Document:

Exhibit
10.1

 

EXECUTION
COPY

 

CREDIT AGREEMENT

 

dated as of April 1, 2008

 

STAPLES, INC.

 

THE LENDERS NAMED HEREIN,

 

LEHMAN COMMERCIAL PAPER INC.,

as ADMINISTRATIVE AGENT,

 

BANK OF AMERICA, N.A.

and

HSBC BANK USA, NATIONAL ASSOCIATION,

as Co-Syndication Agents,

 

with

 

LEHMAN BROTHERS INC.

as Lead Arranger and Bookrunner

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  §1.

  	
  DEFINITIONS AND RULES OF
  INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  §1.1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.2.

  	
  Rules of Interpretation

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  §2.

  	
  THE CREDIT FACILITY

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.1.

  	
  Commitment to Lend Loans

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.2.

  	
  Requests for Loans

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.3.

  	
  Funds for Loans

  	
  21

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.3.1.

  	
  Funding Procedures

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.3.2.

  	
  Advances by Administrative Agent

  	
  21

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.4.

  	
  Reduction of Total Commitment

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.5.

  	
  Maturity of Loans

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.6.

  	
  Mandatory Commitment Reductions; Mandatory
  Prepayments of Loans

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.7.

  	
  Optional Repayments of Loans

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.8.

  	
  Interest on Loans

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.9.

  	
  Conversion Options

  	
  25

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.9.1.

  	
  Conversion to Different Type of Loan

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.9.2.

  	
  Continuation of Type of Loan

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.9.3.

  	
  Eurocurrency Rate Loans

  	
  25

  
	
   

  	
   

  	
   

  
	
   

  	
  §2.10.

  	
  Evidence of Debt

  	
  26

  
	
   

  	
   

  	
   

  
	
  §3.

  	
  CERTAIN GENERAL PROVISIONS; FEES

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.1.

  	
  Administrative Agent Fees

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.2.

  	
  Commitment Fee

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.3.

  	
  Funds for Payments

  	
  26

  
	
   

  	
   

  	
   

  
	
   

  	
  §3.3.1.

  	
  Payments to Administrative Agent

  	
  26

  
	
   

  	
   

  	
   

  
	
  §3.3.2.

  	
  No Offset, Etc

  	
  27

  
	
   

  	
   

  	
   

  
	
  §3.3.3.

  	
  Withholding

  	
  27

  
	
   

  	
   

  	
   

  
	
   

  	
  §3.4.

  	
  Computations

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.5.

  	
  Inability to Determine Eurocurrency Rate

  	
  28

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  §3.6.

  	
  Illegality

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.7.

  	
  Additional Costs, Etc.

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.8.

  	
  Capital Adequacy

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.9.

  	
  Certificate

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.10.

  	
  Indemnity

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.11.

  	
  Interest After Default

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.12.

  	
  Replacement of Individual Lenders

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.13.

  	
  Additional Reserve Requirements

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.14.

  	
  Guaranties

  	
  33

  
	
   

  	
   

  	
   

  
	
  §4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  33

  
	
   

  	
   

  	
   

  
	
   

  	
  §4.1.

  	
  Corporate Authority

  	
  33

  
	
   

  	
   

  	
   

  
	
   

  	
  §4.1.1.

  	
  Incorporation; Good Standing

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.1.2.

  	
  Authorization

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.1.3.

  	
  Enforceability

  	
  34

  
	
   

  	
   

  	
   

  
	
   

  	
  §4.2.

  	
  Governmental Approvals

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.3.

  	
  Title to Properties; Leases

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.4.

  	
  Financial Statements; Fiscal Year

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.5.

  	
  No Material Changes, Etc.

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.6.

  	
  Franchises, Patents, Copyrights, Etc

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.7.

  	
  Litigation

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.8.

  	
  Compliance with Other Instruments, Laws, Etc

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.9.

  	
  Tax Status

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.10.

  	
  No Event of Default

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.11.

  	
  Investment Company Act

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.12.

  	
  Employee Benefit Plans

  	
  36

  
	
   

  	
   

  	
   

  
	
   

  	
  §4.12.1.

  	
  In General

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.12.2.

  	
  Terminability of Welfare Plans

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.12.3.

  	
  Guaranteed Pension Plans

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.12.4.

  	
  Multiemployer Plans

  	
  37

  
	
   

  	
   

  	
   

  
	
   

  	
  §4.13.

  	
  Regulations U and X, Etc

  	
  37

  
						

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.14.

  	
  Environmental Compliance

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.15.

  	
  Foreign Assets Control Regulations, Etc

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.16.

  	
  Subsidiaries, Etc

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.17.

  	
  Taxpayer Identification Numbers

  	
  39

  
	
   

  	
   

  	
   

  
	
  §5.

  	
  AFFIRMATIVE COVENANTS OF THE
  BORROWER

  	
  39

  
	
   

  	
   

  	
   

  
	
   

  	
  §5.1.

  	
  Punctual Payment

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.2.

  	
  Maintenance of Office

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.3.

  	
  Records and Accounts

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.4.

  	
  Financial Statements, Certificates and Information

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.5.

  	
  Notices

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.6.

  	
  Legal Existence; Maintenance of Properties

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.7.

  	
  Insurance

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.8.

  	
  Taxes

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.9.

  	
  Inspection of Properties and Books, Etc.

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.10.

  	
  Compliance with Laws, Contracts, Licenses, and Permits

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.11.

  	
  Employee Benefit Plans

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.12.

  	
  Use of Proceeds

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.13.

  	
  Licenses and Permits

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.14.

  	
  Guaranties

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.15.

  	
  Further Assurances

  	
  45

  
	
   

  	
   

  	
   

  
	
  §6.

  	
  CERTAIN NEGATIVE COVENANTS OF
  THE BORROWER

  	
  45

  
	
   

  	
   

  	
   

  
	
   

  	
  §6.1.

  	
  Restrictions on Indebtedness

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.2.

  	
  Restrictions on Liens

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.3.

  	
  Restrictions on Investments

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.4.

  	
  Distributions

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.5.

  	
  Employee Benefit Plans

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.6.

  	
  Merger and Consolidation; Acquisitions

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.7.

  	
  Disposition of Assets and Sale-Leaseback Transactions

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.8.

  	
  Subordinated Debt

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.9.

  	
  Transactions with Affiliates

  	
  52

  
						

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  §7.

  	
  FINANCIAL COVENANTS OF THE
  BORROWER

  	
  53

  
	
   

  	
   

  	
   

  
	
   

  	
  §7.1.

  	
  Fixed Charge Coverage Ratio

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.2.

  	
  Adjusted Funded Debt to Total Capitalization Ratio

  	
  53

  
	
   

  	
   

  	
   

  
	
  §8.

  	
  EFFECTIVE DATE CONDITIONS

  	
  53

  
	
   

  	
   

  	
   

  
	
   

  	
  §8.1.

  	
  Loan Documents

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.2.

  	
  Certified Copies of Charter Documents

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.3.

  	
  Corporate Action

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.4.

  	
  Incumbency Certificate

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.5.

  	
  Opinion of Counsel

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.6.

  	
  Payment of Fees

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.7.

  	
  Financial Statements

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.8.

  	
  Specified Representations True; No Default

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.9.

  	
  No Default under Material Indebtedness

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.10.

  	
  Governmental Regulation

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.11.

  	
  USA Patriot Act

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.12.

  	
  Effective Date Certificate

  	
  55

  
	
   

  	
   

  	
   

  
	
  §9.

  	
  CLOSING DATE CONDITIONS

  	
  55

  
	
   

  	
   

  	
   

  
	
   

  	
  §9.1.

  	
  Effective Date

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.2.

  	
  Offer Consummation

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.3.

  	
  Approvals

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.4.

  	
  Opinion of Counsel

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.5.

  	
  Payment of Fees

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.6.

  	
  Pro Forma Financial Statements

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.7.

  	
  Specified Representations True; No Default; No Default under Material
  Indebtedness

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.8.

  	
  Closing Date Certificate

  	
  57

  
	
   

  	
   

  	
   

  
	
  §10.

  	
  CONDITIONS TO BORROWINGS TO FUND
  ADDITIONAL PURCHASES OF CORPORATE EXPRESS SHARES AND CONVERTIBLE DEBT

  	
  57

  
	
   

  	
   

  	
   

  
	
   

  	
  §10.1.

  	
  Closing Date

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.2.

  	
  Specified Representations True; No Default

  	
  57

  

 

iv

 

	
   

  	
   

  	
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  §11.

  	
  CONDITIONS TO BORROWINGS TO
  REPAY COMMERCIAL PAPER

  	
  58

  
	
   

  	
   

  	
   

  
	
   

  	
  §11.1.

  	
  Representations True; No Default or Event of Default

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.2.

  	
  No Legal Impediment

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.3.

  	
  Governmental Regulation

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.4.

  	
  Proceedings and Documents

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.5.

  	
  Effective Date

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.6.

  	
  Certain Conditions

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.7.

  	
  Payment of Fees

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.8.

  	
  Borrowing Date Certification

  	
  59

  
	
   

  	
   

  	
   

  
	
  §12.

  	
  EVENTS OF DEFAULT; ACCELERATION;
  ETC

  	
  59

  
	
   

  	
   

  	
   

  
	
   

  	
  §12.1.

  	
  Events of Default and Acceleration

  	
  59

  
	
   

  	
   

  	
   

  
	
   

  	
  §12.2.

  	
  Termination of Commitments

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §12.3.

  	
  Remedies

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.

  	
  SETOFF

  	
  64

  
	
   

  	
   

  	
   

  
	
  §14.

  	
  THE ADMINISTRATIVE AGENT

  	
  65

  
	
   

  	
   

  	
   

  
	
   

  	
  §14.1.

  	
  Authorization

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.2.

  	
  Employees and Agents

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.3.

  	
  No Liability

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.4.

  	
  No Representations

  	
  67

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §14.4.1.

  	
  General

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §14.4.2.

  	
  Closing Documentation, etc

  	
  67

  
	
   

  	
   

  	
   

  
	
   

  	
  §14.5.

  	
  Payments

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §14.5.1.

  	
  Payments to Administrative Agent

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §14.5.2.

  	
  Distribution by Administrative Agent

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §14.5.3.

  	
  Delinquent Lenders

  	
  68

  
	
   

  	
   

  	
   

  
	
   

  	
  §14.6.

  	
  Holders of Notes

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.7.

  	
  Indemnity

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.8.

  	
  Administrative Agent as Lender;
  Etc

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.9.

  	
  Resignation

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.10.

  	
  Notification of Defaults and Events of Default

  	
  70

  

 

v

 

	
   

  	
   

  	
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  §14.11.

  	
  Administrative Agent May File Proofs
  of Claim

  	
  70

  
	
   

  	
   

  	
   

  
	
  §15.

  	
  EXPENSES

  	
  71

  
	
   

  	
   

  	
   

  
	
  §16.

  	
  INDEMNIFICATION

  	
  72

  
	
   

  	
   

  	
   

  
	
  §17.

  	
  SURVIVAL OF COVENANTS, ETC

  	
  72

  
	
   

  	
   

  	
   

  
	
  §18.

  	
  ASSIGNMENT AND PARTICIPATION

  	
  73

  
	
   

  	
   

  	
   

  
	
   

  	
  §18.1.

  	
  General Conditions and Conditions to Assignment

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.2.

  	
  Certain Representations and Warranties; Limitations; Covenants

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.3.

  	
  Register

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.4.

  	
  Participations

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.5.

  	
  Limitation upon Participant Rights

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.6.

  	
  Assignee or Participant Affiliated with the Borrower

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.7.

  	
  Miscellaneous Assignment Provisions

  	
  77

  
	
   

  	
   

  	
   

  
	
  §19.

  	
  NOTICES, ETC

  	
  77

  
	
   

  	
   

  	
   

  
	
  §20.

  	
  GOVERNING LAW

  	
  79

  
	
   

  	
   

  	
   

  
	
  §21.

  	
  HEADINGS

  	
  79

  
	
   

  	
   

  	
   

  
	
  §22.

  	
  COUNTERPARTS

  	
  80

  
	
   

  	
   

  	
   

  
	
  §23.

  	
  ENTIRE AGREEMENT, ETC

  	
  80

  
	
   

  	
   

  	
   

  
	
  §24.

  	
  WAIVER OF JURY TRIAL

  	
  80

  
	
   

  	
   

  	
   

  
	
  §25.

  	
  CONSENTS, AMENDMENTS, WAIVERS,
  ETC

  	
  80

  
	
   

  	
   

  	
   

  
	
  §26.

  	
  TREATMENT OF CERTAIN
  CONFIDENTIAL INFORMATION

  	
  81

  
	
   

  	
   

  	
   

  
	
   

  	
  §26.1.

  	
  Confidentiality

  	
  81

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §26.2.

  	
  Prior Notification

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §26.3.

  	
  Other

  	
  82

  
	
   

  	
   

  	
   

  
	
  §27.

  	
  SEVERABILITY

  	
  82

  
	
   

  	
   

  	
   

  
	
  §28.

  	
  USA PATRIOT ACT NOTICE

  	
  83

  
	
   

  	
   

  	
   

  
	
  §29.

  	
  NO ADVISORY OR FIDUCIARY
  RESPONSIBILITY

  	
  83

  
	
   

  	
   

  	
   

  
	
  §30.

  	
  COLLATERAL

  	
  84

  
						

 

vi

 

EXHIBITS
AND  SCHEDULES

 

	
  Exhibit A

  	
   

  	
  Form of Loan Request

  
	
  Exhibit B

  	
   

  	
  Form of Guaranty

  
	
  Exhibit C

  	
   

  	
  Form of Compliance Certificate

  
	
  Exhibit D

  	
   

  	
  Form of Assignment and Assumption

  
	
  Exhibit E

  	
   

  	
  Form of Joinder Agreement

  
	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  Lenders

  
	
  Schedule 2

  	
   

  	
  Guarantors

  
	
  Schedule 4.3

  	
   

  	
  Title to Properties, Leases

  
	
  Schedule 4.7

  	
   

  	
  Litigation

  
	
  Schedule 4.9

  	
   

  	
  Taxes

  
	
  Schedule 4.12

  	
   

  	
  Pension Liabilities

  
	
  Schedule 4.14

  	
   

  	
  Environmental Compliance

  
	
  Schedule 4.16(a)

  	
   

  	
  Subsidiaries

  
	
  Schedule 4.16(b)

  	
   

  	
  Joint Ventures and Partnerships

  
	
  Schedule 4.16(c)

  	
   

  	
  Equity Interests of 50% or Less

  
	
  Schedule 4.17

  	
   

  	
  Tax Payer Identification Numbers

  
	
  Schedule 6.1

  	
   

  	
  Existing Indebtedness

  
	
  Schedule 6.2

  	
   

  	
  Existing Liens

  
	
  Schedule 6.3

  	
   

  	
  Existing Investments

  

 

 

CREDIT
AGREEMENT

 

This CREDIT
AGREEMENT,  dated as of April 1,
2008, is by and among (a) STAPLES, INC.
(the “Borrower”), a Delaware corporation
having its principal place of business at 500 Staples Drive, Framingham, MA
01701, (b) the lending institutions listed on Schedule  1
hereto (the “Lenders”), (c) LEHMAN BROTHERS COMMERCIAL PAPER INC., as administrative
agent (in such capacity, the “Administrative
Agent”) for the Lenders and (d) BANK OF AMERICA, N.A. and HSBC
BANK USA, NATIONAL ASSOCIATION,  as  co-syndication
agents for the Lenders (collectively, the “Co-Syndication
Agents”).

 

WHEREAS, the Lenders are willing to make loans to
the Borrower, all on the terms and conditions set forth herein.

 

NOW
THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged (these recitals
being an integral part of this Credit Agreement), the Borrower, the
Administrative Agent and the Lenders hereby agree as follows:

 

§1.          DEFINITIONS AND
RULES OF INTERPRETATION.

 

§1.1.       Definitions.  The
following terms shall have the meanings set forth in this §1 or elsewhere in
the provisions of this Credit Agreement referred to below:

 

Adjustment  Date. 
The date which is three (3) Business Days after each Compliance
Certificate is delivered by the Borrower pursuant to §§5.4(a) and (b) hereof.

 

Administrative  Agent.  As defined in the preamble hereto.

 

Administrative  Agent  Fees.  See §3.1 hereof.

 

Administrative  Agent’s  Special  Counsel.  Milbank, Tweed, Hadley & McCloy LLP
or such other counsel as may be approved by the Administrative Agent.

 

Administrative  Questionnaire.  An Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

Affiliate.  Any
Person that would be considered to be an affiliate of a Person under Rule 144(a) of
the Rules and Regulations of the SEC, as in effect on the Effective Date,
if such Person were issuing securities.

 

AFM. 
Stichting Autoriteit Financiële Markten (the Netherlands Authority for
the Financial Markets).

 

Agent  Parties.  See §14.3 hereof.

 

 

Anticipatory  Commercial  Paper.  Commercial paper issued by the Borrower prior
to and in anticipation of the first date on which it will purchase Corporate
Express Shares pursuant to the Offer (the “Initial  Offer  Funding
Date”); provided that (a) such commercial paper shall be
issued no earlier than five (5) Business Days prior to the anticipated
Initial Offer Funding Date as notified by the Borrower in writing to the
Administrative Agent at or prior to the time of such issuance, (b) such
commercial paper shall mature no later than thirty (30) days following the date
of the first issuance of Anticipatory Commercial Paper issued by the Borrower
and (c) if the Initial Offer Funding Date has not occurred on or prior to
the date that is thirty (30) days following such first issuance date, such
commercial paper shall not be rolled (or refinanced through the issuance of
additional commercial paper) to a maturity date later than such thirtieth
(30th) day.

 

Applicable  Margin. 
The Applicable Margin shall be in effect for each period commencing on
an Adjustment Date through the date immediately preceding the next Adjustment
Date (each a “Rate  Adjustment  Period”) based on a
determination of the Senior Debt Rating. 
The Senior Debt Rating shall be determined as of the last day of the
preceding Rate Adjustment Period.  The
Applicable Margin shall be the applicable rate per annum, corresponding to the
lower of the Levels set forth in the table below (with Level I being the lowest
level and Level IV being the highest level) corresponding to the Senior Debt
Rating.  In the event that the Senior
Debt Ratings assigned by Moody’s and S&P are not equivalent, the following
criteria shall determine which Level shall be applicable to the Senior Debt
Rating: (a) if the Senior Debt Ratings are one Level apart, the Level
applicable to the Senior Debt Rating shall be the lower of the two Levels and (b) if
the Senior Debt Ratings are more than one Level apart, the Level applicable to
the Senior Debt Rating shall be one Level above (i.e., towards Level IV) the
lower of the two Levels.  For purposes of
clarity, the parties hereto acknowledge that (i) the Applicable Margin
with respect to Base Rate Loans shall be the rate per annum set forth in column
C in the table below (as such Applicable Margin shall be adjusted pursuant to
the last paragraph of this definition), (ii) the Applicable Margin with
respect to Eurocurrency Rate Loans shall be the rate per annum set forth in
column D in the table below (as such Applicable Margin shall be adjusted
pursuant to the last paragraph of this definition) and (iii) the
Commitment Fee shall be the rate per annum set forth in column E.

 

	
  A

  	
   

  	
  B

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  
	
  Level

  	
   

  	
  Senior Debt

  Rating

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurocurrency

  Rate Loans

  	
   

  	
  Commitment

  Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  S&P: BBB+

  or better

  Moody’s:

  Baa1 or better

  	
   

  	
  0

  	
  %

  	
  1.00

  	
  %

  	
  0.08

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  S&P: BBB

  Moody’s:

  Baa2

  	
   

  	
  0.125

  	
  %

  	
  1.125

  	
  %

  	
  0.09

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  S&P: BBB-

  Moody’s:

  Baa3

  	
   

  	
  0.375

  	
  %

  	
  1.375

  	
  %

  	
  0.125

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  S&P: Lower

  than BBB-

  Moody’s:

  Lower than

  Baa3

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.175

  	
  %

  

 

2

 

Notwithstanding the
foregoing, if the Borrower fails to deliver any Compliance Certificate pursuant
to §§5.4(a) or (b) hereof then, for the period commencing on the date
such Compliance Certificate was due through the date immediately preceding the
Adjustment Date that occurs immediately following the date on which such
Compliance Certificate is delivered, the Applicable Margin shall be the
Applicable Margin corresponding to Level IV above.

 

The relevant Applicable
Margin for Base Rate Loans and Eurocurrency Rate Loans, as determined in
accordance with this definition, shall increase by (i) 0.25% per annum on
the date which is 90 days after the Closing Date, (ii) an additional 0.50%
per annum on the date which is 180 days after the Closing Date and (iii) an additional 0.50% per
annum on the date which is 210 days after the Closing Date.

 

Applicable  Pension  Legislation.  At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Borrower or any of its Subsidiaries.

 

Approved  Fund. 
Any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

Arranger.  Lehman Brothers Inc.

 

Asset  Sale. 
Any Disposition of property or series of related Dispositions of
property after the Effective Date (other than any Excluded Disposition),
including any Dispositions resulting from any condition or requirement of any antitrust
regulatory authority in connection with the Corporate Express Acquisition,
which yields gross proceeds to the Borrower or any of its Subsidiaries in
excess of $15,000,000 (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds).

 

3

 

Assignment  and  Assumption.  See §18.1 hereof.

 

Balance  Sheet  Date.  February 2, 2008.

 

Base  Rate. 
The higher of (a) the Prime Rate and (b) one-half of one
percent (1/2%) per annum above the Federal Funds Effective Rate.  Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

 

Base  Rate  Loans.  Any Loans bearing interest calculated by
reference to the Base Rate.

 

Borrower.  As
defined in the preamble hereto.

 

Borrower  Materials.  See §5.4(e) hereof.

 

Business  Day. 
Any day on which banking institutions in New York, New York, are open
for the transaction of banking business and, if such day relates to any
interest rate settings as to a Eurocurrency Rate Loan, any fundings,
disbursements, settlements and payments in respect of any such Eurocurrency
Rate Loan, or any other dealings to be carried out pursuant to this Credit
Agreement in respect of any such Eurocurrency Rate Loan, means any such day on
which dealings in deposits in Dollars are conducted by and between banks in the
London interbank eurodollar market.

 

Capital  Stock. 
With respect to any corporation, partnership, trust, unincorporated
association, joint venture, limited liability company, or other legal or
business entity, any and all shares, interests, participations or other
equivalent (however designated) of capital stock of such entity, any and all
limited or general partnership interests and equivalent ownership interests in
such entity, any and all warrants and options to purchase any of the foregoing,
and any securities convertible into any of the foregoing.

 

Capitalized  Leases.  Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.

 

CERCLA.  The
Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

Closing Date.  The
date (which shall be no later than February 17, 2009) on which the
conditions set forth in §9 hereof have been satisfied (or waived in accordance
with §25 hereof).

 

Code.  The
Internal Revenue Code of 1986.

 

4

 

Commitment.  The
agreement of each Lender, subject to the terms and conditions of this Credit
Agreement, to make Loans to the Borrower.

 

Commitment  Amount.  With respect to each Lender, the amount of
such Lender’s Commitment set forth on Schedule  1 hereto or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable, as the same may be reduced from time to time in
accordance with the terms of this Credit Agreement; or if the Total Commitment
is terminated pursuant to the provisions hereof, zero.

 

Commitment  Fee.  See
§3.2 hereof.

 

Commitment  Percentage.  With respect to each Lender, the percentage
of the Total Commitment represented by such Lender’s Commitment.  If the Commitments have terminated or expired,
the Commitment Percentages of the Lenders shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments.

 

Commitment  Period.  The period commencing on the earlier of (a) the
Closing Date and (b) the initial date of issuance of any Anticipatory
Commercial Paper, to and including the day immediately preceding the Maturity
Date.

 

Compliance  Certificate.  See §5.4(a) hereof.

 

Confidential  Information.  All
information relating to the Borrower or any of its Subsidiaries that is labeled
by the Borrower or such Subsidiary as confidential at the time such information
is supplied by the Borrower or such Subsidiary to a Lender, other than
information which (a) is public knowledge or generally available to the
public, or (b) is obtained by any of the Lenders, whether prior to or
after disclosure to such Lender by the Borrower or any of its Subsidiaries,
from a source other than the Borrower or any of its Subsidiaries, provided
that such information is not known by such Lender to have been disclosed by any
party in violation of a confidentiality agreement with the Borrower or any of
its Subsidiaries, any other obligation of nondisclosure with respect to the
Borrower or any of its Subsidiaries or any applicable statutory or regulatory
limitation imposed on the disclosure of such information.

 

Consolidated or  consolidated.  With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with GAAP.

 

Consolidated  Adjusted  Funded  Debt.  With respect to the Borrower and its
Subsidiaries, as at any date of determination, on a consolidated basis, the
aggregate of (a) Consolidated Total Funded Debt as of such date plus
(b) (i) Rental Expense for the period of twelve consecutive months
then ended multiplied  by (ii) eight (8).

 

Consolidated  EBIT.  For
any period, consolidated net income (or deficit) of the Borrower and its
Subsidiaries, after deducting all expenses and other proper charges other 

 

5

 

than
interest expense, taxes and any noncash nonrecurring charges, and excluding,
without duplication, (a) all extraordinary and nonrecurring items of (i) income
or (ii) cash losses in an aggregate amount not to exceed $100,000,000 on a
cumulative basis from October 13, 2006, as determined in accordance with
GAAP and (b) all income or loss from any corporation, partnership, limited
liability company, joint venture or other entity in which the Borrower or any
of its Subsidiaries holds not more than a fifty percent (50%) ownership
interest, as determined in accordance with GAAP; provided that there
shall be further excluded in calculating consolidated net income (or deficit)
for purposes of this definition, without duplication, any noncash (x) losses
attributable to the use of a fair value methodology for recognition and
measurement of impairment of goodwill not identified with impaired assets in
accordance with Accounting Principles Board Opinion No. 142 and (y) SFAS
123R expenses; provided that, with respect to any such period
in which the Corporate Express Acquisition
shall have been consummated, Consolidated EBIT for such period shall be
calculated on a pro forma basis so as to give
effect thereto as of the first day of such period.

 

Consolidated Total Assets.  All assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

 

Consolidated  Total  Funded
Debt.  With respect to the Borrower and its
Subsidiaries, as at any date of determination, on a consolidated basis, the
aggregate (without duplication) of (a) all outstanding Indebtedness of the
Borrower and its Subsidiaries relating to or in respect of (i) the
borrowing of money or the obtaining of credit, including the issuance of notes
or bonds and standby letters of credit outstanding but excluding documentary
letters of credit, (ii) the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business), (iii) any
Synthetic Leases or any Capitalized Leases, and (iv) the transactions
permitted under §6.1(q) hereof, plus (b) all Indebtedness of
the type referred to in clause (a) of another Person guaranteed by the
Borrower or any of its Subsidiaries.

 

Consolidated  Total  Interest
Expense.  For any period, the aggregate amount of
interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of Capitalized Leases and Synthetic
Leases, and including facility fees, commitment fees, usage fees, agency fees,
balance deficiency fees, and similar fees or expenses in connection with the
borrowing of money, as determined in accordance with GAAP; provided that, with respect to any Measurement Period in which the Corporate Express Acquisition shall
have been consummated, Consolidated Total Interest Expense for such
period shall be calculated on a pro forma basis
so as to give effect thereto as of the first day of such period.

 

Contingent  Liabilities.  Any
guaranties, endorsements, obligations to reimburse the issuer in respect of any
letters of credit, agreements to purchase or provide funds for the payment of
obligations of others, or other liabilities which would be classified as 

 

6

 

contingent in accordance
with GAAP consistently applied, excluding, however, (a) product warranties
given in the ordinary course of business, (b) endorsements of checks or
other negotiable instruments for deposit or collection in the ordinary course
of business, and (c) reimbursement obligations in respect of documentary
trade letters of credit.

 

Conversion  Request.  A notice given by the Borrower to the
Administrative Agent of the Borrower’s election to convert or continue a Loan
in accordance with §2.9 hereof.

 

Corporate  Express.  Corporate Express N.V., a public limited
liability company incorporated under the laws of The Netherlands.

 

Corporate  Express  Acquisition.  The acquisition of Corporate Express Shares
and convertible debt of Corporate Express pursuant to the Offer.

 

Corporate  Express  ADS.  The issued and outstanding American
Depositary Shares of Corporate Express, each representing one Corporate Express
Ordinary Share, listed on the New York Stock Exchange.

 

Corporate  Express  Default.  See §9.7 hereof.

 

Corporate  Express  Dutch Shares.  Collectively, Corporate Express Ordinary
Shares and Corporate Express Preference Shares A.

 

Corporate  Express  Material  Indebtedness
Default.  See §9.7 hereof.

 

Corporate Express Ordinary
Shares.  The issued and outstanding ordinary shares,
nominal value €1.20 per share, of Corporate Express, including the ordinary
shares underlying Corporate Express ADS.

 

Corporate  Express  Preference  Shares A.  The depositary receipts representing the
issued and outstanding preference Shares A, nominal value €1.20 per share, of
Corporate Express.

 

Corporate  Express-Related  Default.  See §9.7 hereof.

 

Corporate  Express Shares.  Collectively, Corporate Express Dutch Shares
and Corporate Express ADS.

 

Co-Syndication Agents.  As defined in the preamble hereto.

 

Credit  Agreement.  This Credit Agreement, including the
Schedules and Exhibits hereto.

 

Default.  Any
event or condition which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

 

Delinquent  Lender.  See §14.5.3 hereof.

 

7

 

Disposition.  Any
sale, assignment, transfer or other disposition of any property (whether now
owned or hereafter acquired) by the Borrower or any of its Subsidiaries to any
Person, including, without limitation, any sale of an equity interest in any
Subsidiary.

 

Distribution.  (a) The
declaration or payment of any dividend on or in respect of any shares of any
class of Capital Stock of the Borrower, other than dividends payable solely in
shares of common stock of the Borrower; (b) the purchase, redemption, or
other retirement of any shares of any class of Capital Stock of the Borrower,
directly or indirectly through a Subsidiary of the Borrower or otherwise; (c) the
return of capital by the Borrower to its shareholders as such; or (d) any
other distribution on or in respect of any shares of any class of Capital Stock
of the Borrower.

 

Dollars or $. 
Dollars in lawful currency of the United States of America.

 

Domestic Subsidiary.  Any Subsidiary that is organized under the
laws of the United States of America, any state or territory thereof or the
District of Columbia.

 

Drawdown  Date. 
The date on which any Loan is made or is to be made, and the date on
which any Loan is converted or continued in accordance with §2.9 hereof.

 

Early  Termination  Date.  The earlier of (a) February 17,
2009, if the Closing Date shall not have occurred on or prior to such date and (b) at
any time after the Effective Date, both of the following have occurred: (i) if
the Borrower and Corporate Express shall have entered into a definitive
acquisition agreement with respect to the acquisition by the Borrower of
Corporate Express, the subsequent termination of such agreement and (ii) the
permanent abandonment by the Borrower of, or the public announcement by the
Borrower of its decision not to proceed with, such acquisition of Corporate
Express (but not a mere lapse or expiration of any offer period in connection
with the Offer).

 

Effective Date.  See
§8 hereof.

 

Eligible  Assignee.  Any of (a) a Lender; (b) an
Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person
(other than a natural person) approved by (i) the Administrative Agent,
and (ii) unless an Event of Default has occurred and is continuing, the
Borrower (each such approval in the case of (i) and (ii) not to be
unreasonably withheld or delayed, and in the case of (ii), it being understood
that it shall be reasonable for the Borrower to withhold such approval if the
proposed Person does not have an investment grade rating).

 

Employee  Benefit  Plan.  Any employee benefit plan within the meaning
of §3(3) of ERISA maintained or contributed to by the Borrower, other than
a Guaranteed Pension Plan or a Multiemployer Plan.

 

Environmental  Laws. 
Any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those
arising under the Resource Conservation and Recovery Act (“RCRA”), CERCLA, the Superfund Amendments and Reauthorization Act of
1986 (“SARA”), the Federal Clean Water Act,

 

8

 

the Federal Clean Air Act,
the Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment.

 

Environmental Notice.  Any notice to the Borrower or any of its
Subsidiaries from any third party including, without limitation: any federal,
state or local governmental authority, (a) that it has been identified by
the United States Environmental Protection Agency as a potentially responsible
party under CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part 300 Appendix B; (b) that any Hazardous
Substances which it has generated, transported or disposed of has been found at
any site at which a federal, state or local agency or other third party has
conducted or has ordered that the Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (c) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding in connection with the release of Hazardous Substances.

 

Equity Issuance. 
After the Effective Date, any issuance or sale by the Borrower or
any of its Subsidiaries of (a) any of its Capital Stock, (b) any
warrants or options exercisable in respect of its Capital Stock (other than any
warrants, options or restricted stock issued to directors, officers, employees
or consultants of the Borrower or any of its Subsidiaries pursuant to benefit
plans established in the ordinary course of business and any of its Capital
Stock issued upon the exercise of such warrants or options) or (c) any
other security or instrument representing an equity interest (or the right to
obtain any equity interest) in the Borrower or any of its Subsidiaries.

 

ERISA.  The
Employee Retirement Income Security Act of 1974.

 

ERISA  Affiliate.  Any Person which is treated as a single
employer with the Borrower under §414 of the Code.

 

ERISA  Reportable  Event.  A reportable event with respect to a
Guaranteed Pension Plan within the meaning of §4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has
not been waived.

 

Eurocurrency  Rate.  For any Interest Period with respect to a
Eurocurrency Rate Loan, the rate per annum determined on the basis of the rate
for deposits in Dollars for a period equal to such Interest Period commencing
on the first day of such Interest Period appearing on Reuters Page LIBOR01
at approximately 11:00 a.m., London time, two (2) Business Days prior
to the commencement of such Interest Period; provided that in the event
that such rate does not appear on such Reuters Page (or otherwise on the
Reuters screen), the “Eurodollar Rate” for purposes of this definition
shall be determined by reference to such other comparable publicly available
service for displaying eurodollar rates as may be reasonably selected by the
Administrative Agent.

 

Eurocurrency  Rate  Loans.  Any Loans bearing interest calculated by
reference to the Eurocurrency Rate.

 

Event  of  Default.  See §12.1 hereof.

 

9

 

Excluded  Disposition.  Any Disposition permitted under §6.7(a) hereof.

 

Excluded  Equity  Issuance.  (a) Any Equity Issuance by any
Subsidiary to the Borrower or any other Subsidiary, (b) any capital
contribution by the Borrower or any Subsidiary to any Subsidiary and (c) any
Equity Issuance by the Borrower pursuant to employee stock plans.

 

Excluded  Indebtedness.  Any Indebtedness permitted under §§6.1(a),
(b), (c), (d), (e), (f), (g), (h), (j), (k), (l), (n) (subject to the
immediately following proviso), (o) or (r) hereof; provided
that the only Indebtedness incurred under §6.1(n) hereof that shall constitute
Excluded Indebtedness shall be (i) Indebtedness of Subsidiaries under
working capital credit lines or facilities (whether or not committed) in an
aggregate principal amount not exceeding $450,000,000 at any time outstanding
and (ii) Indebtedness constituting Anticipatory Commercial Paper hereunder
or additional commercial paper issued by the Borrower after the Closing Date.

 

Existing
Credit  Agreement.  That
certain Amended and Restated Revolving Credit Agreement dated as of October 13,
2006, as amended, by and among the Borrower, the lending institutions party
thereto and Bank of America as administrative agent for such lending
institutions.

 

Federal
Funds  Effective
Rate.   For any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published for the Business Day next succeeding (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any next succeeding
Business Day, the Federal Funds Effective Rate for any such day shall be the
average rate per annum (rounded upward, if necessary, to a whole multiple of
1/100 of 1%) of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

 

Financial  Affiliate.  A Subsidiary of the bank holding company
controlling any Lender, which Subsidiary is engaging in any of the activities
permitted by §4(e) of the Bank Holding Company Act of 1956 (12 U.S.C.
§1843).

 

Fixed
Charge  Coverage
Ratio.  See §7.1 hereof.

 

Fund.  Any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

 

GAAP
or  generally
accepted  accounting
principles.  (a) When used in §§6 and
7 hereof, whether directly or indirectly through reference to a capitalized
term used therein, means (i) principles that are consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, in effect for the fiscal year ended on the Balance Sheet
Date, and (ii) to the extent consistent with such principles, 

 

10

 

the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided
above, means principles that are (i) consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, provided that in each case referred to in this definition of
GAAP a certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(other than a qualification regarding changes in GAAP) as to financial
statements in which such principles have been properly applied.

 

Governmental Authority.  The
government of the United States of America, or of any other nation, or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

Guaranteed  Pension  Plan.  Any employee pension benefit plan within the
meaning of §3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.

 

Guaranties.  The Guaranty by each Guarantor in favor of
the Administrative Agent for the benefit of the Lenders and the Administrative
Agent, dated as of the date hereof, and each additional guaranty executed by a
Subsidiary of the Borrower acquired or formed after the date hereof.

 

Guarantors.  Those Subsidiaries of the Borrower listed on Schedule  2
hereto, as such schedule may be modified from time to time in accordance with
§3.14 hereof.

 

Hazardous Substances.  Any hazardous waste, as
defined by 42 U.S.C. §6903(5), any hazardous substances as defined by 42 U.S.C.
§9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) and
any toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws.

 

Indebtedness.  All
obligations, contingent and otherwise, that in accordance with GAAP should be
classified upon the obligor’s balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any event and
whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect; (b) all liabilities secured by
any mortgage, pledge, security interest, lien, charge or other encumbrance
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; (c) all obligations in
respect of interest rate protection arrangements and exchange rate protection
arrangements; (d) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any 

 

11

 

manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit; and (e) every
obligation of such Person under any Synthetic Lease.

 

Indemnified  Party.  See §14.7 hereof.

 

Indemnitee.  See
§16 hereof.

 

Initial  Lenders.  LCPI, Bank of America, N.A. and HSBC Bank
USA, National Association.

 

Initial  Offer Funding Date.  As defined in the definition of Anticipatory
Commercial Paper.

 

Interest  Payment  Date.  (a) As to any Base Rate Loan, each
Quarterly Date; and (b) as to any Eurocurrency Rate Loan in respect of
which the Interest Period is (i) 3 months or less, the last day of such
Interest Period and (ii) more than 3 months, the date that is 3 months from
the first day of such Interest Period, the last day of each 3 month period
thereafter, and, in addition, the last day of such Interest Period.

 

Interest  Period.  With respect to each Eurocurrency Rate Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and ending on the
numerically corresponding day in the calendar month that is 1, 2, 3 or 6 months
thereafter, as selected by the Borrower in a Loan Request; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Loan and ending on the numerically corresponding day in the
calendar month that is 1, 2, 3 or 6 months thereafter, as selected by the
Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:

 

(a)                                  if any Interest
Period would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;

 

(b)                                 if the Borrower
shall fail to give notice as provided in §2.9 hereof, the Borrower shall be deemed
to have requested a conversion of the affected Eurocurrency Rate Loan to a Base
Rate Loan;

 

(c)                                  any Interest
Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of a
calendar month; and

 

12

 

(d)                                 any Interest
Period that would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.

 

Investments.  All
expenditures made and all liabilities incurred (contingently or otherwise) for
the acquisition of stock or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person.  In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount
of any Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d) there
shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the foregoing clause (b) may
be deducted when paid; and (e) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.

 

Joinder
Agreements.  Joinder agreements in
substantially the form of Exhibit E hereto
pursuant to which Subsidiaries of the Borrower become parties to and agree to
be bound by the provisions of the Guaranty as a Guarantor.

 

LCPI. 
Lehman Commercial Paper Inc., in its individual capacity.

 

Lender Affiliate.  With
respect to any Lender, (a) an Affiliate of such Lender or (b) any
Approved Fund.

 

Lenders.  As
defined in the preamble hereto, which term shall include any other Person who
becomes an assignee of any rights and obligations of a Lender pursuant to §18
hereof.

 

Lending  Office.  As to any Lender, the office or offices of
such Lender described as such in such Lender’s Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify the
Borrower and the Administrative Agent.

 

Loan  Documents.  This Credit Agreement, the Guaranties, the
Notes and any other documents
delivered pursuant to this Credit Agreement.

 

Loan  Request.  See §2.2 hereof.

 

Loans. 
Loans made or to be made by the Lenders to the Borrower pursuant to §2
hereof.

 

Margin  Regulations.  Regulations U and X.

 

13

 

Margin  Stock.  “Margin stock” as such term is defined in
Regulation U.

 

Material  Indebtedness.  Indebtedness (other than the Loans) or
obligations in respect of one or more interest rate protection arrangements or
exchange rate protection arrangements (calculated, with respect to such
arrangements based on the notional principal amount thereof) of any one or more
of the Borrower and its Subsidiaries in an aggregate principal amount of
$50,000,000 or more.

 

Maturity Date.  The date which is 364 days after the Closing
Date.

 

Measurement Period.  See §7.1 hereof.

 

Moody’s. 
Moody’s Investors Service, Inc.

 

Multiemployer  Plan. 
Any multiemployer plan within the meaning of §3(37) of ERISA maintained
or contributed to by the Borrower or any ERISA Affiliate.

 

Net  Cash  Proceeds.  (a) In connection with any issuance or
incurrence of Indebtedness, the cash proceeds received from such issuance or
incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees,
underwriting discounts and commissions and other fees and expenses actually
incurred in connection therewith; (b) in connection with any Equity
Issuance, the cash proceeds received from such Equity Issuance, net of
attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other fees and expenses actually incurred in
connection therewith; and (c) in connection with any Asset Sale or
Recovery Event, the proceeds thereof in the form of cash (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or the sale or
disposition of any non-cash consideration or otherwise, but only as and when
received and excluding the portion of such deferred payment constituting
interest) of such Asset Sale or Recovery Event, net of attorneys’ fees,
accountants’ fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset which is the subject of such Asset Sale or Recovery Event and
other costs, fees and expenses actually incurred in connection therewith and
net of taxes paid or reasonably estimated to be payable as a result thereof and
net of amounts deposited in escrow in connection therewith or reasonably
expected to be paid as a result of any purchase price adjustment, indemnities
or reserves related thereto (such amounts shall be Net Cash Proceeds to the
extent and at the time released or not required to be so used).

 

Non-U.S.  Lender.  See §3.3.3 hereof.

 

Notes. 
Notes issued pursuant to §2.10 hereof.

 

Obligations.  All
indebtedness, obligations and liabilities of any of the Borrower and its
Subsidiaries to any of the Lenders and the Administrative Agent, individually
or collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or 

 

14

 

unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans or other instruments at any time evidencing any
thereof.

 

Obligor  Group.  Collectively, the Borrower and the Guarantors
(including any Subsidiary of the Borrower which as of any date of determination
has become a Guarantor pursuant to the provisions of this Credit Agreement).

 

OECD.  The Organization for Economic Cooperation and
Development.

 

Offer. 
Collectively, (a) the tender offer in The Netherlands and all other
jurisdictions (other than the United States of America) by the Borrower or a
wholly-owned Subsidiary for all of the Corporate Express Dutch Shares and
convertible debt of Corporate Express pursuant to the applicable Offer
Documents and (b) the concurrent tender offer in the United States of
America by the Borrower or a wholly-owned Subsidiary for all of the Corporate
Express ADS, wherever held, and Corporate Express Dutch Shares held by persons
located in the United States pursuant to the applicable Offer Documents, in
each case, as such offer may be modified, amended, supplemented, withdrawn,
reinstated or reaffirmed, launched or relaunched on or prior to the Closing
Date.

 

Offer  Documents.  (a) The Offer Memorandum, (b) each
other document filed (whether prior to or following the Effective Date) by or
on behalf of the Borrower or any of its Subsidiaries with the AFM, the SEC or
any other applicable Governmental Authority in connection with the Offer, which
in each case shall contain customary offer terms and conditions, and (c) any
amendments, supplements or other modifications to any of the foregoing.

 

Offer  Memorandum.  (a) The offer memorandum (biedingsbericht) filed (or to be filed) by the Borrower
with, and approved (or to be approved) by, the AFM and (ii) the tender
offer document filed with or submitted to the SEC, with respect to the Borrower’s
offer to purchase all of the Corporate Express Shares (and, if applicable, the
convertible debt of Corporate Express), in each case, which shall contain
customary offer terms and conditions.

 

Outstanding or outstanding.  With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.

 

Overnight  Rate. 
For any day, the greater of (a) the Federal Funds Effective Rate
and (b) an overnight rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

 

Participant.  See
§18.4 hereof.

 

PBGC.  The
Pension Benefit Guaranty Corporation created by §4002 of ERISA and any
successor entity or entities having similar responsibilities.

 

15

 

Permitted  Liens.  Liens, security interests and other
encumbrances permitted under §6.2 hereof.

 

Person.  Any
individual, corporation, limited liability company, partnership, limited
liability partnership, trust, unincorporated association, business, or other
legal entity, and any government or any governmental agency or political
subdivision thereof.

 

Platform.  See
§5.4(e) hereof.

 

Prime Rate.  The prime lending rate as set forth on the
Reuters Screen RTRTSY1 Page (or such other comparable page as may, in
the reasonable opinion of the Administrative Agent, replace such page for
the purpose of displaying such rate), as in effect from time to time.

 

Public  Lender.  See §4.15 hereof.

 

Quarterly Dates.  The last Business Day of March, June, September and
December in each year, the first of which shall be the first such day
after the date hereof.

 

Rate  Adjustment  Period.  As defined in the definition of Applicable
Margin.

 

Real  Estate.  All real property at any time owned or leased
(as lessee or sublessee) by the Borrower or any of its Subsidiaries.

 

Recovery Event.  Any settlement of or payment in respect of any
property or casualty insurance claim (but not to the extent such claim
compensates for any loss of revenues or interruption of business or operations
caused thereby) or any condemnation proceeding relating to any asset of the
Borrower or any of its Subsidiaries with a value in excess of $10,000,000.

 

Register.  See
§18.3 hereof.

 

Regulation  U. 
Regulation U of the Board of Governors of the Federal Reserve System (or
any governmental body or authority succeeding to its functions), 12 C.F.R. Part 221,
as in effect from time to time.

 

Regulation  X. 
Regulation X of the Board of Governors of the Federal Reserve System (or
any governmental body or authority succeeding to its functions), 12 C.F.R. Part 224,
as in effect from time to time.

 

Reinvestment Deferred Amount.  With respect to any Recovery Event in respect
of which the Borrower has delivered a Reinvestment Notice, the aggregate Net Cash Proceeds received by
the Borrower or any Subsidiary in connection therewith that are not applied to
prepay the Loans pursuant to §2.6 hereof as a result of the delivery of a
Reinvestment Notice.

 

16

 

Reinvestment Notice.  A
written notice executed by the chief financial officer or the treasurer of the
Borrower stating that no Default or Event of Default has occurred and is
continuing and that the Borrower or any Subsidiary intends and expects to use
all or a specified portion of the Net Cash Proceeds of a Recovery Event to
repair or replace all or any portion of the assets relating to such Recovery
Event.

 

Reinvestment Prepayment
Amount.  With respect to any Recovery Event in respect
of which the Borrower has delivered a Reinvestment Notice, the Reinvestment
Deferred Amount relating thereto minus any amount contractually
committed by the Borrower (directly or indirectly through a Subsidiary) to be
expended prior to the relevant Reinvestment Prepayment Date, or actually expended prior to such date, in
each case to repair or replace assets relating to the relevant Recovery Event.

 

Reinvestment Prepayment Date.  With
respect to any Recovery Event in respect of which the Borrower has delivered a
Reinvestment Notice, the earlier of (a) the date occurring twelve months
after such Recovery Event and (b) with respect to any portion of a
Reinvestment Deferred Amount, the date on which the Borrower or the relevant
Subsidiary shall have determined not to, or shall have otherwise ceased to,
repair or replace assets relating to the relevant Recovery Event with such
portion of such relevant Reinvestment Deferred Amount.

 

Related  Parties.  With respect to any Person, such Person’s
Affiliates and the officers, directors, partners, trustees, employees,
shareholders, advisors, agents, attorneys and controlling persons of such
Person and of such Person’s Affiliates and their respective heirs, successors
and assigns.

 

Rental  Expense.  All obligations of the Borrower or any of its
Subsidiaries under any rental agreements or leases of real property relating to
retail stores, other than obligations in respect of Capitalized Leases and
Synthetic Leases; provided that, with respect to any Measurement
Period in which the Corporate Express
Acquisition shall have been consummated, Rental Expense for such period
shall be calculated on a pro forma basis
so as to give effect thereto as of the first day of such period.

 

Replacement  Lender.  See §3.12 hereof.

 

Required  Lenders.  As of any date, the Lenders holding more than
fifty percent (50%) of the sum of the outstanding principal amount of the Loans
on such date (excluding any participations of a Delinquent Lender); and if no
such principal and/or participation is outstanding, the Lenders whose aggregate
Commitment Amounts constitute more than fifty percent (50%) of the Total
Commitment.

 

Same  Day  Funds.
With respect to disbursements and payments in Dollars, immediately available
funds.

 

S&P. 
Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.

 

17

 

SEC. 
The United States Securities and Exchange Commission or any successor
agency.

 

Senior Debt Rating.  The rating issued by S&P or Moody’s with
respect to unsecured Indebtedness of the Borrower not maturing within twelve
months, issued without third-party credit enhancement, and not subordinated by
its term in right of payment to other Indebtedness of the Borrower.  In the event that no such ratings are
available on such unsecured Indebtedness of the Borrower, the Senior Debt
Rating shall be the rating implied, in the reasonable discretion of the
Administrative Agent, to such unsecured Indebtedness by reference to such other
Indebtedness of the Borrower as shall be so rated.

 

SFAS 123R. 
Financial Accounting Standards Board Statement No. 123 (revised
2004), Share Based Payment, as amended or revised
from time to time.

 

Specified Representations.  Each
of (a) the representations and warranties of the Borrower set forth in §§4.1, 4.11 and 4.13 hereof and (b) the
representations and warranties of the Borrower and/or any of its Subsidiaries
set forth in any Offer Document.

 

Stockholders’
Equity.  As at any date of determination, the sum of (a) the
capital accounts including common stock and preferred stock, but excluding
treasury stock of the Borrower plus (b) the earned surplus and
capital surplus of the Borrower (excluding adjustments to translate foreign
assets and liabilities for changes in foreign exchange rates made in accordance
with Financial Accounting Standards Board Statement No. 52), as determined
in accordance with GAAP.

 

Subordinated Debt. 
Unsecured Indebtedness of the Borrower or any of its Subsidiaries that
is expressly subordinated and made junior to the payment and performance of the
Obligations, and evidenced as such by a written instrument containing
subordination provisions in form and substance approved by the Required Lenders
in writing.

 

Subsidiary.  Any
corporation, association, trust, or other business entity of which the
designated parent shall at any time own directly or indirectly through a
Subsidiary or Subsidiaries at least a majority (by number of votes) of the
outstanding Voting Stock and the accounts of which are consolidated with such
designated parent in accordance with GAAP. 
Unless otherwise specified, “Subsidiary” means a Subsidiary of the
Borrower.

 

Substituted Lender.  See
§3.12 hereof.

 

Synthetic  Lease.  Any lease of goods or other property, whether
real or personal, which is treated as an operating lease under GAAP and as a
loan or financing for U.S. income tax purposes.

 

18

 

Total  Commitment.  The sum of the Commitment Amounts of the
Lenders, as in effect from time to time. 
The Total Commitment as of the Effective Date is $3,000,000,000.

 

Transactions. 
Collectively, the transactions contemplated in the Offer Documents and
the Loan Documents, the financing of the Corporate Express Acquisition
including the financing contemplated by this Credit Agreement, and the
repayment of any Indebtedness of Corporate Express and its Subsidiaries
contemplated to be refinanced in connection with (or as a result of) the
Corporate Express Acquisition.

 

Type.  As
to any Loan, its nature as a Base Rate Loan or a Eurocurrency Rate Loan.

 

USA Patriot Act.  The
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), as amended from time to time.

 

Voting  Stock.  Capital Stock of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.

 

§1.2.                     Rules of
Interpretation

 

(a)                                A reference to
any document or agreement shall include such document or agreement as amended,
modified or supplemented from time to time in accordance with its terms and the
terms of this Credit Agreement.

 

(b)                               The singular
includes the plural and the plural includes the singular.

 

(c)                                A reference to
any law includes any amendment or modification to such law.

 

(d)                               A reference to
any Person includes its permitted successors and permitted assigns.

 

(e)                                Accounting
terms not otherwise defined herein have the meanings assigned to them by
generally accepted accounting principles applied on a consistent basis by the
accounting entity to which they refer.

 

(f)                                  The words “include”, “includes”
and “including” are not limiting.

 

(g)                               All terms not
specifically defined herein or by GAAP, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term “instrument” being that
defined under Article 9 of the Uniform Commercial Code.

 

19

 

(h)           Reference
to a particular “§” refers to that section of this Credit Agreement unless
otherwise indicated.

 

(i)            The
words “herein”, “hereof”, “hereunder” and words
of like import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.

 

(j)            Unless
otherwise expressly indicated, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including,” the words “to” and “until” each mean “to but excluding,” and the
word “through” means “to and including.”

 

(k)           This
Credit Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar
matters.  All such limitations, tests and
measurements are, however, additive and are to be performed in accordance with
the terms thereof.

 

(l)            This
Credit Agreement and the other Loan Documents are the result of negotiation
among, and have been reviewed by counsel to, among others, the Administrative
Agent and the Borrower and are the product of discussions and negotiations
among all parties.  Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be construed
against the Administrative Agent or any of the Lenders merely on account of the
Administrative Agent’s or any Lender’s involvement in the preparation of such
documents.

 

§2.          THE CREDIT FACILITY.

 

§2.1.       Commitment to Lend Loans. 
Subject to the terms and conditions set forth in this Credit Agreement,
each of the Lenders severally agrees from time to time during the Commitment
Period to make Loans to the Borrower in Dollars and in such amounts as are
requested by the Borrower, provided that (i) the aggregate
principal amount of Loans made by each Lender (after giving effect to all
amounts requested) shall not at any time exceed such Lender’s Commitment Amount
and (ii) the outstanding Loans shall not at any time exceed the Total
Commitment.  Subject to the terms and
conditions set forth in this Credit Agreement, the Borrower may borrow, repay
and reborrow Loans from time to time during the Commitment Period upon notice
by the Borrower to the Administrative Agent given in accordance with §2.2
hereof.

 

§2.2.       Requests for Loans.  The
Borrower shall give to the Administrative Agent written notice in the form of Exhibit A hereto (or telephonic notice confirmed in a
writing in the form of Exhibit A hereto) of each Loan
requested hereunder (a “Loan  Request”) not later than (a) 12:00
noon (New York time) on the proposed Drawdown Date of any Base Rate Loan and (b) 12:00
noon (New York time) three (3) Business Days prior to the proposed
Drawdown Date of any Eurocurrency Rate Loan. 
Each such notice shall specify (i) the principal amount of the Loan
requested, (ii) the proposed Drawdown Date of such Loan, (iii) with
respect to any Eurocurrency Rate Loan, the 

 

20

 

initial Interest Period relating thereto and (iv) the Type of such
Loan.  Promptly upon receipt of any such
notice, the Administrative Agent shall notify each of the Lenders thereof.  Each Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept the Loan
requested from the Lenders on the proposed Drawdown Date.  Each Loan Request shall be (A) in a
minimum aggregate amount of $1,000,000 or an integral multiple thereof with
respect to Base Rate Loans and (B) in a minimum aggregate amount of
$5,000,000 or an integral multiple of $l,000,000 with respect to Eurocurrency
Rate Loans.

 

§2.3.       Funds for Loans.

 

§2.3.1.       Funding Procedures.  Each
of the relevant Lenders will make available to the Administrative Agent, to the
account of the Administrative Agent most recently designated by it for such
purpose to the Lenders, in Same Day Funds, the amount of such Lender’s
Commitment Percentage of the amount of the requested Loans not later than 1:30 p.m.
(New York time) on the proposed Drawdown Date of any Loans.  Upon receipt from each Lender of such amount,
and upon receipt of the documents required by §9 or §10 hereof, as applicable,
and the satisfaction of the other conditions set forth therein, to the extent
applicable, the Administrative Agent will make available to the Borrower the
aggregate amount of such Loans made available to the Administrative Agent by
the relevant Lenders.  The failure or
refusal of any Lender to make available to the Administrative Agent its
Commitment Percentage of the requested Loans on any Drawdown Date shall not excuse
any other Lender from making available to the Administrative Agent the amount
of such other Lender’s Commitment Percentage of any requested Loans.

 

§2.3.2.       Advances
by Administrative Agent.

 

(a)           The Administrative Agent may, unless notified to the
contrary by any Lender prior to a Drawdown Date, assume that such Lender has
made available to the Administrative Agent on such Drawdown Date the amount of
such Lender’s Commitment Percentage of the Loans to be made on such Drawdown
Date, and the Administrative Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If any Lender makes available to
the Administrative Agent such amount on a date after such Drawdown Date, such
Lender shall pay to the Administrative Agent on demand an amount equal to the
product of (a) the average computed for the period referred to in clause (c) below,
of the Overnight Rate for each day included in such period, times (b) the
amount of such Lender’s Commitment Percentage of such Loans, times (c) a
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Lender’s
Loans shall become immediately available to the Administrative Agent, and the
denominator of which is 360.  A statement
of the Administrative Agent submitted to such Lender with respect to any
amounts owing under this §2.3.2 shall be prima facie evidence of the amount due
and owing to the Administrative Agent by such Lender.  If the amount of such Lender’s Loans is not
made available to the Administrative Agent by such Lender within three (3) Business
Days 

 

21

 

following such Drawdown Date, the
Administrative Agent shall be entitled to recover such amount from the Borrower
on demand, with interest thereon at the rate per annum applicable to the Loans
made on such Drawdown Date and the Borrower may take the actions permitted
under §3.12 hereof to replace such Lender. 
Any payment by the Borrower to the Administrative Agent of any Loans
pursuant to this §2.3.2 shall be deemed to be a payment of the Loans that were
to be made by the Lender that failed to make such Loans.

 

(b)           Unless the Borrower has notified the Administrative Agent
prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to such Lender.  If and to the extent that such payment was
not in fact made to the Administrative Agent by the Borrower in Same Day Funds,
then each Lender shall forthwith on demand repay to the Administrative Agent
the portion of such assumed payment that was made available to such Lender in
Same Day Funds, together with interest thereon in respect of each day from and
including the date such amount was made available by the Administrative Agent
to such Lender to the date such amount is repaid to the Administrative Agent in
Same Day Funds at the Overnight Rate from time to time in effect.

 

(c)           A notice of the Administrative Agent to any Lender or the
Borrower with respect to any amount owing under §§2.3.2(a) and (b) hereof
shall be conclusive, absent manifest error.

 

§2.4.       Reduction of Total Commitment.  The
Borrower shall have the right at any time and from time to time prior to the
Maturity Date upon three (3) Business Days’ prior written notice to the
Administrative Agent to reduce by $5,000,000 or an integral multiple thereof or
terminate entirely the Total Commitment, whereupon the Commitment Amount of
each Lender shall be reduced pro rata in
accordance with its Commitment Percentage by the amount specified in such
notice or, as the case may be, terminated. 
Promptly after receiving any notice of the Borrower delivered pursuant
to this §2.4, the Administrative Agent will notify the Lenders of the substance
thereof.  No reduction or termination of
the Total Commitment may be reinstated.

 

Unless previously terminated, the Total
Commitment shall terminate entirely and automatically at 5:00 p.m., New
York City time, on the earlier of (a) the Maturity Date and (b) the
Early Termination Date.

 

§2.5.       Maturity of Loans.  The
Borrower promises to pay on the Maturity Date, and there shall become
absolutely due and payable on the Maturity Date, all of the Loans outstanding
to the Borrower on such date, together with any and all accrued and unpaid
interest thereon.

 

22

 

§2.6.      Mandatory Commitment
Reductions; Mandatory Prepayments of Loans.

 

(a)           If after the Effective Date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from the incurrence or issuance of
any Indebtedness (other than Excluded Indebtedness), not later than two (2) Business
Days following the date of receipt of the Net Cash Proceeds of such
Indebtedness the Total Commitment shall be reduced in an amount equal to such
Net Cash Proceeds (and the Loans shall be prepaid to the extent required by
§2.6(e) hereof).

 

(b)           If after the Effective Date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Equity Issuance (other
than Excluded Equity Issuance), not later than two (2) Business Days
following the date of receipt of the Net Cash Proceeds of such Equity Issuance
the Total Commitment shall be reduced in an amount equal to such Net Cash
Proceeds (and the Loans shall be prepaid to the extent required by §2.6(e) hereof).

 

(c)           If after the Effective Date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale, not later
than two (2) Business Days following the date of receipt of the Net Cash
Proceeds of such Asset Sale the Total Commitment shall be reduced in an amount
equal to such Net Cash Proceeds (and the Loans shall be prepaid to the extent
required by §2.6(e) hereof).

 

(d)           If after the Effective Date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Recovery Event, then,
unless a Reinvestment Notice shall be delivered to the Administrative Agent in
respect thereof within ten (10) Business Days after such Recovery Event,
on such tenth (10th) Business Day the Total Commitment shall be
reduced in an amount equal to such Net Cash Proceeds (and the Loans shall be
prepaid to the extent required by §2.6(e)); provided that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date with
respect to such Recovery Event, the Total Commitment shall be reduced in an
amount equal to the Reinvestment Prepayment Amount with respect to such
Recovery Event (and the Loans shall be prepaid to the extent required by §2.6(e) hereof).

 

(e)           If immediately after giving effect to any reduction of the
Total Commitment pursuant to this Credit Agreement the outstanding Loans exceed
the Total Commitment, then the Borrower shall, on the date of such reduction,
prepay the outstanding Loans in an aggregate amount such that, after giving
effect thereto, the outstanding Loans shall not exceed the Total Commitment
then in effect, such payment to be applied to the Loans for the respective
accounts of the Lenders.

 

(f)            The Borrower shall give the Administrative Agent, prior
written notice no later than 1:00 p.m., (New York time), on the date of
any proposed prepayment pursuant to this §2.6 of Base Rate Loans and no later
than 1:00 p.m., (New York time), three (3) Business Days’ prior to
any proposed prepayment pursuant to this §2.6 of Eurocurrency Rate Loans, in
each case specifying the proposed date of prepayment of such Loans and the
principal amount to be prepaid.  Each
such partial prepayment of the Loans shall be applied, in the absence of
instruction by the Borrower, first to the principal of Base Rate Loans and then
to the principal of Eurocurrency Rate Loans. 
Each partial 

 

23

 

prepayment of Loans shall be allocated
ratably among the Lenders in proportion to the respective unpaid principal
amount of the Loans made by each Lender being prepaid.

 

(g)           Notwithstanding anything herein to the contrary, in the
event that the Borrower borrows Loans under §11B hereof for purposes of
refunding or repaying maturing Anticipatory Commercial Paper, then the Borrower
will prepay such Loans in full, on the next succeeding Business Day, subject
to the Borrower’s right to reborrow such Loans subject to the conditions under
§9, 10 or 11 hereof.

 

§2.7.       Optional Repayments of Loans.  The
Borrower shall have the right, at its election, to repay the outstanding amount
of the Loans, as a whole or in part, at any time without penalty or premium, provided
that any full or partial repayment of the outstanding amount of any
Eurocurrency Rate Loans pursuant to this §2.7 may be made only on the last day
of the Interest Period relating thereto unless the Borrower pays each Lender,
in accordance with §3.10 hereof, the costs and expenses incurred by such Lender
as a result of the repayment of such Eurocurrency Rate Loan on a day other than
the last day of the Interest Period relating thereto.  The Borrower shall give the Administrative
Agent, prior written notice no later than 1:00 p.m., (New York time), on
the date of any proposed repayment pursuant to this §2.7 of Base Rate Loans and
no later than 1:00 p.m., (New York time), three (3) Business Days’
prior to any proposed repayment pursuant to this §2.7 of Eurocurrency Rate
Loans, in each case specifying the proposed date of repayment of such Loans and
the principal amount to be prepaid.  Each
such partial repayment of the Loans shall be in an integral multiple of
$5,000,000 and shall be applied, in the absence of instruction by the Borrower,
first to the principal of Base Rate Loans and then to the principal of
Eurocurrency Rate Loans.  Each partial
repayment of Loans shall be allocated ratably among the Lenders in proportion
to the respective unpaid principal amount of the Loans made by each Lender
being prepaid.

 

§2.8.       Interest on Loans.  (a) 
Except as otherwise provided in §3.11 hereof,

 

(i)            each Base Rate Loan
shall bear interest for the period commencing with the Drawdown Date thereof
and to but excluding the date of payment thereof at the rate per annum equal to
the Base Rate plus the Applicable Margin (subject to adjustment from time to
time as provided in the last paragraph of the definition of “Applicable Margin”);
and

 

(ii)           each Eurocurrency
Rate Loan shall bear interest for the period commencing with the Drawdown Date
thereof and to but excluding the last day of the Interest Period with respect
thereto at the rate per annum equal to the Eurocurrency Rate determined for
such Interest Period plus the Applicable Margin (subject to adjustment from
time to time as provided in the last paragraph of the definition of “Applicable
Margin”).

 

(b)           Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Total Commitment; provided
that, in the event of any repayment or prepayment of any Loan (other than a 

 

24

 

repayment or prepayment of a Base Rate Loan prior to the Maturity
Date), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment.

 

§2.9.       Conversion Options.

 

§2.9.1.       Conversion to Different Type of Loan.  The
Borrower may elect from time to time to convert any outstanding Loan to a Loan
of another Type, provided that (a) with respect to any such
conversion of a Eurocurrency Rate Loan to a Base Rate Loan, the Borrower shall
give the Administrative Agent at least one (1) Business Day’s prior
written notice of such election; (b) with respect to any such conversion
of a Base Rate Loan to a Eurocurrency Rate Loan, the Borrower shall give the
Administrative Agent at least three (3) Business Days’ prior written
notice of such election; (c) with respect to any such conversion of a
Eurocurrency Rate Loan into a Base Rate Loan, such conversion shall only be
made on the last day of the Interest Period with respect to such Eurocurrency
Rate Loan; and (d) no Base Rate Loan may be converted into a Eurocurrency
Rate Loan when any Default or Event of Default has occurred and is
continuing.  On the date on which such
conversion is being made each Lender shall take such action as is necessary to
transfer its Commitment Percentage of such Loans to its Lending Office for
domestic loans or its Lending Office for Eurocurrency Rate Loans, as the case
may be.  All or any part of outstanding
Loans of any Type may be converted into a Loan of another Type as provided
herein, provided that any partial conversion shall be in an aggregate
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Each Conversion Request
relating to the conversion of a Loan to a Eurocurrency Rate Loan shall be irrevocable
by the Borrower.

 

§2.9.2.       Continuation of Type of Loan.  Any
Eurocurrency Rate Loan may be continued as a Eurocurrency Rate Loan upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in §2.9.1 hereof; provided
that no Eurocurrency Rate Loan may be continued as such when any Default or
Event of Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or Event of
Default of which officers of the Administrative Agent active upon the Borrower’s
account have actual knowledge.  In the
event that the Borrower fails to provide any such notice with respect to
continuation of a Eurocurrency Rate Loan as such, than such Eurocurrency Rate
shall be automatically converted to a Base Rate Loan on the last day of the
Interest Period relating thereto.  The Administrative
Agent shall notify the Lenders and the Borrower promptly when any such
automatic conversion contemplated by this §2.9.2 is scheduled to occur.

 

§2.9.3.       Eurocurrency Rate Loans.  Any
conversion to or from Eurocurrency Rate Loans shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of all Eurocurrency Rate Loans having the same
Interest Period shall not be less than 5,000,000 

 

25

 

or a whole multiple of $1,000,000 in excess thereof.  No more than six (6) Eurocurrency Rate
Loans having different Interest Periods may be outstanding at any time.

 

§2.10.     Evidence of Debt.  The
Loans made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Administrative Agent in the ordinary
course of business.  The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Loans made to the
Borrower and the interest and payments thereon. 
Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error. 
Upon the request of any Lender made through the Administrative Agent,
the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note (a “Note”), which shall evidence such
Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note
and endorse thereon the date, Type (if applicable), amount and maturity of its
Loans and payments with respect thereto.

 

§3.          CERTAIN GENERAL
PROVISIONS; FEES.

 

§3.1.       Administrative Agent Fees.  The
Borrower shall pay the fees (the “Administrative Agent Fees”)
to the Administrative Agent for its own account in the amount and at the times
separately agreed upon in writing between the Borrower and the Administrative
Agent.

 

§3.2.       Commitment Fee.  The
Borrower agrees to pay to the Administrative Agent for the accounts of the
Lenders in accordance with their respective Commitment Percentages a commitment
fee (the “Commitment Fee”), which shall be calculated for
each day at a per annum rate as set forth in the definition of Applicable
Margin with respect to the Commitment Fee in effect at such time on the average
daily unused amount of the Total Commitment during the period from and
including the Effective Date to but excluding the earlier of the date
the Commitments terminate and the Maturity Date.  The Commitment Fee shall be
payable quarterly in arrears on each Quarterly Date and on the earlier
of (a) the date on which the Total Commitment shall terminate and (b) the
Maturity Date, commencing on the first such date to occur after the Effective
Date.

 

§3.3.       Funds for Payments.

 

§3.3.1.       Payments to Administrative Agent.  All
payments of principal, interest, Commitment Fees and any other fees or amounts
due hereunder or under any of the other Loan Documents shall be made in Dollars
to the Administrative Agent, for the respective accounts of the Lenders and the
Administrative Agent, not later than 2:00 p.m. (New York time), to the
account of the Administrative Agent most recently designated by it for such
purpose to the Lenders, in each case in Same Day Funds.

 

26

 

§3.3.2.       No Offset, Etc.  All
payments by the Borrower hereunder and under any of the other Loan Documents
shall be made without condition or deduction for any recoupment, defense,
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding.  If
any such obligation is imposed upon the Borrower with respect to any amount payable
by it hereunder or under any of the other Loan Documents, other than (a) with
respect to taxes based upon the Administrative Agent’s or any Lender’s net
income, or (b) with respect to amounts owing to a Lender that (i) is
not incorporated under the laws of the United States of America or a state
thereof and (ii) has not delivered to the Administrative Agent the forms
referred to in §3.3.3 hereof, the Borrower will pay to the Administrative
Agent, for the account of the Lenders or (as the case may be) the
Administrative Agent, on the date on which such amount is due and payable
hereunder or under such other Loan Document, such additional amount as shall be
necessary to enable the Lenders or the Administrative Agent to receive the same
net amount which the Lenders or the Administrative Agent would have received on
such due date had no such obligation been imposed upon the Borrower.  The Borrower will deliver promptly to the
Administrative Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.

 

§3.3.3.       Withholding.  Each Lender and the Administrative Agent that is not a U.S. Person as
defined in Section 7701(a)(30) of the Code for federal income tax purposes
(a “Non-U.S.  Lender”) hereby agrees that, if and to the extent it
is legally able to do so, it shall, on the date it becomes a Lender hereunder,
deliver to the Borrower and the Administrative Agent such certificates, documents
or other evidence, as and when required by the Code or Treasury Regulations
issued pursuant thereto, including (a) in the case of a Non-U.S. Lender
that is a “bank” for purposes of Section 881(c)(3)(A) of the Code,
two (2) duly completed copies of Internal Revenue Service Form W-8BEN
or Form W-8ECI and any other certificate or statement of exemption
required by Treasury Regulations, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Lender or the
Administrative Agent establishing that with respect to payments of principal,
interest or fees hereunder it is (i) not subject to United States federal
withholding tax under the Code because such payment is effectively connected
with the conduct by such Lender or Administrative Agent of a trade or business
in the United States or (ii) totally exempt from United States federal
withholding tax under a provision of an applicable tax treaty and (b) in
the case of a Non-U.S. Lender that is not a “bank” for purposes of Section 881(c)(3)(A) of
the Code, a certificate in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower and to the effect that (i) such
Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Code, is not subject to regulatory or other legal requirements as a bank in
any jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental
Authority, any 

 

27

 

application made to a rating agency or qualification for any exemption
from any tax, securities law or other legal requirements, (ii) is not a
ten percent (10%) shareholder for purposes of Section 881(c)(3)(B) of
the Code and (iii) is not a controlled foreign corporation receiving
interest from a related person for purposes of Section 881(c)(3)(C) of
the Code, together with a properly completed Internal Revenue Service Form W-8
or W-9, as applicable (or successor forms). 
Each Lender or the Administrative Agent agrees that it shall, promptly
upon a change of its lending office or the selection of any additional lending
office, to the extent the forms previously delivered by it pursuant to this
§3.3.3 are no longer effective, and promptly upon the Borrower’s or the
Administrative Agent’s reasonable request after the occurrence of any other
event (including the passage of time) requiring the delivery of a Form W-8BEN,
Form W-8ECI, Form W-8 or W-9 in addition to or in replacement of the
forms previously delivered, deliver to the Borrower and the Administrative
Agent, as applicable, if and to the extent it is properly entitled to do so, a
properly completed and executed Form W-8BEN, Form W-8ECI, Form W-8
or W-9, as applicable (or any successor forms thereto).  Each Lender shall promptly (A) notify
the Administrative Agent of any change in circumstances which would modify or
render invalid any such claimed exemption or reduction, and (B) take such
reasonable steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary to avoid
any requirement of applicable laws of any such jurisdiction that the Borrower
make any deduction or withholding for taxes from amounts payable to such
Lender.  Additionally, the Borrower shall
promptly deliver to the Administrative Agent or any Lender, as the
Administrative Agent or such Lender shall reasonably request, on or prior to
the Effective Date, and in a timely fashion thereafter, such documents and
forms required by any relevant taxing authorities under the laws of any
jurisdiction, duly executed and completed by the Borrower, as are required to
be furnished by such Lender or the Administrative Agent under such laws in
connection with any payment by the Administrative Agent or any Lender of taxes
or otherwise in connection with the Loan Documents, with respect to such
jurisdiction.  This §3.3.3 shall not be
construed to require the Administrative Agent, any Lender to make available its
tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.

 

§3.4.       Computations.  All computations of interest for Base Rate Loans when the Base Rate is
determined by the Prime Rate shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed.  All other computations of fees and interest
shall be based on a 360-day year, and, in each case, paid for the actual number
of days elapsed.  Except as otherwise
provided in the definition of the term “Interest
Period”, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension.

 

§3.5.       Inability to Determine Eurocurrency
Rate.  In the event, prior to the commencement of
any Interest Period relating to any Eurocurrency Rate Loan, the Administrative
Agent shall determine or be notified by the Required Lenders that 

 

28

 

adequate and reasonable methods do not exist for ascertaining the
Eurocurrency Rate that would otherwise determine the rate of interest to be
applicable to any Eurocurrency Rate Loan during any Interest Period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Lenders) to the
Borrower and the Lenders.  In such event (a) any
Loan Request or Conversion Request with respect to Eurocurrency Rate Loans
shall be automatically withdrawn and shall be deemed a request for Base Rate
Loans, (b) each Eurocurrency Loan, will automatically, on the last day of
the then current Interest Period relating thereto, become a Base Rate Loan, and
(c) the obligations of the Lenders to make Eurocurrency Rate Loans shall
be suspended until the Administrative Agent or the Required Lenders, as
applicable, determine that the circumstances giving rise to such suspension no
longer exist, whereupon the Administrative Agent or, as the case may be, the
Administrative Agent upon the instruction of the Required Lenders, shall so
notify the Borrower and the Lenders.

 

§3.6.       Illegality. 
Notwithstanding any other provisions herein, if any present or future
law, regulation, treaty or directive or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurocurrency
Rate Loans, such Lender shall forthwith give notice of such circumstances to
the Borrower and the other Lenders and thereupon the commitment of such Lender
to make Eurocurrency Rate Loans or convert Base Rate Loans to Eurocurrency Rate
Loans shall forthwith be suspended and such Lender’s Loans then outstanding as
Eurocurrency Rate Loans, if any, shall be automatically, on the last day of the
then current Interest Period relating thereto or within such earlier period as
may be required by law, converted to a Base Rate Loan.  The Borrower hereby agrees promptly to pay
the Administrative Agent for the account of such Lender, upon demand by such
Lender, any additional amounts necessary to compensate such Lender for any
costs incurred by such Lender in making any conversion in accordance with this
§3.6, including any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its Eurocurrency Rate Loans
hereunder.

 

§3.7.       Additional Costs, Etc.  If
any change after the Effective Date to any present applicable law or if any
future applicable law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or by
any governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Lender or the Administrative Agent by any central
bank or other fiscal, monetary or other authority (whether or not having the
force of law), shall:

 

(a)           subject
any Lender or the Administrative Agent to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Credit
Agreement, the other Loan Documents, such Lender’s Commitment or the Loans
(other than taxes based upon or measured by the income or profits of such
Lender or the Administrative Agent), or

 

29

 

(b)           materially
change the basis of taxation (except for changes in taxes on income or profits)
of payments to any Lender of the principal of or the interest on any Loans or
any other amounts payable to any Lender or the Administrative Agent under this
Credit Agreement or any of the other Loan Documents, or

 

(c)           impose or increase or render applicable
(other than to the extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans by, or
commitments of an office of any Lender, or

 

(d)           impose
on any Lender or the Administrative Agent any other conditions or requirements
with respect to this Credit Agreement, the other Loan Documents, the Loans,
such Lender’s Commitment, or any class of loans or commitments of which any of
the Loans or such Lender’s Commitment forms a part,

 

and the result of any of the foregoing is:

 

(i)            to increase the
cost to any Lender, of making, funding or maintaining any of the Loans or such
Lender’s Commitment, or

 

(ii)           to reduce the
amount of principal, interest, or other amount payable to such Lender or the
Administrative Agent hereunder on account of such Lender’s Commitment or any of
the Loans, or

 

(iii)          to require such
Lender or the Administrative Agent to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Lender or the Administrative
Agent from the Borrower hereunder,

 

then,
in each such case and to the extent that the amount of such additional cost,
reduction, payment, foregone interest or other sum is not reflected in the Base
Rate or the Eurocurrency Rate, the Borrower will, upon demand made by such
Lender or (as the case may be) the Administrative Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Lender
or the Administrative Agent such additional amounts as will be sufficient to
compensate such Lender or the Administrative Agent for such additional cost,
reduction, payment or foregone interest or other sum (without duplication for
recovery of such amounts under any other provision hereof), provided
that the Borrower shall not be liable to any Lender or the Administrative Agent
for costs incurred more than sixty (60) days prior to receipt by the Borrower
of such demand for payment from such Lender or (as the case may be) the
Administrative Agent unless such costs were incurred prior to such 60-day
period solely as a result of such present or future applicable law being
retroactive to a date which occurred prior to such 60-day period.

 

30

 

§3.8.       Capital Adequacy.  If
after the Effective Date any Lender or the Administrative Agent determines that
the adoption of or change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a Governmental Authority with
appropriate jurisdiction has the effect of reducing the return on such Lender’s
or the Administrative Agent’s commitment with respect to any Loans to a level
below that which such Lender or the Administrative Agent could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender’s or the Administrative Agent’s then existing policies with respect to
capital adequacy and assuming full utilization of such entity’s capital) by any
amount deemed by such Lender or (as the case may be) the Administrative Agent
to be material, then such Lender or the Administrative Agent may notify the
Borrower of such fact.  To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate or the Eurocurrency Rate, then the Borrower agrees to pay such
Lender or (as the case may be) the Administrative Agent for the amount of such
reduction in the return on capital as and when such reduction is determined
upon presentation by such Lender or (as the case may be) the Administrative
Agent of a certificate in accordance with §3.9 hereof, provided that the
Borrower shall not be liable to any Lender or the Administrative Agent for
costs incurred more than sixty (60) days prior to receipt by the Borrower of
the notice referred to in the immediately preceding sentence from such Lender
or (as the case may be) the Administrative Agent.  Each Lender shall allocate such cost
increases among its customers in good faith and on an equitable basis.

 

§3.9.       Certificate.  A
certificate setting forth any additional amounts payable pursuant to §§3.7 or 3.8
hereof and a brief explanation of such amounts which are due, submitted by any
Lender or the Administrative Agent to the Borrower, shall be conclusive, absent
manifest error, that such amounts are due and owing.  If the Borrower is required to pay any additional
amounts pursuant to §§3.7 or 3.8 hereof with respect to any Lender, the
Borrower may, following payment in full of the amount or amounts due set forth
in such certificate, take the actions permitted by §3.12 hereof to replace such
Lender.

 

§3.10.     Indemnity.  The
Borrower agrees to indemnify each Lender and to hold each Lender harmless from
and against all redeployment costs or expenses that such Lender may reasonably
sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or any interest on any Eurocurrency Rate
Loan as and when due and payable, including any such cost or expense arising
from interest or fees payable by such Lender to lenders of funds obtained by it
in order to maintain its Eurocurrency Rate Loans, (b) default by the
Borrower in making a borrowing or conversion after the Borrower has given (or
is deemed to have given) a Loan Request or a Conversion Request relating
thereto in accordance with §§2.2 or 2.9 hereof or (c) the making of any
payment of a Eurocurrency Rate Loan or the making of any conversion of any
Eurocurrency Rate Loan to a Base Rate Loan on a day that is not the last day of
the applicable Interest Period with respect thereto, including interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
any such Loans.

 

31

 

§3.11.     Interest After Default.  Overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder or under
any of the other Loan Documents, if not repaid on or before the fifth calendar
day following the day such payment was due, shall bear interest from the due
date thereof, compounded monthly and payable on demand at any time from and
after the fifth calendar day following the day such payment was due, at a rate
per annum equal to two percent (2%) above the rate of interest then applicable
thereto (or, if no rate of interest is then applicable thereto, the Base Rate)
until such amount shall be paid in full (after as well as before judgment).

 

§3.12.     Replacement of Individual Lenders.  Upon
the happening of any of the events set forth in §§2.3.2, 3.3.2, 3.3.3, 3.6,
3.7, 3.8 or 3.13 hereof, or in the case of a Delinquent Lender, the Borrower
may (provided that at the time no Default or Event of Default exists or
would result after giving effect to the Borrower’s action) prepay in full all
Loans and other obligations owing by the Borrower to each affected Lender under
§§2.3.2, 3.3.2, 3.3.3, 3.6, 3.7, 3.8 or 3.13 hereof and/or each Delinquent
Lender (each such Lender being called a “Substituted
Lender”), together with all amounts payable
by the Borrower under §3.10 hereof with respect to such prepayment, and
terminate the Commitment(s) of such Lender(s) subject to the
following conditions:

 

(a)           the
Borrower shall have delivered to the Administrative Agent not less than ten (10) Business
Days (or, in the case of a replacement of a Delinquent Lender, such lesser
number of Business Days acceptable to the Administrative Agent) prior to the
exercise of its rights under this §3.12 a written commitment in form and
substance satisfactory to the Administrative Agent and each of the Lenders from
a financial institution (the “Replacement  Lender”) reasonably
acceptable to the Administrative Agent and each of the remaining Lenders (other
than the Substituted Lender) in which such Replacement Lender agrees to become
a “Lender” under this Credit Agreement, having a Commitment Amount in the
amount of the Substituted Lender’s Commitment Amount;

 

(b)           the
Borrower shall have given appropriate notice of any prepayment under this §3.12
as required by §3.7 hereof and subject to all other provisions of this Credit
Agreement; and

 

(c)           simultaneously
with any prepayment of all Loans and other obligations owing by the Borrower to
a Substituted Lender under this §3.12, the Substituted Lender shall have
assigned, pursuant to §18 hereof the Commitment of such Substituted Lender to
the Replacement Lender and such Replacement Lender shall have become a Lender
under this Credit Agreement, having a Commitment Amount in the amount of such
Substituted Lender’s Commitment Amount and such Replacement Lender shall have
simultaneously funded all such Loans prepaid hereunder. Each of the Lenders
agrees that in the event that it becomes a Substituted Lender pursuant to this
§3.12, it will cooperate and assign its Commitment pursuant to this §3.12(c).

 

32

 

§3.13.     Additional Reserve Requirements.  The Borrower shall pay to each Lender, as long as such Lender shall be required to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which in each case shall be due and payable on each date on which interest is payable on
such Loan, provided the Borrower shall have received at least ten (10) days’
prior notice (with a copy to the Administrative Agent) of such additional interest
or costs from such Lender.  If a Lender fails to give notice ten (10) days
prior to the relevant Interest Payment Date, such additional interest or
costs shall be due and payable ten (10) days
from receipt of such notice.

 

§3.14.     Guaranties.  The
payment and performance of the Obligations shall be guaranteed by each
Guarantor pursuant to the Guaranties, each of which shall be in the form of Exhibit B
hereto.  The Borrower may cause
additional Subsidiaries of the Borrower to become Guarantors hereunder by
causing such Subsidiary or Subsidiaries to agree to be bound by the provisions
of the Guaranty, to execute and deliver a Joinder Agreement and to deliver such
legal opinions and other documents and instruments as the Administrative Agent
may request.  The Administrative Agent
and the Lenders hereby agree that they shall, upon the written request of the
Borrower and at the cost and expense of the Borrower, release any Guarantor
from its obligations to the Administrative Agent and the Lenders under the Guaranty
to which such Guarantor is a party if, and only if, (a) such Guarantor is
not a guarantor of any of the Borrower’s publicly issued notes or bonds
outstanding from time to time, (b) no Default or Event of Default shall
have occurred and be continuing on the date of such release and (c) the
Borrower shall have delivered to the Administrative Agent and the Lenders on
the date of such release a certificate signed by an authorized officer of the
Borrower and evidence satisfactory to the Administrative Agent and the Lenders
showing compliance with the provisions of clauses (a) and (b) of this
§3.14.  The Borrower shall deliver to the
Lenders an updated Schedule  2 upon the release or addition of any
Guarantor as provided in this §3.14.

 

§4.          REPRESENTATIONS AND
WARRANTIES.

 

The Borrower represents and
warrants to the Lenders and the Administrative Agent as follows:

 

§4.1.       Corporate Authority.

 

§4.1.1.       Incorporation; Good Standing.  The
Borrower and each Guarantor (a) is a corporation (or similar business
entity) or, as the case may be, a Massachusetts Business Trust duly organized,
validly existing and in good standing under the laws of its state of
incorporation or organization, (b) has all requisite corporate (or the
equivalent company) or, as the case may be, trust power to own its property and
conduct its business as now conducted and as presently contemplated, and (c) is
in good standing as a foreign corporation (or similar business entity) and is
duly authorized to do business 

 

33

 

in each jurisdiction where such qualification is necessary except where
a failure to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of the Borrower.

 

§4.1.2.       Authorization.  The
execution, delivery and performance of this Credit Agreement and the other Loan
Documents by the Borrower and each Guarantor which is or is to become a party
thereto, and the transactions contemplated hereby and thereby (a) are
within the corporate (or the equivalent company) or, as the case may be, trust
authority of such Person, (b) have been duly authorized by all necessary
corporate (or the equivalent company) or, as the case may be, trust
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which such Person is subject which would have a material adverse effect either
individually or in the aggregate on the Borrower and its Subsidiaries taken as
a whole or on the ability of such Person to fulfill its obligations under this
Credit Agreement and the other Loan Documents to which it is a party, (d) do
not conflict with or result in any breach or contravention of any judgment,
order, writ, injunction, license or permit applicable to the Borrower or any
Guarantor and (e) do not conflict with any provision of the corporate
charter or bylaws (or similar constitutive documents) or, as the case may be,
the Agreement and Declaration of Trust of, or any agreement or other instrument
binding upon, the Borrower or any Guarantor.

 

§4.1.3.       Enforceability.  The
execution and delivery of this Credit Agreement and the other Loan Documents to
which the Borrower or any Guarantor is or is to become a party will result in
valid and legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.

 

§4.2.       Governmental Approvals.  The
execution, delivery and performance by the Borrower and the Guarantors of this
Credit Agreement and the other Loan Documents to which the Borrower or any
Guarantor is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
Governmental Authority other than those already obtained.

 

§4.3.       Title to Properties; Leases. 
Except as indicated on Schedule  4.3 hereto, the Borrower
and its Subsidiaries own all of the assets reflected in the consolidated
balance sheet of the Borrower as at the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.

 

34

 

 

§4.4.       Financial
Statements; Fiscal Year. 
(a)  There has been furnished to each of the Lenders an audited
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date, and consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, certified by
Ernst & Young LLP.  Such balance
sheet and statements of income and cash flows have been prepared in accordance
with GAAP and fairly present the financial condition of the Borrower and its
Subsidiaries as at the close of business on the date thereof and the results of
operations for the fiscal year then ended. 
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the officers
of the Borrower, which were not disclosed in such balance sheet and the notes
related thereto.

 

(b)           The Borrower has a fiscal year which
is the 52/53 week period ending on the Saturday closest to January 31st  of each year.

 

§4.5.       No Material
Changes, Etc.  Since the Balance Sheet Date there has
occurred no change in the operations, business, properties, assets or financial
condition of the Borrower and its Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date, or the consolidated statements of income and cash flows for
the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business, assets or financial condition of the Borrower
and its Subsidiaries taken as a whole. 
Since the Balance Sheet Date, the Borrower has not made any
Distributions except Distributions made in compliance with §6.4 hereof.

 

§4.6.       Franchises,
Patents, Copyrights, Etc.  The Borrower and each of its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.

 

§4.7.       Litigation. 
Except as set forth in Schedule  4.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or, to the
best of the Borrower’s knowledge, threatened against the Borrower or any of its
Subsidiaries before any court, tribunal or administrative agency or board that,
either in any case or in the aggregate, would be reasonably likely to (i) materially
adversely affect the properties, assets, financial condition or business of the
Borrower and its Subsidiaries taken as a whole, (ii) materially impair the
right of the Borrower and each of its Subsidiaries to carry on business
substantially as now conducted by it, (iii) result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not maintained on the consolidated balance sheet of the Borrower and its
Subsidiaries or (iv) question the validity of this Credit Agreement or any
of the other Loan Documents, or any action taken or to be taken pursuant hereto
or thereto.

 

35

 

§4.8.       Compliance with
Other Instruments, Laws, Etc.  Neither the Borrower nor any of
its Subsidiaries is in violation of any provision of its charter documents,
bylaws (or equivalent constitutive documents), or any agreement or instrument
to which it may be subject or by which it or any of its properties may be bound
or any decree, order, judgment, statute, license, rule or regulation, in
any of the foregoing cases in a manner that could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Borrower and its Subsidiaries taken as
a whole.

 

§4.9.       Tax Status.  The
Borrower and each of its Subsidiaries (a) has made or filed all applicable
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (c) has set aside on its
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply.  Except as set forth on Schedule
4.9 hereto, there are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.

 

§4.10.     No Event of Default.  No
Default or Event of Default has occurred and is continuing.

 

§4.11.     Investment Company
Act.  Neither the Borrower nor any of its
Subsidiaries is an “investment  company”, or a “principal
underwriter” of an “investment  company”, or a
company controlled by an “investment  company”, as such terms are defined in the
Investment Company Act of 1940.

 

§4.12.     Employee Benefit Plans.

 

§4.12.1.     In General.  Each
Employee Benefit Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA, all Applicable Pension
Legislation, and, to the extent applicable, the Code, including but not limited
to the provisions thereunder respecting the bonding of fiduciaries and other
persons handling plan funds as required by §412 of ERISA.  No prohibited transaction has occurred that
would result in material liability for the Borrower or any of its Subsidiaries.

 

§4.12.2.     Terminability of
Welfare Plans.  No Employee Benefit Plan which is an employee
welfare benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA
provides benefit coverage subsequent to termination except as required by Title
I, Subtitle B, Part 6 of ERISA or applicable state law. The Borrower may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of the
Borrower without liability to any Person other than for claims arising or
benefits accruing prior to termination.

 

36

 

§4.12.3.     Guaranteed Pension
Plans.  Each contribution required to be made to a
Guaranteed Pension Plan, whether required to be made to avoid the incurrence of
an accumulated funding deficiency, the notice or lien provisions of §302(f) of
ERISA, or otherwise, has been timely made. 
No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed Pension
Plan, and neither the Borrower nor any ERISA Affiliate is obligated to or has
posted security in connection with an amendment to a Guaranteed Pension Plan
pursuant to §307 of ERISA or §401(a)(29) of the Code.  No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event, or any other event or condition
which presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which
in each case occurred within twelve months of the date of this representation),
and on the actuarial methods and assumptions employed for that valuation,
except as set forth on Schedule  4.12 hereto, the aggregate benefit liabilities
of all such Guaranteed Pension Plans within the meaning of §4001 of ERISA did
not exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.

 

§4.12.4.     Multiemployer
Plans.  Neither the Borrower nor any ERISA Affiliate
has incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under §4201 of ERISA or as a result of a sale of assets
described in §4204 of ERISA.  Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer Plan
is in reorganization or insolvent under and within the meaning of §4241 or
§4245 of ERISA or is at risk of entering reorganization or becoming insolvent,
or that any Multiemployer Plan intends to terminate or has been terminated
under §4041A of ERISA.

 

§4.13.     Regulations U and X,
Etc.  The proceeds of the Loans shall be used for
the purposes described in §5.12 hereof. 
The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no portion of any Loan is
to be used for the purpose of purchasing or carrying any “margin  security” (as such term
is defined in Regulation X) or Margin Stock in violation of the Margin
Regulations.  Following application of
the proceeds of each Loan, not more than twenty-five percent (25%) of the value
of the assets of the Borrower and its Subsidiaries on a consolidated basis will
consist of Margin Stock.

 

§4.14.     Environmental
Compliance.  The Borrower has taken all reasonably
necessary steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such diligent
investigation, has determined that:

 

(a)           none of the Borrower, its
Subsidiaries nor any operator of the Real Estate or any operations thereon is
in violation, or alleged violation, of any 

 

37

 

Environmental
Laws, which violation would have a material adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries taken as a
whole;

 

(b)           neither the Borrower nor any of its
Subsidiaries has received any Environmental Notice during the last five (5) years
that has the potential to materially affect the assets, liabilities, financial
condition or operations of the Borrower and its Subsidiaries taken as a whole,
except as set forth on Schedule  4.14 hereto;

 

(c)           except as set forth on Schedule
4.14 hereto: (i) no portion of the Real Estate has been used for
the handling, processing, storage or disposal of Hazardous Substances; and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; in each case except in
accordance with applicable Environmental Laws the noncompliance with which
would have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken as a whole; (ii) in
the course of any activities conducted by the Borrower or operators of its
properties, no Hazardous Substances have been generated or are being used on
the Real Estate except in accordance with applicable Environmental Laws the
noncompliance with which would have a material adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries, taken as a
whole; (iii) there have been no releases or threatened releases of
Hazardous Substances on, upon, into or from the properties of the Borrower or any
of its Subsidiaries, which releases would have a material adverse effect on the
business, assets or financial condition of the Borrower and its Subsidiaries,
taken as a whole; (iv) to the best of the Borrower’s knowledge, there have
been no releases on, upon, from or into any real property in the vicinity of
any of the Real Estate which, through soil or groundwater contamination, may
have come to be located on the Real Estate and which would have a material
adverse effect on the Borrower and its Subsidiaries, taken as a whole; and (v) in
addition, any Hazardous Substances that have been generated on any of the Real
Estate have, to the best of the Borrower’s knowledge, been transported offsite
only as required under and in compliance with applicable Environmental Laws.

 

§4.15.     Foreign
Assets Control Regulations, Etc.  None of the requesting or
borrowing of the Loans, or the use of the proceeds of any thereof will violate
the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading  With
the Enemy  Act”)
or any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign  Assets
Control  Regulations”)
or any enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)) (the “Executive
Order”) and (b) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Public Law 107-56)).  Furthermore, neither the Borrower nor any of
its Subsidiaries or, to Borrower’s knowledge, other Affiliates (a) is or
will become a “blocked person” as described in the Executive Order, the Trading
With the Enemy Act or the Foreign Assets 

 

38

 

Control
Regulations or (b) engages or will engage in any dealings or transactions,
or be otherwise associated, with any such “blocked person”.

 

§4.16.     Subsidiaries, Etc.  As of
the Effective Date, other than those Subsidiaries of the Borrower described on Schedule
4.16(a) hereto, the Borrower has no other Subsidiaries.  As of the Effective Date, except as set forth
on Schedule  4.16(b) hereto, neither the Borrower nor any
Subsidiary of the Borrower is engaged in any joint venture or partnership with
any other Person.  As of the Effective
Date, except as set forth on Schedule  4.16(c) hereto,
neither the Borrower nor any Subsidiary of the Borrower owns or has acquired an
equity interest of fifty percent (50%) or less in any other Person.  The Borrower hereby agrees to deliver to the
Lenders an updated Schedule  4.16(a), Schedule  4.16(b) or
Schedule  4.16(c), as applicable, upon the acquisition or
formation by the Borrower of any Subsidiary, the formation of any joint venture
or partnership by the Borrower or any of its Subsidiaries with any other Person
or the acquisition by the Borrower or any of its Subsidiaries of an equity
interest of fifty percent (50%) or less in any other Person, in each case in
accordance with the provisions of this Credit Agreement.

 

§4.17.     Taxpayer Identification Numbers.  The
true and correct U.S. taxpayer identification number of the Borrower and each
Guarantor as of the Effective Date is set forth on Schedule  4.17
hereto.

 

§5.          AFFIRMATIVE COVENANTS OF THE
BORROWER.

 

The Borrower covenants and agrees that, so
long as any Loan is outstanding or any Lender has any obligation to make any
Loans:

 

§5.1.       Punctual Payment.  The
Borrower will duly and punctually pay or cause to be paid the principal and
interest on the Loans, the Commitment Fee, the Administrative Agent Fees, all
other fees and other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrower is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.

 

§5.2.       Maintenance of
Office.  The Borrower will maintain its chief
executive office in Framingham, Massachusetts, or at such other place in the
United States of America as the Borrower shall designate upon written notice to
the Administrative Agent, where notices, presentations and demands to or upon
the Borrower in respect of the Loan Documents to which the Borrower is a party
may be given or made.

 

§5.3.       Records and
Accounts.  The Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
GAAP and (b) maintain adequate accounts and reserves for all taxes,
depreciation, depletion, obsolescence and amortization of its properties and
the properties of its Subsidiaries, contingencies, and other reserves.

 

39

 

§5.4.       Financial
Statements, Certificates and Information.  The
Borrower will deliver to the Administrative Agent (and the Administrative Agent
will promptly, after receipt thereof, deliver to the Lenders):

 

(a)           as soon as practicable, but in any
event not later than ninety (90) days after the end of each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such year, and the related consolidated statement
of income and consolidated statement of cash flows for such year, each setting
forth in comparative form the figures for the previous fiscal year and all such
consolidated statements to be in reasonable detail, prepared in accordance with
GAAP, and certified without qualification by Ernst & Young LLP, any
nationally recognized firm of independent certified public accountants or by
other independent certified public accountants reasonably satisfactory to the
Administrative Agent and (ii) a statement certified by the chief financial
officer or the treasurer of the Borrower in substantially the form of Exhibit C
hereto (a “Compliance Certificate”) and
setting forth in reasonable detail computations evidencing compliance with the
covenants contained in §7 hereof and (if applicable) reconciliations to reflect
changes in GAAP since the Balance Sheet Date;

 

(b)           as soon as practicable, but in any
event not later than forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, (i) copies of
the unaudited consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such quarter, and the related consolidated statement of income
and consolidated statement of cash flows for the portion of the Borrower’s
fiscal year then elapsed, all in reasonable detail and prepared in accordance
with GAAP, together with a certification by the chief financial officer or the
treasurer of the Borrower that to the best of the Borrower’s knowledge, the
information contained in such financial statements fairly presents the
financial position of the Borrower and its Subsidiaries on the date thereof
(subject to year-end adjustments) and (ii) a Compliance Certificate as of
such fiscal quarter end;

 

(c)           from time to time such other
financial data and information as the Administrative Agent or any Lender may
reasonably request;

 

(d)           (i) promptly upon becoming aware
of the occurrence of any actual or claimed “Event of Termination” or similar
event under and as defined in any of the documents relating to any receivables
securitization transaction or other financing of any special purpose
receivables Subsidiary of the Borrower, entered into or guaranteed by the
Borrower and/or any of its Subsidiaries and then in effect, notice thereof,
which notice shall describe such Event of Termination or similar event and
indicate what steps the Borrower and its Subsidiaries are taking to remedy the
same and (ii) promptly upon request therefor, such other information with
respect thereto as the Administrative Agent shall reasonably request;

 

(e)           promptly after the same are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of 

 

40

 

the Borrower,
and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to file with
the Securities Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, and not otherwise required to be delivered to
the Administrative Agent pursuant hereto; and

 

(f)            promptly after the same are
available, copies of each of the Offer Documents.

 

All Confidential Information concerning the
Borrower supplied by the Borrower to the Lenders pursuant to the terms hereof
will be held in confidence by the Lenders and the Lenders shall not disclose
such Confidential Information except as permitted by §26 hereof.

 

Documents required to be delivered pursuant
to this §5.4 (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
the Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at staples.com; or (ii) on which such documents
are posted on the Borrower’s behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent has access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies
of such documents to the Administrative Agent or any Lender that requests in
writing that the Borrower deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents. 
Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by §§5.4(a) and (b) hereof to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

 

The Borrower hereby acknowledges that (i) the
Administrative Agent and/or the Arranger will make available to the Lenders
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the “Platform”) and (ii) certain
of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public
Lender”).  The Borrower hereby
agrees that (A) all Borrower Materials that are to be made available to
Public Lenders shall be clearly and conspicuously marked “PUBLIC” by the
Borrower which, at a minimum, shall mean that 

 

41

 

the word “PUBLIC” shall
appear prominently on the first page thereof; (B) by marking Borrower
Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
(provided, however, (x) to the extent such Borrower
Materials constitute Confidential Information, they shall be treated as set
forth in §26 hereof and (y) to the extent such Borrower Materials are not
marked “PUBLIC” and posted on the Platform, such Borrower Materials will also
be subject to the additional confidentiality provisions included on the
Platform); (C) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (D) the Administrative Agent and the Arranger shall be entitled to
treat any Borrower Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not designated “Public Investor”
and the Administrative Agent and the Lenders agree not to trade securities on
the basis of any Borrower Materials that are posted on the Platform and are not
marked “PUBLIC.”  Notwithstanding the
foregoing, the Borrower shall be under no obligation to mark any Borrower
Materials “PUBLIC.”

 

§5.5.       Notices.  The Borrower will promptly notify the Administrative Agent for the
benefit of the Lenders in writing of the occurrence of any Default or Event of
Default.  The Borrower will promptly give
notice to the Administrative Agent for the benefit of the Lenders (a) of
any material violation of any Environmental Law that the Borrower or any of its
Subsidiaries reports in writing or is reportable by such Person in writing (or
for which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency, (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action, including
a notice from any agency of potential environmental liability, or any federal,
state or local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or operations
of the Borrower, (c) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential ERISA liability, that has the potential to materially affect the
assets, liabilities, financial conditions or operations of the Borrower and (d) of
any material change in accounting policies or financial reporting practices by
the Borrower or any Subsidiary of the Borrower. 
The Borrower will give notice to the Administrative Agent for the
benefit of the Lenders in writing within fifteen (15) days of becoming aware of
any litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower or any of its Subsidiaries or to which the
Borrower or any of its Subsidiaries is or becomes a party involving an
uninsured claim against the Borrower or any of its Subsidiaries that could
reasonably be expected to have a materially adverse effect on the Borrower and
its Subsidiaries taken as a whole and stating the nature and status of such
litigation or proceedings.  The Borrower
will, and will cause each of its Subsidiaries to, give notice to the
Administrative Agent for the benefit of the Lenders, in writing, in form and
detail satisfactory to the Administrative Agent, within ten (10) days of
any judgment not covered by insurance, final or otherwise, against the Borrower
or any of its Subsidiaries in an amount in excess of $25,000,000.

 

42

 

§5.6.       Legal Existence;
Maintenance of Properties.  The Borrower will do or cause
to be done all things necessary to preserve and keep in full force and effect
its legal existence, rights and franchises and those of its Subsidiaries and
will not, and will not cause or permit any of the Guarantors to, convert to a
limited liability company or a limited liability partnership unless
simultaneously with such conversion the Borrower or such Guarantor shall have
executed and delivered to the Administrative Agent all documentation which the
Administrative Agent reasonably determines is necessary to continue the
Borrower’s or such Guarantor’s obligations in respect of this Credit Agreement
or the Guaranty, as applicable.  It (a) will
cause all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment, (b) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (c) will, and will cause each of its Subsidiaries to, continue to
engage primarily in the businesses now conducted by them and in related
businesses; provided that nothing in this §5.6 shall prevent the
Borrower from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its or their business
and does not in the aggregate materially adversely affect the business of the
Borrower and its Subsidiaries on a consolidated basis.

 

§5.7.       Insurance.  The
Borrower will, and will cause each of its Subsidiaries to, maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be
in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms,
in such forms and for such periods as may be reasonable and prudent.  At the request of the Administrative Agent,
the Borrower shall deliver from time to time a summary schedule indicating all
insurance then in force with respect to the Borrower and its Subsidiaries.

 

§5.8.       Taxes.  The
Borrower will, and will cause each of its Subsidiaries to, duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of its
property; provided that any such tax, assessment, charge, levy or claim
need not be paid if the validity or amount thereof shall currently be contested
in good faith by appropriate proceedings and if the Borrower or such Subsidiary
shall have set aside on its books adequate reserves with respect thereto; and provided
further that the Borrower and each Subsidiary of the Borrower will pay
all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor or shall have obtained such bonding as may be required to
release such lien.

 

43

 

§5.9.       Inspection of
Properties and Books, Etc.  The Borrower shall permit the
Lenders, through the Administrative Agent or any of the Lenders’ other
designated representatives, no more frequently than once each calendar year, or
more frequently as determined by the Lenders upon the occurrence and during the
continuance of an Event of Default, to visit and inspect any of the properties
of the Borrower or any of its Subsidiaries, and each such inspection, if no
Event of Default has occurred and is continuing, shall be at the Lenders’
expense.  The Borrower shall also permit
the Lenders, through the Administrative Agent or any of the Lenders’ other
designated representatives, to examine the books of account of the Borrower and
its Subsidiaries (and to make copies thereof and extracts therefrom), and to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with, and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Administrative Agent or any Lender may
reasonably request.  The Borrower
authorizes the Administrative Agent and, if accompanied by the Administrative
Agent, the Lenders to communicate directly with the Borrower’s independent
certified public accountants and authorizes such accountants to disclose to the
Administrative Agent and the Lenders any and all financial statements and other
supporting financial documents and schedules with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries.

 

§5.10.     Compliance with
Laws, Contracts, Licenses, and Permits.  The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, (b) the provisions of its charter documents and
by-laws (or equivalent constitutive documents), (c) all agreements and
instruments by which it or any of its properties may be bound and (d) all
applicable decrees, orders, and judgments, in each case if noncompliance with
which would have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken as a whole, or on the
ability of the Borrower or any of the Guarantors to fulfill its obligations
under this Credit Agreement or any of the other Loan Documents to which such
Person is a party.  If any authorization,
consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder or any of the
other Loan Documents to which the Borrower is a party, the Borrower will, or
(as the case may be) will cause such Subsidiary to, immediately take or cause
to be taken all reasonable steps within the power of the Borrower or such
Subsidiary to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Lenders with evidence thereof.

 

§5.11.     Employee Benefit
Plans.  The Borrower will (a) promptly upon
request of the Administrative Agent, furnish to the Administrative Agent a copy
of the most recent actuarial statement required to be submitted under §103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in
respect of each Guaranteed Pension Plan and (b) promptly upon receipt or
dispatch, furnish to the Administrative Agent any notice, report or demand sent
or received in respect of a Guaranteed Pension Plan under 

 

44

 

§§302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under §§4041A, 4202, 4219, 4242, or 4245 of ERISA.

 

§5.12.     Use of Proceeds.  The
Borrower will use the proceeds of the Loans solely to finance the Transaction,
including to pay related transaction fees, costs and expenses, and for backup
for the Borrower’s commercial paper program for the issuance of Anticipatory
Commercial Paper (including to refund or repay Anticipatory Commercial Paper at
maturity thereof, but only in accordance with §11 hereof) and additional
commercial paper issued after the Closing Date; provided that, except as
provided in §11B hereof, no Loans shall be made hereunder, and no Lender shall
have any obligation hereunder to make any Loans, prior to the Closing Date.

 

§5.13.     Licenses and Permits.  The
Borrower will maintain and renew any and all licenses or permits now held or
hereafter acquired by the Borrower or any of its Subsidiaries unless the loss,
suspension, revocation or failure to renew any such licenses or permits would
not have a material adverse effect on the business or financial condition of
the Borrower and such Subsidiary.

 

§5.14.     Guaranties.  In the event that any Subsidiary of the Borrower, which is not a
Guarantor hereunder, becomes a guarantor of any of the Borrower’s publicly
issued notes or bonds outstanding from time to time, the Borrower shall cause
such Subsidiary to become a Guarantor hereunder pursuant to §3.14 hereof.

 

§5.15.     Further Assurances.  The
Borrower will, and will cause each of the Guarantors to, cooperate with the
Lenders and the Administrative Agent and execute such further instruments and
documents as the Lenders or the Administrative Agent shall reasonably request
to carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.

 

§6.          CERTAIN NEGATIVE COVENANTS OF THE
BORROWER.

 

The Borrower covenants and agrees that, so long as
any Loan is outstanding or any Lender has any obligation to make any Loans:

 

§6.1.       Restrictions on
Indebtedness.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume, guarantee or become or
remain liable, contingently or otherwise, with respect to Indebtedness other
than:

 

(a)           Indebtedness to the Lenders and the
Administrative Agent arising under any of the Loan Documents;

 

(b)           current liabilities of the Borrower
or such Subsidiary incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit
except for credit on an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and services;

 

45

 

(c)           Indebtedness in respect of taxes,
assessments, governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be required
to be made in accordance with the provisions of §5.8 hereof;

 

(d)           Indebtedness in respect of judgments
or awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or review;

 

(e)           endorsements for collection, deposit
or negotiation and warranties of products or services, in each case incurred in
the ordinary course of business;

 

(f)            Indebtedness in respect of
documentary letters of credit issued in the ordinary course of business;

 

(g)           Indebtedness of the Borrower in
respect of interest rate protection arrangements and exchange rate protection
arrangements;

 

(h)           Indebtedness existing on the
Effective Date and listed and described on Schedule 6.1 hereto
or any refinancing thereof on substantially similar terms as the Indebtedness
being refinanced;

 

(i)            Subordinated Debt;

 

(j)            obligations under Capitalized
Leases;

 

(k)           Indebtedness in respect of
intercompany loans, guaranties and, so long as no Default or Event of Default
shall have occurred and be continuing at the time such Indebtedness is
incurred, other Investments and contingent obligations to make Investments, (i) from
the Borrower to any of its Subsidiaries or of any of its Subsidiaries’ obligations
or (ii) between Subsidiaries of the Borrower or of any of the Borrower’s
Subsidiaries’ obligations, or (iii) from any Subsidiary of the Borrower to
the Borrower or of any of the Borrower’s obligations;

 

(l)            Indebtedness incurred in connection
with the acquisition after the Effective Date of any real or personal property
by the Borrower or any Subsidiary of the Borrower as contemplated by §6.2(ix) hereof;

 

(m)          Indebtedness secured by a lien on Real
Estate of the Borrower or its Subsidiaries; provided that the aggregate
amount of Indebtedness permitted pursuant to this §6.1(m) shall not, at
any time, exceed the fair market value of the Real Estate securing such
Indebtedness;

 

(n)           other Indebtedness of the Borrower
and its Subsidiaries (whether or not such Subsidiaries are Guarantors), provided that (i) with respect to
Indebtedness 

 

46

 

incurred by
the Borrower or a Guarantor, such Indebtedness contains covenants that are no
more restrictive on the Borrower or such Guarantor than the covenants contained
in this Credit Agreement and (ii) immediately after such incurrence of
Indebtedness, and after giving effect thereto on a pro forma
basis, no Default or Event of Default shall then exist;

 

(o)           Indebtedness consisting of
Investments permitted under §6.3(m) hereof;

 

(p)           Indebtedness payable at the election
of the Borrower by the issuance of the Borrower’s Capital Stock;

 

(q)           Indebtedness of the Borrower and its
Subsidiaries in respect of receivables securitization transactions or other
financing of any special purpose receivables Subsidiary of the Borrower,
entered into or guaranteed by the Borrower and/or any of its Subsidiaries; provided
that the aggregate amount of all such Indebtedness shall not exceed $300,000,000
outstanding at any time; and

 

(r)            Indebtedness of the Borrower and its
Subsidiaries arising under the Existing Credit Agreement and any of the other “Loan
Documents” as such term is defined therein; provided that the aggregate
amount of all such Indebtedness shall not exceed $1,000,000,000 outstanding at
any time.

 

Notwithstanding the
foregoing, at no time shall the aggregate amount of Indebtedness of the
Borrower and its Subsidiaries consisting of guaranties and other Contingent
Liabilities (excluding (i) Indebtedness permitted pursuant to §6.1 hereof
to the extent such Indebtedness (or if such Indebtedness is a Contingent
Liability of the Borrower and/or its Subsidiaries, the underlying Indebtedness
relating to such Contingent Liability) is included in the calculation of
Consolidated Total Funded Debt and (ii) obligations in respect of
documentary letters of credit) exceed, in the aggregate, fifteen percent (15%)
of the Stockholders’ Equity of the Borrower at such time.  For purposes of this §6.1, the amount of
Contingent Liabilities in respect of interest rate protection arrangements and
exchange rate protection arrangements permitted under §6.1(g) hereof at
any time shall be the net liability of the Borrower and its Subsidiaries under
such arrangements at such time, calculated on a basis satisfactory to the
Administrative Agent in accordance with accepted practice.

 

§6.2.       Restrictions on
Liens.  The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets
or the income or profits therefrom for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other obligation in priority
to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security 

 

47

 

agreement,
device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency under the laws of the United States of America or any state thereof,
or otherwise, be given any priority whatsoever over its general creditors; or (e) sell,
assign, pledge or otherwise transfer any accounts, contract rights, general
intangibles, chattel paper or instruments, with or without recourse; provided
that the Borrower and any Subsidiary of the Borrower may create or incur or
suffer to be created or incurred or to exist:

 

(i)            liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;

 

(ii)           liens to secure taxes, assessments and other government
charges and liens to secure claims for labor, material or supplies, in each
case in respect of obligations not overdue or which are being contested in good
faith and by appropriate proceedings and for which the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto;

 

(iii)          deposits or pledges made in connection with, or to secure
payment of, worker’s compensation, unemployment insurance, old age pensions or
other social security obligations;

 

(iv)          liens in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower or such
Subsidiary is at the time in good faith prosecuting an appeal and in respect of
which a stay of execution shall have been obtained pending such appeal or shall
have obtained an unsecured bond sufficient to release such lien;

 

(v)           liens of carriers, warehousemen, mechanics and
materialmen, and other like liens, in respect of obligations not overdue or, if
such obligations are overdue, being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary shall have set aside
on its books adequate reserves with respect thereto, provided that no
proceeding to foreclose any such lien shall have been commenced;

 

(vi)          encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord’s or lessor’s liens
under Capitalized Leases to which the Borrower or a Subsidiary of the Borrower
is a party, and other minor liens or encumbrances none of which in the opinion
of the Borrower interferes materially with the use of the property affected in
the ordinary conduct of the business of the Borrower and its Subsidiaries,
which defects do not individually or in the aggregate have a materially adverse
effect on the business of the Borrower individually or of the Borrower and its
Subsidiaries on a consolidated basis;

 

48

 

(vii)         liens
existing on the Effective Date and listed on Schedule 6.2
hereto or liens on the same assets in connection with the refinancing of such
existing liens;

 

(viii)        liens
arising in the ordinary course of business of the Borrower or a Subsidiary of
the Borrower none of which in the opinion of the Borrower interferes materially
with the use of the property affected in the ordinary course of business of the
Borrower and its Subsidiaries and which do not, individually or in the
aggregate, have a materially adverse effect on the business of the Borrower or
such Subsidiary individually or of the Borrower and its Subsidiaries on a
consolidated basis;

 

(ix)           purchase
money security interests in or purchase money mortgages on real or personal
property acquired after the Effective Date to secure purchase money
Indebtedness of the type permitted by §6.1(l) hereof, incurred in
connection with the acquisition of such property, which security interests or
mortgages cover only the real or personal property so acquired;

 

(x)            liens
on accounts receivable of the Borrower and/or its Subsidiaries that are the
subject of and secure the Indebtedness permitted under §6.1(q) hereof;

 

(xi)           liens
securing other permitted Indebtedness that does not exceed $50,000,000 in the
aggregate;

 

(xii)          liens
in respect of the interests of lessors under Capitalized Leases; and

 

(xiii)         liens
on Real Estate securing Indebtedness permitted under §6.1(m) hereof.

 

§6.3.       Restrictions on Investments.  The Borrower will not, and will not permit
any of its Subsidiaries to, make or permit to exist or to remain outstanding
any Investment except Investments in:

 

(a)           marketable direct or guaranteed
obligations of the United States of America or any country which is a member of
the OECD;

 

(b)           demand deposits, certificates of
deposit, bankers acceptances and time deposits of (i) United States or
Canadian banks having total assets in excess of $1,000,000,000 or (ii) a
commercial bank organized under the laws of any other country which is a member
of the OECD, or a political subdivision of such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting
through a branch or agency located in the country in which its is organized or
another country which is a member of the OECD;

 

(c)           (i) securities commonly known as
“commercial paper” denominated in Dollars, euros, British pounds sterling or
Canadian dollars which at the 

 

49

 

time of
purchase have been rated and the ratings for which are not less than “P 1”
if rated by Moody’s, and not less than “A 1” if rated by S&P; and (ii) securities
commonly known as “short-term bank notes” issued by any Lender denominated in
Dollars or any such other currency which at the time of purchase have been
rated and the ratings for which are not less than “P 2” if rated by Moody’s,
and not less than “A 2” if rated by S&P;

 

(d)           Investments existing on the Effective
Date and listed on Schedule 6.3 hereto;

 

(e)           Investments with respect to
Indebtedness permitted by §6.1(k) hereof so long as such entities remain
Subsidiaries of the Borrower;

 

(f)            taxable or tax-exempt securities
which at the time of purchase have been rated and the ratings for which are not
less than A 3 if rated by Moody’s, and not less than A- if rated by
S&P;

 

(g)           Investments consisting of loans and
advances to employees of the Borrower or any Subsidiary of the Borrower, not
exceeding $10,000,000 in the aggregate at any one time outstanding;

 

(h)           options to invest in or to lease real
property to be used in the operations of the Borrower or any Subsidiary of the
Borrower;

 

(i)            guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions
effected in the ordinary course of business;

 

(j)            (i) the Borrower’s or any
Subsidiary’s guaranty of the Indebtedness of any Subsidiary or the Borrower,
and (ii) any other Investments by the Borrower or any Subsidiary of the
Borrower in any Subsidiary of the Borrower or the Borrower;

 

(k)           Investments by the Borrower or any
Subsidiary of the Borrower to acquire a more than fifty percent (50%) equity
interest in any Person, provided that such acquisition is permitted
under §6.6 hereof;

 

(l)            Investments by the Borrower or any
Subsidiary of the Borrower to acquire up to a fifty percent (50%) equity
interest in another Person, provided that (i) such Person is in the
same line of business as the Borrower or such Subsidiary, as applicable and (ii) the
aggregate amount of (A) such Investments in such Person and (B) existing
Investments made by the Borrower or any Subsidiary of the Borrower pursuant to
this §6.3(l) shall at no time exceed sixty-five percent (65%) of the
Stockholders’ Equity of the Borrower;

 

(m)          Investments consisting of
Distributions permitted by §6.4 hereof;

 

50

 

(n)           Investments consisting of loans and
advances to, guaranties of the obligations of and equity Investments in,
Persons in a related line of business as the Borrower, not exceeding
$25,000,000 in the aggregate at any one time outstanding;

 

(o)           shares of money market mutual or
similar funds which invest exclusively in assets satisfying the requirements of
clauses (a) (b), (c) and (f) contained in this §6.3;

 

(p)           shares of money market mutual or
similar funds which have an Aaa or MR1+ money market fund rating from Moody’s
or an AAA money market fund rating from S&P; and

 

(q)           the Corporate Express Acquisition.

 

§6.4.       Distributions.  The Borrower will not declare any dividend or
make any Distribution if any Default or Event of Default has occurred and is
continuing or would result after giving effect to such Distribution.

 

§6.5.       Employee Benefit Plans.  Neither the Borrower nor any ERISA Affiliate
will: (a) engage in any “prohibited
transaction” within the meaning of §406 of ERISA or §4975 of the Code which
could result in a material liability for the Borrower or any of its
Subsidiaries; or (b) permit any Guaranteed Pension Plan to incur an “accumulated  funding
deficiency”, as such term is defined in
§302 of ERISA, whether or not such deficiency is or may be waived; or (c) fail
to contribute to any Guaranteed Pension Plan to an extent which, or terminate
any Guaranteed Pension Plan in a manner which, could result in the imposition
of a lien or encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to §302(f) or §4068 of ERISA; or (d) amend any
Guaranteed Pension Plan in circumstances requiring the posting of security
pursuant to §307 of ERISA or §401(a)(29) of the Code; or (e) permit or take
any action which would result in the aggregate benefit liabilities (with the
meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding the value
of the aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess of
benefit liabilities.

 

§6.6.       Merger and Consolidation; Acquisitions.  The Borrower will not, and will not permit
any of its Subsidiaries to, merge or consolidate with any other Person; enter
into any stock or asset acquisitions (other than the acquisition of assets in
the ordinary course of such Person’s business and other than the acquisition of
stock permitted under §§6.3(j), 6.3(l) or 6.3(q) hereof); enter into
any joint venture or partnerships (except to the extent permitted under §6.3
hereof); or enter into any new lines of business or otherwise change the
conduct of the Borrower’s or such Subsidiary’s business as presently conducted
other than (a) the merger or consolidation of one or more Subsidiaries of
the Borrower with and into the Borrower, provided that the Borrower is
the surviving entity, (b) the merger or consolidation of two (2) or
more Subsidiaries of the Borrower, provided that, if one of the
Subsidiaries is a Guarantor, that the Guarantor is the surviving entity, or (c) (other
than with respect to the Corporate Express 

 

51

 

Acquisition) the acquisition (whether of
stock or assets or by means of a merger) of (i) a more than fifty percent
(50%) equity interest in any other Person or (ii) assets of any other
Person; provided that (A) immediately after such acquisition, and
after giving effect thereto on a pro forma
basis, no Default or Event of Default shall then exist, (B) if required by
applicable law, the board of directors and the shareholders or the equivalent,
of such other Person has approved such acquisition, (C) such other Person
is in the business of selling office services, products and/or supplies, and (D) if
the Borrower or a Guarantor and such other Person merge, the Borrower or such
Guarantor is the surviving entity.

 

§6.7.       Disposition of Assets and
Sale-Leaseback Transactions.  The Borrower will not, and will not permit
any of its Subsidiaries to, dispose of or sell assets other than:

 

(a)           the disposition of assets in the
ordinary course of business;

 

(b)           sale-leaseback transactions and other
dispositions of assets that do not have a materially adverse effect on the
business, assets or financial condition of the Borrower or any of its Subsidiaries,
provided that (i) the aggregate net book value of the assets to be
sold plus the net book value of all other assets of the Borrower and its
Subsidiaries sold under this clause (b) during the period of time from the
Effective Date through the date of such sale does not, at the time of such
sale, exceed twenty-five percent (25%) of the Consolidated Total Assets of the
Borrower and its Subsidiaries and (ii) such assets are sold in an arm’s
length transaction for fair market value (after giving effect to all tax
benefits, if any, associated with such sale); and

 

(c)           the sale of accounts receivable of
the Borrower and/or its Subsidiaries pursuant to the transactions permitted
under §6.1(q) hereof.

 

§6.8.       Subordinated Debt.  The Borrower will not effect or permit any
change in or amendment to any document or instrument pertaining to the
subordination, covenants, events of default, terms of payment or required
prepayments of any Subordinated Debt, give any notice of redemption or
prepayment or offer to repurchase under any such document or instrument or,
directly or indirectly, make any payment of principal of or interest on or in
redemption, retirement or repurchase of any Subordinated Debt, except that (a) the
Borrower may make regularly scheduled payments when required by the terms of
the Subordinated Debt, and (b) the Borrower may refinance all or a portion
of the Subordinated Debt so long as such refinancing Subordinated Debt (i) has
a maturity that is no earlier than the Subordinated Debt being refinanced and (ii) is
subordinated to the Obligations on terms at least as favorable to the
Administrative Agent and the Lenders, in the opinion of the Administrative
Agent and the Required Lenders, as the Subordinated Debt being refinanced.

 

§6.9.       Transactions with Affiliates.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any transaction of any kind with any
Affiliate of the Borrower (excluding transactions between the Borrower and any
of its Subsidiaries and transactions between any Subsidiary of the Borrower and
any other Subsidiary of the 

 

52

 

Borrower), whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm’s length
transaction with a Person other than an Affiliate.

 

§7.          FINANCIAL COVENANTS OF THE BORROWER.

 

The Borrower covenants and
agrees that, so long as any Loan is outstanding or any Lender has any
obligation to make any Loans:

 

§7.1.       Fixed Charge Coverage Ratio.  As at the end of each fiscal quarter of the
Borrower, the Borrower will not permit the ratio (the “Fixed  Charge  Coverage  Ratio”)
of (a) the sum of (i) Consolidated EBIT for the period of the four
consecutive fiscal quarters (the “Measurement
Period”) ending on such date plus (ii) the
Rental Expense for such Measurement Period, to (b) the sum of (i) the
Consolidated Total Interest Expense for such Measurement Period plus (ii) the
Rental Expense for such Measurement Period, to be less than 1.50 to 1.

 

§7.2.       Adjusted Funded Debt to Total
Capitalization Ratio.  As
at the end of each fiscal quarter of the Borrower, the Borrower will not permit
the ratio of (a) Consolidated Adjusted Funded Debt as at such date to (b) the
sum of (i) Consolidated Adjusted Funded Debt as at such date plus (ii) Stockholders’
Equity as of such date, to be greater than 0.75 to 1.

 

§8.          EFFECTIVE DATE CONDITIONS.

 

This Credit Agreement shall
become effective on the date (the “Effective Date”) on which each of the
following conditions precedent is satisfied (or waived in accordance with §25
hereof):

 

§8.1.       Loan Documents.  Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Lenders.  The Administrative Agent shall
have received a fully executed counterpart of each such document.

 

§8.2.       Certified Copies of Charter Documents.  The Administrative Agent shall have received
from the Borrower and each of the Guarantors a copy, certified by a duly
authorized officer of such Person to be true and complete on the Effective Date,
of each of (a) its charter or other incorporation documents (or the
equivalent constitutive documents) as in effect on such date of certification,
and (b) its by-laws or the equivalent constitutive documents as in effect
on such date.

 

§8.3.       Corporate Action.  All corporate (or other) action necessary for
the valid execution, delivery and performance by the Borrower and each of the
Guarantors of this Credit Agreement and the other Loan Documents to which it is
or is to become a party 

 

53

 

shall have been duly and effectively taken,
and evidence thereof satisfactory to the Lenders shall have been provided to
the Administrative Agent.

 

§8.4.       Incumbency Certificate.  The Administrative Agent shall have received
from the Borrower and each of the Guarantors an incumbency certificate, dated
as of the Effective Date, signed by a duly authorized officer of the Borrower
and each Guarantor, as applicable, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the
name and to the benefit of each of the Borrower and the Guarantors, each of the
Loan Documents; (b) with respect to the Borrower, to make Loan Requests
and Conversion Requests; and (c) to give notices and to take other action
on its behalf under the Loan Documents.

 

§8.5.       Opinion of Counsel.  The Administrative Agent shall have received
favorable legal opinions addressed to the Lenders and the Administrative Agent,
dated as of the Effective Date, in form and substance satisfactory to the
Lenders and the Administrative Agent, from (a) Kristin A. Campbell, Esq.,
general counsel to the Borrower and the Guarantors and (b) Wilmer Cutler
Pickering Hale and Dorr LLP, special counsel to the Borrower and the Guarantors.

 

§8.6.       Payment of Fees.  The Borrower shall have paid to the
Administrative Agent and the other relevant Persons (including the Lenders) all
fees and expenses (including without limitation all reasonable legal fees and
disbursements of the Administrative Agent’s Special Counsel) required to be
paid by the Borrower in connection with this Credit Agreement on or prior to
the Effective Date.

 

§8.7.       Financial Statements.  The Borrower shall have delivered to the
Administrative Agent and the Lenders (i) audited consolidated financial
statements of the Borrower for the three most recent fiscal years as to which
such financial statements are available and (ii) unaudited interim
consolidated financial statements of the Borrower for each quarterly period, if
any, ended subsequent to the date of the latest financial statements delivered
pursuant to clause (i) of this §8.7 as to which such financial statements
are available.

 

§8.8.       Specified Representations True; No
Default.  (a) Each
of the Specified Representations referred to in clause (a) of the
definition thereof shall be true as of the Effective Date (it being agreed
that, notwithstanding anything herein to the contrary, the only representations
and warranties, the accuracy of which shall be a condition to the Effective
Date, shall be the Specified Representations) and (b) no Default or Event
of Default shall have occurred and be continuing; provided that,
notwithstanding anything herein to the contrary, for purposes of this §8.8,
Defaults and Events of Default due to a breach of representations and
warranties shall be limited to a breach of the Specified Representations.

 

§8.9.       No Default under Material Indebtedness.  No “Event of Default”, or event or condition
which upon notice, lapse of time or both would, unless cured or waived, become
such an “Event of Default”, in respect of Material Indebtedness of the 

 

54

 

Borrower and its Subsidiaries (excluding, for
the avoidance of doubt, Corporate Express and its Subsidiaries) shall have
occurred and be continuing as of the Effective Date.

 

§8.10.     Governmental Regulation.  Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System.

 

§8.11.     USA Patriot Act.  Each Lender
shall have received at least five (5) days prior to the Effective Date
from the Borrower documentation and other written information required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the USA
Patriot Act, as such Lender may reasonably request.

 

§8.12.     Effective Date Certificate.  The Administrative Agent shall have received
a certificate, dated the Effective Date and signed by the chief financial
officer or the treasurer of the Borrower, confirming the satisfaction of the
conditions set forth in this §8.

 

§9.          CLOSING DATE CONDITIONS.

 

The obligations of the
Lenders to make the initial Loans hereunder shall be subject to the
satisfaction of the following conditions precedent:

 

§9.1.       Effective Date.  The Effective Date shall have occurred.

 

§9.2.       Offer Consummation.  The Offer and the other Transactions, which
are contemplated to be consummated prior to or substantially simultaneously
with the Closing Date, shall be consummated simultaneously with the Closing
Date in accordance with the applicable Offer Documents and applicable law, and
no provision thereof (in the form submitted to and/or approved by the AFM, the
SEC or any other applicable Governmental Authority or otherwise in the final
form thereof, in each case furnished to the Lenders hereunder) shall have been
waived, amended, supplemented or otherwise modified in a manner materially
adverse to the Lenders without the consent of the Initial Lenders.  At the Borrower’s option, it may request the
Lenders, and the Lenders agree, to fund the initial Loans under this §9 one
Business Day prior to the anticipated Closing Date; provided that the
proceeds of such Loans shall be held pursuant to escrow or similar arrangements
reasonably satisfactory to the Administrative Agent and shall be released to
the Borrower on the Closing Date upon the satisfaction of the conditions set
forth in this §9 and such Loans shall bear interest hereunder at the applicable
rate therefor from the date of such funding (or failing the satisfaction of
such conditions, the proceeds of such Loans shall be returned to the Lenders,
with interest thereon payable by the Borrower at the rate per annum applicable
to Base Rate Loans hereunder, subject to being readvanced in accordance with
the provisions of this Credit Agreement).

 

55

 

§9.3.       Approvals.  All approvals from any Governmental Authority
or other Person necessary or, in the discretion of the Arranger, advisable in
connection with the Corporate Express Acquisition, the financing contemplated
hereby and the continuing operations of the Borrower and its Subsidiaries
(including Corporate Express and its Subsidiaries) shall have been obtained and
be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority, in each case above, that could reasonably be expected to restrain,
prevent or otherwise impose material, adverse conditions on the Corporate
Express Acquisition or the financing thereof.

 

§9.4.       Opinion of Counsel.  The Administrative Agent shall have received
favorable legal opinions addressed to the Lenders and the Administrative Agent,
dated as of the Closing Date, in form and substance satisfactory to the Lenders
and the Administrative Agent, from (a) Kristin A. Campbell, Esq.,
general counsel to the Borrower and the Guarantors and (b) Wilmer Cutler
Pickering Hale and Dorr LLP, special counsel to the Borrower and the
Guarantors.

 

§9.5.       Payment of Fees.  The Borrower shall have paid to the
Administrative Agent and the other relevant Persons (including the Lenders) all
fees and expenses (including without limitation all reasonable legal fees and
disbursements of the Administrative Agent’s Special Counsel) required to be
paid by the Borrower in connection with this Credit Agreement on or prior to
the Closing Date.

 

§9.6.       Pro Forma Financial Statements.  The Borrower shall have delivered to the
Administrative Agent and the Lenders a pro forma
consolidated balance sheet and a trailing twelve month income statement of the
Borrower, after giving effect to the Transactions, prepared as of the end of
the most recent fiscal quarter of the Borrower as to which financial statements
are available.

 

§9.7.       Specified Representations True; No
Default; No Default under Material Indebtedness.  (a) Each of the Specified
Representations shall be true as of the Closing Date (it being agreed that,
notwithstanding anything herein to the contrary, the only representations and
warranties, the accuracy of which shall be a condition to the Closing Date,
shall be the Specified Representations), (b) no Default or Event of
Default shall have occurred and be continuing as of the Closing Date and (c) after
giving pro forma effect to the Transactions, no
“Event of Default”, or event or condition which upon notice, lapse of time or
both would, unless cured or waived, become such an “Event of Default”, in
respect of Material Indebtedness of the Borrower and its Subsidiaries shall
have occurred and be continuing as of the Closing Date; provided that,
notwithstanding anything herein to the contrary, for purposes of this §9.7, (i) Defaults
and Events of Default hereunder due to a breach of representations and
warranties shall be limited to a breach of any of the Specified
Representations, (ii) the absence of any Default or Event of Default
hereunder due to the existence of any Indebtedness, Lien, Investment, asset,
business, transaction or any event or condition of any kind relating to
Corporate Express or any of its Subsidiaries (any such Default or Event of
Default, a “Corporate  Express-Related  Default”) as of the
Closing Date shall not be a condition to the Closing Date; 

 

56

 

provided that in no event shall a
Corporate Express-Related Default include any such Default or Event of Default
or event or condition of the type described in §12.1(g)(i)(2) hereof
relating to Corporate Express or any of its Subsidiaries, (iii) the
absence of any “Event of Default” or event or condition which upon notice,
lapse of time or both would, unless cured or waived, become such an “Event of
Default” in respect of Material Indebtedness of Corporate Express or any of its
Subsidiaries (any such Event of Default or event or condition, a “Corporate
Express  Material  Indebtedness  Default” and,
together with any Corporate Express-Related Default, each a “Corporate  Express
Default”) as of the Closing Date shall not be a condition to the Closing
Date; provided that in no event shall a Corporate Express Material
Indebtedness Default include any such “Event of Default” or event or condition
of the type described in §12.1(g)(i)(2) hereof relating to Corporate
Express or any of its Subsidiaries and (iv) with respect to the pro forma calculation of the Fixed Charge
Coverage Ratio for purposes of this §9.7 only, such calculation will be made on
the basis of the most recently completed period of four consecutive fiscal
quarters ended prior to the Closing Date for which consolidated financial
statements of the Borrower and consolidated financial statements of Corporate
Express are available (regardless of whether such periods are different for the
Borrower and Corporate Express).

 

§9.8.       Closing Date Certificate.  The Administrative Agent shall have received
a certificate, dated the Closing Date and signed by the chief financial officer
or the treasurer of the Borrower, confirming the satisfaction of the conditions
set forth in this §9.

 

§10.        CONDITIONS TO BORROWINGS TO FUND ADDITIONAL PURCHASES OF
CORPORATE EXPRESS SHARES AND CONVERTIBLE DEBT.

 

The obligations of the
Lenders to make any Loan after the Closing Date to fund additional purchases of
Corporate Express Shares and the convertible debt of Corporate Express pursuant
to the Offer and to fund the other Transactions shall be subject to the satisfaction
of the following conditions precedent:

 

§10.1.     Closing Date.  The Closing Date shall have occurred.

 

§10.2.     Specified Representations True; No
Default.  (a) Each
of the Specified Representations shall be true as of the relevant Drawdown Date
(it being agreed that, notwithstanding anything herein to the contrary, the
only representations and warranties, the accuracy of which shall be a condition
to the Closing Date, shall be the Specified Representations) and (b) no
Default or Event of Default shall have occurred and be continuing; provided
that, notwithstanding anything herein to the contrary, for purposes of this
§10.2, (i) Defaults and Events of Default due to a breach of
representations and warranties shall be limited to a breach of the Specified
Representations and (ii) the absence of any Corporate Express Default as
of the relevant Drawdown Date shall not be a condition to the making of such
Loans (provided that in no event shall a Corporate Express Default
include any Default or Event of Default or event or condition of the type 

 

57

 

described in §12.1(g)(i)(2) hereof
relating to Corporate Express or any of its Subsidiaries).

 

Each request for a Loan hereunder under this §10 shall constitute a representation
and warranty by the Borrower that the conditions set forth in this §10 shall
have been satisfied on the date of the relevant Loan Request and the relevant
Drawdown Date.

 

§11.        CONDITIONS TO BORROWINGS TO REPAY COMMERCIAL PAPER.

 

A.  In the event the Closing Date shall have
occurred, the obligations of the Lenders to make Loans after the Closing Date
to fund the repayment of Anticipatory Commercial Paper shall be subject to the
satisfaction of the following conditions precedent:

 

§11.1.     Representations True; No Default or
Event of Default.  Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement (other than §4.5 hereof), the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of the making of
such Loan, with the same effect as if made at and as of that time (except to
the extent of changes resulting from transactions contemplated or permitted by
this Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.

 

§11.2.     No Legal Impediment.  No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable
opinion of any Lender would make it illegal for such Lender to make such Loan.

 

§11.3.     Governmental Regulation.  Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.

 

§11.4.     Proceedings and Documents.  All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents
and all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Lenders and to the Administrative Agent and the Administrative
Agent’s Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.

 

58

 

Each request for a Loan for the purposes contemplated by this §11A
after the Closing Date shall constitute a representation and warranty by the
Borrower that the conditions set forth in this §11A shall have been satisfied
on the date of the relevant Loan Request and the relevant Drawdown Date.

 

B.  In the event the Borrower shall have issued
any Anticipatory Commercial Paper and the Initial Offer Funding Date shall not
have occurred prior to the maturity date of such Anticipatory Commercial Paper,
then, notwithstanding anything herein to the contrary, on such maturity date,
the Borrower may borrow Loans hereunder solely for the purpose of repaying such
Anticipatory Commercial Paper, subject to the satisfaction of the following
conditions precedent:

 

§11.5.     Effective Date.  The Effective Date shall have occurred.

 

§11.6.     Certain Conditions.  The conditions set forth in §§11.1, 11.2,
11.3 and 11.4 hereof shall have been satisfied on the date of the relevant Loan
Request and the relevant Drawdown Date.

 

§11.7.     Payment of Fees.  The Borrower shall have paid to the
Administrative Agent and the other relevant Persons (including the Lenders) all
fees and expenses (including without limitation all reasonable legal fees and
disbursements of the Administrative Agent’s Special Counsel) required to be
paid by the Borrower in connection with this Credit Agreement on or prior to
the relevant Drawdown Date.

 

§11.8.     Borrowing Date Certification.  The Administrative Agent shall have received
a certificate, dated the relevant Drawdown Date and signed by the chief
financial officer or the treasurer of the Borrower, confirming the satisfaction
of the conditions set forth in this §11B.

 

Each request for a Loan for the purposes contemplated by this §11B
shall constitute a representation and warranty by the Borrower that the
conditions set forth in this §11B shall have been satisfied on the date of the
relevant Loan Request and the relevant Drawdown Date.

 

§12.        EVENTS OF DEFAULT; ACCELERATION; ETC.

 

§12.1.     Events of Default and Acceleration.  If any of the following events (“Events  of  Default”) shall occur and be continuing:

 

(a)           the Borrower or any Guarantor shall
fail to pay any principal of the Loans when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;

 

(b)           the Borrower or any Guarantor shall
fail to pay any interest on the Loans, the Commitment Fee, the Administrative
Agent Fees, other fees or other sums due hereunder or under any of the other
Loan Documents, within five (5) Business Days of 

 

59

 

the date when
the same shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment;

 

(c)           the Borrower (i) shall fail to
comply with any of its covenants contained in §§5.4, 5.5, 5.10, 6 or 7 hereof,
or (ii) shall fail to comply with its covenant contained in §5.6 hereof
and such failure shall continue for thirty (30) days;

 

(d)           the Borrower or any of its
Subsidiaries shall fail to perform any term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those specified
elsewhere in this §12.1) for thirty (30) days after written notice of such
failure has been given to the Borrower by the Administrative Agent;

 

(e)           any material representation or
warranty of the Borrower or any of its Subsidiaries in this Credit Agreement or
any of the other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Credit Agreement shall prove
to have been false in any material respect upon the date when made or deemed to
have been made or repeated;

 

(f)            the Borrower or any of its
Subsidiaries shall fail to pay when due, or within any applicable period of
grace, any obligation for borrowed money or credit received or in respect of
any Capitalized Leases or any obligations with respect to interest rate
protection arrangements or exchange rate protection arrangements which, in the
aggregate, represents Indebtedness (calculated, with respect to interest rate
protection arrangements and exchange rate protection arrangements based on the
notional principal amount thereof) of $50,000,000 or more, or fail to observe
or perform any material term, covenant or agreement contained in any agreement
by which it is bound, evidencing or securing borrowed money or credit received
or in respect of any Capitalized Leases or evidencing any interest rate
protection arrangement or exchange rate protection arrangement which in the
aggregate represents Indebtedness (calculated, with respect to interest rate
protection arrangements and exchange rate protection arrangements based on the
notional principal amount thereof) of $50,000,000 or more, and for such period
of time as would permit (assuming the giving of appropriate notice if required)
the holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;

 

(g)           (i) the Borrower or any of its
Subsidiaries (1) shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its debts as
they mature or become due, or (2) shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of the
Borrower or any of its Subsidiaries or of any substantial part of the assets of
the Borrower or any of its Subsidiaries or shall commence any case or other proceeding
relating to the Borrower or any of its Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, or (3) shall
take any action to authorize or in furtherance of any of the foregoing, or (ii) if
any such petition or application shall be filed or any such case or other
proceeding shall be commenced against the Borrower or any of its Subsidiaries
and 

 

60

 

shall not have
been dismissed within sixty (60) days, or the Borrower or any of its
Subsidiaries shall indicate its approval thereof, consent thereto or
acquiescence therein;

 

(h)           a decree or order is entered
appointing any such trustee, custodian, liquidator or receiver or adjudicating
the Borrower or any of its Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
is entered in respect of the Borrower or any Subsidiary of the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter constituted;

 

(i)            there shall remain in force,
undischarged, unsatisfied and unstayed, for more than sixty (60) days, whether
or not consecutive, any final judgment against the Borrower or any of its
Subsidiaries that, with other outstanding final judgments, undischarged,
against the Borrower or any of its Subsidiaries, exceeds in the aggregate
$50,000,000;

 

(j)            with respect to any Guaranteed
Pension Plan, an ERISA Reportable Event, or a failure to make a required
installment or other payment (within the meaning of §302(f)(1) of ERISA),
shall have occurred and the Required Lenders shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower or any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $10,000,000 and such
event in the circumstances occurring reasonably could constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC, for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan or for the imposition of a Lien in
favor of such Guaranteed Pension Plan; or a trustee shall have been appointed
by the United States District Court to administer such Plan; or the PBGC shall
have instituted proceedings to terminate such Guaranteed Pension Plan;

 

(k)           the holders of all or any part of the
Subordinated Debt shall accelerate the maturity of all or any part of the
Subordinated Debt or the Subordinated Debt shall be prepaid, redeemed or
repurchased in whole or in part, or an offer to prepay, redeem or repurchase
the Subordinated Debt in whole or in part shall have been made, in each case in
violation of the provisions of this Credit Agreement;

 

(l)            if any of the Loan Documents shall
be canceled, terminated, revoked or rescinded, in each case otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Lenders, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or any of its Subsidiaries
party thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or ruling
to the effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof; or

 

61

 

(m)                           a “Change in Control” shall have occurred (which
for the purposes of this clause (m) shall mean the occurrence of any of
the following events):

 

(i)                                   the
acquisition by any Person (including any syndicate or group deemed to be a “person”
under Section 13(d)(3) of the Securities and Exchange Act of 1934, as
amended) of beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions, of shares of
Capital Stock of the Borrower entitling such Person to exercise fifty percent
(50%) or more of the total voting power of all shares of Capital Stock of the
Borrower entitled to vote generally in the elections of directors (any shares
of voting stock of which such person or group is the beneficial owner that are
not then outstanding being deemed outstanding for purposes of calculating such
percentage);

 

(ii)                                any
consolidation of the Borrower with, or merger of the Borrower into, any other
Person, any merger of another Person into the Borrower, or any sale or transfer
of all or substantially all of the assets of the Borrower to another Person
(other than a transfer of assets to one or more Guarantors or a merger (A) which
does not result in any reclassification, conversion, exchange or cancellation
of outstanding shares of Capital Stock of the Borrower or (B) which is
effected solely to change the jurisdiction of incorporation of the Borrower);
or

 

(iii)                             during
any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Borrower was approved by a vote of
sixty-six and two-thirds percent 

(66-2/3%) of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office; or

 

(n)                               any
of (i) the Borrower or any of its Subsidiaries shall fail to make any
payment under any transaction permitted under §6.1(q) hereof when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise), and any such failure shall continue after
the applicable grace period, if any, specified in the documents relating to
such transaction, or (ii) the “Termination Date” or similar date (under
and as defined in any of the documents relating to the transactions permitted
under §6.1(q) hereof) shall have been declared to have occurred, or (iii) any
“Event of Termination” or similar event (under and as defined in any of the
documents relating to the transactions permitted under §6.1(q) hereof)
shall occur and continue after the applicable grace period, if any, specified
in such documents if either, pursuant to such documents, (A) the existence
of such Event of Termination or similar event would automatically cause the
Termination Date or similar date to occur or (B) the existence of such
Event of Termination or similar event would permit the purchaser or lender
under such documents to declare the Termination Date or similar date to have
occurred and such Event of Termination or similar event continues unremedied or

 

62

 

unwaived for a
period of more than ninety (90) days after the date that the Administrative
Agent gives notice to the Borrower of such Event of Termination or similar event;

 

then, and in any such event,
so long as the same may be continuing, the Administrative Agent may, and upon
the request of the Required Lenders shall, by notice in writing to the Borrower
declare all amounts owing with respect to this Credit Agreement and the other
Loan Documents to be, and they shall thereupon forthwith become, immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in §§12.1(g) or 12.1(h) hereof,
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Administrative Agent or any Lender.

 

In the event that any
Corporate Express Default shall have occurred and be continuing at any time
during the period from and including the Closing Date to and including the Cure
Period Expiration Date (as defined below), the existence of such Corporate
Express Default shall not constitute an Event of Default hereunder if such
Corporate Express Default is remedied on or prior to the Cure Period Expiration
Date for such Corporate Express Default. As used in this paragraph, the “Cure
Period Expiration Date” means (a) with respect to any Corporate Express
Material Indebtedness Default relating to a failure to make any payment on such
Material Indebtedness or any cross-acceleration of such Material Indebtedness,
the earlier of (i) the later of (A) the date which is twenty (20)
days after the Closing Date or (B) the date which is three (3) Business
Days after any such failure or cross-acceleration, as the case may be, and (ii) the
date which is sixty (60) days after the Closing Date, (b) with respect to
any other Corporate Express Default, the date which is sixty (60) days after
the Closing Date or (c) with respect to any Corporate Express Default
referred to in clause (a) or (b) above, such shorter cure period for
such Corporate Express Default (if any) as shall be applicable thereto under
the Existing Credit Agreement.

 

§12.2.            Termination of Commitments.  If
any one or more of the Events of Default specified in §§12.1(g) or 12.1(h) hereof
shall occur, any unused portion of the credit hereunder shall forthwith
terminate and each of the Lenders shall be relieved of all further obligations
to make Loans to the Borrower.  If any
other Event of Default shall have occurred and be continuing, the
Administrative Agent may and, upon the request of the Required Lenders, shall,
by notice to the Borrower, terminate the unused portion of the credit
hereunder, and upon such notice being given such unused portion of the credit
hereunder shall terminate immediately and each of the Lenders shall be relieved
of all further obligations to make Loans. 
No termination of the credit hereunder shall relieve the Borrower of any
of the Obligations.

 

§12.3.            Remedies.  In
case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Lenders shall have accelerated the maturity
of the Loans pursuant to §12.1 hereof, each Lender, if owed any amount with
respect to the Loans may, with the consent of the Required Lenders, but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other 

 

63

 

appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Credit Agreement and the other Loan Documents or any instrument pursuant
to which the Obligations to such Lender are evidenced, including as permitted
by applicable law the obtaining of the ex parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such
Lender.  No remedy herein conferred upon
any Lender or the Administrative Agent or the holder of any Note is intended to
be exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of
law.

 

§13.                      SETOFF.

 

Regardless of the adequacy of any collateral,
during the continuance of any Event of Default, any deposits or other sums
credited by or due from any of the Lenders or any of the Subsidiaries of the
holding company owning such Lender to the Borrower and any securities or other
property of the Borrower in the possession of such Lender or such Subsidiary of
the holding company owning such Lender may be applied to or set off by such
Lender or such Subsidiary of the holding company owning such Lender against the
payment of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower to such Lender. 
Each of the Lenders agrees with each other Lender that (a) if an
amount to be set off is to be applied to Indebtedness of the Borrower to such
Lender, other than Indebtedness evidenced by this Credit Agreement owed to such
Lender, such amount shall be applied ratably to such other Indebtedness (except
that no amounts shall be applied to documentary letters of credit) and to the
Indebtedness evidenced by this Credit Agreement owed to such Lender, and (b) if
such Lender shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by this Credit Agreement owed to such Lender by proceedings against
the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Obligations held by such
Lender any amount in excess of its ratable portion of the payments received by
all of the Lenders with respect to the Loans made by all of the Lenders, such
Lender will make such disposition and arrangements with the other Lenders with
respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Lender
receiving in respect of the Loans made by it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part
of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.

 

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§14.                        THE ADMINISTRATIVE AGENT.

 

§14.1.              Authorization.

 

(a)                                Each
of the Lenders hereby irrevocably appoints LCPI to act on its behalf as
administrative agent hereunder and under the other Loan Documents. The
Administrative Agent is authorized to take such action on behalf of each of the
Lenders and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Administrative
Agent, together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or therein
shall be implied to have been assumed by the Administrative Agent.

 

(b)                               The
relationship between the Administrative Agent and the Lenders is and shall be
that of an independent contractor.  The
use of the term “Administrative Agent” herein is for convenience only and is
used to describe, as a form of convention, the independent contractual
relationship between the Administrative Agent and each of the Lenders.  Nothing contained in this Credit Agreement or
any of the other Loan Documents shall be construed to create an agency, trust
or other fiduciary relationship between the Administrative Agent and any of the
Lenders.

 

(c)                                As
an independent contractor empowered by the Lenders to exercise certain rights
and perform certain duties and responsibilities hereunder and under the other
Loan Documents, the Administrative Agent is nevertheless a “representative” of
the Lenders, as that term is defined in Article 1 of the Uniform
Commercial Code, for purposes of actions for the benefit of the Lenders with
respect to all collateral security and guaranties contemplated by the Loan
Documents.  Such actions include the
designation of the Administrative Agent as “secured
party”, “mortgagee”, “lienholder” or the like on all financing
statements, motor vehicle titles and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority or
enforcement of any security interests, mortgages, liens or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Lenders and the Administrative Agent.

 

§14.2.              Employees and Agents.  The
Administrative Agent may exercise its powers and execute its duties by or
through employees or agents and shall be entitled to take, and to rely on,
advice of counsel concerning all matters pertaining to its rights and duties
under this Credit Agreement and the other Loan Documents.  The Administrative Agent may utilize the
services of such Persons as the Administrative Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.

 

§14.3.              No Liability. 
Neither the Administrative Agent nor any of its shareholders, directors,
officers or employees nor any other Person assisting them in their duties nor
any agent or employee thereof, shall be liable to the Lenders for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Administrative Agent
or such other Person, as the case may be, may be liable for losses due to its
willful misconduct or gross negligence. The 

 

65

 

Administrative Agent shall
be entitled to rely upon, and shall not incur any liability to any Lender for
relying upon, any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent.  With respect to the Lenders, the
Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action; provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, is contrary to any Loan Document or
applicable law; provided  further that, the Administrative Agent
shall not be required to take any action (other than an action expressly
required by this Credit Agreement to be taken by it under such circumstances)
that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability. The Administrative Agent shall in all cases
be fully protected, as against the Lenders, in acting, or in refraining from
acting, under this Credit Agreement or any other Loan Document in accordance
with a request or consent of the Required Lenders (or such greater number of
Lenders as may be expressly required hereby in any instance) and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders. Except as expressly set forth herein and in the other Loan
Documents, the Administrative Agent shall have no duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any of their respective Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.  The
Administrative Agent shall be deemed not to have knowledge of any Default or
Event of Default unless and until notice describing such Default or Event of
Default is given to the Administrative Agent by the Borrower or a Lender.

 

THE PLATFORM IS
PROVIDED “AS IS” AND “AS AVAILABLE.”  THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender or any
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of 

 

66

 

Borrower
Materials through the Internet, except to the extent that such losses, claims,
damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to the Borrower, any
Lender or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).

 

§14.4.              No Representations.

 

§14.4.1.  General.  The
Administrative Agent shall not be responsible for the execution or validity or
enforceability of this Credit Agreement, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Obligations, or for the value of any such collateral security
or for the validity, enforceability or collectibility of any such amounts owing
with respect to this Credit Agreement or for any recitals or statements, warranties
or representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as to
the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Obligations or to inspect any of the
properties, books or records of the Borrower or any of its Subsidiaries.  The Administrative Agent shall not be bound
to ascertain whether any notice, consent, waiver or request delivered to it by
the Borrower or any Lender shall have been duly authorized or is true, accurate
and complete.  The Administrative Agent
has not made nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Lenders, with respect to the
creditworthiness or financial conditions of the Borrower or any of its Subsidiaries.  Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Credit Agreement.

 

§14.4.2.  Closing Documentation, etc.  For
purposes of determining compliance with the conditions set forth in §8 or §9
hereof, each Lender that has executed this Credit Agreement shall be deemed to
have consented to, approved or accepted, or to be satisfied with, each document
and matter either sent, or made available, by the Administrative Agent  or the Arranger to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or approved
by or acceptable or satisfactory to such Lender, unless an officer of the
Administrative Agent  or the
Arranger identified to the Lenders as having responsibility for dealing with
this Credit Agreement shall have received notice from such Lender prior to (i) in
the case of §8 hereof, the Effective Date or (ii) in the case of §9
hereof, the Closing Date, specifying such Lender’s objection thereto and such
objection shall not have been withdrawn by notice to the Administrative Agent
or the Arranger to such effect on or prior to the Effective Date or the Closing
Date, as applicable.

 

67

 

§14.5.              Payments.

 

§14.5.1.  Payments to Administrative Agent.  A
payment by the Borrower to the Administrative Agent hereunder or any of the
other Loan Documents for the account of any Lender shall constitute a payment
to such Lender.  The Administrative Agent
agrees promptly to distribute to each Lender such Lender’s pro rata
share of payments received by the Administrative Agent for the account of the
Lenders except as otherwise expressly provided herein or in any of the other
Loan Documents.

 

§14.5.2.  Distribution by Administrative
Agent.  If in the opinion of the Administrative Agent
the distribution of any amount received by it in such capacity hereunder or
under any of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction.  If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Administrative Agent is
to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Administrative Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.

 

§14.5.3.  Delinquent Lenders. 
Notwithstanding anything to the contrary contained in this Credit
Agreement or any of the other Loan Documents, any Lender that fails (a) to
make available to the Administrative Agent its pro rata
share of any Loan or (b) to comply with the provisions of §13 hereof with
respect to making dispositions and arrangements with the other Lenders, where
such Lender’s share of any payment received, whether by setoff or otherwise, is
in excess of its pro rata share of such payments
due and payable to all of the Lenders, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be deemed
delinquent (a “Delinquent Lender”) and
shall be deemed a Delinquent Lender until such time as such delinquency is
satisfied.  A Delinquent Lender shall be
deemed to have assigned any and all payments due to it from the Borrower,
whether on account of outstanding Loans, interest, fees or otherwise, to the
remaining nondelinquent Lenders for application to, and reduction of, their
respective pro rata shares of all outstanding
Loans.  The Delinquent Lender hereby
authorizes the Administrative Agent to distribute such payments to the
nondelinquent Lenders in proportion to their respective pro rata
shares of all outstanding Loans.  A
Delinquent Lender shall be deemed to have satisfied in full a delinquency when
and if, as a result of application of the assigned payments to all outstanding
Loans of the nondelinquent Lenders, the Lenders’ respective pro rata shares of all outstanding Loans have returned to
those in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.

 

§14.6.            Holders of Notes. 
The Administrative
Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.

 

§14.7.            Indemnity.  To
the extent not reimbursed by the Borrower, the Lenders ratably (based on each
Lender’s Commitment Percentage determined as of the time that 

 

68

 

the applicable unreimbursed
expense or indemnity payment is sought) at the time agree hereby to indemnify
and hold harmless the Administrative Agent and or any of its Related Parties
(each an “Indemnified Party”) from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which such Indemnified Party has not been
reimbursed by the Borrower as required by §15 hereof), and liabilities of every
nature and character arising out of or related to this Credit Agreement or any
of the other Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or such Indemnified Party’s actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by such
Indemnified Party’s willful misconduct, gross negligence or, in the absence of
instruction or concurrence of the Required Lenders, material breach of
contract.

 

§14.8.            Administrative
Agent as Lender; Etc.  In its individual capacity, LCPI shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, as it would have were it not also the
Administrative Agent.  None of the
Co-Syndication Agents or the Arranger shall have any obligation, liability,
responsibility or duty under this Credit Agreement other than as a Lender
hereunder.

 

§14.9.            Resignation.  The
Administrative Agent may resign at any time by giving seventy five (75) days’
prior written notice thereof to the Lenders and the Borrower.  Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent.  Unless a Default or Event of Default shall
have occurred and be continuing, such successor Administrative Agent shall be
reasonably acceptable to the Borrower. 
Upon the earlier of (i) acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent and (ii) the
date on which the Administrative Agent notifies the Borrower that no qualifying
Person has accepted such appointment within seventy five (75) days after the
Administrative Agent shall have provided notice to the Lenders and the
Borrowers of its resignation, (A) the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and (B) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made, in the case of clause
(i), by or to the successor Administrative Agent and in the case of clause
(ii), by or to each Lender directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this §14.9.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this §14.9).  The fees payable
by the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this §14 and §§15 and 16 hereof shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents
and their 

 

69

 

respective Affiliates,
partners, directors, officers, employees, agents and advisors in respect of any
actions taken or omitted to be taken by any of them while such retiring
Administrative Agent was acting as Administrative Agent.

 

§14.10.        Notification of Defaults and
Events of Default.  Each Lender hereby agrees that, upon learning
of the existence of a Default or an Event of Default, it shall promptly notify
the Administrative Agent thereof.  The
Administrative Agent hereby agrees that (a) upon receipt of any notice
under this §14.10 it shall promptly notify the other Lenders and the Borrower
of the existence of such Default or Event of Default and (b) upon receipt
of any notice from the Borrower under §5.5 it shall promptly notify
the other Lenders thereof.

 

§14.11.         Administrative Agent May File
Proofs of Claim.

 

(a)                                In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial, administrative or like proceeding or any
assignment for the benefit of creditors relative to the Borrower or any of its
Subsidiaries, the Administrative Agent (irrespective of whether the principal
of any Loan shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Administrative Agent shall have
made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding, under any such assignment or otherwise:

 

(i)                                   to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans
and all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Lenders and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under the terms of this
Credit Agreement)  allowed in such
proceeding or under any such assignment; and

 

(ii)                                to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

(b)                               Any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such proceeding or
under any such assignment is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders,
nevertheless to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel due the Administrative Agent
under the terms of this Credit Agreement, and any other amounts due the Administrative
Agent under the terms of this Credit Agreement.

 

70

 

(c)                                Nothing contained herein shall authorize the
Administrative Agent to consent to or accept or adopt on behalf of any Lender
any plan of reorganization, arrangement, adjustment or composition affecting
the Obligations owed to such Lender or the rights of any Lender or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any
such proceeding or under any such assignment.

 

§15.                        EXPENSES.

 

The Borrower agrees to pay (a) the
Administrative Agent’s and the Arranger’s reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Administrative Agent,
the Arranger or any of the Lenders (other than taxes based upon the
Administrative Agent’s or any Lender’s net income or taxes not payable by the
Borrower pursuant to the provisions of this Credit Agreement) on the
transactions contemplated by this Credit Agreement (the Borrower hereby
agreeing to indemnify the Administrative Agent, the Arranger and each Lender
with respect thereto), (c) the reasonable fees, expenses and disbursements
of the Administrative Agent’s Special Counsel or any local counsel to the
Administrative Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the reasonable
fees, expenses and disbursements of the Administrative Agent, the Arranger or
any of their respective Affiliates incurred by the Administrative Agent, the
Arranger or such Affiliate in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including all insurance premiums and surveyor, engineering and appraisal
charges and all charges for the use of IntraLinks (or any similar service) in
connection with this Credit Agreement, (e) all reasonable out-of-pocket
expenses (including, without limitation, reasonable attorneys’ fees and costs
and reasonable accounting, appraisal, investment banking and similar
professional fees and charges) incurred by the Administrative Agent or any
Lender in connection with (i) the enforcement of or preservation of rights
under any of the Loan Documents against the Borrower or any of its Subsidiaries
or the administration thereof after the occurrence of an Event of Default
(including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiation) and (ii) any other litigation, proceeding or
dispute whether arising hereunder or otherwise, in any way related to any
Lender’s or the Administrative Agent’s relationship with the Borrower or any of
its Subsidiaries (other than any litigation, proceeding or dispute referred to
in §16 hereof) but only if such Lender or the Administrative Agent is the
prevailing party in such litigation, proceeding or dispute, and (f) all
reasonable fees, expenses and disbursements of the Administrative Agent
incurred in connection with UCC searches. 
The Borrower shall not pay the fees, expenses and disbursements incurred
by any Lender other than the Administrative Agent in connection with the review
and preparation of this Credit Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein.  The covenants of this §15 shall survive
payment or satisfaction of all other Obligations.

 

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§16.                      INDEMNIFICATION.

 

The Borrower agrees to indemnify and hold harmless
the Administrative Agent, the Arranger, the Lenders and their respective
Related Parties (each such Person being called an “Indemnitee”) from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby, regardless of
whether any Indemnitee is a party thereto, including, without limitation, (a) any
actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Loans, (b) the Borrower or any of its Subsidiaries
entering into or performing this Credit Agreement or any of the other Loan
Documents or (c) with respect to the Borrower and its Subsidiaries and
their respective properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel incurred
in connection with any such investigation, litigation or other proceeding, but
excluding liabilities, losses, damages or expenses which are determined by a
court of competent jurisdiction by final order to result from the gross
negligence, willful misconduct or material breach of contract of the Person
seeking indemnification hereunder.  In
litigation, or the preparation therefor, the relevant Indemnitee shall be
entitled to select its own counsel and, in addition to the foregoing indemnity,
the Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel.  No Indemnitee shall be liable
for any damages arising from the use by others of any information or other
materials obtained through IntraLinks or other similar information transmission
systems which was disseminated in connection with this Credit Agreement or the
transactions contemplated hereby or for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission
systems in connection with this Credit Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby, except, in each case, to the
extent such damages are found in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnitee’s gross
negligence, willful misconduct or material breach of contract relating to its
treatment or handling of such Intralinks information, electronic
telecommunications or other information transmission system.  If, and to the extent that the obligations of
the Borrower under this §16 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction
of such obligations which is permissible under applicable law.  The covenants of this §16 shall survive
payment or satisfaction in full of all other Obligations.

 

§17.                      SURVIVAL OF COVENANTS, ETC.

 

All covenants, agreements, representations and
warranties made herein, in any of the other Loan Documents or in any documents
or other papers delivered by or on behalf 

 

72

 

of the Borrower or any of its Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them
and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default or Event of Default, and shall survive the making
by the Lenders of any of the Loans, as herein contemplated, and shall continue
in full force and effect so long as any amount due under this Credit Agreement
or the other Loan Documents remains outstanding or any Lender has any
obligation to make any Loans, and for such further time as may be otherwise
expressly specified in this Credit Agreement. 
All statements contained in any certificate or other paper delivered to
any Lender or the Administrative Agent at any time by or on behalf of the
Borrower or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by the Borrower or such Subsidiary hereunder.

 

§18.                        ASSIGNMENT AND PARTICIPATION.

 

§18.1.              General Conditions and Conditions
to Assignment.  The provisions of this Credit Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except:

 

(a)                                any Lender may assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Credit Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing to it); provided
that

 

(i)                                   except in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if a “Trade
Date” is specified in the Assignment and Assumption, as of such Trade Date,
shall not be less than $5,000,000  unless each of
the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed);

 

(ii)                                  the
parties to such assignment shall execute and deliver to the Administrative
Agent, for recording in the Register, an Assignment and Assumption,
substantially in the form of Exhibit D hereto (an “Assignment
and  Assumption”), together with any Notes subject to such
assignment, a processing and recordation fee in the amount of $3,500 (provided,
however, that the Administrative Agent may, in its sole 

 

73

 

discretion,
elect to waive such processing and recordation fee in the case of any
assignment) and, in the case of a Foreign Lender, any documents, certificates
or evidence required to be delivered under §3.3.3 hereof, and the Eligible
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire;

 

(iii)                           each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Credit Agreement with respect to the Loans or the
Commitment assigned; and

 

(iv)                            (A) any assignment of a Commitment must
be approved by the Administrative Agent unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee) and (B) unless an Event of Default has
occurred and is continuing, in the case of any assignment to an Eligible
Assignee who would impose costs or burdens on the Borrower under §§3.3.2,
3.3.3, 3.6, 3.7, 3.8 and/or 3.13 hereof not applicable to the assigning Lender
(or in the aggregate greater than any such costs or burdens imposed by the
assigning Lender), such assignment must be approved by the Borrower (each such
approval, whether referred to in clause (A) or (B), not to be unreasonably
withheld or delayed).

 

Subject to the approvals pursuant to §18.1(a)(iv) hereof,
upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Assumption, (i) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Assumption, have the rights and obligations of a Lender
hereunder, and (ii) the assigning Lender shall, to the extent of its
interest being assigned by such Assignment and Assumption (and, in the case of
an Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto), be released from its obligations under this Credit Agreement but,
notwithstanding such assignment, shall continue to be entitled to the benefits
of (i) §§3.3.2, 3.7, 3.8 and 3.10 hereof and (ii) §16 hereof, with
respect to facts and circumstances occurring prior to the effective date of
such assignment. Any assignment or transfer by a Lender of rights or
obligations under this Credit Agreement that does not comply with this
paragraph shall be treated for purposes of this Credit Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with §18.4 hereof;

 

(b)                               by way of participation in accordance with
the provisions of §18.4 hereof; or

 

(c)                                by way of pledge or assignment of a security
interest subject to the restrictions of §18.7 hereof (and any other attempted
assignment or transfer by any party hereto shall be null and void).

 

Nothing in this Credit Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in §18.4 hereof and, to the 

 

74

 

extent
expressly contemplated hereby, the respective Affiliates, directors, officers,
employees, agents and advisors of each of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Credit Agreement or any of the other Loan Documents.

 

§18.2.            Certain Representations and
Warranties; Limitations; Covenants.  By executing and delivering an
Assignment and Assumption, the parties to the assignment thereunder confirm to
and agree with each other and the other parties hereto as follows:  (a) other than the representation and
warranty that it is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security interest or
mortgage; (b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or observance
by the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of their
obligations under this Credit Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto; (c) such
assignee confirms that it has received a copy of this Credit Agreement,
together with copies of the most recent financial statements referred to in
§§4.4 and 5.4 hereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Assumption; (d) such assignee will, independently and
without reliance upon the assigning Lender, the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement; (e) such assignee
represents and warrants that it is an Eligible Assignee; (f) such assignee
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under this Credit Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such powers as are reasonably incidental
thereto; (g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit Agreement
are required to be performed by it as a Lender; and (h) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Assumption.

 

§18.3.            Register.  The
Administrative Agent shall maintain a copy of each Assignment and Assumption
delivered to it and a register or similar list (the “Register”) for the recordation of the names and addresses of the
Lenders and the Commitment Percentage of, and principal amount of the Loans owing
to, the Lenders from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose 

 

75

 

name is recorded in the
Register as a Lender hereunder for all purposes of this Credit Agreement.  The Register shall be available for
inspection by the Borrower and the Lenders at any reasonable time and from time
to time upon reasonable prior notice.

 

§18.4.            Participations.  Each
Lender may sell participations to one or more Persons (other than a natural
person) (each, a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Credit Agreement and the other Loan Documents;
provided that (a) except in the case of any such participation sold
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, each such participation shall be in an amount of not less than
$5,000,000 or shall be in an amount of such Lender’s entire remaining
Commitment and the Loans at the time owing to it, (b) any such sale or
participation shall not affect the rights and duties of the selling Lender
hereunder to the Borrower, (c) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations and (d) the
Borrower, the Administrative Agent, the Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Credit Agreement. Any agreement or instrument pursuant
to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that would reduce the principal of or the interest rate on any Loans
subject to such participation, extend the term or increase the amount of the
Commitment of such Lender as it relates to such Participant, reduce the amount
of any fees to which such Participant is entitled or extend any regularly
scheduled payment date for principal or interest with respect to Loans subject
to such participation.  Subject to §18.5
hereof, the Borrower agrees that each Participant shall be entitled to the
benefits of §§3.3.2, 3.7, 3.8 and 3.10 hereof to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to §18.1
hereof.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of §13 hereof as though
it were a Lender, provided that such Participant agrees to be subject to
§13 hereof as though it were a Lender.

 

§18.5.            Limitation upon Participant
Rights.  A Participant shall not be entitled to
receive any greater payment under §§3.3.2, 3.7 and 3.8 hereof than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  Without limiting the foregoing, a Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of §3.3.2 hereof unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with §3.3.3 hereof as though it were a Lender.

 

§18.6.            Assignee or Participant
Affiliated with the Borrower.  If any assignee Lender is an
Affiliate of the Borrower, then any such assignee Lender shall have no right to
vote as a Lender hereunder or under any of the other Loan Documents for purposes
of 

 

76

 

granting consents or waivers
or for purposes of agreeing to amendments or other modifications to any of the
Loan Documents or for purposes of making requests to the Administrative Agent
pursuant to §§12.1 or 12.2 hereof, and the determination of the Required
Lenders shall for all purposes of this Credit Agreement and the other Loan
Documents be made without regard to such assignee Lender’s interest in any of
the Loans.  If any Lender sells a participating
interest in any of the Loans to a Participant, and such Participant is the
Borrower or an Affiliate of the Borrower, then such transferor Lender shall
promptly notify the Administrative Agent of the sale of such participation.  A transferor Lender shall have no right to
vote as a Lender hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Administrative Agent pursuant to §§12.1 or 12.2 hereof
to the extent that such participation is beneficially owned by the Borrower or
any Affiliate of the Borrower, and the determination of the Required Lenders
shall for all purposes of this Credit Agreement and the other Loan Documents be
made without regard to the interest of such transferor Lender in the Loans to
the extent of such participation.

 

§18.7.            Miscellaneous Assignment
Provisions.  Any Lender may at any time grant a security
interest in all or any portion of its rights under this Credit Agreement to
secure obligations of such Lender, including without limitation (a) any
pledge or assignment to secure obligations to any of the twelve Federal Reserve
Banks organized under §4 of the Federal Reserve Act, 12 U.S.C. §341 and (b) with
respect to any Lender that is a Fund, to any lender or any trustee for, or any
other representative of, holders of obligations owed or securities issued by
such Fund as security for such obligations or securities or any institutional
custodian for such Fund or for such lender; provided that no such grant
shall release such Lender from any of its obligations hereunder or under any of
the other Loan Documents, provide any voting rights hereunder to the secured
party thereof, substitute any such secured party for such Lender as a party
hereto or affect any rights or obligations of the Borrower or the
Administrative Agent hereunder.  The
words “execution,” “signed,” “signature,” and words of like import in any Assignment
and Assumption shall be deemed to include electronic signatures or the keeping
of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

§19.                      NOTICES, ETC.

 

Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required by this
Credit Agreement shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent
by overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:

 

77

 

(a)           if to the Borrower, at 500 Staples
Drive, Framingham, MA 01701, Attention: Mr. John J. Mahoney (phone:
508-253-7298) (fax: 508-253-8955) (e-mail: john.mahoney@staples.com), or at
such other address for notice as the Borrower shall last have furnished in
writing to the Person giving the notice, with a copy to Kristin A.
Campbell, Esq., Senior Vice President and General Counsel,
Staples, Inc., 500 Staples Drive, Framingham, MA  01701 (phone: 508-253-8614) (fax:
508-253-8955) (e-mail: kristin.campbell@staples.com);

 

(b)           if to the Administrative Agent,
(i) for payments and requests for Loans, at 745 Seventh Avenue, New York,
New York 10019, Attention: Yvonne Lin-Lu (phone: 212-526-6590) (fax:
212-299-0202) (e-mail: Yvonne.Lin@lehman.com), (ii) for all other notices,
745 Seventh Avenue, New York, New York 10019, Attention: Janine Shugan (phone:
212-526 8625) (fax: 917-522-0139) (e-mail: jshugan@lehman.com), or such other
addresses for notice as the Administrative Agent shall last have furnished in
writing to the Person giving the notice; and

 

(c)           if to any Lender, at such Lender’s
address set forth on such Lender’s Administrative Questionnaire, or such other
address for notice as such Lender shall have last furnished in writing to the
Person giving the notice.

 

Any such notice or
demand shall be deemed to have been duly given or made and to have become
effective (i) if delivered by hand, overnight courier or facsimile to a
responsible officer of the party to which it is directed, at the time of the
receipt thereof by such officer and (ii) if sent by registered or
certified first-class mail return receipt requested, postage prepaid, on the
third Business Day following the mailing thereof.

 

Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender pursuant to §2
hereof if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such §2 by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.

 

Unless the Administrative
Agent otherwise prescribes, (i) notices and other communications sent to
an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as 

 

78

 

described in the
foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.

 

Each Lender agrees to
notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which
notices and other communications may be sent and (ii) accurate wire
instructions for such Lender.

 

The Administrative Agent
and the Lenders shall be entitled to reasonably rely and act in good faith upon
any notices (including telephonic Loan Requests) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof.  The Borrower shall indemnify the
Administrative Agent, each Lender and the directors, officers, employees, agents
and advisors of each of them from all losses, costs, expenses and liabilities
resulting from the reliance by such Person pursuant to this §19 on each notice
purportedly given by or on behalf of the Borrower.  All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

§20.        GOVERNING
LAW.

 

THIS
CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH
OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW
YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF SAID STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW).  THE BORROWER AGREES THAT ANY SUIT
FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT
SITTING IN SUCH STATE AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY
MAIL AT THE ADDRESS SPECIFIED IN §19 HEREOF. 
THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.

 

§21.        HEADINGS.

 

The captions in
this Credit Agreement are for convenience of reference only and shall not
define or limit the provisions hereof.

 

79

 

§22.        COUNTERPARTS.

 

This Credit
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when executed and
delivered shall be an original, and all of which together shall constitute one
instrument.  In proving this Credit
Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.  Delivery by facsimile by any of the parties
hereto of an executed counterpart hereof or of any amendment or waiver hereto
shall be as effective as an original executed counterpart hereof or of such
amendment or waiver and shall be considered a representation that an original
executed counterpart hereof or such amendment or waiver, as the case may be,
will be delivered.

 

§23.        ENTIRE
AGREEMENT, ETC.

 

The Loan Documents
and any other documents executed in connection herewith or therewith express
the entire understanding of the parties with respect to the transactions contemplated
hereby.  Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in §25 hereof.

 

§24.        WAIVER OF
JURY TRIAL.

 

EACH PARTY HERETO
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE PERFORMANCE OF WHICH RIGHTS AND OBLIGATIONS.  Except as prohibited by law, the Borrower
hereby waives any right it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.  The Borrower (a) certifies
that no representative, agent or attorney of any Lender or the Administrative
Agent has represented, expressly or otherwise, that such Lender or the
Administrative Agent would not, in the event of litigation, seek to enforce the
foregoing waivers and (b) acknowledges that the Administrative Agent and
the Lenders have been induced to enter into this Credit Agreement and the other
Loan Documents to which it is a party by, among other things, the waivers and
certifications contained herein.

 

§25.        CONSENTS,
AMENDMENTS, WAIVERS, ETC.

 

Any
consent or approval required or permitted by this Credit Agreement to be given
by the Lenders may be given, and any term of this Credit Agreement, the other
Loan Documents or any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower, the written consent of the Required 

 

80

 

Lenders and the written
acknowledgment of the Administrative Agent (such acknowledgment not to
be unreasonably withheld or delayed); provided that (a) the
rate of interest on the Loans and the amount of any Commitment Fees may not be
reduced or forgiven, the term of the Loans or the Commitments may not be
extended, the regularly scheduled payment date for principal or interest on the
Loans or any Commitment Fees may not be postponed or extended, and the
Commitment Amounts of a Lender may not be increased, in each case without the
written consent of each Lender directly affected thereby; (b) the
principal amount of any Loans may not be forgiven without the written consent
of each Lender directly affected thereby; (c) any provision hereof
entitling any Lender to receive pro rata
application of payments may not be changed, in each case without the written
consent of each Lender directly affected thereby; (d) this §25 may not be
changed without the written consent of all of the Lenders; (e) the
definition of Required Lenders may not be amended without the written consent
of all of the Lenders; (f) the Administrative Agent may not release any
guaranty for the Obligations (except as provided in §3.14 hereof) without the
written consent of all of the Lenders; and (g) the amount of the
Administrative Agent Fees payable for the account of the Administrative Agent,
and §14 hereof may not be amended without the written consent of the
Administrative Agent.  No waiver shall
extend to or affect any obligation not expressly waived or impair any right
consequent thereon.  No course of dealing
or delay or omission on the part of the Administrative Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be prejudicial
thereto.  No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.

 

§26.        TREATMENT
OF CERTAIN CONFIDENTIAL INFORMATION.

 

§26.1.     Confidentiality.  Each of the Lenders and the Administrative
Agent agrees, on behalf of itself and each of its Affiliates, directors,
officers, employees and representatives, to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any Confidential Information supplied to it by the
Borrower or any of its Subsidiaries pursuant to this Credit Agreement, provided
that nothing herein shall limit the disclosure of any such information (a) after
such information shall have become public other than through a violation of
this §26 or becomes available to any of the Lenders or the Administrative Agent
on a nonconfidential basis from a source other than the Borrower or any of its
Subsidiaries, (b) to the extent required by statute, rule, regulation or
judicial process, (c) to counsel for any of the Lenders or the
Administrative Agent, (d) to bank examiners, any other regulatory
authority having jurisdiction over any Lender or the Administrative Agent (to
the extent required by such Lender by law or subpoena, but only to the extent
permitted by applicable laws and regulations, including those applying to
classified materials), or to auditors or accountants (provided that such
auditor or accountant has agreed to be bound by this §26), (e) to the
Administrative Agent, any Lender or, solely in connection with this Credit
Agreement and the transactions contemplated hereby, any Financial Affiliate (provided
that such Financial Affiliate has agreed in a writing enforceable by the
Borrower to be bound by this §26), (f) in connection with any 

 

81

 

litigation to which any
one or more of the Lenders, the Administrative Agent or any Financial Affiliate
is a party, or in connection with the enforcement of rights or remedies
hereunder or under any other Loan Document, (g) solely in connection with
this Credit Agreement and the transactions contemplated hereby, to a Lender
Affiliate or a Subsidiary or Affiliate of the Administrative Agent (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (h) to any assignee or participant (or prospective
assignee or participant) or any actual or prospective counterparty (or its
advisors) to any swap or derivative transactions referenced to credit or other
risks or events arising under this Credit Agreement or any other Loan Document
so long as such assignee, participant or counterparty, as the case may be,
agrees in a writing enforceable by the Borrower to be bound by the provisions
of this §26 or (i) with the consent of the Borrower.

 

§26.2.     Prior
Notification. 
Unless specifically prohibited by applicable law or court order, each of
the Lenders and the Administrative Agent shall, prior to disclosure thereof,
notify the Borrower of any request for disclosure of any such non-public
information by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition
of such Lender by such governmental agency) or pursuant to legal process
including, without limitation, any disclosure under §26.1(b), (d) or
(f) hereof.  In addition to, and
without limiting the foregoing, each of the Lenders and the Administrative
Agent shall permit the Borrower to intervene in any relevant proceedings to
protect its interests in the non-public information and shall provide
reasonable cooperation to the Borrower, at the Borrower’s expense, in seeking
to obtain such protection.  Each of the
Lenders and the Administrative Agent further agrees that if the Borrower is not
successful in precluding the court or other legal body from requiring the
disclosure of the non-public information, such Lender or the Administrative
Agent, as the case may be, will furnish only that portion of the non-public
information which it in good faith reasonably considers to be legally required
and, at the request and expense of the Borrower, will exercise all reasonable
efforts to obtain reliable assurances that confidential treatment will be
accorded the non-public information.

 

§26.3.     Other.  In no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
to it or any Financial Affiliate by the Borrower or any of its
Subsidiaries.  The obligations of each
Lender under this §26 shall supersede and replace the obligations of such
Lender under any confidentiality letter in respect of this financing signed and
delivered by such Lender to the Borrower prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any
interest in any of the Loans from any Lender.

 

§27.        SEVERABILITY.

 

The provisions of
this Credit Agreement are severable and if any one clause or provision hereof
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
then such invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not in any manner
affect such 

 

82

 

clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.

 

§28.        USA
PATRIOT Act Notice.

 

Each Lender that
is subject to the USA Patriot Act and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act, it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify such Borrower in
accordance with the USA Patriot Act.

 

§29.        NO
ADVISORY OR FIDUCIARY RESPONSIBILITY.

 

In connection with
all aspects of each transaction contemplated hereby, the Borrower acknowledges
and agrees, and acknowledges its Affiliates’ understanding, that: (i) the
credit facility provided for hereunder and any related arranging or other
services in connection therewith (including in connection with any amendment,
waiver or other modification hereof or of any other Loan Document) are an
arm’s-length commercial transaction between the Borrower and its Affiliates, on
the one hand, and the Administrative Agent, the Arranger and the Lenders, on
the other hand, and the Borrower is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with
the process leading to such transaction, the Administrative Agent, the Arranger
and the Lenders each is and has been acting solely as a principal and is not
the financial advisor, agent or fiduciary, for the Borrower or any of its
Affiliates, stockholders, creditors or employees or any other Person;
(iii) none of the Administrative Agent, the Arranger nor any Lender has
assumed or will assume an advisory, agency or fiduciary responsibility in favor
of the Borrower with respect to any of the transactions contemplated hereby or
the process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of
whether the Administrative Agent, the Arranger or any Lender has advised or is
currently advising the Borrower or its Affiliates on other matters) and none of
the Administrative Agent, the Arranger nor any Lender has any obligation to the
Borrower or its Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Administrative Agent, the Arranger, the Lenders and
their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Borrower and its
Affiliates, and none of the Administrative Agent, the Arranger nor any Lender
has any obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) none of the Administrative
Agent, the Arranger nor any Lender has provided or will provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and the 

 

83

 

Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate.  The Borrower hereby waives and releases, to
the fullest extent permitted by law, any claims that it may have against the
Administrative Agent, the Arranger or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty.

 

§30.        COLLATERAL.

 

Each of the
Lenders represents to the Administrative Agent and each of the other Lenders
that it in good faith is not relying upon any Margin Stock as collateral
(whether direct or indirect security) in the extension or maintenance of the
credit provided for in this Credit Agreement.

 

[signature pages follow]

 

84

 

IN
WITNESS WHEREOF, the undersigned have duly executed this
Credit Agreement as of the date first set forth above.

 

	
   

  	
  STAPLES,
  INC.

  	 

	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Nicholas Hotchkin

  	 

	
   

  	
  Name: Nicholas Hotchkin

  	 

	 
	
   

  	
  Title: Senior Vice
  President, Finance and

  Treasurer

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	 
	
   

  	
  LEHMAN
  COMMERCIAL PAPER

  INC., as Administrative Agent

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Laurie B. Perper

  	 

	
   

  	
  Name: Laurie B. Perper

  	 

	 
	
   

  	
  Title: MD

  
	 
	
   

  	
   

  
	 
	
   

  	
  LENDERS

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	 
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Laurie B. Perper

  	 

	
   

  	
  Name: Laurie B. Perper

  	 

	 
	
   

  	
  Title: MD

  
	 
	
   

  	
   

  
	 
	
   

  	
  BANK
  OF AMERICA, N.A.,

  
	 
	
   

  	
  as Lender and Co-Syndication
  Agent

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas J. Kane

  	 

	
   

  	
  Name: Thomas J. Kane

  	 

	 
	
   

  	
  Title: Senior Vice
  President

  
							

 

 

	 
	
   

  	
  HSBC
  BANK USA, NATIONAL

  ASSOCIATION,

  
	 
	
   

  	
  as Lender and
  Co-Syndication Agent

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert J. Devir

  	 

	
   

  	
  Name: Robert J. Devir

  	 

	 
	
   

  	
  Title: Managing Director

  
	 
	
   

  	
   

  
	 
	
   

  	
  THE BANK OF NOVA SCOTIA

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	 
	
   

  	
  By:

  	
   /s/ Todd Meller

  
	 
	
   

  	
  Name: Todd Meller

  
	 
	
   

  	
  Title: Managing
  Director

  
	 
	
   

  	
   

  
	 
	
   

  	
  KEY
  BANK NATIONAL

  ASSOCIATION

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Marianne T. Meil

  	 

	
   

  	
  Name: Marianne T. Meil

  	 

	 
	
   

  	
  Title: Senior Vice
  President

  
	 
	
   

  	
   

  
	 
	
   

  	
  SUMITOMO
  MITSUI BANKING

  CORPORATION

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Yoshihiro Hyakutome

  	 

	
   

  	
  Name: Yoshihiro
  Hyakutome

  	 

	 
	
   

  	
  Title: General Manager

  
	 
	
   

  	
   

  
	 
	
   

  	
  PNC
  BANK, NATIONAL

  ASSOCIATION

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michael A. Richards

  	 

	
   

  	
  Name: Michael A.
  Richards 

  	 

	 
	
   

  	
  Title: Senior Vice
  President 

  
	 
	
   

  	
   

  
								

 

 

	 
	
   

  	
  SOVEREIGN
  BANK

  
	 
	
   

  	
   

  
	 
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Judith C.E. Kelly

  	 

	
   

  	
  Name: Judith C.E. Kelly

  	 

	 
	
   

  	
  Title: Senior Vice
  PresidentEXHIBIT
10.15

 

THE
KROGER CO.

EMPLOYEE
PROTECTION PLAN

(as
amended and restated effective December 13, 2007)

 

The Kroger Co. Employee
Protection Plan, as set forth herein, is intended to assist The Kroger Co. and
its affiliates in attracting and retaining key employees and enhance the
long-term stability of The Kroger Co.’s work environment by providing for the
protection of covered employees in connection with a Change in Control as set
forth herein.

 

ARTICLE I

DEFINITIONS

 

1.1           “Additional Vacation and Bonus Amount” means
one-twelfth of the sum of (a) the amount of vacation pay the Eligible
Employee accrues on an annual basis under the vacation plan or policy covering
the Eligible Employee immediately prior to a Change in Control and (b) 70%
of the Eligible Employee’s Bonus.

 

1.2           “Affiliate” means a corporation, partnership,
business trust, limited liability company, or other form of business
organization at least 50% of the total combined voting power of all classes of
stock or other equity interests of which is owned by Kroger, either directly or
indirectly.

 

1.3           “Annual Base Salary” means an Eligible Employee’s
annual base salary in effect immediately preceding a Change in Control (or if
greater, immediately preceding the Eligible Employee’s Termination of
Employment).

 

1.4           “Annual Pay” means the sum of an Eligible
Employee’s Annual Base Salary plus 70% of the Eligible Employee’s Bonus.

 

1.5           “Board” means the Board of Directors of Kroger.

 

1.6           “Bonus” means, the Eligible Employee’s  annual bonus potential amount for the year
including the Eligible Employee’s Termination of Employment, or, if higher, the
average of the annual bonuses paid, or payable (including any bonus or portion
thereof which has been earned but deferred) to the Eligible Employee by the Company
in respect of the three fiscal years (or such shorter period during which the
Eligible Employee has been employed by the Company) immediately preceding the
Change in Control.

 

1.7           “Cause” means an Eligible Employee’s:

 

(a)           failure to substantially perform the Eligible Employee’s
duties (other than by reason of disability) with respect to Kroger or an
Affiliate,

 

 

(b)           engaging in conduct injurious to Kroger or an
Affiliate,

 

(c)           breach of fiduciary duty to Kroger or an Affiliate,

 

(d)           dishonesty, fraud, alcohol or illegal drug abuse, or
misconduct with respect to the business or affairs of Kroger or an Affiliate,

 

(e)           willful violation of the policies of Kroger or an
Affiliate after receiving written notice of such violation, or

 

(f)            conviction of a felony or crime involving moral
turpitude.

 

All determinations of
Cause hereunder shall be made by [the Plan Administrator] and shall be binding
for all purposes hereunder.

 

1.8           “Change in Control” means, and shall be deemed
to have occurred, if:

 

(a)           any Person, excluding employee benefit plans of Kroger
or an Affiliate, is or becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of Company
securities representing 20% or more of the combined voting power of Kroger’s
then outstanding securities;

 

(b)           Kroger consummates a merger, consolidation, share
exchange, division or other reorganization or transaction of Kroger (a “Fundamental
Transaction”) with any other corporation, other than a Fundamental Transaction
that results in the voting securities of Kroger outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 60% of the
combined Voting Power immediately after such Fundamental Transaction of (i) Kroger’s
outstanding securities, (ii) the surviving entity’s outstanding
securities, or (iii) in the case of a division, the outstanding securities
of each entity resulting from the division;

 

(c)           the shareholders of Kroger approve a plan of complete
liquidation or winding up of Kroger or an agreement for the sale or disposition
(in one transaction or a series of transactions) of all or substantially all of
Kroger’s assets; or

 

(d)           during any period of 24 consecutive months,
individuals who at the beginning of such period constituted the Board
(including for this purpose any new director whose election or nomination for
election by Kroger’s shareholders was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of
such period or whose appointment, election or nomination was previously so
approved or recommended) cease for any reason to constitute at least a majority
of the Board.

 

1.9           “Code” means the Internal Revenue Code of 1986,
as amended.

 

2

 

1.10         “Company” means Kroger and its Affiliates.

 

1.11         “Coverage Period” means the period commencing
on the date on which a Change in Control occurs and ending on the second
anniversary thereof.

 

1.12         “Eligible Employee” means any employee of the
Company who has, prior to a Change in Control, (a) completed at least one
Year of Service and (b) as of the date of a Change in Control, is employed
(i)  as an exempt employee under the Fair Labor Standards Act, or (ii) in
a non-union administrative or technical support personnel position in a
corporate, division, manufacturing, field, or logistics office, and is a
non-exempt employee under the Fair Labor Standards Act

 

1.13         “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time.

 

1.14         “Good Reason” means:

 

(a)           with respect to an Eligible Employee, and, in all
cases without the written consent of the Eligible Employee:

 

(i)            A material diminution in the Eligible Employee’s base
compensation;

 

(ii)           A material diminution in the Eligible Employee’s
authority, duties, or responsibilities

 

(iii)          A material change in the geographic location at which
the Eligible Employee must perform services (for purposes of this Plan, this
shall be deemed to occur if and only if the Eligible Employee’s principal place
of work is relocated more than 50 miles from the Eligible Employee’s principal
place of work immediately before a Change in Control); or

 

(iv)          Any other action or inaction that constitutes a
material breach by Kroger of Section 2.1 hereof.

 

(b)           An Eligible Employee shall not have Good Reason for a
Termination of Employment unless:

 

(i)            the condition constituting Good Reason occurs during
the Coverage Period,

 

(ii)           the Eligible Employee provides written notice to the
Plan Administrator of the existence of the condition constituting Good Reason
within 90 days of the initial existence of the condition constituting Good
Reason and the Company is given 30 days to cure such condition, and

 

3

 

(iii)          the Eligible Employee incurs a Termination of
Employment no later than 120 days following the end of the Coverage Period.

 

1.15         “Kroger” means The Kroger Co. and any successor
thereto.  The term successor shall
include, without limitation, the surviving entity following any merger or any
entity that acquires substantially all of Kroger’s assets.

 

1.16         “Monthly Pay” or “Month’s Pay” means
Annual Pay divided by twelve.

 

1.17         “Person” shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

 

1.18         “Plan” means The Kroger Co. Employee Protection
Plan, as set forth herein, as amended from time to time.

 

1.19         “Plan Administrator” means the Compensation
Committee of the Board.

 

1.20         “Severance Benefit” means:

 

(a)           With respect to an Eligible Employee who is non-exempt
under the Fair Labor Standards Act, an amount equal to the Eligible Employee’s
Monthly Pay multiplied by the Eligible Employee’s total Years of Service not in
excess of six years.

 

(b)           With respect to an Eligible Employee who is exempt
under the Fair Labor Standards Act, an amount equal to the Eligible Employee’s
Monthly Pay multiplied by the Eligible Employee’s total Years of Service not in
excess of twelve years.

 

(c)           With respect to an Eligible Employee described in Section 1.20(b) above,
the benefit provided under Section 1.20(b) will be increased by the
number of months corresponding to the Eligible Employee’s pay level as set
forth below:

 

	
  Pay Level

  	
   

  	
  Additional Months Pay

  
	
  12 or 13

  	
   

  	
  1

  
	
  14 or 15

  	
   

  	
  2

  
	
  31

  	
   

  	
  3

  
	
  32

  	
   

  	
  4

  
	
  33

  	
   

  	
  5

  
	
  34

  	
   

  	
  6

  
	
  35

  	
   

  	
  7

  
	
  36

  	
   

  	
  8

  
	
  37

  	
   

  	
  9

  
	
  38

  	
   

  	
  10

  
	
  39

  	
   

  	
  11

  
	
  Higher Pay
  Levels

  	
   

  	
  12

  

 

4

 

1.21         “Termination of Employment” means an Eligible
Employee’s termination of employment with the Company.  In no event shall an Eligible Employee’s
employment with the Company be treated as having terminated for purposes of
this Plan unless such termination of employment constitutes a “separation from
service” (within the meaning of Section 409A of the Code) with the
Company.

 

1.22         “Year of Service” means, for purposes of this
Plan, the total number of  whole
years  during which an Employee was
employed by the Company (including service with an entity prior to the date it
became an Affiliate), including any periods during which an employee was on
vacation or authorized sick leave.

 

ARTICLE
II

BENEFITS
AND RIGHTS

 

2.1           Continued Benefits During the Coverage Period. 
During the Coverage Period, the Company shall provide each Eligible
Employee, while employed by the Company, with employee benefits, perquisites
and fringe benefits that, in the aggregate, are no less favorable than those
provided to the Eligible Employee immediately prior to the Change in Control.

 

2.2           Benefits Upon Involuntary Termination of Employment. 
If an Eligible Employee’s employment is terminated during the Coverage
Period by the Company without Cause or by the Eligible Employee for Good
Reason, the Eligible Employee shall be entitled to the following benefits:

 

(a)           Severance Benefits.  Kroger shall
pay to the Eligible Employee the Eligible Employee’s Severance Benefit,
calculated in accordance with Section 1.20 hereof.  The Severance Benefit shall be paid in one
lump sum payment to be paid no later than two weeks following the Eligible
Employee’s Termination of Employment.

 

(b)           Vacation.  Kroger shall
pay to the Eligible Employee no later than two weeks following the Eligible Employee’
termination of employment a lump sum amount equal to the value of the Eligible
Employee’s accrued and unpaid vacation (including “banked” vacation), if any,
as of the Eligible Employee’s Termination of Employment.

 

(c)           Additional Vacation and Bonus. 
Kroger shall pay to the Eligible Employee no later than two weeks
following the Eligible Employee’s Termination of Employment, a lump sum amount
equal to the Additional Vacation and Bonus Amount multiplied by the number of
whole months the Eligible Employee was employed by the 

 

5

 

Company in the year in
which the Eligible Employee’s Termination of Employment occurred.

 

(d)           Continued Health Care Insurance. 
Immediately following the Eligible Employee’s termination of employment,
Kroger shall provide to the Eligible Employee health care coverage that is
substantially similar to the coverage provided to the Eligible Employee and at
the contribution level being then made by the Eligible Employee immediately prior
to the Change in Control.  Such health
care coverage shall be provided through a third-party insurance policy and
shall continue until the earlier of: (i) the expiration of a number of
months equal to the months of the Eligible Employee’s Severance Benefit under Section 1.20,  and (ii) the date the Eligible Employee is employed by
a subsequent employer and is eligible by reason of such employment to receive
substantially similar health care coverage. 
Upon termination of such coverage, the Eligible Employee shall be
entitled to continuation of health care coverage under such terms as state or
federal law may provide as if his or her termination of employment occurred on
the last day of health care coverage provided by this Section 2.2(d).

 

(e)           Continued Group Term Life Insurance. 
Immediately following the Eligible Employee’s termination of employment,
Kroger shall provide to the Eligible Employee at no cost to the Eligible
Employee, term life insurance coverage that is substantially similar to the
coverage provided immediately prior to the Change in Control.  Such term life insurance shall be provided
through a third-party insurance policy, at the election of the Company shall be
through the Company or individually issued policies, and shall continue until
the earlier of: (i) a period of six months following the Eligible Employee’s
termination of employment, and (ii) the date the Eligible Employee is
employed by a subsequent employer and is eligible by reason of such employment
to receive substantially similar group term life insurance coverage.  In no event shall the taxable value of the
benefit provided pursuant to this Section 2.2(e) exceed the amount
set forth in Treasury Regulation Section 1.409A-1(b)(9)(iii).

 

(f)            Tuition Reimbursement.  Kroger shall
reimburse the Eligible Employee up to $5,000 for up to one full year’s tuition
for one course of study at any college, university or technical school,
provided that the Eligible Employee shall have commenced classes within one
year after the Eligible Employee’s termination of employment, reimbursement
will be further limited to (i)75% of the tuition for courses in which the
Eligible Employee receives a grade of B (including pluses and minuses), (ii) 50%
of the tuition for courses in which the Eligible Employee receives a grade of C
(including pluses and minuses) or a grade of 
“pass” in courses in which only “pass” and “fail” grades are awarded,
and (iii) 0% of the tuition for courses in which the Eligible Employee
receives a grade lower than C.  Claims
for reimbursement, including evidence of receipt of a qualifying grade, must be
made no later than six months following the end of the one-year period and
shall be accompanied by such documentation evidencing tuition payment as Kroger
may reasonably require.  Kroger shall
reimburse the Eligible Employee no later than 30 days following the receipt of
such reimbursement request.

 

6

 

(g)           Outplacement Assistance.

 

(i)            Kroger shall reimburse the Eligible Employee for outplacement
assistance expenses incurred during the first six months following the Employee’s
termination of employment up to the amount provided in Section 2.2(g)(ii) hereof.  Claims for reimbursement must be made no
later than six months following the end of the six-month period and shall be
accompanied by such documentation evidencing outplacement assistance expenses
as Kroger may reasonably require.  Kroger
shall reimburse the Eligible Employee no later than 30 days following the
receipt of such reimbursement request.

 

(ii)           The maximum amount of reimbursable outplacement
expenses is as follows:

 

(A)  If the Eligible Employee is non-exempt under the Fair
Labor Standards Act, the maximum amount is $5,000; and

 

(B)   If the Eligible is exempt under the Fair Labor
Standards Act, the maximum amount is $10,000.

 

(h)   Limitation on Benefits.  In no event
will the Total Payments (as defined in Section 2.5(b) hereof to any
executive officer exceed 2.99 times the officer’s average W-2 earnings over the
preceding five years.  In the event that
the total payments under Section 2.2 of this Plan would exceed such
amount,  (i) the Severance Benefits provided for by Section 2.2(a) hereof
shall first be reduced (if necessary, to zero), and (ii) the benefits
provided for by the remaining provisions of Section 2.2 hereof shall next
be reduced  so that the Total Payments do not
exceed 2.99 times such officer’s average W-2 earnings over the preceding five
years.

 

2.3           Benefits on Termination in Connection with Sale of
Assets.  Notwithstanding Section 2.2, if the
Company terminates an Eligible Employee’s employment without Cause, Kroger
transfers all or substantially all of the assets at the employment location
where the Eligible Employee was employed by the Company within 30 days of such
Termination of Employment, and the entity acquiring such assets offers
employment to the Eligible Employee under substantially the same terms and
conditions as formerly provided by the Company, then Kroger shall pay to such
Eligible Employee a lump sum payment in an amount equal to the Eligible
Employee’s Monthly Pay no later than 60 days following the Eligible Employee’s
Termination of Employment and such Eligible Employee shall not be entitled to
receive any other payments or benefits under the Plan.  The provisions of this Section 2.3 shall
apply regardless of whether the Eligible Employee accepts such offer of
employment. The provisions of this Section 2.3 shall not apply in the case
of a transaction described in Article III hereof.

 

2.4           Certain Terminations of Employment. 
In the event an Eligible Employee’s employment is terminated by the
Company for Cause or an Eligible Employee voluntarily terminates employment
with the Company other than for Good 

 

7

 

Reason, the Eligible
Employee shall not be entitled to any payments or benefits hereunder.

 

2.5           Golden Parachute Provisions.

 

(a)           Subject to the provisions of Section 2.2(h) hereof,
in the event that any payment or benefit received or to be received by an
Eligible Employee in connection with a Change in Control or the termination of
the Eligible Employee’s employment (whether pursuant to the terms of the Plan
or any other plan, arrangement or agreement with Kroger, any Person whose
actions result in a Change in Control or any Person affiliated with Kroger or
such Person) (all such payments and benefits, including the payments and
benefits provided for hereunder, being hereinafter called “Total Payments”),
will be subject to the excise tax imposed under Section 4999 of the Code
(the “Excise Tax”), then subject to the provisions of Section 2.5(c) hereof,
Kroger shall pay to the Eligible Employee an additional amount (the “280G
Gross-Up Payment”) such that the net amount retained by the Eligible Employee,
after deduction of any Excise Tax on the Total Payments and any federal, state,
local income and employment taxes and Excise Taxes on the 280G Gross Up
Payment, shall be equal to the Total Benefits.

 

(b)           For purposes of determining the amount of the Excise
Tax, the amount of the Total Payments that shall be treated as subject to the
Excise Tax shall be equal to (i) the Total Payments, minus (ii) the
amount of such Total Payments that, in the opinion of tax counsel selected by
Kroger’s independent auditors (“Tax Counsel”), are not excess parachute
payments (within the meaning of Section 280G(b)(1) of the Code).  Except as otherwise provided herein, all
determinations required to be made under this Section 2.5 shall be made by
Tax Counsel, which determinations shall be conclusive and binding on the
Eligible Employee and Kroger absent manifest error.

 

(c)           In the event that the Total Payments payable to or for
the benefit of the Eligible Employee are less than one hundred ten percent
(110%) of the maximum amount the Eligible Employee could receive without
becoming subject to the Excise Tax (the “Maximum Amount”), then (i) the
Severance Benefits provided for by Section 2.2(a) of the Plan shall
first be reduced (if necessary, to zero), and (ii) the benefits provided
for by the remaining provisions of Section 2.2 of the Plan shall next be
reduced so that the Total Payments do not exceed the Maximum Amount.

 

(d)           Kroger shall pay the 280G Gross-Up Payment to the
Eligible Employee within 30 days following the Eligible Employee’s remittance
of the tax in respect of which the 280G Gross-Up Payment relates.

 

(e)           In the event that (i) a 280G Gross-Up Payment is
paid to the Eligible Employee pursuant to Section 2.5(a), (ii) there
is a final determination by the Internal Revenue Service or, if such
determination is appealed, a final determination by any court of competent
jurisdiction (“a “Final Determination”), that the Excise Tax is less than the
amount taken into account hereunder in calculating the 280G Gross-Up Payment,
and (iii) after giving effect to such Final Determination, the Severance
Benefits 

 

8

 

are to be reduced
pursuant to Section 2.5(c), the Eligible Employee shall repay to Kroger,
within five business days following the date of the Final Determination, the
280G Gross-Up Payment, the amount of the reduction in the Severance Benefits,
plus interest on the amount of such repayments at 120% of the rate provided in Section 1274(b)(2)(B) of
the Code.

 

(f)            In the event that (i) a 280G Gross-Up Payment is
paid to the Eligible Employee pursuant to Section 2.5(a), (ii) there
is a Final Determination that the Excise Tax is less than the amount taken into
account hereunder in calculating the 280G Gross-Up Payment, and (iii) after
giving effect to such Final Determination, the Severance Benefits are not to be
reduced pursuant to Section 2.5(c), the Eligible Employee shall repay to
Kroger, within five business days following the date of the Final
Determination, the portion of the 280G Gross-Up Payment attributable to such
reduction (plus that portion of the 280G Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and employment taxes imposed on
the 280G Gross-Up Payment being repaid by the Eligible Employee), to the extent
that such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Eligible Employee’s taxable income and wages
for purposes of federal, state and local income and employment taxes, plus
interest on the amount of such repayment at 120% of the rate provided in Section 1274(b)(2)(B) of
the Code.

 

(g)           Except as otherwise provided in paragraph (h) below,
in the event there is a Final Determination that the Excise Tax exceeds the
amount previously taken into account hereunder in determining the 280G Gross-Up
Payment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the 280G Gross-Up Payment), Kroger shall
pay to the Eligible Employee, within five business days following the date of
the Final Determination, the sum of (i) a 280G Gross-Up Payment in respect
of such excess and in respect of any portion of the Excise Tax with respect to
which Kroger had not previously made a 280G Gross-Up Payment, including a 280G
Gross-Up Payment in respect of any Excise Tax attributable to amounts payable
under clauses (ii) and (iii) of this paragraph (g) (plus any
interest, penalties or additions payable by the Eligible Employee with respect
to such excess and such portion), (ii) if Severance Benefits were reduced
pursuant to Section 2.5(c) but after giving effect to such Final
Determination, the Severance Benefits should not have been reduced pursuant to Section 2.5(c),
the amount by which the Severance Benefits were reduced pursuant to Section 2.5(c),
and (iii) interest on such amounts at 120% of the rate provided in Section 1274(b)(2)(B) of
the Code.

 

(h)           In the event that (i) Severance Benefits were
reduced pursuant to Section 2.5(c) and (ii) the aggregate value
of Total Payments which are considered “parachute payments” within the meaning
of Section 280G(b)(2) of the Code is subsequently redetermined in a
Final Determination, but such redetermined value still does not exceed 110% of
the Maximum Amount, then, within five business days following such Final
Determination, (x) Kroger shall pay to the Eligible Employee the amount
(if any) by which the reduced Severance Benefits (after taking the Final
Determination into account) exceeds the amount of the reduced Severance Benefits

 

9

 

actually paid to the
Eligible Employee, plus interest on the amount of such repayment at 120% of the
rate provided in Section 1274(b)(2)(B) of the Code, or (y) the
Eligible Employee shall pay to Kroger the amount (if any) by which the reduced
Severance Benefits actually paid to the Eligible Employee exceeds the amount of
the reduced Severance Benefits (after taking the Final Determination into
account), plus interest on the amount of such repayment at 120% of the rate
provided in Section 1274(b)(2)(B) of the Code.

 

(i)            To the extent that any payment to be made
to an Eligible Employee pursuant to this Section 2.5 constitutes “deferred
compensation” that is subject to Section 409A of the Code, such payment
shall be made on the later of the date specified by the foregoing provisions of
this Section 2.5 or the date that is six months after the Eligible
Employee’s Termination of Employment.

 

2.6           Mitigation.  An Eligible
Employee shall not be required to mitigate damages or the amount of the
Eligible Employee’s benefits by seeking or accepting other employment, nor
shall the amount of such benefits be reduced by the amount of any payments
required to be made by Kroger outside of the Plan or by the amount of any compensation
earned by such Eligible Employee in any subsequent employment.

 

2.7           Reduction of Benefits by Other Required Benefits. 
Notwithstanding any other provision of this Plan to the contrary, the
Severance Benefits provided under Section 2.2(a) hereof shall be
reduced by the amount of any severance payments made pursuant to a written
employment agreement between the Company and an Eligible Employee.  For purposes of this Section 2.7,
payments made pursuant to a stock appreciation right, limited stock appreciation
right, stock option or stock incentive agreement, payments under any employee
benefit plan or arrangement providing benefits for more than one employee,
whether a qualified or non-qualified plan, payments of deferred compensation,
and payments under any other arrangement between Kroger or any Affiliate and
any group of employees of Kroger or any Affiliate shall not be deemed “severance
payments made pursuant to a written employment agreement.”

 

ARTICLE
III

SUCCESSOR
TO COMPANY OR AN AFFILIATE

 

In addition to any
obligations imposed by law upon any successor to Kroger, Kroger shall be
obligated to require any successor or transferee (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
its business and/or assets, or to all or substantially all of the business,
assets or stock of an Affiliate, to expressly assume its (and/or the relevant
Affiliate’s) obligations under this Plan with respect to the persons employed
in connection with the business and assets so transferred, in the same manner
and to the same extent that Kroger (or the Affiliate) would be required to
perform if no such succession had taken place. 
It is intended that any such successor or transferee shall be bound to
the provisions of this Plan whether or not Kroger shall have complied with the
foregoing provisions of this Article III.

 

10

 

ARTICLE
IV

LEGAL
FEES AND ARBITRATION

 

4.1           Legal Fees.

 

(a)           Kroger shall reimburse each Eligible Employee for all
reasonable legal fees, costs of litigation, and other expenses actually
incurred by the Eligible Employee if the Eligible Employee, either alone or as
part of a class of Eligible Employees, prevails in any legal action arising
from Kroger’s refusal to provide any benefit or payment to which the Eligible
Employee becomes entitled under this Plan, or as a result of Kroger’s
contesting the validity, enforceability or interpretation of the Plan.  For the purposes of this Section 4.1, an
Eligible Employee will be deemed to prevail in a legal action upon the
execution of a binding legal settlement agreement between Kroger and the
Eligible Employee (or a class of Eligible Employees that includes the Eligible
Employee) or upon the issuance of a final non-appealable judgment, in either
case which provides for the Eligible Employee to receive either a monetary
recovery or any benefits described in Article II hereof.  Kroger may require the Eligible Employee to
provide documentation evidencing that the Eligible Employee has prevailed in
the legal action.

 

(b)           Claims for reimbursement must be made no later than December 31
of the year in which the Eligible Employee is deemed to prevail in the legal
action, or if later, [45 days] after the date such Eligible Employee is deemed
to prevail in the legal action and shall be accompanied by such documentation
evidencing the legal fees and other expenses as Kroger may reasonably
require.  Kroger shall reimburse the
Eligible Employee no later than 30 days following the receipt of such
reimbursement request. Any reimbursement provided for under Section 4.1(a) shall
be paid in a lump sum payment no later than 30 days following the date on which
the Eligible Employee is deemed to prevail in the action.

 

4.2           Arbitration.  Each Eligible
Employee shall have the right to elect (in lieu of litigation) to have any
dispute or controversy arising under or in connection with the Plan settled by
arbitration, conducted before a panel of three arbitrators sitting in a
location selected by the Eligible Employee within 50 miles from the location of
his or her principal employment location, in accordance with the rules of
the American Arbitration Association then in effect.  Judgment may be entered on the award of the
arbitrator in any court having jurisdiction. 
Kroger shall pay any fees and expenses associated with the arbitration
and, if the Eligible Employee prevails, Kroger shall pay his or her attorney’s
fees as provided in Section 4.1.

 

11

 

ARTICLE V

PLAN
ADMINISTRATION

 

5.1           Authority to Plan Administrator. 
The Plan shall be interpreted, administered and operated by the Plan
Administrator, subject to the express provisions of the Plan.

 

5.2           Delegation of Duties.  The Plan
Administrator may delegate any of its duties hereunder to such person or
persons from time to time as it may designate.

 

5.3           Engagement of Third Parties. 
The Plan Administrator is empowered, on behalf of the Plan, to engage
accountants, legal counsel and such other personnel as it deems necessary or
advisable to assist it in the performance of its duties under the Plan.  The functions of any such persons engaged by
the Plan Administrator shall be limited to the specified services and duties
for which they are engaged, and such persons shall have no other duties,
obligations or responsibilities under the Plan. 
Such persons shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. 
All reasonable expenses hereof shall be borne by Kroger.

 

ARTICLE
VI

CLAIMS

 

6.1           Claims Procedure.  Claims for
benefits under the Plan shall be filed with the Plan Administrator.  If any Employee or other payee claims to be
entitled to a benefit under the Plan and the Plan Administrator determines that
such claim should be denied in whole or in part, the Plan Administrator shall
notify such person of its decision in writing. 
Such notification will be written in a manner calculated to be
understood by such person and will contain (a) specific reasons for the
denial, (b) specific reference to pertinent Plan provisions, (c) a
description of any additional material or information necessary for such person
to perfect such claim and an explanation of why such material or information is
necessary, and (d) information as to the steps to be taken if the person
wishes to submit a request for review. 
Such notification will be given within 60 days after the claim is
received by the Plan Administrator.

 

6.2           Time to File Claim.  A claim for a
benefit under Section 6.1 shall be filed no later than 60 days after the
latest date on which such benefit could have been timely paid hereunder
assuming the Eligible Employee or other payee were entitled to the benefit.

 

6.3           Review Procedure.  Within 60
days after the date on which a person receives a written notice of a denied
claim such person (or his duly authorized representative) may (a) file a
written request with the Plan Administrator for a review of his denied claim
and of pertinent documents and (b) submit written issues and comments to
the Plan Administrator.  The Plan
Administrator will notify such person of its decision in writing.  Such notification will be written in a manner
calculated to be understood by such person and will contain specific reasons
for the decision  as well as specific
references to pertinent Plan provisions. 
The decision on review will be made within 60 days after the request for
review is received by the Plan Administrator.

 

12

 

6.4           Claims and Review Procedures Not Mandatory. 
The claims procedure and review procedure provided for in this Article VI
are provided for the use and benefit of Eligible Employees who may choose to
use such procedures, but compliance with the provisions of this Article VI
are not mandatory for any Eligible Employee claiming benefits under the
Plan.  It shall not be necessary for any
Eligible Employee to exhaust these procedures and remedies prior to bringing
any legal claim or action, or asserting any other demand, for payments or other
benefits to which such Eligible Employee claims entitlement hereunder.

 

ARTICLE
VII

AMENDMENT
AND TERMINATION

 

The Plan may be amended
or terminated by the Board at any time; provided, however, that the Plan may
not be terminated or amended in a manner adverse to the interests of any
Eligible Employee (without the consent of the Eligible Employee) during the
Coverage Period.  Upon the expiration of
the Coverage Period, the Plan may not be amended in any manner that would
adversely affect the rights of any Eligible Employee to receive any and all
payments or benefits pursuant to Article II hereof by reason of a
termination of the Eligible Employee’s employment during the Coverage Period,
and Kroger’s obligations to make such payments and provide such benefits shall
survive any termination of the Plan.

 

ARTICLE
VIII

MISCELLANEOUS

 

8.1           No Right to Continued Employment. 
Nothing in the Plan shall be deemed to give any Eligible Employee the
right to be retained in the employ of the Company, or to interfere with the
right of Kroger or any Affiliate to discharge him or her at any time and for
any lawful reason, with or without notice, subject to the terms of this Plan.

 

8.2           No Assignment of Benefits. Except as otherwise provided herein or
by law, no right or interest of any Eligible Employee under the Plan shall be
assignable or transferable, in whole or in part, either directly or by
operation of law or otherwise, including without limitation by execution, levy,
garnishment, attachment, pledge or in any manner; no attempted assignment or
transfer thereof shall be effective; and no right or interest of any Eligible
Employee under the Plan shall be liable for, or subject to, any obligation or
liability of such Eligible Employee.

 

8.3           Death. This Plan shall inure to the benefit of and be
enforceable by an Eligible Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If an Eligible Employee shall
die while any amount would still be payable to the Eligible Employee hereunder
(other than amounts which, by their terms, terminate upon the death of the
Eligible Employee) if the Eligible Employee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Plan to the executors, personal representatives or administrators
of the Eligible Employee’s estate.

 

13

 

8.4           Enforceability.  If any
provision of the Plan shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and the Plan
shall be construed and enforced as if such provisions had not been included.

 

8.5           Modification, Waiver.  After a
Change in Control, no right of any Eligible Employee under this Plan may be
released, modified, waived or discharged by an Eligible Employee unless such
release, waiver, modification or discharge is agreed to in writing signed by
the Eligible Employee.  A waiver by an
Eligible Employee at any time of any breach of the terms of this Plan or of
compliance with any condition or provision of this Plan to be performed by
Kroger shall not be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

 

8.6           Withholding Taxes.  All payments
made and benefits provided hereunder shall be subject to all applicable
federal, state, local and foreign tax withholding requirements.

 

8.7           Headings.  The headings
and captions herein are provided for reference and convenience only, shall not
be considered part of the Plan, and shall not be employed in the construction
of the Plan.

 

8.8           Notices.  Any notice or
other communication required or permitted pursuant to the terms hereof shall be
deemed to have been duly given when delivered or mailed by United States Mail,
first class, postage prepaid, addressed to the intended recipient at his, her
or its last known address.

 

8.9           Governing Law.  This Plan
shall be construed and enforced according to the laws of the State of Ohio to
the extent not preempted by Federal law, which shall otherwise control.

 

IN
WITNESS WHEREOF,
The Kroger Co. has caused the Plan to be duly adopted this 13th day of
December, 2007.

 

	
   

  	
  THE KROGER CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/

  	
  Paul Heldman

  
	
   

  	
   

  	
  Paul Heldman

  
	
   

  	
   

  	
  Executive Vice
  President,

  
	
   

  	
   

  	
  Secretary
  and General Counsel

  

 

14

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