Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.18    
    

 
 

THIRD AMENDMENT TO
  AMENDED AND RESTATED CREDIT AGREEMENT    

        THIS
THIRD AMENDMENT (this "Amendment"), dated as of December 31, 2003, amends and modifies a certain Amended and Restated Credit Agreement, dated as of December 30, 2002,
as amended by Amendments dated as of August 14, 2003, and October 24, 2003 (as so amended, the "Credit Agreement"), among AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY, an Iowa
corporation (the "Borrower"), the banks named therein (the "Banks"), the Banks named therein, WEST BANK, an Iowa state bank (formerly known as West Des Moines State Bank), as Co-Agent (in
such capacity, the "Co-Agent"), FLEET NATIONAL BANK, a national banking association, as Documentation Agent (in such capacity, the "Documentation Agent") and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as agent for the Banks (in such capacity, the "Agent"). Terms not otherwise expressly defined herein shall have the meanings set forth in the Credit
Agreement. 

        FOR
VALUE RECEIVED, the Borrower, the Banks and the Agent agree that the Credit Agreement is amended as follows: 

 
 

ARTICLE I—AMENDMENTS TO THE CREDIT AGREEMENT    

        1.1    New Definition.    The following new definitions are added to Section 1.1 in alphabetical order: 

         "'AEISC Acquisition':    Acquisition by the Borrower of all of the stock of AEISC from David J. Noble for consideration not to exceed the
lesser of
(a) $5,000,000, or (b) the value of such stock determined by the Board of Directors of the Borrower in good faith and agreed to by Mr. Noble. Such consideration shall be paid in
annual installments of not more than $500,000 each, commencing on April 1, 2004, and on
each anniversary date thereof until April 1, 2008, on which date the balance of such consideration shall be paid. Such consideration shall be payable only out of cash released from the AEISC
Noble Collateral Account, and Mr. Noble shall not have recourse to the Borrower for payment from any other source. The stock of AEISC shall remain subject to the Lien in favor of U.S. Bank
National Association, as provided in the definition of 'AEISC Pledge Agreement' below." 

         "'AEISC Noble Collateral Account':    A deposit or securities account in which proceeds of payment to AEISC under the 2002 General Agency
Commission
Agreement are deposited. The AEISC Noble Collateral Account is subject to the security interests and pledges provided in the Noble Security Agreement and the AEISC Noble Security Agreement, and is
maintained at U.S. Bank National Association in the name of Mr. Noble and under the control of U.S. Bank National Association." 

         "'AEISC Noble Notes':    The following promissory notes, payable by AEISC to David J. Noble: 

        (a)   Noble
Term Note, dated as of April 30, 1999, in the principal amount of $45,000,000; and 

        (b)   Noble
Term Note, dated as of December 30, 2002, in the principal amount of $10,000,000. 

         "'AEISC Noble Security Agreement':    That certain Amended and Restated Security Agreement, dated as of June 30, 1997 (as thereafter
amended,
modified, or replaced from time to time), between AEISC and U.S. Bank National Association (formerly known as First Bank National Association), pursuant to which certain collateral is pledged by AEISC
to secure indebtedness and liabilities of David J. Noble to U.S. Bank National Association. Such collateral includes rights of AEISC under the 2002 General Agency Commission Agreement, the AEISC Noble
Collateral Account and the AEISC Noble Notes." 

 

         "'AEISC Notes':    Promissory Notes payable to the Borrower issued from time to time to evidence obligations of AEISC arising in
connection with loans
to AEISC by the Borrower, including the loans permitted by Section 9.6(l)."

        "'AEISC Pledge Agreement':    A Pledge Agreement by the Borrower in favor of U.S. Bank National Association, as a creditor of David J.
Noble, pledging
the stock of AEISC to such bank to secure indebtedness of Mr. Noble to such bank (not in its capacity as a Bank or Agent hereunder); such Pledge Agreement being a restatement and continuation
of the prior pledge agreement by Mr. Noble to such bank and confirming that the purchase of such stock by the Borrower is subject to the prior Lien in favor of the Bank." 

         "'Noble Security Agreement':    That certain Noble Security Agreement, dated as of June 30, 1997 (as thereafter amended, modified, or
replaced
from time to time), between AEISC and David J. Noble, pursuant to which certain collateral is pledged by AEISC to secure indebtedness and liabilities of AEISC to David J. Noble under the AEISC Noble
Notes. Such collateral includes rights of AEISC under the 2002 General Agency Commission Agreement and the AEISC Noble Collateral Account." 

         "'2002 General Agency Commission Agreement':    That certain Second Amended and Restated General Agency Commission and Servicing Agreement,
 dated as of
October 1, 2002, between AEISC and AEILIC, as the same shall be modified and supplemented and in effect from time to time." 

        "'2003 Subordinated Debentures':    The Subordinated Debentures to be issued by the Borrower in a nominal amount not to exceed $12,400,000
in exchange
for the proceeds received by Trust IV upon issuance of the 2003 Trust Securities." 

         "2003 Trust Securities':    The preferred securities and the common securities to be issued by Trust IV." 

         "'Trust IV':    American Equity Capital Trust IV, a statutory trust created or to be created under the laws of the State of Delaware, of
which 100% of
the common securities issued by Trust IV are, or shall be, owned by the Borrower." 

        1.2    Dividends.    Section 8.11 is amended to read as follows: 

        "Section 8.11    Dividends.    Cause AEILIC to make dividends and/or principal and interest payments to the
Borrower (a) in an amount sufficient to satisfy AEILIC's debt obligations under the Surplus Note (subject to regulatory approval), the 8% Subordinated Debentures, the 5% Subordinated Debentures
and the 2003 Subordinated Debentures, and (b) to permit the Borrower to satisfy its payment obligations hereunder with respect to the Loans, if necessary." 

        1.3    Proceeds of Initial Public Offering.    New Section 8.12 is added after Section 8.11, and shall
read as follows: 

        Section 8.12    Investment of Proceeds.    Promptly invest the proceeds of the Initial Public Offering as
contributions to the equity of AEILIC, provided, that an amount of $30,000,000 of such proceeds may be retained by the Borrower, invested in Investments
permitted to be made by the Borrower hereunder, and subsequently contributed to the equity of AEILIC not later than April 1, 2004." 

        1.4    Indebtedness.    Section 9.1 is amended by deleting the period at the end of (g), and adding new
Sections 9.1(h) and (i), to read as follows: 

        "(h) Indebtedness
in respect of the 2003 Subordinated Debentures in a principal amount not to exceed $12,400,000; and 

2

 

        (i)    Indebtedness
of AEISC in respect of the AEISC Noble Notes and the AEISC Notes." 

        1.5    Liens.    Section 9.2 is amended by deleting the period at the end of (h) and adding new Sections
9.2(i) and (j), to read as follows: 

        "(i)  Liens
on the assets of AEISC created by the AEISC Security Agreement, the AEISC Noble Security Agreement and the Noble Security Agreement; and 

        (j)    Pledge
of the stock of AEISC by the Borrower pursuant to the AEISC Pledge Agreement." 

        1.6    Restricted Payments.    Section 9.5 is amended as follows: 

        (a)   Section 9.5(d)
is amended to read as follows: 

        "(d) Make
payments of (i) principal of the 8% Subordinated Debentures, the 5% Subordinated Debentures or the 2003 Subordinated Debentures, or (ii) interest of
the 8% Subordinated Debentures, the 5% Subordinated Debentures or the 2003 Subordinated Debentures at any time that the subordination terms of the documents pertaining thereto shall prevent or defer
such payment or shall provide that the recipient of such payments may not retain such payment (it being expressly acknowledged that the Borrower may pay accrued interest at the stated rates of the 8%
Subordinated Debentures, the 5% Subordinated Debentures and the 2003 Subordinated Debentures at any time that the foregoing clause shall not apply)" 

        (b)   The
last sentence of Section 9.5 is amended to read as follows: 

"Notwithstanding
the foregoing: (1) Trust I may pay interest or interest-equivalent dividends on the 8% Trust Securities at a rate not to exceed 8% per annum; (2) Trust II may pay
interest or interest-equivalent dividends on the 5% Trust Securities at a rate not to exceed 5% per annum; (3) Trust IV may pay interest or interest-equivalent dividends on the 2003 Trust
Securities at the rates applicable thereto; (4) the Borrower or any Subsidiary may acquire shares of the Borrower's common stock to be held in trust to fund the obligations of AEILIC under its
NMO Deferred Stock Compensation Plans; and (5) the Borrower may redeem shares of its capital stock of any class, provided that (aa) the number of shares of voting capital stock redeemed in any
one fiscal year shall not exceed 1% of the total number of such shares outstanding at January 1 of such year, and (bb) the aggregate redemption price paid for all such shares redeemed in any
fiscal year of the Borrower shall not exceed $750,000." 

        1.7    Investments.    Section 9.6 is amended as follows: 

        (a)   Section 9.6(f)(ii) is
amended to read as follows: 

        "(ii) Investments
in mortgage loans and real estate shall not exceed 15.00% of the Invested Assets of AEILIC as reported on and after December 31, 2001;" 

        (b)   Section 9.6(h)
is amended to read as follow: 

        "(h) Investment
in the 8% Trust Securities, the 5% Trust Securities and the 2003 Trust Securities, to be held by the Borrower, not to exceed 3% of the total amount of the 8%
Trust Securities, the 5% Trust Securities or the 2003 Trust Securities;" 

        (c)   The
period is deleted at the end of (j) and the following new Sections 9.6(k), (l) and (m) are added: 

        "(k) Investment
of the proceeds of the Net Issuance Proceeds of the Initial Public Offering as contributions to the equity of AEILIC as provided in  Section 8.12; 

3

 

        "(l)  Investment
in the AEISC Acquisition in accordance with the terms of the definition thereof; and 

        "(m) Investment
consisting of loans to AEISC to finance commissions paid to Persons acting as agents of AEILIC for sale of annuity contracts, in amounts not to exceed
$15,000,000, which shall be evidenced by the AEISC Notes." 

        1.8    Subsidiaries.    Section 9.9(a) is amended by adding the following phrase at the end of such Section: 

";
for purposes of the foregoing, acquisition of AEISC pursuant to the AEISC Acquisition shall be deemed approved, without pledge of the stock of AEISC." 

        1.9    Transactions with Affiliates.    Section 9.11 is amended by adding the following sentence at the end of
such Section: 

"Consummation
of the AEISC Acquisition in accordance with the terms of the definition thereof shall not be deemed to violate this Section." 

        1.10    Liquidity.    Section 9.20 (added by the Second Amendment hereto) is deleted. 

        1.11    Construction.    All references in the Credit Agreement to "this Agreement", "herein" and similar references
shall be deemed to refer to the Credit Agreement as amended by this Amendment. 

 
 

ARTICLE II—REPRESENTATIONS AND WARRANTIES    

        To
induce the Agent and the Banks to enter into this Amendment and to make and maintain the Loans under the Credit Agreement as amended hereby, the Borrower hereby warrants and
represents to the Agent and the Banks that it is duly authorized to execute and deliver this Amendment, and to perform its obligations under the Credit Agreement as amended hereby, and that this
Amendment constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. 

 
 

ARTICLE III
  WAIVERS AND CONSENT    

        3.1    Initial Public Offering.    Section 3.2 of the Second Amendment, dated October 24, 2003, to the
Credit Agreement provided that effectiveness of such Second Amendment was subject to the condition that the Borrower shall have received Net Issuance Proceeds from the Initial Public Offering of not
less than $200,000,000. The Borrower received Net Issuance Proceeds of approximately $170,000,000. The Borrower has requested that the Agent and the Banks waive such requirement. 

        3.2    Trust Preferred Issuance.    The Borrower have entered into and consummated the transactions that are permitted
by the amendment, in this Amendment, of Sections 8.11, 9.1(h),  9.5 and 9.6(h)
 of the Credit Agreement. The Borrower has requested that the Agent and the Banks waive
the application of such Sections of the Credit Agreement, as in effect prior to this Amendment, to such transactions. 

        3.3    Waiver.    The Agent and the Banks hereby agree to the waivers described in Section 3.1 and 3.2 hereof.
Except as expressly provided herein, all provisions of the Credit Agreement remain in full force and effect and this waiver shall not apply to any other or subsequent failure to comply with any
provision of the Credit Agreement. 

        3.4    General Agency Commission Agreement.    The Agent and the Banks hereby consent, as required by
Section 9.18 of the Credit Agreement, to amendment of the General Agency Commission Agreement by a First Amendment in the form attached as  Exhibit AA to this Amendment. 

4

 

 
 

ARTICLE IV—CONDITIONS    

        This
Amendment shall become effective on the date first set forth above, provided, however, that the effectiveness of this Amendment is subject to the satisfaction of each of the
following conditions precedent: 

        4.1    Warranties.    After giving effect to this Amendment, the representations and warranties in  Article VII of the Credit
Agreement shall be true and correct as though made on the date hereof, except for changes that are permitted by the
terms of the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing condition. 

        4.2    Defaults.    After giving effect to this Amendment, no Default and no Event of Default shall have occurred and
be continuing under the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing condition. 

        4.4    Documents.    

        (a)   The
Borrower, the Agent and the Banks shall have executed and delivered this Amendment; 

        (b)   AEISC
and AEILIC shall have executed and delivered the Acknowledgements attached hereto; 

        (c)   The
Borrower shall have entered into an amendment to the Pledge Agreement to include the AEISC Notes, and shall have delivered the AEISC Notes and bond powers for the
AEISC notes to the Collateral Agent to hold as Collateral thereunder; and 

        (d)   The
Borrower shall have delivered to the Agent a copy of the executed First Amendment to the General Agency Commission Agreement. 

 
 

ARTICLE V—GENERAL    

        5.1    Expenses.    The Borrower agrees to reimburse the Agent upon demand for all reasonable expenses (including
reasonable attorneys' fees and legal expenses) incurred by this Agent in the preparation, negotiation and execution of this Amendment and any other document required to be furnished herewith, and in
enforcing the obligations of the Borrower hereunder, and to pay and save the Agent harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or
delivery of this Amendment and the Notes hereunder, which obligations of the Borrower shall survive any termination of the Credit Agreement. 

        5.2    Counterparts.    This Amendment may be executed in as many counterparts as may be deemed necessary or
convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same
instrument. 

        5.3    Severability.    Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of
such provisions in any other jurisdiction. 

        5.4    Law.    This Amendment shall be a contract made under the laws of the State of Minnesota, which laws shall
govern all the rights and duties hereunder. 

        5.5    Successors; Enforceability.    This Amendment shall be binding upon the Borrower, the Banks, the Agents and
their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agents, the Banks and the successors and assigns of the Banks and the Agents. Except as hereby amended, the
Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. 

(signature
page follows) 

5

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed at Minneapolis, Minnesota by their respective officers thereunto duly authorized as of the date first
written above. 

	 	 	AMERICAN EQUITY INVESTMENT LIFE

HOLDING COMPANY
	

 	
 	

 	

 
	 	 	By:	/s/  WENDY L. CARLSON      

	

 	
 	

Title:	

Chief Financial Officer and General Counsel
	

 	
 	

 	

 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as

Agent and as a Bank
	

 	
 	

 	

 
	 	 	By:	/s/  SAM S. PEPPER      

	

 	
 	

Title:	

Vice President
	

 	
 	

 	

 
	 	 	WEST BANK, as

Co-Agent and as a Bank
	

 	
 	

 	

 
	 	 	By:	/s/  BRAD WINTERBOTTOM      

	

 	
 	

Title:	

President
	

 	
 	

 	

 
	 	 	FLEET NATIONAL BANK,

as Documentation Agent and as a Bank
	

 	
 	

 	

 
	 	 	By:	/s/  DAVID A. BOSSELAIT      

	

 	
 	

Title:	

Director

6

 
ACKNOWLEDGMENT 

        The
undersigned has entered into a Third Amended and Restated Security Agreement, dated as of April 6, 2000 (the "Security Agreement") in favor of U.S. Bank National Association,
as Agent for the Banks securing the "Obligations" as defined in the Credit Agreement (defined in the foregoing Amendment). The undersigned hereby acknowledges that the "Obligations" include the
obligations of the Borrower under the Credit Agreement as amended by the foregoing Amendment and under the Notes issued under the foregoing Amendment. The undersigned hereby confirms that the Security
Agreement remains in full force and effect, enforceable against the undersigned in accordance with its terms. 

	 	 	AMERICAN EQUITY INVESTMENT SERVICE COMPANY
	

 	
 	

 	

 
	 	 	By:	/s/  DAVID J. NOBLE      

	

 	
 	

Title:	

President

ACKNOWLEDGMENT 

        The
undersigned has entered into a Consent and Agreement to Security Agreement, dated as of April 6, 2000 (the "Consent") in favor of U.S. Bank National Association, as Agent for
the Banks. The undersigned hereby acknowledges that the "Obligations" specified in the Consent include the obligations of the Borrower under the Credit Agreement as amended by the foregoing Amendment
and under the Notes issued under the foregoing Amendment. The undersigned hereby confirms that the Consent remains in full force and effect, enforceable against the undersigned in accordance with its
terms. 

	 	 	AMERICAN EQUITY INVESTMENT LIFE

INSURANCE COMPANY
	

 	
 	

 	

 
	 	 	By:	/s/  WENDY L. CARLSON      

	

 	
 	

Title:	

General Counsel and Assistant Secretary

7

 
 

Exhibit AA    
    

        The FIRST AMENDMENT TO 1999 GENERAL AGENCY COMMISSION AND SERVICING AGREEMENT (the "First
Amendment"), by and between AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY ("American Equity") and AMERICAN EQUITY INVESTMENT
SERVICE COMPANY ("Service Company"), is entered into this 23rd day of December, 2003, and shall be deemed effective as of the
1st day of July, 2003. 

        WHEREAS,
the parties have previously entered into the 1999 General Agency Commission and Servicing Agreement (the "1999 Agreement"), and
have now agreed to modify such 1999 Agreement in certain respects; 

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

        1.    Amendment of AEISC Amount.    The definition of "AEISC Amount" as set forth in
Section 1 of the 1999 Agreement shall be amended by deleting such definition in its entirety and inserting the following in lieu thereof: 

"AEISC Amount" shall mean, with respect to any Eligible Contract: (i) 50% of the Sales Agent Commission payable with respect to all such Eligible
Contracts issued during the period from July 1, 1999 through and including August 31, 1999; (ii) 30% of Sales Agent Commission payable with respect to all such Eligible Contracts
issued from September 1, 1999 through and including December 31, 2000; and (iii) 25% of the Sales Agency Commission payable with respect to all such Eligible Contracts issued from
July 1, 2003 until such time as this Agreement is terminated or modified by mutual agreement of the parties. 

        2.    Amendment of Termination Date.    Section 10 of the 1999 Agreement shall be
modified by deleting the date "June 5, 2005", and inserting in lieu thereof the date "December 31, 2008." 

        3.    Ratification.    Except as expressly modified by this First Amendment, the parties
hereby ratify and confirm all other terms and conditions of the 1999 Agreement, all of which shall remain in full force and effect. 

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to by duly executed as of the day and year first above written. 

	AMERICAN EQUITY INVESTMENT

LIFE INSURANCE COMPANY	 	AMERICAN EQUITY INVESTMENT

SERVICE COMPANY
	

 	

 	
 	

 	

 
	By:	/s/  WENDY L. CARLSON      
	 	By:	/s/  DJ NOBLE      

QuickLinks

Exhibit 10.18

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

ARTICLE I—AMENDMENTS TO THE CREDIT AGREEMENT

ARTICLE II—REPRESENTATIONS AND WARRANTIES

ARTICLE III WAIVERS AND CONSENT

ARTICLE IV—CONDITIONS

ARTICLE V—GENERAL

Exhibit AA<Page>

                                                                     EXHIBIT 4.3

                          SECOND SUPPLEMENTAL INDENTURE

                                       to

         INDENTURE (SENIOR DEBT SECURITIES), DATED AS OF AUGUST 12, 1997

     This SECOND SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), is
entered into as of October 27, 2000, by and among Staples, Inc., a Delaware
corporation (the "Company"); Rochester Capital, LLC, a Delaware limited
liability company, and Hackensack Funding, LLC, a Delaware limited liability
company (each, a "Subsidiary Guarantor" and collectively, the "Subsidiary
Guarantors"); and Staples Contract & Commercial, Inc., Staples the Office
Superstore, Inc., and Staples the Office Superstore East, Inc. (each, an Initial
Subsidiary Guarantor: and collectively, the "Initial Subsidiary Guarantors");
and The Chase Manhattan Bank, a banking corporation duly organized and existing
under the laws of the State of New York, as trustee under the Indenture referred
to below (the "Trustee").

                               W I T N E S S E T H

     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture, dated as of August 12, 1997 (the "Indenture"), providing for the
issuance from time to time of its unsecured debentures, notes or other evidences
of indebtedness (the "Securities");

     WHEREAS, on August 5, 1997, the Company issued a series of Securities,
consisting of $200,000,000 principal amount of its 7.125% Senior Notes due
August 15, 2007 pursuant to the Indenture;

     WHEREAS, on January 15, 1998, the Company and the Initial Subsidiary
Guarantors executed and delivered to the Trustee a First Supplemental Indenture
to Indenture (Senior Debt Securities), dated as of August 12, 1997 (the "First
Supplemental Indenture"), providing for the

<Page>

guarantee by the Initial Subsidiary Guarantors of all the Company's payment
obligations under the Indenture;

     WHEREAS, the Company may from time to time in the future issue additional
series of Securities;

     WHEREAS, each of the Subsidiary Guarantors is a direct or indirect wholly
owned subsidiary of the Company;

     WHEREAS, one or more of the Initial Subsidiary Guarantors desire to make,
directly or indirectly, certain transfers or capital contributions to one or
more of the Subsidiary Guarantors, including the transfer to such Subsidiary
Guarantors of assets, cash or equity securities in other Subsidiaries (or any
combination of the foregoing) (collectively, the "Contributions");

     WHEREAS, each Subsidiary Guarantor has agreed to accept such Contributions
subject to its providing a guarantee of the Company's payment obligations under
the Indenture as set forth herein;

     WHEREAS, Section 901 of the Indenture contemplates the execution of
supplemental indentures without the consent of any Holders of Securities for the
purposes stated therein;

     WHEREAS, the Company desires and has requested the Trustee, in a Company
Request, to join in the execution and delivery of this Supplemental Indenture
for the purpose of supplementing the Indenture in certain respects as set forth
in this Supplemental Indenture;

     WHEREAS, such Company Request was accompanied by a Board Resolution
authorizing the execution of this Supplemental Indenture and by an Opinion of
Counsel as required by the Indenture;

                                        2
<Page>

     WHEREAS, pursuant to Section 901 of the Indenture, upon receipt of the
documents set forth in the preceding recitals, the Trustee shall join in the
execution of a supplemental indenture without the consent of the Holders for the
purposes set forth in the preceding recitals; and

     WHEREAS, all things necessary to make this Supplemental Indenture a valid
supplement to the Indenture have been done.

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Subsidiary Guarantors, the Initial Subsidiary Guarantors, and
the Trustee mutually covenant and agree for the equal and proportionate benefit
of the respective Holders from time to time of Securities as follows:

     1.   CAPITALIZED TERMS. Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the Indenture.

     2.   AGREEMENT TO GUARANTEE. Each Subsidiary Guarantor hereby absolutely
and unconditionally guarantees, jointly and severally with each other Subsidiary
Guarantor and the Initial Subsidiary Guarantors, to each Holder of a Security
authenticated and delivered by the Trustee pursuant to the Indenture and to the
Trustee and its successors and assigns, regardless of the validity and
enforceability of the Indenture, the Securities or the obligations of the
Company under the Indenture or the Securities, that:

          (i)  the principal of, premium, if any, and interest on the Securities
               will be promptly paid in full when due, whether at maturity, by
               acceleration, redemption or otherwise, and interest on the
               overdue principal of, premium, if any, and interest on the
               Securities, to the extent lawful, and all other payment
               obligations of the Company to the Holders or the Trustee

                                        3
<Page>

               thereunder or under the Indenture will be promptly paid in full,
               all in accordance with the terms thereof and of the Indenture;
               and

          (ii) in case of any extension of time for payment or renewal of any
               Securities, that the same will be promptly paid in full when due
               in accordance with the terms of the extension or renewal, whether
               at stated maturity, by acceleration or otherwise.

Notwithstanding the foregoing, in the event that this guarantee would constitute
or result in a violation of any applicable fraudulent conveyance of similar law
of any relevant jurisdiction, the liability of each Subsidiary Guarantor under
this Supplemental Indenture and its guarantee shall be reduced to the maximum
amount permissible under such fraudulent conveyance or similar law.

     3.   AGREEMENTS AND OBLIGATIONS OF SUBSIDIARY GUARANTORS.

          (a)  If the Company shall default in the due and punctual payment of
any obligation under the Indenture including under the Securities, without the
necessity of action by the Trustee or any Holder of Securities, the Subsidiary
Guarantor will promptly and fully make such payments in the same manner as
required to have been made by the Company.

          (b)  To the extent permitted by law, the obligations of each
Subsidiary Guarantor hereunder shall be continuing, absolute and unconditional,
and shall not be impaired, modified, released or limited by any occurrence or
condition whatsoever, including, without limitation, (i) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of,
or any change in, any of the obligations and liabilities of the Company
contained in the Securities or in the Indenture or of any other Subsidiary
Guarantor contained in this Supplemental Indenture or of the Initial Subsidiary
Guarantors contained in the First

                                        4
<Page>

Supplemental Indenture, (ii) any impairment, modification, release or limitation
of the liability of the Company or of any of the Initial Subsidiary Guarantors
or of any other Subsidiary Guarantor in bankruptcy, or any remedy for the
enforcement thereof, resulting from the operation of any present or future
provision of any applicable federal or state bankruptcy, insolvency,
reorganization or other similar laws or from the decision of any court, (iii)
the assertion or exercise by the Company, the Initial Subsidiary Guarantors, any
other Subsidiary Guarantor, or the Trustee of any rights or remedies under the
Securities, the Indenture, the First Supplemental Indenture, or this
Supplemental Indenture, or their delay in or failure to assert or exercise any
such rights or remedies, (iv) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the
assets, marshaling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar proceeding
affecting the Company, any of the Initial Subsidiary Guarantors or any other
Subsidiary Guarantor or any of their assets, or the disaffirmance of this
Supplemental Indenture, the First Supplemental Indenture or the Securities or
the Indenture in any such proceeding, (v) the release or discharge of the
Company, any of the Initial Subsidiary Guarantors, or any other Subsidiary
Guarantor from the performance or observance of any agreement, covenant, term or
condition contained in any of such instruments by operation of law, (vi) the
unenforceability of the Securities, the Indenture, the First Supplemental
Indenture, or this Supplement Indenture or (vii) any other circumstance which
might otherwise constitute a legal or equitable discharge of a surety or
guarantor.

          (c)  Each Subsidiary Guarantor hereby (i) waives diligence,
presentment, demand for payment, filing of claims with a court in the event of
the merger or bankruptcy of the

                                        5
<Page>

Company, any right to require a proceeding first against the Company or to
realize on any collateral, protest, notice and all demands whatsoever with
respect to the payment obligations of the Company under the Indenture, (ii)
agrees that its obligations hereunder constitute a guarantee of payment and not
of collection and are not in any way conditional or contingent upon any attempt
to collect from or enforce against the Company or upon any other condition or
contingency, (iii) acknowledges that any agreement, instrument or document
evidencing the obligations of the Company under the Indenture may be transferred
and that the benefit of its obligations hereunder shall extend to each holder of
any agreement, instrument or document evidencing such obligations without notice
to them and (iv) covenants that its guarantee will not be discharged except by
complete performance of the payment obligations under the Securities and the
Indenture.

          (d)  Each Subsidiary Guarantor further agrees that if at any time all
or any part of any payment theretofore applied by any person to any payment
obligation is, or must be, rescinded or returned for any reason whatsoever,
including, without limitation, the insolvency, bankruptcy or reorganization of
the or any other subsidiary Guarantor or any of the Initial Subsidiary
Guarantors, such obligations shall for the purposes of the guarantee, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence notwithstanding such application, and the guarantee made
pursuant to this Supplement Indenture shall continue to be effective or be
reinstated, as the case may be, as to such payment obligation as though such
application had not been made.

          (e)  Each Subsidiary Guarantor shall, to the extent of any payment
made by it pursuant to this Supplemental Indenture, be subrogated to all rights
of the Trustee and the Holders of the Securities as to all payments and damages
payable by the Company with respect

                                        6
<Page>

to which payments have been made by such Subsidiary Guarantor, but, so long as
any payment obligation remains outstanding, such right of subrogation on the
part of such Subsidiary Guarantor shall be subject to the payment in full or
discharge of all such payment obligations.

          (f)  Each of the Subsidiary Guarantors and the Initial Subsidiary
Guarantors shall have the right to seek contribution from any other non-paying
Subsidiary Guarantor or Initial Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the Holders or the Trustee under the
guarantees made pursuant to this Supplemental Indenture and the First
Supplemental Indenture.

     4.   CONVEYANCE, TRANSFER OR LEASE BY SUBSIDIARY GUARANTORS.

          (a)  Nothing contained in the Indenture, the First Supplemental
Indenture, this Supplemental Indenture or in the Securities shall prevent any
conveyance, transfer or lease of the properties and assets of any Subsidiary
Guarantor or the Initial Subsidiary Guarantor (whether or not as an entirety) to
the Company or any other Initial Subsidiary Guarantor or Subsidiary Guarantor,
or any other Wholly-Owned Subsidiary of the Company that guarantees or has
guaranteed the Company's payment obligations, which guarantee is evidenced by
the execution of a supplemental indenture substantially in the form of the First
Supplemental Indenture and this Supplemental Indenture and has the same effect
as if such Wholly-Owned Subsidiary were a Subsidiary Guarantor hereunder.

          (b)  Except as set forth below, nothing contained in the Indenture,
the First Supplemental Indenture, this Supplemental Indenture or in the
Securities shall prevent any conveyance, transfer or lease of the properties and
assets of any Subsidiary Guarantor (whether or not as an entirety) to any Person
other than the Company or any other Subsidiary Guarantor or any of the Initial
Subsidiary Guarantors. If one or more Subsidiary Guarantors, in one

                                        7
<Page>

transaction or a series of related transactions, conveys, transfers or leases
properties and assets which, if owned by the Company, would constitute all or
substantially all of the properties and assets of the Company and its
Subsidiaries (determined on a consolidated basis), such conveyance, transfer or
lease shall be deemed to be a conveyance, transfer or lease by the Company of
its properties and assets substantially as an entirety for purposes of (x)
Section 801 of the Indenture (if such conveyance, transfer or lease is to any
Person other than one or more Wholly Owned Subsidiaries of the Company) or (y)
Section 803 of the Indenture (if such conveyance, transfer or lease is solely to
one or more Wholly Owned Subsidiaries of the Company).

     5.   RELEASE FOLLOWING SALE OF VOTING STOCK. If and when all of the
issued and outstanding shares of Voting Stock of a Subsidiary Guarantor are
sold, directly or indirectly, by the Company or another Wholly Owned Subsidiary
of the Company to any Person (other than the Company or another Wholly Owned
Subsidiary of the Company), the guarantee of such Subsidiary Guarantor shall be
released and discharged in full.

     6.   MISCELLANEOUS.

          (a)  GOVERNING LAW. This Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.

          (b)  COUNTERPARTS. This Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

          (c)  EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction hereof.

                                        8
<Page>

          (d)  EFFECTIVE DATE. This Supplemental Indenture shall be effective as
of October 27, 2000.

          (e)  RECITALS. The recitals contained herein shall be the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The trustee shall not be responsible for, and assumes no liability with respect
to, the validity or sufficiency of this Supplemental Indenture.

          (f)  INTERPRETATION. Except as expressly supplemented as provided in
this Supplemental Indenture, the Indenture, as supplemented by the First
Supplemental Indenture, shall remain in full force and effect. All the terms and
conditions of this Supplemental Indenture shall be deemed to be part of the
terms and conditions of the Indenture for any and all purposes.

                                        9
<Page>

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

<Table>
<S>                                                         <C>
[CORPORATE SEAL]                                            STAPLES, INC.

Attest: /s/ Jack A. VanWoerkom                              By: /s/ William Swanson
        ---------------------------                             -------------------
Name:                                                       Name:   William Swanson
                                                            Title:  Senior Vice President, Finance &  Treasurer

[CORPORATE SEAL]                                            ROCHESTER CAPITAL, LLC

Attest: /s/ Jack A. VanWoerkom                              By: /s/ William Swanson
        ---------------------------                             -------------------
Name:                                                       Name:   William Swanson
                                                            Title:  President

[CORPORATE SEAL]                                            HACKENSACK FUNDING, LLC

Attest: /s/ Jack A. VanWoerkom                              By: /s/ William Swanson
        ---------------------------                             -------------------
Name:                                                       Name:   William Swanson
                                                            Title:  Treasurer

[CORPORATE SEAL]                                            STAPLES CONTRACT & COMMERCIAL, INC.

Attest: /s/ Jack A. VanWoerkom                              By: /s/ William Swanson
        ---------------------------                             -------------------
Name:                                                       Name:   William Swanson
                                                            Title:  Senior Vice President, Finance &   Treasurer

[CORPORATE SEAL]                                            STAPLES THE OFFICE SUPERSTORE, INC.

Attest: /s/ Jack A. VanWoerkom                              By: /s/ William Swanson
        ---------------------------                             -------------------
Name:                                                       Name:   William Swanson
                                                            Title:  Senior Vice President, Finance &  Treasurer
</Table>

                                       10
<Page>

<Table>
<S>                                                         <C>
[CORPORATE SEAL]                                            STAPLES THE OFFICE SUPERSTORE EAST, INC.

Attest: /s/ Jack A. VanWoerkom                              By: /s/ William Swanson
        ---------------------------                             -------------------
Name:                                                       Name:   William Swanson
                                                            Title:  Senior Vice President, Finance &  Treasurer

[CORPORATE SEAL]                                            THE CHASE MANHATTAN BANK, as Trustee

Attest:                                                     By:  /s/ Don M. Iaccheri
        -------------------------                                --------------------------------
Name:                                                       Name:     Don M. Iaccheri
                                                            Title:    Vice-President
</Table>

                                       11

<PAGE>

COMMONWEALTH OF MASSACHUSETTS       )
                                    : ss.:
COUNTY OF MIDDLESEX                 )

         On the 27 day of October, 2000, before me personally came William
Swanson, to me known, who, being by me duly sworn, did depose and say that he is
Senior Vice President, Finance & Treasurer of Staples, Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.

                                        /s/ NANCY A. PARCINTO
                                        ------------------------------------
                                        Notary Public

                                    My Commission Expires September 21, 2001

                                       12

<PAGE>

COMMONWEALTH OF MASSACHUSETTS       )
                                    : ss.:
COUNTY OF MIDDLESEX                 )

         On the 27 day of October, 2000, before me personally came William
Swanson, to me known, who, being by me duly sworn, did depose and say that he is
President of Rochester Capital LLC, one of the limited liability companies
described in and which executed the foregoing instrument; that he knows the seal
of said company; that the seal affixed to said instrument is such company seal;
that it was so affixed by authority of the Managers of said company; and that he
signed his name thereto by like authority.

                                        /s/ NANCY A. PARCINTO
                                        ------------------------------------
                                        Notary Public

                                    My Commission Expires September 21, 2001

                                       13

<PAGE>

COMMONWEALTH OF MASSACHUSETTS       )
                                    : ss.:
COUNTY OF MIDDLESEX                 )

         On the 27 day of October, 2000, before me personally came William
Swanson, to me known, who, being by me duly sworn, did depose and say that he is
Treasurer of Hackensack Funding LLC, one of the limited liability companies
described in and which executed the foregoing instrument; that he knows the seal
of said company; that the seal affixed to said instrument is such company seal;
that it was so affixed by authority of the Managers of said company; and that he
signed his name thereto by like authority.

                                        /s/ NANCY A. PARCINTO
                                        ------------------------------------
                                        Notary Public

                                    My Commission Expires September 21, 2001

                                       14

<PAGE>

COMMONWEALTH OF MASSACHUSETTS       )
                                    : ss.:
COUNTY OF MIDDLESEX                 )

         On the 27 day of October, 2000, before me personally came William
Swanson, to me known, who, being by me duly sworn, did depose and say that he is
Senior Vice President, Finance & Treasurer of Staples Contract & Commercial,
Inc., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.

                                        /s/ NANCY A. PARCINTO
                                        ------------------------------------
                                        Notary Public

                                    My Commission Expires September 21, 2001

                                       15

<PAGE>

COMMONWEALTH OF MASSACHUSETTS      )
                                   : ss.:
COUNTY OF MIDDLESEX                )

         On the 27 day of October, 2000, before me personally came William
Swanson, to me known, who, being by me duly sworn, did depose and say that he is
Senior Vice President, Finance & Treasurer of Staples the Office Superstore,
Inc., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.

                                        /s/ NANCY A. PARCINTO
                                        ------------------------------------
                                        Notary Public

                                    My Commission Expires September 21, 2001

                                       16

<PAGE>

COMMONWEALTH OF MASSACHUSETTS       )
                                    : ss.:
COUNTY OF MIDDLESEX                 )

         On the 27 day of October, 2000, before me personally came William
Swanson, to me known, who, being by me duly sworn, did depose and say that he is
Senior Vice President, Finance & Treasurer of Staples the Office Superstore
East, Inc., one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation; and that he signed his
name thereto by like authority.

                                        /s/ NANCY A. PARCINTO
                                        ------------------------------------
                                        Notary Public

                                    My Commission Expires September 21, 2001

                                       17

<PAGE>

COMMONWEALTH OF MASSACHUSETTS       )
                                    : ss.:
COUNTY OF SUFFOLK                   )

         On the 26th day of October, 2000, before me personally came Don M.
Iaccheri, to me known, who, being by me duly sworn, did depose and say that he
is a Trust Officer of The Chase Manhattan Bank, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

                                         /s/ LYNNE PENNEY
                                         ---------------------------------
                                         Notary Public

                                       18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}]]