acquisition Outside Date” means September 10, 2016; provided that solely in the
event that the conditions precedent pursuant to Section 6.1(b) of the
Acquisition Agreement shall not have been satisfied on or prior to such date,
upon receipt by the Escrow Agent of written confirmation from an Authorized
Representative of the Administrative Agent that it has received the Escrow
Extension Fee, such date shall be extended to November 10, 2016.

 

“Additional Interest Deposit” means, with respect to any Interest Period for the
Term B Loans pursuant to the Credit Agreement, an amount, as calculated by the
Administrative Agent and notified in an Additional Interest Deposit and Interest
Payment Notice, equal to the amount of regularly accruing interest that will be
payable to the Administrative Agent for such Interest Period assuming that the
full amount of the Term B Loans that are outstanding on such date remain
outstanding throughout such Interest Period.

 

“Additional Interest Deposit and Interest Payment Notice” means a notice
delivered from the Administrative Agent to the Escrow Agent and the Borrower in
the form of Annex III at least five Business Days prior to the end of the then
current Interest Period, identifying the applicable Additional Interest Deposit
and including instructions for the amount of Interest the Escrow Agent is to pay
on the next Interest Payment Date.

 

“Alternate Investment” has the meaning set forth in Section 2(a)(ii).

 

“Authorized Representative” has the meaning set forth in Section 3(i).

 

“Borrower Release Request” means a certificate signed by an Authorized
Representative of the Borrower requesting release of the Escrow Property in the
form attached hereto as Annex I (or in another form acceptable to the Collateral
Agent and the Borrower, as identified in writing to the Escrow Agent prior to
the delivery of the Borrower Release Request), certifying as to the matters
specified therein.

 

“Borrower’s Deposit” has the meaning set forth in Section 2(a)(i).

 

“Closing Date” means February 2, 2016.

 

“Collateral” has the meaning set forth in Section 6(a).

 

“Collateral Agent Notice” means a notice sent pursuant to Section 3(d) by an
Authorized Representative of the Collateral Agent in the form of Annex II.

 

“Collateral Agent Acceleration Notice” has the meaning set forth in
Section 3(f).

 

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“Credit Agreement” has the meaning set forth in the recitals.

 

“Distributions” has the meaning set forth in Section 2(a)(ii).

 

“Eligible Escrow Investments” means (a) U.S. dollar denominated institutional
money market funds (“MMMF”), governed by Rule 2a-7 under the Investment Company
Act of 1940 and rated “AAAm” by S&P and/or “Aaa-mf” by Moody’s, including funds
managed by the Escrow Agent or any of its affiliates, in which case the
Collateral Agent and the Borrower acknowledge that they have received from the
Escrow Agent, either directly or via access to a relevant website, a current
copy of the prospectus for the money market fund investment they have authorized
and (b) a JPMorgan interest bearing demand deposit account.

 

“Escrow Account” means the escrow account established pursuant to Section 2.

 

“Escrow Property” has the meaning set forth in Section 2(a)(ii).

 

“Initial Deposit” has the meaning set forth in Section 2(a)(i).

 

“Initial Interest Deposit” has the meaning set forth in Section 2(a)(i).

 

“Initial Interest Period” means the Interest Period commencing on the Closing
Date to (but not including) the date that is one month following the Closing
Date.

 

“Interest Deposit” means the Initial Interest Deposit or an Additional Interest
Deposit, as applicable.

 

“Interest Payment Date” means (i) initially, the last Business Day of the
Initial Interest Period and (ii) subsequently, the last Business Day of the any
future Interest Period as notified by the Administrative Agent in the Additional
Interest Deposit and Interest Payment Notice for the next interest payment due.

 

“Lenders” has the meaning set forth in the recitals.

 

“Net Proceeds Deposit” has the meaning set forth in Section 2(a)(i).

 

“Obligations” means “Obligations” (as defined in the Credit Agreement).

 

“Secured Parties” means, collectively, the Arrangers, the Collateral Agent and
the other Agents (as defined in the Credit Agreement), the Lenders, each
Indemnitee pursuant to Section 9.03(b) of the Credit Agreement and each co-agent
or sub-agent appointed by the Collateral Agent or the Administrative Agent from
time to time pursuant to the Credit Agreement.

 

“Staples” means Staples, Inc., a Delaware corporation.

 

“Term B Loans” has the meaning set forth in the recitals.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

 

2.                                      Escrow Accounts; Escrow Agent.

 

(a)                                 Establishment of Escrow Accounts.

 

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(i)                  The Parties hereby appoint the Escrow Agent as their escrow
agent for the purposes set forth herein, and the Escrow Agent hereby accepts
such appointment under the terms and conditions set forth herein.   Concurrently
with the execution and delivery hereof, the Escrow Agent shall establish escrow
accounts in the name of Barclays Bank PLC, as Collateral Agent, entitled
“Barclays Bank PLC, as Collateral Agent, Escrow Account” (collectively referred
to herein each as the “Escrow Account” and together the “Escrow Accounts”). 
Concurrently with the execution and delivery hereof and the making of the Term B
Loans, amounts will be deposited into the Escrow Accounts as follows:

 

A.                  as provided in the Credit Agreement, the Administrative
Agent will deposit with the Escrow Agent $2,475,000,000 (Two Billion Four
Hundred Seventy Five Million Dollars) in cash or by wire transfer in immediately
available funds (the “Net Proceeds Deposit”), which amount represents the gross
proceeds from the Term B Loans, net of original issue discount.

 

B.                  the Borrower will deposit with the Escrow Agent
$34,565,972.22 (Thirty Four Million Five Hundred Sixty Five Thousand Nine
Hundred Seventy Two Dollars and Twenty Two Cents) in cash or by wire transfer in
immediately available funds (the “Borrower’s Deposit”), which amount represents
the difference between the original principal amount of the Term B Loans and the
Net Proceeds Deposit, plus the interest that will accrue on the Term B Loans for
the Initial Interest Period (such amount, the “Initial Interest Deposit”).

 

As a result of the Net Proceeds Deposit and the Borrower’s Deposit made pursuant
to clauses (A) and (B) above, the aggregate amount deposited with the Escrow
Agent on the date hereof will be $2,509,565,972.22 (Two Billion Five Hundred And
Nine Million Five Hundred Sixty Five Thousand Nine Hundred Seventy Two Dollars
and Twenty Two Cents) (the “Initial Deposit”), which amount is sufficient to
repay in cash the Term B Loans, in whole and not in part, at par, plus accrued
and unpaid interest thereon for the Initial Interest Period.

 

On the first day of each Interest Period (other than the Initial Interest
Period), the Borrower will deposit with the Escrow Agent the Additional Interest
Deposit in respect of such Interest Period in cash or by wire transfer in
immediately available funds.

 

(ii)               The Escrow Agent shall accept the Initial Deposit and each
Additional Interest Deposit and shall hold such funds, all investments thereof,
any Distributions (as hereinafter defined) and the proceeds of the foregoing in
the Escrow Accounts.  All amounts so deposited, all funds, securities or
property now or hereafter credited to the Escrow Account or otherwise registered
in the name of the Collateral Agent, and the interest thereon, and dividends,
distributions and other payments or proceeds in respect of any of the foregoing
(collectively, the “Distributions”), less any amounts released pursuant to the
terms of this Agreement, shall constitute the “Escrow Property.”  It is
understood and agreed that all investments hereunder shall be directed by the
Borrower and the Escrow Agent shall have no investment discretion with regard to
any selected investment .  As further provided below, the Escrow Agent shall
continually invest any portion of the Escrow Property that is cash only in
alternative (b) of the Eligible Escrow Investments as defined above, until
otherwise directed by the Borrower in writing.  If directed in accordance with
this Section 2(a)(ii), the Escrow Agent shall invest any portion of the Escrow
Property that is desired to be maintained as securities only in a MMMF selected
by the Borrower pursuant to alternative (a) of the Eligible Escrow Investments,
as defined above.  To the extent applicable, the Escrow Agent is hereby directed
to hold the cash portion of the Escrow Property in one or more demand deposit
accounts (the “Cash Accounts”), and any securities, including the

 

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permitted MMMF, in separate securities accounts (the “Securities Accounts” which
along with the Cash Accounts constitute the Escrow Accounts) and to promptly
transfer to the Cash Accounts any cash in the Securities Accounts that is not
promptly invested in MMMFs.  Borrower hereby directs the Escrow Agent to hold
the Escrow Property in the Cash Accounts and invest and reinvest the Escrow
Property and the proceeds thereof in an interest bearing demand deposit account,
or a successor investment offered by Escrow Agent, and this authorization is a
permanent investment direction until the Escrow Agent is directed in writing by
an Authorized Representative of the Borrower of permissible alternate
instructions consistent with the definition of Eligible Escrow Investments
(“Alternate Investment”).  Interest bearing demand deposit accounts have rates
of interest or compensation that may vary from time to time as determined by the
Escrow Agent.  The Parties recognize and agree that instructions to make any
other Alternative Investment, and any instruction to change investments must be
in a writing and executed by an Authorized Representative of the Borrower and
shall specify the type and identity of the investments to be purchased and/or
sold.  The Escrow Agent is hereby authorized to execute purchases and sales of
investments through the facilities of its own trading or capital markets
operations or those of any affiliated entity and the Escrow Agent or any
affiliated entity may act as counterparty with respect to such investments. 
Each of the Parties and the Escrow Agent agree that all financial assets will
either be registered in the name of the Collateral Agent or credited to the
Securities Account and registered in the name of the Escrow Agent or indorsed to
the Escrow Agent or in blank and credited to the Securities Account or an
account of the Escrow Agent at another securities intermediary.  In no case will
any financial assets constituting the Escrow Property be registered in the name
of the Borrower, payable to the order of the Borrower or indorsed to the
Borrower.  Each of the Parties and the Escrow Agent agree that the Collateral
Agent shall be its sole customer with respect to all Cash Accounts.  All Escrow
Property shall be held in the appropriate Escrow Accounts until disbursed in
accordance with the terms hereof.  The Escrow Accounts and all property credited
thereto, including the Escrow Property shall be under the control (within the
meaning of Sections 9-104 and 9-106 of the UCC) of the Collateral Agent for the
benefit of the Secured Parties.

 

(iii)            The obligation and liability of the Escrow Agent to make the
payments and transfers required by this Agreement shall be limited to the Escrow
Property.  The Escrow Agent shall not have any liability for any loss sustained
as a result of any investment made pursuant to the terms of this Agreement or as
a result of any liquidation of any investment prior to its maturity or for the
failure of an Authorized Representative of the Borrower to give the Escrow Agent
instructions to invest or reinvest the Escrow Property.  The Escrow Agent or any
of its affiliates may receive compensation with respect to any Alternative
Investment directed hereunder including without limitation charging any
applicable agency fee or trade execution fee in connection with each
transaction.  The Escrow Agent will not provide supervision, recommendations or
advice relating to either the investment of moneys held in the Escrow Accounts
or the purchase, sale, retention or other disposition of any investment
described herein, and each Party acknowledges that it was not offered any advice
or recommendation by the Escrow Agent with regard to any investment and has made
an independent assessment of the suitability for its own purposes of any of any
investment hereunder.    Market values, exchange rates and other valuation
information (including without limitation, market value, current value or
notional value) of any Eligible Escrow Investment furnished in any report or
statement may be obtained from third party sources and is furnished for the
exclusive use of the Parties.  The Escrow Agent has no responsibility whatsoever
to determine the market or other value of any Eligible Escrow Investment and
makes no representation or warranty, express or implied, as to the accuracy of
any such valuations or that any values necessarily reflect the proceeds that may
be received on the sale of an Eligible Escrow Investment.  The Escrow Agent
shall have the right to liquidate any investments held in order to provide funds
necessary to make required payments under this Agreement.  All interest or other

 

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income earned under this Agreement shall be allocated to the Borrower and
reported, by the Escrow Agent to the Internal Revenue Service (“IRS”), or any
other taxing authority, on IRS Form 1099 or 1042-S (or other appropriate or
successor form) as income earned from the Initial Deposit by the Borrower
whether or not said income has been distributed during such year. The Escrow
Agent shall have no responsibility for the preparation and/or filing of any tax
or information return with respect to any transactions, whether or not related
to the Agreement, that occur outside the Escrow Property (other than with
respect to income earned from the Initial Deposit by the Borrower in accordance
with the previous sentence).  The Borrower shall provide the Escrow Agent with a
properly executed IRS Form W-9 or W-8 and such other forms and documents that
the Escrow Agent may reasonably request.  The Borrower understands that if the
appropriate IRS Forms W-9 or W-8 and such other forms and documents that the
Escrow Agent may reasonably request are not provided and certified to the Escrow
Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder, and by other applicable
Law, to withhold a portion of any interest or other income earned on the
investment of the Escrow Property.

 

(b)                                 Escrow Agent Compensation; Expense
Reimbursement.

 

(i)                                     The Borrower shall pay, or cause to be
paid, to the Escrow Agent for services to be performed by it under this
Agreement in accordance with the Escrow Agent’s fee schedule attached hereto as
Schedule II.  The Escrow Agent shall be paid any compensation owed to it
directly by the Borrower and shall not disburse from any Escrow Account any such
amounts, nor shall the Escrow Agent have any interest in the Escrow Accounts
with respect to such amounts.  The provisions of this clause (i) shall survive
the termination of this Agreement and survive the resignation or removal of the
Escrow Agent.  The Parties further agree to the disclosures and agreements set
forth in Schedule II.

 

(ii)                                  The Borrower shall reimburse the Escrow
Agent upon request for all reasonable and documented out-of-pocket expenses,
disbursements and advances incurred or made by the Escrow Agent in implementing
any of the provisions of this Agreement, including compensation and the
reasonable and documented out-of-pocket expenses and disbursements of its
counsel (limited to one outside counsel and one local counsel in each relevant
jurisdiction).  The Escrow Agent shall be paid any such expenses owed to it
directly by the Borrower and shall not disburse from any Escrow Account any such
amounts, nor shall the Escrow Agent have any interest in the Escrow Accounts
with respect to such amounts.  The provisions of this clause (ii) shall survive
the termination of this Agreement and survive the resignation or removal of the
Escrow Agent.

 

(c)                                  Substitution of Escrow Agent.  The Escrow
Agent may resign by giving no less than 30 days’ prior written notice to the
Borrower and the Collateral Agent.  Such resignation shall take effect upon the
later to occur of (i) delivery of all Escrow Property maintained by the Escrow
Agent hereunder and copies of all books, records, plans and other documents in
the Escrow Agent’s possession relating to such funds, or this Agreement, in each
case to a successor escrow agent mutually approved by the Borrower and the
Collateral Agent (which approvals shall not be unreasonably withheld or delayed)
and (ii) the Borrower, the Agents and such successor escrow agent entering into
this Agreement or any written successor agreement no less favorable to the
interests of the Agents and the Lenders than this Agreement.  The Escrow Agent
shall thereupon be discharged of all obligations under this Agreement and shall
have no further duties, obligations or responsibilities in connection herewith,
except to the limited extent set forth in Section 4.  If a successor escrow
agent has not been appointed or has not accepted such appointment within 30 days
after notice of resignation is given to the Borrower, the Escrow Agent may apply
to a court of competent jurisdiction for the appointment of a successor escrow
agent.

 

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3.                                      Release of Escrow Property.  Subject to
Section 2(a)(ii), the Escrow Agent is directed to hold and distribute the Escrow
Property in the following manner:

 

(a)                                 Except as otherwise provided in Sections
6(e) and 9(o) hereof, the Escrow Agent will only release the Escrow Property in
the cases specifically provided for in this Section 3.

 

(b)                                 Upon the satisfaction or waiver (in
accordance with Section 9.02 of the Credit Agreement) of the conditions set
forth in Section 4.02 of the Credit Agreement (other than conditions that will
be satisfied substantially concurrently with the release of the Escrow
Property), the Borrower will promptly deliver a Borrower Release Request to each
of the Agents and the Escrow Agent, confirming that all of such conditions have
been satisfied or will be satisfied substantially concurrently with the release
of the Escrow Property (the date that all of such conditions have been or will
be so satisfied, the “Acquisition Effective Date”).

 

(c)                                  Promptly upon receipt of (1) the Borrower
Release Request and (2) confirmation by the Agents of their receipt of the same
signed by an Authorized Representative, the Escrow Agent will liquidate all
investments and release the Escrow Property as follows:

 

(i)                                   first, an amount in cash equal to any
Interest Deposit that has not been paid to the Administrative Agent, to the
Administrative Agent, by wire transfer of immediately available funds in
accordance with the wire transfer instructions set forth in Section 3(j) hereof;
and

 

(ii)                                second, any and all remaining Escrow
Property, together with interest or other income with respect to such remaining
Escrow Property that became part of the Escrow Property pursuant to
Section 2(a)(ii) hereof, to the Borrower, by wire transfer of immediately
available funds in accordance with the wire instructions provided to the Escrow
Agent as set forth in Section 3(j) hereof.

 

(iii)                             For the avoidance of doubt, any amounts
required to be released above shall be stated on the Borrower Release Request.

 

(d)                                 If the conditions contained in clause
(b) have not been satisfied by the Acquisition Outside Date, upon the receipt of
a Collateral Agent Notice, the Escrow Agent will, promptly following the
Acquisition Outside Date, liquidate all investments of Escrow Property then held
by it and release all of the Escrow Property as follows:

 

(i)                                     first, to the Agents, an amount of
Escrow Property in cash equal to amounts owing to the Agents in respect of fees
and expenses of the Agents under the Credit Agreement by wire transfer of
immediately available funds in accordance with the wire transfer instructions
set forth in Section 3(j) hereof;

 

(ii)                                  second, to the Administrative Agent, an
amount of Escrow Property in cash equal to the outstanding principal amount of
the Term B Loans plus accrued and unpaid interest on the Term B Loans through
the date of such prepayment for payment to the Lenders in accordance with the
prepayment provisions contained in Section 2.07(b)(v) of the Credit Agreement;
such release of Escrow Property to the Administrative Agent will be made by wire
transfer of immediately available funds in accordance with the wire instructions
set forth in Section 3(j) hereof;

 

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(iii)                             third, to the Borrower, any Escrow Property
remaining after distributions in clauses (d)(i) and (ii) above, by wire transfer
of immediately available funds in accordance with the wire instructions provided
to the Escrow Agent as set forth in Section 3(j) hereof.

 

(iv)                            for the avoidance of doubt, any amounts required
to be released above shall be stated on the Collateral Agent Notice.

 

(e)                                  The Borrower may determine, in its sole
discretion, that the conditions contained in clause (b) of this Section 3 will
not be satisfied by the Acquisition Outside Date and may elect to optionally
repay the Term B Loans in accordance with the Credit Agreement.  Upon written
notice and instruction from an Authorized Representative of the Collateral Agent
to the Escrow Agent (which will only be given after the Borrower has given the
corresponding written notice to the Agents) that the Borrower has elected to
exercise its right to optionally prepay the Term B Loans in accordance with the
provisions of the Credit Agreement, the Escrow Agent will, on or before the
Business Day immediately prior to the date fixed for such optional prepayment,
liquidate all investments of Escrow Property then held by it and release all of
the Escrow Property as follows:

 

(i)                                   first, to the Agents, an amount of Escrow
Property in cash equal to amounts owing to the Agents in respect of fees and
expenses of the Agents under the Credit Agreement by wire transfer of
immediately available funds in accordance with the wire transfer instructions
set forth in Section 3(j) hereof;

 

(ii)                                second, to the Administrative Agent, an
amount of Escrow Property in cash equal to the outstanding principal amount of
the Term B Loans plus accrued and unpaid interest on the Term B Loans through
the date of such prepayment to the Lenders in accordance with the prepayment
provisions contained in Section 2.07(a) of the Credit Agreement; such release of
Escrow Property to the Administrative Agent will be made by wire transfer of
immediately available funds in accordance with the wire instructions set forth
in Section 3(j) hereof;

 

(iii)                             third, to the Borrower, any Escrow Property
remaining after the distributions in clauses (e)(i) and (ii) above, by wire
transfer of immediately available funds in accordance with the wire instructions
set forth in Section 3(j) hereof.

 

(iv)                            For the avoidance of doubt, any amounts required
to be released above shall be stated on the above Borrower notice.

 

(f)                                   If the Escrow Agent receives a written
notice and instruction from an Authorized Representative of the Collateral Agent
that the principal amount of and accrued and unpaid interest on the Term B Loans
has become immediately due and payable pursuant to Article VII of the Credit
Agreement (a “Collateral Agent Acceleration Notice”), then the Escrow Agent
will, within one Business Day after receipt of such written notice and
instruction from the Collateral Agent, liquidate all Escrow Property then held
by it and release all of the Escrow Property as follows:

 

(i)                                     first, to the Agents, an amount of
Escrow Property in cash equal to amounts owing to the Agents in respect of fees
and expenses of the Agents under the Credit Agreement by wire transfer of
immediately available funds in accordance with the wire transfer instructions
set forth in Section 3(j) hereof;

 

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(ii)                                  second, to the Administrative Agent for
payment to the Lenders, an amount of Escrow Property in cash equal to the amount
of such accelerated principal amount and interest, if any, on the Term B Loans;
such release of Escrow Property to the Administrative Agent under the Credit
Agreement will be made by wire transfer of immediately available funds in
accordance with the wire instructions set forth in Section 3(j) hereof; and

 

(iii)                               third, to the Borrower, any Escrow Property
remaining after distributions in clauses (f)(i) and (ii) above, by wire transfer
of immediately available funds in accordance with the wire instructions set
forth in Section 3(j) hereof.

 

(iv)                            For the avoidance of doubt, any amounts required
to be released above shall be stated on a Collateral Agent Acceleration Notice.

 

(g)                                  On the last day of each Interest Period,
the Escrow Agent shall as promptly as practicable thereafter transfer to the
Administrative Agent, to the account set forth in Section 3(j) hereof, an amount
of funds that is equal to (i) in the case of the Initial Interest Period, the
Initial Interest Deposit and (ii) in the case of each subsequent Interest
Period, the Additional Interest Deposit for such Interest Period as instructed
in the Additional Interest Deposit and Interest Payment Notice.

 

(h)                                 The Collateral Agent agrees to promptly
execute and deliver or cause to be executed and delivered any instruments,
documents and agreements and to promptly take all additional steps reasonably
requested by the Borrower to evidence and/or confirm the release of all or any
portion of the Escrow Property to the Borrower in accordance with this
Section 3, including authorizing filing of one or more UCC amendments or
termination statements in such jurisdictions and filing offices as are
reasonably necessary or advisable (as reasonably determined by the Borrower) in
order to terminate or discharge the applicable security interest granted
herein.  In connection with any release pursuant to this Section 3(h), the
Borrower shall be permitted to take any action in connection therewith
consistent with such release including, without limitation, the filing of UCC
amendments or termination statements.

 

(i)                                     Notwithstanding anything to the contrary
set forth in Section 9, any Borrower Release Request, Collateral Agent Notice,
Collateral Agent Acceleration Notice or other notice related to the transfer or
distribution of the Escrow Property, must be in writing executed by the
appropriate Party or Parties as evidenced by the signatures of the person or
persons signing this Agreement or one of their designated persons as set forth
on the Designation of Authorized Representatives attached hereto as Schedule I-1
and Schedule I-2, as applicable (each an “Authorized Representative”), and
delivered to the Escrow Agent only by confirmed facsimile or as a Portable
Document Format (“PDF”) attached to an email on a Business Day only at the fax
number or email address set forth in Section 8 below.  Each designation of
Authorized Representatives shall be signed by the Secretary, any Assistant
Secretary or other duly authorized officer of the named Party.  The Escrow Agent
shall not be liable to any Party or other person for refraining from acting upon
any instruction for or related to the transfer or distribution of the Escrow
Property if delivered to any other fax number or email address, including but
not limited to a valid email address of any employee of the Escrow Agent.

 

(j)                                    The Parties each acknowledge that the
Escrow Agent is authorized to use the funds transfer instructions below to
disburse any funds due to each Agent and/or Borrower, respectively, without a
verifying call-back as set forth in Section 3(k) below:

 

A.            (i) All cash (including the cash proceeds from liquidation of any
Escrow Property) distributed from the Escrow Account to the Borrower will be
transferred by wire transfer of immediately available funds in accordance with
the wire transfer

 

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instructions indicated in the Borrower Release Request or otherwise provided by
the Borrower to the Escrow Agent (which will require a call-back as set forth in
Section 3(k) below).

 

(ii) If, upon termination of this Agreement and after any required liquidation
or distribution of Escrow Property for the benefit of any person other than the
Borrower pursuant to this Section 3, any Escrow Property consists of assets
other than cash and is to be released to the Borrower, the Escrow Agent shall
liquidate such Escrow Property into cash and distribute it to the Borrower
pursuant to this Section 3(j) unless the Borrower has provided a prior written
request to the Escrow Agent not to liquidate such Escrow Property and to deliver
such non-cash Escrow Property in kind to the Borrower at such account(s) or
location(s) specified by the Borrower in such written request.  If the Escrow
Agent receives such a request, it shall deliver such non-cash Escrow Property to
the Borrower as promptly as practicable.  No request by the Borrower pursuant to
this paragraph shall constitute an “Entitlement Order” or instruction with
respect to the Escrow Property prior to the termination of this Agreement.

 

B.            All cash distributed from the Escrow Account to the Administrative
Agent for payment on the Term B Loans will be transferred by wire transfer of
immediately available funds in accordance with the following wire transfer
instructions:

 

Bank:

 

Barclays Bank PLC

Address:

 

745 Seventh Ave, New York, NY 10019

ABA No.:

 

026 002 574

Account Name:

 

Clad Control Account

Account No.:

 

050-019104

Attention:

 

Staples Inc. Attn: May Wong / Joe Tricamo

 

 

C.            All cash distributed from the Escrow Account to the Collateral
Agent or Administrative Agent for fees and expenses of the Agents will be
transferred by wire transfer of immediately available funds in accordance with
the following wire transfer instructions:

 

Bank:

 

Barclays Bank PLC

Address:

 

745 Seventh Ave, New York, NY 10019

ABA No.:

 

026 002 574

Account Name:

 

Clad Control Account

Account No.:

 

050-019104

Attention:

 

Staples Inc. Attn: May Wong / Joe Tricamo

 

(k)                                 In the event any other funds transfer
instructions are set forth in a permitted instruction from a Party or the
Parties in accordance with Section 3, the Escrow Agent is authorized to seek

 

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confirmation of such funds transfer instructions by a single telephone call-back
to one of the Authorized Representatives, and the Escrow Agent may rely upon the
confirmation of anyone purporting to be that Authorized Representative. The
persons designated as Authorized Representatives and telephone numbers for same
may be changed only in a writing executed by an Authorized Representative or
other duly authorized officer of the applicable Party setting forth such changes
and actually received by the Escrow Agent via facsimile or as a PDF attached to
an email.  Except as set forth in Section 3(j) above, no funds will be disbursed
until an Authorized Representative is able to confirm such instructions by
telephone callback.  The Escrow Agent, any intermediary bank and the
beneficiary’s bank in any funds transfer may rely upon the identifying number of
the beneficiary’s bank or any intermediary bank included in a funds transfer
instruction provided by a Party or the Parties and confirmed by an Authorized
Representative.  Further the beneficiary’s bank in the funds transfer
instruction may make payment on the basis of the account number provided in such
Party’s or the Parties’ instruction and confirmed by an Authorized
Representative even though it identifies a person different from the named
beneficiary.

 

(l)                                     The Parties acknowledge that there are
certain security, corruption, transmission error and access availability risks
associated with using open networks such as the internet and the Parties hereby
expressly assume such risks.

 

(m)                             As used in this Section 3, “Business Day” shall
mean any day other than a Saturday, Sunday or any other day on which the Escrow
Agent located at the notice address set forth below is authorized or required by
law or executive order to remain closed. The Parties acknowledge that the
security procedures set forth in this Section 3 are commercially reasonable.
Upon delivery of the Escrow Property in full by the Escrow Agent, this Agreement
shall terminate and the related account(s) shall be closed, subject to the
provisions of Section 2(b).

 

4.                                      Limitation of Escrow Agent’s Liability;
Responsibilities of Escrow Agent.  The Escrow Agent’s responsibility and
liability under this Agreement shall be limited as follows:  (i) the Escrow
Agent does not represent, warrant or guaranty to the Agents or the Lenders from
time to time the performance of the Borrower; (ii) the Escrow Agent shall have
no responsibility to the Borrower or the Agents or the Lenders from time to time
as a consequence of performance or non-performance by the Escrow Agent
hereunder, except for any gross negligence, bad faith or willful misconduct of
the Escrow Agent that was the cause of any direct loss to any Party; (iii) the
Borrower shall remain solely responsible for all aspects of its business and
conduct; and (iv) the Escrow Agent shall not be obligated to supervise, inspect
or inform the Borrower, the Agents or any third party of any matter referred to
above.  In no event shall the Escrow Agent be liable (i) for relying upon any
judicial or administrative order or judgment, upon any opinion of counsel or
upon any certification, instruction, notice, or other writing delivered to it by
the Borrower or the Collateral Agent in compliance with the provisions of this
Agreement, (ii) for acting in accordance with or relying upon any instruction,
notice, demand, certificate or document believed by it in good faith to be
genuine and to have been signed by an Authorized Representative of a specified
Party, (iii) for any special, incidental, indirect, consequential, punitive or
special damages or losses of any kind whatsoever (including but not limited to
lost profits), even if Escrow Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action, (iv) for the acts or
omissions of its nominees, correspondents, designees, subagents or subcustodians
or (v) for an amount in excess of the value of the Escrow Account, valued as of
the date of deposit.  Except as specifically provided herein, the Escrow Agent
shall have no duty to solicit any payments which may be due it or the Escrow
Account, including, without limitation, the Escrow Property nor shall the Escrow
Agent have any duty or obligation to confirm or verify the accuracy or
correctness of any amounts deposited with it hereunder.

 

The Escrow Agent undertakes to perform only such duties as are expressly set
forth herein, which shall be deemed purely ministerial in nature and no duties,
including but not limited to any fiduciary duty, shall be implied.  The Escrow
Agent shall have no liability under and no duty to inquire as

 

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to the provisions of any agreement other than this Agreement, including without
limitation the Credit Agreement or any other agreement between any or all of the
parties hereto or any other persons even though reference thereto may be made
herein, nor shall the Escrow Agent be required to determine if any Party has
complied with any other agreement.  Notwithstanding the terms of any other
agreement between the Parties, the terms and conditions of this Agreement shall
control the actions of the Escrow Agent.  The Escrow Agent shall not be charged
with knowledge or notice of any fact or circumstance not specifically set forth
herein.  The Escrow Agent may rely upon any notice, instruction, request or
other instrument, not only as to its due execution, validity and effectiveness,
but also as to the truth and accuracy of any information contained therein,
which the Escrow Agent shall believe to be genuine and to have been signed by an
Authorized Representative or presented by the Parties purporting to sign the
same.  Any notice, document, instruction or request delivered by a Party but not
required under this Agreement may be disregarded by the Escrow Agent and
returned to the sending Party.  The rights and powers granted to the Escrow
Agent hereunder are being granted in order to allow the Escrow Agent to hold and
disburse the Escrow Property in accordance with the terms hereof and preserve
and protect the Collateral Agent’s security interest in and to the Collateral
granted hereby and shall not be interpreted to, and shall not, impose any duties
on the Escrow Agent in connection therewith other than those imposed under
applicable law.  The Escrow Agent shall exercise the same degree of care in the
custody and preservation of the Collateral in its possession as it exercises
toward its own similar property and shall not be held to any higher standard of
care under this Agreement, nor be deemed to owe any fiduciary duty to the
Borrower, the Administrative Agent, the Lenders or any other party.

 

At the expense of the Borrower, the Escrow Agent may act pursuant to the advice
of counsel chosen by it with respect to any matter relating to this Agreement
and shall not be liable for any action taken or omitted in accordance with such
advice, except for any such action taken or omitted in bad faith.

 

Except upon its receipt of a Collateral Agent Notice, a Collateral Agent
Acceleration Notice or a Borrower Release Request, in the event of any ambiguity
in the provisions of this Agreement with respect to any Escrow Property, or
instruction, notice or certification delivered hereunder, the Escrow Agent shall
be entitled to refuse to comply with any and all claims, demands or instructions
with respect to such Escrow Property and the Escrow Agent shall not be or become
liable for its failure or refusal to comply with conflicting claims, demands or
instructions.  In such event, the Escrow Agent shall be entitled to refuse to
act until either (i) it shall have received an instruction from an Authorized
Representative of the Collateral Agent and the Borrower; or (ii) any conflicting
or adverse claims or demands shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the conflicting claimants
as evidenced in a writing reasonably satisfactory to the Escrow Agent.  The
costs and expenses (including reasonable attorney’s fees and expenses) incurred
in connection with such proceedings shall be paid by, and shall be deemed an
obligation of the Borrower.

 

No provision of this Agreement shall require the Escrow Agent to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder.

 

The Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of the Escrow Agent (including but not limited to
any act or provision of any present or future law or regulation or governmental
authority, any act of God, terrorism or war, the failure or malfunction of
communication or computer systems, or the unavailability of the Federal Reserve
Bank wire or telex or other wire or communication facility).

 

5.                                      Indemnity.  The Borrower shall
indemnify, hold harmless, pay or reimburse and defend the Escrow Agent and its
directors, officers, agents, employees and controlling persons, affiliates

 

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and their respective successors, assigns, (each, an “Indemnified Person”) from
and against any and all losses, penalties, judgments, settlements, litigation,
claims, actions, obligations, liabilities and expenses, including reasonable
defense costs, reasonable investigative fees and costs, reasonable legal fees,
and claims for damages, arising out of or in connection with (a) the Escrow
Agent’s performance or non-performance, or in connection with the Escrow Agent’s
acceptance of appointment as the Escrow Agent under this Agreement, except to
the extent that such liability, expense or claim is solely and directly
attributable to the gross negligence, bad faith or willful misconduct of any
such Indemnified Person (as determined by a judgment of a court of competent
jurisdiction) and (b) the Escrow Agent’s following, accepting or acting upon any
instructions or directions, whether joint or singular, from the Parties received
in accordance with this Agreement.  The provisions of this Section 5 shall
survive any termination, satisfaction or discharge of this Agreement as well as
the resignation or removal of the Escrow Agent.

 

6.                                      Grant of Security Interest; Instructions
to Escrow Agent.

 

(a)                                 The Borrower hereby grants a first priority
security interest in and lien on, and assigns and transfers to the Collateral
Agent for the benefit of the Secured Parties, all of its right, title and
interest in, to the extent applicable, (i) the Escrow Accounts and the Escrow
Property (including, without limitation, all Escrow Property now or hereafter
placed or deposited in, or delivered to the Escrow Agent for placement or
deposit in, the Escrow Accounts, all funds held therein, and all Eligible Escrow
Investments held by (or otherwise maintained in the name of) the Escrow Agent or
the Collateral Agent pursuant to Section 2); (ii)  all rights which the Borrower
has under this Agreement and all rights it may now have or hereafter acquire
against the Escrow Agent in respect of its holding and managing all or any part
of the Escrow Property; and (iii) all proceeds (as such term is defined in
Section 9-102(a) of the UCC) of any of the foregoing (collectively, the
“Collateral”), in order to secure the Obligations.  The Escrow Agent hereby
acknowledges the Collateral Agent’s security interest and lien as set forth
above.  The Borrower shall take all actions and shall direct the Collateral
Agent in writing to take all actions necessary on its part to insure the
continuance of a perfected first priority security interest in the Collateral in
favor of the Collateral Agent for the benefit of the Secured Parties in order to
secure all Obligations.  The Borrower shall not grant or cause or permit any
other person to obtain a security interest, encumbrance, lien or other claim,
direct or indirect, in the Borrower’s right, title or interest in the Escrow
Account or any Collateral.

 

(b)                                 The Borrower and the Collateral Agent hereby
irrevocably instruct the Escrow Agent to, and the Escrow Agent shall:

 

(i)                                     maintain the Escrow Accounts for the
benefit of the Collateral Agent on its own behalf and on behalf of the Secured
Parties to the extent specifically required herein;

 

(ii)                                  [reserved];

 

(iii)                               transfer the Collateral to each applicable
Agent and the Borrower, as applicable, to the extent required by Section 3(c),
Section 3(d), Section 3(e) or Section 3(f).

 

The lien and security interest provided for in this Section 6 shall
automatically terminate and cease as to, and shall not extend or apply to, and
the Collateral Agent shall have no security interest in, any funds disbursed by
the Escrow Agent to the Borrower pursuant to Section 3.  The Escrow Agent shall
not have any right to receive compensation from the Agents and shall have no
authority to obligate the Agents or to compromise or pledge its security
interest hereunder.  The Escrow Agent is hereby directed to cooperate with the
Collateral Agent in the exercise of its rights in the Collateral provided for
herein.

 

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(c)                                  The Borrower will execute and deliver or
cause to be executed and delivered, or use its reasonable best efforts to
procure, all assignments, instruments and other documents, deliver any
instruments to the Collateral Agent and take any other actions that are
necessary or desirable to perfect, continue the perfection of, or protect the
first priority of the Collateral Agent’s security interest in and to the
Collateral, to protect the Collateral against the rights, claims, or interests
of third persons or to effect the purposes of this Agreement and agree to file
or to cause to be filed one or more UCC financing statements and continuation
statements or financing change statements, as the case may be, in such
jurisdictions and filing offices and containing such description of collateral
as are reasonably necessary or advisable in order to perfect the security
interest granted herein.  The Borrower also hereby authorizes the Collateral
Agent to file any financing or continuation statements or financing change
statements, as the case may be, with respect to the Collateral without its
respective signature (to the extent permitted by applicable law).  The Borrower
shall pay all reasonable and documented out-of-pocket costs incurred in
connection with any of the foregoing, it being understood that the Collateral
Agent shall have no duty to determine whether to file or record any document or
instrument relating to Collateral.  Neither the Collateral Agent nor the Escrow
Agent shall have any duty or obligation to file or record any document or
otherwise to see to the grant or perfection of any security interest granted
hereunder.

 

(d)                                 The Borrower hereby appoints the Collateral
Agent as attorney-in-fact with full power of substitution to do any act that the
Borrower is obligated hereby to do, and the Collateral Agent may, but shall not
be obligated to, upon the occurrence and during the continuation of an Event of
Default, exercise such rights as the Borrower might exercise with respect to the
Collateral and take any action in the Borrower’s name to protect the Collateral
Agent’s security interest hereunder.

 

(e)                                  Each of the Parties and the Escrow Agent
acknowledges and agrees that: (i) each of the Securities Accounts is and will be
treated as a “securities account,” and with respect to each of the Cash
Accounts, a “deposit account,” (ii) the Escrow Property in the Securities
Accounts (other than any cash balance) will be treated as “financial assets,”
(iii) this Agreement governs the Escrow Accounts and provides rules governing
the priority among possible “entitlement orders” and instructions received by
the Escrow Agent as “securities intermediary” from the Borrower, the Collateral
Agent and any other persons entitled to give “entitlement orders” and
instructions with respect to such financial assets and (iv) the “securities
intermediary’s jurisdiction” and “bank’s jurisdiction” is the State of New York
(as each such term is defined in the UCC).  The Escrow Agent represents and
warrants that the Escrow Agent is a “Securities Intermediary” with respect to
the Securities Accounts and the “Financial Assets” credited to the Securities
Accounts or a “Bank” with respect to the Cash Accounts.  The Borrower represents
that it is validly existing as a limited liability company under the laws of
Delaware.  During the term of this Agreement, the Borrower will not change its
legal name, identity or organizational type, jurisdiction of organization or
location of the chief executive office without giving the Collateral Agent
prompt written notice and within thirty (30) days it shall have taken all
actions reasonably necessary to maintain the perfection and priority of the
security interest granted hereunder, if applicable.  Without limiting the
Borrower’s rights under Section 3, but notwithstanding any other provision of
this Agreement, the Escrow Agent shall comply with all entitlement orders and
instructions of either Agent without further consent of the Borrower.

 

(f)                                   The Borrower hereby confirms that the
arrangements established under this Section 6 constitute “control” (within the
meanings of Sections 9-104 and 9-106 of the UCC) by the Collateral Agent of the
Escrow Account and the Escrow Property credited thereto.  The Escrow Agent and
the Borrower have not entered and will not enter into any other agreement with
respect to control of the Escrow Accounts or purporting to limit or condition
the obligation of the Escrow Agent to comply with any orders or instructions of
the Collateral Agent with respect to the Escrow Accounts as set forth in this
Section 6.  In the event of any conflict with respect to control over the Escrow
Accounts between this Agreement (or any portion hereof) and any other agreement
now existing or hereafter entered into, the terms of this Agreement shall
prevail.

 

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(g)                                  The Escrow Agent hereby agrees that any
security interest in, lien on, encumbrance, claim or right of setoff against,
the Escrow Accounts or any funds therein or credited thereto that it now has or
subsequently obtains shall be subordinate to the security interest of the
Collateral Agent in the Escrow Accounts and the Escrow Property therein or
credited thereto.  The Escrow Agent agrees not to exercise any present or future
right of recoupment or set-off against the Escrow Accounts or to assert against
the Escrow Accounts any present or future security interest, banker’s lien or
any other lien or claim (including claim for penalties) that the Escrow Agent
may at any time have against or in the Escrow Accounts or any funds therein or
credited thereto.

 

7.                                      Termination.  This Agreement and the
security interest in the Escrow Accounts evidenced by this Agreement shall
terminate automatically and be of no further force or effect upon the
distribution of all Escrow Property in accordance with Section 3 hereof;
provided, however, that the obligations of the Borrower under Section 2(b) and
Section 5 (and any existing claims thereunder) shall survive termination of this
Agreement and the resignation or removal of the Escrow Agent.

 

8.                                      Security Interest Absolute.  All rights
of each Agent for its own benefit and the benefit of the Lenders and the Secured
Parties, the security interests hereunder, and all obligations of the Borrower
hereunder, shall be absolute and unconditional irrespective of:

 

(a)                                 any lack of validity or enforceability of
the Credit Agreement or any other agreement or instrument relating thereto;

 

(b)                                 any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement;

 

(c)                                  any exchange, surrender, release or
non-perfection of any Liens on any other collateral for all or any of the
Obligations; or

 

(d)                                 to the extent permitted by applicable law,
any other circumstance which might otherwise constitute a defense available to,
or a discharge of, the Borrower in respect of the Obligations or of this
Agreement.

 

9.                                      Miscellaneous.

 

(a)                                 Waiver.  Any party hereto may specifically
waive any breach of this Agreement by any other party, but no such waiver shall
be deemed to have been given unless such waiver is in writing, signed by the
waiving party and specifically designating the breach waived, nor shall any such
waiver constitute a continuing waiver of similar or other breaches.

 

(b)                                 Invalidity.  If for any reason whatsoever
any one or more of the provisions of this Agreement shall be held or deemed to
be inoperative, unenforceable or invalid in a particular case or in all cases,
such circumstances shall not have the effect of rendering any of the other
provisions of this Agreement inoperative, unenforceable or invalid, and the
inoperative, unenforceable or invalid provision shall be construed as if it were
written so as to effectuate, to the maximum extent possible, the parties’
intent.

 

(c)                                  Assignment.  This Agreement is personal to
the parties hereto, and the rights and duties of the Borrower hereunder shall
not be assignable except with the prior written consent of the other parties. 
Notwithstanding the foregoing, this Agreement shall inure to and be binding upon
the parties and their successors and permitted assigns.

 

15

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(d)                                 Benefit.  This Agreement shall be binding
upon the parties hereto and their successors and permitted assigns.  Nothing in
this Agreement, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder any benefit or any legal or
equitable right, remedy or claim under this Agreement.

 

(e)                                  Entire Agreement; Amendments.  This
Agreement and the Credit Agreement contain the entire agreement among the
parties hereto with respect to the subject matter hereof and supersede any and
all prior agreements, understandings and commitments, whether oral or written. 
Any amendment or waiver of any provision of this Agreement and any consent to
any departure by the Borrower from any provision of this Agreement shall be
effective only if made or duly given in writing by all parties hereto, and
neither the Escrow Agent nor any Agent shall be deemed, by any act, delay,
indulgence, omission or otherwise, to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the
Escrow Agent or any Agent of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Escrow Agent or
the Agents would otherwise have on any future occasion.  The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.

 

(f)                                   Notices.  Except as otherwise required by
Section 3(i) above, all notices and other communications required or permitted
to be given or made under this Agreement shall be in writing and shall be deemed
to have been duly given and received when actually received (i) on the day of
delivery; (ii) three (3) Business Days following the day sent, when sent by
United States certified mail, postage and certification fee prepaid, return
receipt requested, addressed as set forth below; (iii) when transmitted by
telecopy to the telecopy number set forth below with verbal confirmation of
receipt by the telecopy operator; or (iv) one (1) Business Day following the day
timely delivered to a next-day air courier addressed as set forth below:

 

To the Escrow Agent:

 

JPMorgan Chase Bank, as Escrow Agent

4 New York Plaza, Floor 11

New York, NY 10004

Attention: Andric Cheong / Chris Palermo

Facsimile: 877-277-1939

Email: ec.escrow@jpmorgan.com

 

To the Administrative Agent or Collateral Agent:

 

Barclays Bank PLC

745 Seventh Avenue

New York, NY 10019

Attn.: Christopher R. Lee

Facsimile: (212) 525-5115

Email: christoper.r.lee@barclays.com

 

With a copy to (which shall not constitute notice):

 

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Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Attn.: Melissa Alwang

Facsimile: (212) 751-4864

Email: melissa.alwang@lw.com

 

To the Borrower:

 

Staples Escrow, LLC

c/o Staples, Inc.

500 Staples Dr.

Framingham, MA 01702

Attn.: Treasurer

Telephone: (508) 253-4766

Email: john.buchta@staples.com

 

and

 

Attn: General Counsel

Telephone: (508) 253-0637

Email: michael.williamsgc@staples.com

 

With a copy to (which shall not constitute notice):

 

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attn.: John Sigel

Facsimile: (617) 526-5000

Email: john.sigel@wilmerhale.com

 

or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section 9(f).  Notwithstanding the
foregoing, notices and other communications to any Agent or the Escrow Agent
pursuant to clauses (ii) and (iv) of this Section 9(f) shall not be deemed duly
given and received until actually received by such Agent or the Escrow Agent, as
applicable, at its address set forth above.

 

(g)                                  Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument. 
Signatures of the parties hereto transmitted by facsimile or PDF transmission
shall be deemed to be their original signatures for all purposes.

 

(h)                                 Captions.  Captions in this Agreement are
for convenience only and shall not be considered or referred to in resolving
questions of interpretation of this Agreement.

 

(i)                                     Choice of Law; Submission to
Jurisdiction.  THE EXISTENCE, VALIDITY, CONSTRUCTION, OPERATION AND EFFECT OF
ANY AND ALL TERMS AND PROVISIONS OF THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.  THE PARTIES
TO THIS AGREEMENT HEREBY AGREE THAT JURISDICTION OVER SUCH PARTIES AND OVER THE
SUBJECT MATTER OF

 

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ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT MAY BE EXERCISED BY A
COMPETENT COURT OF THE CITY AND STATE OF NEW YORK, OR BY A COMPETENT UNITED
STATES COURT, SITTING IN NEW YORK CITY.  THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE ESCROW AGENT HEREBY SUBMIT TO THE PERSONAL JURISDICTION OF SUCH COURTS. 
FOR PURPOSES OF THE UCC, THE ESCROW AGENT’S JURISDICTION (WITHIN THE MEANING OF
SECTIONS 8-110, 9-304 AND 9-305 OF THE UCC) SHALL BE THE STATE OF NEW YORK. 
EACH OF THE PARTIES HERETO WAIVES THE RIGHT TO A TRIAL BY JURY AND TO ASSERT
COUNTERCLAIMS OTHER THAN MANDATORY COUNTERCLAIMS IN ANY ACTION OR PROCEEDING
RELATING TO OR ARISING FROM, DIRECTLY OR INDIRECTLY, THIS AGREEMENT.  THE
BORROWER HEREBY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF
PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
IT AT THE ADDRESS LAST SPECIFIED FOR NOTICES HEREUNDER, AND SUCH SERVICE SHALL
BE DEEMED COMPLETED TEN (10) CALENDAR DAYS AFTER THE SAME IS SO MAILED.  FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE, NEW YORK SHALL BE THE ESCROW AGENT’S
JURISDICTION.

 

(j)                                    Representations and Warranties of the
Borrower.  The Borrower hereby represents and warrants that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms
(except as the enforcement thereof may be limited by bankruptcy, reorganization,
insolvency (including without limitation, all laws relating to fraudulent
transfers), moratorium or other laws relating to or affecting creditors’ rights
and remedies generally and except as the enforcement thereof is subject to
equitable principles regardless of whether enforcement is considered in a
proceeding at law or in equity).  The execution, delivery and performance of
this Agreement by the Borrower does not violate any material applicable law or
regulation to which the Borrower is subject and does not require the consent of
any governmental or other regulatory body to which the Borrower is subject,
except for such consents and approvals as have been obtained and are in full
force and effect.  Other than the interests of the Escrow Agent and the
Collateral Agent, the Borrower is, with respect to the Collateral it is
delivering pursuant to this Agreement, the sole beneficial owner of such
Collateral, free and clear of any Lien or claims of any Person (except for the
security interest granted under this Agreement) and is the only owner of the
Escrow Accounts and Escrow Property held or credited therein.  The
person(s) executing this Agreement on behalf of the Borrower and certifying
Authorized Representatives in the applicable Schedule I have been duly and
properly authorized to do so, and each Authorized Representative of the Borrower
has been duly and properly authorized to take the actions specified for such
person in the applicable Schedule I.

 

(k)                                 Representations and Warranties of Escrow
Agent and each Agent.  The Escrow Agent hereby represents and warrants that this
Agreement has been duly authorized, executed and delivered on its behalf and
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms.  Each Agent hereby represents and warrants that the
person(s) executing this Agreement and certifying Authorized Representatives in
the applicable Schedule I is duly authorized to do so, and that this Agreement
has been duly executed and delivered on its behalf and each Authorized
Representative of each Agent has been duly and properly authorized to take the
actions specified for such person in the applicable Schedule I.

 

(l)                                     No Adverse Interpretation of Other
Agreements.  This Agreement may not be used to interpret another pledge,
security or debt agreement of the Borrower or any subsidiary thereof.  No such
pledge, security or debt agreement may be used to interpret this Agreement.

 

(m)                             Interpretation of Agreement.  All terms not
defined herein or in the Credit Agreement shall have the meaning set forth in
the UCC, except where the context otherwise requires.  To

 

18

--------------------------------------------------------------------------------

 

the extent a term or provision of this Agreement relating to any Agent or the
Borrower conflicts with the Credit Agreement, the Credit Agreement shall control
with respect to the subject matter of such term or provision.  Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.

 

(n)                                 Survival of Provisions.  All
representations, warranties and covenants of the Borrower contained herein shall
survive the execution and delivery of this Agreement, and shall terminate only
upon the termination of this Agreement.

 

(o)                                 Compliance with Orders.  Notwithstanding the
security interest granted to the Collateral Agent herein or any other terms set
forth in this Agreement, in the event that a legal garnishment, attachment, levy
restraining notice or court order is served with respect to any of the Escrow
Property, or the delivery thereof shall be stayed or enjoined by an order of a
court, the Escrow Agent is hereby expressly authorized, in its sole discretion
(but following reasonable prior notice to the Collateral Agent and the Borrower
to the extent permitted by applicable law), to obey and comply with all such
orders so entered or issued, which it is advised by legal counsel of its own
choosing is binding upon it, whether with or without jurisdiction, and in the
event that the Escrow Agent obeys or complies with any such order it shall not
be liable to any of the Parties hereto or to any other person by reason of such
compliance notwithstanding such order be subsequently reversed, modified,
annulled, set aside or vacated.

 

(p)                                 Information.  The Parties authorize the
Escrow Agent to disclose information with respect to this Agreement and the
account(s) established hereunder, the Parties, or any transaction hereunder if
such disclosure is: (i) necessary or desirable, in the Escrow Agent’s opinion,
for the purpose of allowing the Escrow Agent to perform its duties and to
exercise its powers and rights hereunder; (ii) to a proposed assignee of the
rights of the Escrow Agent; (iii) to a branch, affiliate, subsidiary, employee
or agent of the Escrow Agent or to their auditors, regulators or legal advisers
or to any competent court; (iv) to the auditors of any of the Parties; or
(v) permitted or required by applicable law, regardless of whether the
disclosure is made in the country in which each Party resides, in which the
Escrow Account is maintained, or in which the transaction is conducted.  The
Parties agree that such disclosures by the Escrow Agent and its affiliates may
be transmitted across national boundaries and through networks, including those
owned by third parties.

 

(q)                                       Miscellaneous.  To the extent that in
any jurisdiction any party hereto may now or hereafter be entitled to claim for
itself or its assets, immunity from suit, execution, attachment (before or after
judgment) or other legal process, such party shall not claim, and hereby
irrevocably waives, such immunity.  The Escrow Agent and the Parties further
hereby waive any right to a trial by jury with respect to any lawsuit or
judicial proceeding arising or relating to this Agreement.  No party to this
Agreement is liable to any other party for losses due to, or if it is unable to
perform its obligations under the terms of this Agreement because of, acts of
God, fire, war, terrorism, floods, strikes, electrical outages, equipment or
transmission failure, or other causes reasonably beyond its control.  If any
provision of this Agreement is determined to be prohibited or unenforceable by
reason of any applicable law of a jurisdiction, then such provision shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in such jurisdiction shall not invalidate
or render unenforceable such provisions in any other jurisdiction.

 

[Remainder of Page Intentionally Left Blank]

 

19

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the day first above written.

 

 

STAPLES ESCROW, LLC,

 

 

as Borrower

 

 

 

 

 

 

 

By:

/s/ Christine T. Komola

 

 

Name:

Christine T. Komola

 

 

Title:

Executive Vice President and

 

 

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

 

as Escrow Agent

 

 

 

 

 

 

 

By:

/s/ Christopher Palermo

 

 

Name:

Christopher Palermo

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

BARCLAYS BANK PLC,

 

 

as Administrative Agent and Collateral Agent

 

 

 

 

 

 

 

By:

/s/ Christopher R. Lee

 

 

Name:

Christopher R. Lee

 

 

Title:

Vice President

 

S-1

--------------------------------------------------------------------------------

 

SCHEDULE I-1

 

DESIGNATION OF AUTHORIZED REPRESENTATIVES

 

OF BORROWER

 

The following persons are entitled to give notices, instructions, confirm
instructions and other communications to the Escrow Agent on behalf of the
Borrower:

 

Name and Title

 

Specimen Signature

 

 

 

Christine T. Komola

 

 

Title: EVP & Chief Financial Officer

 

/s/ Christine T. Komola

 

 

 

Phone Number: (508) 253-7409

 

 

 

 

 

John Buchta

 

 

Title: Treasurer

 

/s/ John Buchta

 

 

 

Phone Number: (508) 253-4766

 

 

 

 

 

Michael T. Williams

 

 

Title: Secretary

 

/s/ Michael T. Williams

 

 

 

Phone Number: (508) 253-0637

 

 

 

 

 

Cristina Gonzalez

 

 

Title: VP & Assistant Secretary

 

/s/ Cristina Gonzalez

 

 

 

Phone Number: (508) 253-1845

 

 

 

 

 

Geoffrey Kupferschmid

 

 

Title: Assistant Treasurer

 

/s/ Geoffrey Kupferschmid

 

 

 

Phone Number: (508)-253-2286

 

 

 

--------------------------------------------------------------------------------

*        This Schedule I-1 may be amended from time to time by written notice
from an Authorized Representative of the Borrower to the Escrow Agent and the
Agents.

 

FOR YOUR SECURITY, PLEASE CROSS OUT ALL UNUSED SIGNATURE LINES ON THIS SCHEDULE
I-1

 

All instructions, including but not limited to funds transfer instructions,
whether transmitted by facsimile or set forth in a PDF attached to an email,
must include the signature of the Authorized Representative authorizing said
funds transfer on behalf of such Party.

 

I-1-1

--------------------------------------------------------------------------------

 

SCHEDULE I-2

 

DESIGNATION OF AUTHORIZED REPRESENTATIVES

 

OF AGENTS

 

The following persons are entitled to give notices, instructions, confirm
instructions and other communications to the Escrow Agent on behalf of the
Administrative Agent or the Collateral Agent:

 

Name and Title

 

Specimen Signature

 

 

 

Christopher Lee

 

 

Vice President

 

/s/ Christopher Lee

Tel: 212-526-0732

 

 

 

 

 

Mathew Cybul

 

 

Assistant Vice President

 

/s/ Mathew Cybul

Tel: 212-526-5851

 

 

 

 

 

Ronnie Glenn

 

 

Vice President

 

/s/ Ronnie Glenn

Tel: 212-526-3987

 

 

 

 

 

May Huang

 

 

Assistant Vice President

 

/s/ May Huang

Tel: 212-526-0787

 

 

 

 

 

Daniel Hunter

 

 

Assistant Vice President

 

/s/ Daniel Hunter

Tel: 212-320-2817

 

 

 

 

 

Vanessa Kurbatskiy

 

 

Vice President

 

/s/ Vanessa Kurbatskiy

Tel: 212-526-2799

 

 

 

 

 

Marguerite Sutton

 

 

Vice President

 

/s/ Marguerite Sutton

Tel: 212-526-7648

 

 

 

 

 

Luke Syme

 

/s/ Luke Syme

Vice President

 

 

Tel: 212-526-3713

 

 

 

--------------------------------------------------------------------------------

*       This Schedule I-2 may be amended from time to time by written notice
from an Authorized Representative of the Agents to the Escrow Agent.

 

I-2-1

--------------------------------------------------------------------------------

 

FOR YOUR SECURITY, PLEASE CROSS OUT ALL UNUSED SIGNATURE LINES ON THIS SCHEDULE
I-2

 

All instructions, including but not limited to funds transfer instructions,
whether transmitted by facsimile or set forth in a PDF attached to an email,
must include the signature of the Authorized Representative authorizing said
funds transfer on behalf of such Party.

 

I-2-2

--------------------------------------------------------------------------------

 

SCHEDULE II

 

SCHEDULE OF FEES

 

[g33651kk07i001.jpg]

 

Schedule of Fees for Escrow Agent Services

 

Based upon our current understanding of your proposed transaction, our fee
proposal is as follows:

 

Account Acceptance Fee

$ waived

 

Encompassing review, negotiation and execution of governing documentation,
opening of the account, and completion of all due diligence documentation. 
Payable upon closing.

 

Annual Administration Fee

$ waived

 

The Administration Fee covers our usual and customary ministerial duties,
including record keeping, distributions, document compliance and such other
duties and responsibilities expressly set forth in the governing documents for
each transaction.  Payable upon closing and annually in advance thereafter,
without pro-ration for partial years.

 

Extraordinary Services and Out-of Pocket Expenses

 

Any additional services beyond our standard services as specified above, and all
reasonable out-of-pocket expenses including attorney’s or accountant’s fees and
expenses will be considered extraordinary services for which related costs,
transaction charges, and additional fees will be billed at the Escrow Agent’s
then standard rate.  Disbursements, receipts, investments or tax reporting
exceeding 25 items per year may be treated as extraordinary services thereby
incurring additional charges. The Escrow Agent may impose, charge, pass-through
and modify fees and/or charges for any account established and services provided
by the Escrow Agent, including but not limited to, transaction, maintenance,
balance-deficiency, and service fees, agency or trade execution fees, and other
charges, including those levied by any governmental authority.

 

Fee Disclosure & Assumptions: Please note that the fees quoted are based on a
review of the transaction documents provided and an internal due diligence
review. The Escrow Agent reserves the right to revise, modify, change and
supplement the fees quoted herein if the assumptions underlying the activity in
the account, level of balances, market volatility or conditions or other factors
change from those used to set our fees.  Payment of the invoice is due upon
receipt

 

The escrow deposit shall be continuously invested in a interest bearing demand
deposit accountInterest bearing demand deposit account have rates of interest or
compensation that may vary from time to time as determined by the Escrow Agent. 
Should the Parties direct as an Alternative Investment a JPMorgan Chase Bank
JPMorgan Money Market Mutual Fund selected by Parties], based upon the
applicable Party’s or Parties’ independent review of previously delivered
prospectuses and its/their acknowledgment of the additional disclosures set
forth below and in the Investment Sweep Service Disclosure attached hereto as
Annex IV.

 

Disclosures and Agreements

 

Representations Relating to Section 15B of the Securities Exchange Act of 1934
(Rule 15Ba1-1 et seq.) (the “Municipal Advisor Rule).  Each Party represents and
warrants to the Escrow Agent that for purposes of the Municipal Advisor Rules, 
none of the funds (if any) currently invested, or that will be invested in the
future, in money market funds, commercial paper or treasury bills under this
Agreement constitute or contain (i) proceeds of municipal securities (including
investment income therefrom and monies pledged or otherwise legally dedicated to
serve as collateral or a source or repayment for such securities) or
(ii) municipal escrow investments (as each such term is defined in the Municipal
Advisor Rule).  Each Party also represents and warrants to the Escrow Agent that
the person providing this certification has access to the appropriate
information or has direct knowledge of the source of the funds to be invested to
enable the forgoing

 

II-1

--------------------------------------------------------------------------------

 

representation to be made.  Further, each Party acknowledges that the Escrow
Agent will rely on this representation until notified in writing otherwise.

 

Patriot Act Disclosure.  Section 326 of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (“USA PATRIOT Act”) requires Escrow Agent to implement reasonable
procedures to verify the identity of any person that opens a new account with
it.  Accordingly, you acknowledge that Section 326 of the USA PATRIOT Act and
Escrow Agent’s identity verification procedures require Escrow Agent to obtain
information which may be used to confirm your identity including without
limitation name, address and organizational documents (“identifying
information”). You agree to provide Escrow Agent with and consent to Escrow
Agent obtaining from third parties any such identifying information required as
a condition of opening an account with or using any service provided by the
Escrow Agent.

 

OFAC Disclosure.  Escrow Agent is required to act in accordance with the laws
and regulations of various jurisdictions relating to the prevention of money
laundering and the implementation of sanctions, including but not limited to
regulations issued by the U.S. Office of Foreign Assets Control.  Escrow Agent
is not obligated to execute payment orders or effect any other transaction where
the beneficiary or other payee is a person or entity with whom the Escrow Agent
is prohibited from doing business by any law or regulation applicable to Escrow
Agent, or in any case where compliance would, in Escrow Agent’s opinion,
conflict with applicable law or banking practice or its own policies and
procedures.  Where Escrow Agent does not execute a payment order or effect a
transaction for such reasons, Escrow Agent may take any action required by any
law or regulation applicable to Escrow Agent including, without limitation,
freezing or blocking funds.  Transaction screening may result in delays in
delays in the posting of transactions.

 

Abandoned Property.  Escrow Agent is required to act in accordance with the laws
and regulations of various states relating to abandoned property and,
accordingly, shall be entitled to remit dormant funds to any state as abandoned
property in accordance with such laws and regulations.

 

THE FOLLOWING DISCLOSURES ARE REQUIRED TO BE PROVIDED UNDER APPLICABLE U.S.
REGULATIONS, INCLUDING, BUT NOT LIMITED TO, FEDERAL RESERVE REGULATION D.  WHERE
SPECIFIC INVESTMENTS ARE NOTED BELOW, THE DISCLOSURES APPLY ONLY TO THOSE
INVESTMENTS AND NOT TO ANY OTHER INVESTMENT.

 

Demand Deposit Account Disclosure.  Escrow Agent is authorized, for regulatory
reporting and internal accounting purposes, to divide an escrow demand deposit
account maintained in the U.S. in which the Fund is held into a non-interest
bearing demand deposit internal account and a non-interest bearing savings
internal account, and to transfer funds on a daily basis between these internal
accounts on Escrow Agent’s general ledger in accordance with U.S. law at no cost
to the Parties.  Escrow Agent will record the internal accounts and any
transfers between them on Escrow Agent’s books and records only.  The internal
accounts and any transfers between them will not affect the Fund, any investment
or disposition of the Fund, use of the escrow demand deposit account or any
other activities under this Agreement, except as described herein. Escrow Agent
will establish a target balance for the demand deposit internal account, which
may change at any time.  To the extent funds in the demand deposit internal
account exceed the target balance, the excess will be transferred to the savings
internal account, unless the maximum number of transfers from the savings
internal account for that calendar month or statement cycle has already
occurred.  If withdrawals from the demand deposit internal account exceeds the
available balance in the demand deposit internal account, funds from the savings
internal account will be transferred to the demand deposit internal account up
to the entire balance of available funds in the savings internal account to
cover the shortfall and to replenish any target balance that Escrow Agent has
established for the demand deposit internal account.  If a sixth transfer is
needed during a calendar month or statement cycle, it will be for the entire
balance in the savings internal account, and such funds will remain in the
demand deposit internal account for the remainder of the calendar month or
statement cycle.

 

MMDA Disclosure and Agreement.  If MMDA is the investment for the escrow deposit
as set forth above or anytime in the future, you acknowledge and agree that U.S.
law limits the number of pre-authorized or automatic transfers or withdrawals or
telephonic/electronic instructions that can be made from an MMDA to a total of
six (6) per calendar month or statement cycle or similar period.  Escrow Agent
is required by U.S. law to reserve the right to require at least seven (7) days
notice prior to a withdrawal from a money market deposit account.

 

Unlawful Internet Gambling.  The use of any account to conduct transactions
(including, without limitation, the acceptance or receipt of funds through an
electronic funds transfer, or by check, draft or similar instrument, or the
proceeds of any of the foregoing) that are related, directly or indirectly, to
unlawful Internet gambling is strictly prohibited.

 

II-2

--------------------------------------------------------------------------------

 

ANNEX I

 

FORM OF BORROWER RELEASE REQUEST

 

This certificate is being delivered to the Agents and the Escrow Agent pursuant
to Section 3(c) of the Escrow Agreement dated as of February 2, 2016 (the
“Escrow Agreement”), among STAPLES ESCROW, LLC, a Delaware limited liability
company (the “Borrower”), JPMORGAN CHASE BANK, N.A., as escrow agent (the
“Escrow Agent”) and BARCLAYS BANK PLC, as Collateral Agent (the “Collateral
Agent”) and Administrative Agent (the “Administrative Agent” and, together with
the Collateral Agent, the “Agents”).  Capitalized terms used but not defined
herein have the respective meanings specified in the Escrow Agreement or in the
Credit Agreement (as defined in the Escrow Agreement).  The Borrower hereby
certifies through the undersigned officers that:

 

(a)           The Acquisition will be consummated, substantially concurrently
with the release of the Escrow Property, in accordance with the Acquisition
Agreement without giving effect to any amendments, modifications, supplements,
consents or waivers by the Staples (other than such amendments, modifications,
supplements, consents or waivers by Staples of any term thereof that are not
materially adverse to any interest of the Lenders) unless consented to by the
Arrangers (it being understood that (i) any amendment, modification, supplement,
consent or waiver by Staples to the definition of “Material Adverse Effect” or
the “Xerox” provisions in Sections 8.5(b), 8.6, 8.11, the last sentence of 8.12
and the last sentence of 8.14 of the Acquisition Agreement shall be deemed to be
materially adverse and (ii) any amendment, modification, supplement, consent or
waiver by the Company that results in a decrease of up to 15% of the Cash
Consideration (as defined in the Acquisition Agreement) shall not be deemed to
be materially adverse so long as the Initial Loans are prepaid (upon release
from the Escrow Account on the Acquisition Effective Date) in an amount equal to
the amount of any such decrease).

 

(b)           The Refinancing Transactions will be consummated substantially
concurrently with the release of the Escrow Property.

 

(c)           (A) Staples has executed and delivered an assumption agreement
substantially in the form of Exhibit N to the Credit Agreement, (B) each
Restricted Subsidiary of Staples (other than any Immaterial Subsidiary or any
Excluded Foreign Subsidiary) has executed and delivered the Guarantee and
Collateral Agreement (or an assumption agreement to the Guarantee and Collateral
Agreement substantially in the form of Annex 1 to the Guarantee and Collateral
Agreement, as applicable), (C) Staples shall have delivered Schedule 3.15 to the
Credit Agreement (completed on a pro forma basis giving effect to the
Transactions), (D) each of Staples and the Target shall have executed and
delivered a Perfection Certificate dated as of the Acquisition Effective Date
and (E) with respect to the Collateral:

 

(i)             the Collateral Agent has received, subject to the terms of the
ABL Intercreditor Agreement, and unless otherwise agreed by the Collateral
Agent, (I) all certificates representing Equity Interests pledged under the
Guarantee and Collateral Agreement to the extent certificated, accompanied by
undated instruments of transfer or stock powers endorsed in blank, (II) the
Subordinated Intercompany Note executed by the parties thereto accompanied by an
undated instrument of transfer duly executed in blank and satisfactory to the
Collateral Agent, (III) an Acknowledgment and Consent, substantially in the form
of Exhibit D to the Guarantee and Collateral Agreement, duly executed by any
issuer of Equity Interests pledged pursuant to the Guarantee and Collateral
Agreement that is not itself a party to the Guarantee and Collateral Agreement
and (IV) each promissory note pledged under the Guarantee and Collateral

 

A-I-1

--------------------------------------------------------------------------------

 

Agreement, duly executed (without recourse), in blank or accompanied by an
undated instrument of transfer duly executed in blank and satisfactory to the
Collateral Agent; and

 

(ii)          all UCC or other applicable personal property and financing
statements reasonably requested by the Collateral Agent to be filed, registered
or recorded to perfect the Liens intended to be created by any Collateral
Document have been delivered to the Collateral Agent for filing, registration or
recording.

 

(d)           The Administrative Agent has received a certificate of the
secretary or assistant secretary or other Authorized Officer of each Loan Party
dated the Acquisition Effective Date, substantially in the form delivered by the
Escrow Borrower to the Administrative Agent on the Closing Date, and with
appropriate resolutions relating to the applicable Transactions.

 

(e)           The Administrative Agent has received the legal opinions of Wilmer
Cutler Pickering Hale and Dorr LLP, special counsel to the Loan Parties, and
other firms of counsel to the Loan Parties that are acceptable to the
Administrative Agent, each (a) dated as of the Acquisition Effective Date,
(b) addressed to the Administrative Agent, the Collateral Agent and the Lenders
and (c) covering such matters relating to the Loan Documents and the
Transactions as the Administrative Agent has reasonably required.

 

(f)            (A) Since September 27, 2014 through the date of the Acquisition
Agreement, there have not been any Events that would, individually or in the
aggregate, reasonably be expected to have a Closing Date Material Adverse
Effect; provided that the condition in this clause (A) is qualified in its
entirety by reference to (1) the information disclosed by the Target in any
Company SEC Document (as defined in the Acquisition Agreement as in effect on
February 4, 2015) filed under Sections 13(a), 14(a) or 15(d) of the Exchange Act
(as defined in the Acquisition Agreement as in effect on February 4, 2015)
during the period from December 31, 2013 through the Business Day (as defined in
the Acquisition Agreement as in effect on February 4, 2015) prior to the date of
the Acquisition Agreement (other than in any risk factor or other cautionary or
forward-looking disclosure contained in such Company SEC Document) and (2) the
exceptions set forth in the Company Disclosure Schedule (as defined in the
Acquisition Agreement as in effect on February 4, 2015); it being understood and
agreed that each exception set forth in the Company Disclosure Schedule shall
qualify such condition to the extent such exception is specifically identified
as being disclosed under Section 3.6 of the Acquisition Agreement or such
exception is disclosed with reference to any other section of the Acquisition
Agreement and it is reasonably apparent on the face of such disclosure that it
relates to such Section 3.6, and (B) since the date of the Acquisition
Agreement, there have not occurred any Events (other than Excluded Company
Events (as defined in the Acquisition Agreement as in effect on February 4,
2015)) that, individually or in the aggregate, have had or would reasonably be
expected to have a Closing Date Material Adverse Effect.

 

(g)           Each of the Specified Representations is true and correct in all
material respects on and as of the Acquisition Effective Date with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties are true and correct in all material
respects as of such earlier date); provided that any representation and warranty
qualified by “materiality”, “Material Adverse Effect” or similar language is
true and correct (after giving effect to any qualification therein) in all
respects.  Each of the Acquisition Agreement Representations is true and correct
in all respects on the Acquisition Effective Date, expect to the extent any such
Acquisition Agreement Representation is stated to relate solely to an earlier
date, in which case

 

A-I-2

--------------------------------------------------------------------------------

 

such Acquisition Agreement Representation is true and correct as of such earlier
date specified in the Acquisition Agreement.

 

(h)           The Lenders, the Arrangers and the Agents have received or,
substantially concurrently with the release of the Escrow Property, will
receive, all fees and other amounts due and payable on or prior to the
Acquisition Effective Date, including, to the extent invoiced at least two
Business Days prior to the Acquisition Effective Date, reimbursement or payment
of all out-of-pocket expenses (including reasonable fees, disbursements and
other charges of counsel) required to be reimbursed or paid under any Loan
Document or any other agreement.

 

(i)            The Escrow Property will be applied in the manner described in
Section 5.08 of the Credit Agreement.

 

The Borrower hereby instructs the Escrow Agent to use the following wire
transfer instructions in distributing cash to the Borrower pursuant to
Section 3(c) of the Escrow Agreement:

 

Bank:

 

ABA No.:

 

Account Name:

 

Account No.:

 

F/F/C:

 

Attention:

 

 

Escrow Property amount to be released to Borrower:$           

 

Escrow Property amount to be released to Administrative Agent: $           

 

IN WITNESS WHEREOF, the Borrower, through the undersigned officer, has signed
this Certificate this [     ] day of [           ], 2016.

 

 

STAPLES ESCROW, LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Confirmed Receipt:

 

Barclays Bank PLC

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

[each an Authorized Representative]

 

A-I-3

--------------------------------------------------------------------------------

 

ANNEX II

 

FORM OF COLLATERAL AGENT NOTICE

 

with regards to

 

STAPLES ESCROW, LLC

 

This certificate is being delivered to the Borrower and the Escrow Agent
pursuant to Section 3(d) of the Escrow Agreement dated as of February 2, 2016
(the “Escrow Agreement”), among STAPLES ESCROW, LLC, a Delaware limited
liability company (the “Borrower”), JPMORGAN CHASE BANK, N.A., as escrow agent
(the “Escrow Agent”) and BARCLAYS BANK PLC, as Collateral Agent (the “Collateral
Agent”) and Administrative Agent.  Capitalized terms used but not defined herein
have the respective meanings specified in the Escrow Agreement.  The Collateral
Agent hereby confirms through the undersigned officer that, as of the
Acquisition Outside Date, it has not received a Borrower Release Request
certifying that the conditions to release of Escrow Property set forth in
Section 3(b) of the Escrow Agreement have been satisfied.  Therefore, the
Collateral Agent hereby provides this written notice and instruction to the
Escrow Agent and the Borrower to liquidate all investments of Escrow Property
currently held by it and to release all of the Escrow Property as set forth in
Section 3(d) of the Escrow Agreement.

 

Escrow Property amount to be released to Borrower:$           

 

Escrow Property amount to be released to Administrative Agent: $           

 

IN WITNESS WHEREOF, the Collateral Agent, through the undersigned officer, has
signed this Certificate this [     ] day of [          ], 2016.

 

 

BARCLAYS BANK PLC,

 

 

 

 

 

as Collateral Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

A-II-1

--------------------------------------------------------------------------------

 

ANNEX III

 

FORM OF ADDITIONAL INTEREST DEPOSIT NOTICE

 

with regards to

 

STAPLES ESCROW, LLC

 

This certificate is being delivered to the Borrower and the Escrow Agent with
respect to an “Additional Interest Deposit” as defined in the Escrow Agreement
dated as of February 2, 2016 (the “Escrow Agreement”), among STAPLES ESCROW,
LLC, a Delaware limited liability company (the “Borrower”), JPMORGAN CHASE BANK,
N.A., as escrow agent (the “Escrow Agent”) and BARCLAYS BANK PLC, as Collateral
Agent and Administrative Agent (the “Administrative Agent”).  Capitalized terms
used but not defined herein have the respective meanings specified in the Escrow
Agreement.  The Administrative Agent hereby confirms through the undersigned
officer that the Additional Interest Deposit for the Interest Period commencing
on [       ] and ending on [       ] (the subsequent “Interest Payment Date”)
shall be $[         ].

 

IN WITNESS WHEREOF, the Administrative Agent, through the undersigned officer,
has signed this Certificate this [    ] day of [          ], 2016.

 

 

BARCLAYS BANK PLC,

 

 

 

 

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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ANNEX IV (OPTIONAL) [Only for Mutual Funds]

Investment Sweep Service Disclosure — Escrow

 

Customer Name:

Escrow Account Number(s):

Investment Sweep [Fund Complex Fund None, Share Class]:

Escrow Agreement Date:

Type of Sweep (End of Day/Intraday):

 

This disclosure confirms that JPMorgan Chase Bank, N.A. (“JPMorgan”) is
authorized and directed to “sweep” on an ongoing basis funds in the
above-referenced accounts, until JPMorgan is advised in writing to the contrary,
to the above-referenced [money market fund], in accordance with the following
terms:

 

1.             In connection with receiving a service for the sweeping of
balances to a JPMorgan money market fund (“Sweep Service”) the entity or person
receiving the Sweep Service (the “Customer”) acknowledges that it has received
and reviewed the prospectus (“Prospectus”) and the Statement of Additional
Information (“SAI”) for each money market fund (each a “Fund”, collectively the
“Funds”) with respect to the class of shares the Customer is purchasing in the
Fund. The Prospectus sets forth fees and expenses applicable to the Customer’s
purchase of shares of the Fund (“Shares”). The Customer acknowledges that it is
relying solely on the representations contained in the relevant Prospectus and
SAI and that JPMorgan has not provided any investment, tax or accounting advice,
nor has it made any recommendation with respect to the Customer’s purchase of
Shares.

 

2.             The Customer has directed JPMorgan as its agent to invest in the
Fund(s) identified above. Pursuant to the Customer’s direction, JPMorgan as
agent for the Customer, will invest balances of the Customer in a particular
share class based on one or more of a number of criteria, including, but not
limited to: amount of balances invested across the Customer relationship,
operational complexity of the service provided and share holder servicing
provided in connection with the Sweep Service, and convenience and expected
duration of the Sweep Service.

 

3.             JPMorgan may receive compensation from the Fund, the Investment
Manager or Investment Advisor for the Fund and/or the distributor of the Fund
for providing services as described in the Prospectus and/or the SAI, which may
include, but not be limited to, shareholder servicing and 12b-1 fees as
described in the Prospectus and SAI; and fees paid by the Investment Advisor /
Investment Manager which range from 0 to 6 basis points depending on the share
class, calculated as a percentage of its Customer’s assets invested in the Fund
and such compensation may vary for different share classes.

 

4.             The compensation discussed in Section 3 above is distinct from
the express fees JPMorgan charges the Customer for trust, agency, escrow,
custody or cash management services (either related or unrelated to the Sweep
Service). Such compensation is also distinct from the express fees JPMorgan may
receive from the Fund for acting as custodian and securities lending agent to
the Fund and from the express fees JPMorgan and/or its affiliates may receive
for acting as the Fund’s investment adviser, distributor, transfer agent, fund
accountant or providing other services to the Fund as more fully described in
the Prospectus and / or SAI.

 

5.             INVESTMENTS IN THE FUNDS ARE NOT BANK DEPOSITS, OR GUARANTEED OR
ENDORSED BY JPMORGAN. FUND SHARES ARE NOT ISSUED OR GUARANTEED BY THE FDIC, THE
UNITED STATES GOVERNMENT OR ANY STATE GOVERNMENT, OR ANY AGENCY OR UNIT THEREOF.
THERE IS NO ASSURANCE THAT ANY MONEY MARKET FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE. INVESTMENTS IN MONEY MARKET FUNDS
INVOLVE RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE CUSTOMER HAS MADE ITS
OWN INDEPENDENT INVESTMENT ASSESSMENT AS TO THE SUITABILITY AND APPROPRIATENESS
OF THE SWEEP SERVICE AND THE INVESTMENTS IN THE FUND FOR ITS OWN NEEDS AND
REQUIREMENTS, AND ASSUMES ALL RISK OF LOSS RESULTING FROM ANY DECISION IT MAKES
TO PURCHASE, EXCHANGE OR SELL SHARES OF THE FUND, OR TO AUTHORIZE THE SAME ON
ITS BEHALF.

 

6.             Required FDIC Disclosures.

(a)   For Intraday Sweeps to JPMorgan Funds:  In the event of a failure of
JPMorgan, funds swept to a Fund, as reflected on JPMorgan’s end-of-day ledger
balance, would not be considered deposits by the Federal Deposit Insurance
Corporation (the “FDIC”).  However, the FDIC would treat the beneficial owner’s
swept funds in one of two

 

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ways: (a) if the failed JPMorgan’s assets were transferred to an acquiring
institution, the swept funds would be returned back into the beneficial owner’s
deposit account on the business day following the failure of JPMorgan; or (b) if
the failed JPMorgan will be dissolved, the beneficial owner would receive a
check or other payment from the FDIC to reacquire the beneficial owner’s
allotted interest in the Fund in accordance with the FDIC’s normal procedures.

 

(b)   For Intraday Sweeps to Funds other than JPMorgan Funds:  In the event of a
failure of JPMorgan, funds swept to a Fund (whether the sweep actually occurs
will depend on the transaction cut-off time used by the FDIC), as reflected on
JPMorgan’s end-of-day ledger balance, would not be considered deposits by the
FDIC.  However, the FDIC would treat the beneficial owner’s swept funds in one
of two ways: (a) if the failed JPMorgan’s assets were transferred to an
acquiring institution, the swept funds would be returned back into the
beneficial owner’s deposit account on the business day following the failure of
JPMorgan; or (b) if the failed JPMorgan will be dissolved, the beneficial owner
would receive a check or other payment from the FDIC to reacquire the beneficial
owner’s allotted interest in the money market fund in accordance with the FDIC’s
normal procedures. If the funds are not swept, such funds would remain in the
deposit account, be treated as deposits, and be insured under the applicable
insurance rules and limits of the FDIC.

 

(c)   For End of Day Sweeps:  In the event of a failure of JPMorgan, funds to be
swept from the beneficial owner’s deposit account to a Fund on the day of
failure of JPMorgan will be treated, on JPMorgan’s end-of-day ledger balance, as
if they had not been swept, will be considered deposits by the FDIC and will be
insured by the FDIC under its applicable insurance rules and limits.

 

ACKNOWLEDGED AND AGREED:

 

 

 

Customer:

 

 

 

 

 

By:

 

 

Its:

 

 

 

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