Document:

Exhibit 10.5

 

AMENDED
AND RESTATED

 

COMMERCIAL
PAPER DEALER AGREEMENT

 

(4(2) PROGRAM;
GUARANTEED)

 

among

 

STAPLES,
INC. as Issuer

 

STAPLES THE OFFICE SUPERSTORE, LLC as Guarantor

 

STAPLES THE OFFICE SUPERSTORE EAST, INC. as
Guarantor

 

STAPLES CONTRACT & COMMERCIAL, INC. as
Guarantor

 

STAPLES THE OFFICE SUPERSTORE, LIMITED PARTNERSHIP
as Guarantor

 

and

 

LEHMAN
BROTHERS INC., as Dealer

 

Concerning Notes to be issued pursuant to an
Issuing and Paying Agency Agreement dated as of June 9, 2008 and amended
as of August 6, 2008 between the Issuer and LaSalle Bank, as Issuing and
Paying Agent

 

Dated as
of

August 6,
2008

 

 

Amended and
Restated Commercial Paper Dealer Agreement

(4(2) Program; Guaranteed)

 

This
Amended and Restated Commercial Paper Agreement (4(2) Program Guaranteed)
(as amended, supplemented or otherwise modified and in effect from time to
time, the “Agreement”) sets forth the understandings among the Issuer, the
Guarantors and the Dealer, each named on the cover page hereof, in
connection with the issuance and sale by the Issuer of its short-term
promissory notes (the “Notes”) through the Dealer.  The Issuer and the Dealer are parties to that
certain Commercial Paper Dealer Agreement, dated as of June 9, 2008 (the “Original
Agreement”) and the Issuer and the Dealer wish to amend and restate the
Original Agreement solely to add the Guarantors as parties in order to evidence
and reflect their guarantee of the Notes.

 

Pursuant to a guarantee, dated the date
hereof, in the form of Exhibit D hereto (the “Guarantee”) each Guarantor
has agreed jointly and severally to guarantee, subject to the terms of the
Guarantee, payment in full of the principal of and interest (if any) on all
such Notes.

 

Certain
terms used in this Agreement are defined in Section 6 hereof.

 

The
Addendum to this Agreement, and any Annexes or Exhibits described in this
Agreement or such Addendum, are hereby incorporated into this Agreement and
made fully a part hereof.

 

1.     Offers, Sales and Resales of Notes.

 

1.1.       While (i) the Issuer has and shall have no
obligation to sell the Notes to the Dealer or to permit the Dealer to arrange
any sale of the Notes for the account of the Issuer, and (ii) the Dealer
has and shall have no obligation to purchase the Notes from the Issuer or to
arrange any sale of the Notes for the account of the Issuer, the parties hereto
agree that in any case where the Dealer purchases Notes from the Issuer, or
arranges for the sale of Notes by the Issuer, such Notes will be purchased or
sold by the Dealer in reliance on the representations, warranties, covenants
and agreements of the Issuer and, unless such Guarantor shall have been
released from the Guarantee in accordance with its terms, each Guarantor
contained herein or made pursuant hereto and on the terms and conditions and in
the manner provided herein.

 

1.2.       So long as this Agreement shall remain in effect, and
in addition to the limitations contained in Section 1.7 hereof, neither
the Issuer nor, unless such Guarantor shall have been released from the
Guarantee in accordance with its terms, any Guarantor shall, without the
consent of the Dealer, offer, solicit or accept offers to purchase, or sell,
any Notes except (a) in transactions with one or more dealers which may
from time to time after the date hereof become dealers with respect to the
Notes by executing with the Issuer and the Guarantors one or more agreements
which contain provisions substantially identical to those contained in Section 1
of this Agreement, of which the Issuer and the Guarantors hereby undertakes to
provide the Dealer prompt notice or (b) in transactions with the other
dealers listed on the Addendum hereto, which are executing agreements with the
Issuer and the Guarantors which contain provisions substantially identical to Section 1
of this Agreement contemporaneously herewith. 
In no event shall the Issuer or any Guarantor offer, solicit or accept
offers to purchase, or sell, any Notes directly on its own behalf in
transactions with persons other than broker-dealers as specifically permitted
in this Section 1.2.

 

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1.3.       The Notes shall be in a minimum denomination of
$250,000 or integral multiples of $1,000 in excess thereof, will bear such
interest rates, if interest bearing, or will be sold at such discount from
their face amounts, as shall be agreed upon by the Dealer and the Issuer, shall
have a maturity not exceeding 397 days from the date of issuance and may have
such terms as are specified in Exhibit C hereto or the Private Placement
Memorandum.   The Notes shall not contain any provision for
extension, renewal or automatic “rollover.”

 

1.4.       The authentication and issuance
of, and payment for, the Notes shall be effected in accordance with the Issuing
and Paying Agency Agreement, and the Notes shall be either individual physical
certificates or book-entry notes evidenced by one or more master notes (each, a
“Master Note”) registered in the name of The Depository Trust Company (“DTC”)
or its nominee, in the form or forms annexed to the Issuing and Paying Agency
Agreement.

 

1.5.       If the Issuer and the Dealer shall agree on the terms
of the purchase of any Note by the Dealer or the sale of any Note arranged by
the Dealer (including, but not limited to, agreement with respect to the date
of issue, purchase price, principal amount, maturity and interest rate or
interest rate index and margin (in the case of interest-bearing Notes) or
discount thereof (in the case of Notes issued on a discount basis), and
appropriate compensation for the Dealer’s services hereunder) pursuant to this
Agreement, the Issuer shall cause such Note to be issued and delivered in
accordance with the terms of the Issuing and Paying Agency Agreement and
payment for such Note shall be made by the purchaser thereof, either directly
or through the Dealer, to the Issuing and Paying Agent, for the account of the
Issuer.  Except as otherwise agreed, in
the event that the Dealer is acting as an agent and a purchaser shall either
fail to accept delivery of or make payment for a Note on the date fixed for
settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has
theretofore paid the Issuer for the Note, the Issuer will promptly return such
funds to the Dealer against its return of the Note to the Issuer, in the case
of a certificated Note, and upon notice of such failure in the case of a
book-entry Note.  If such failure
occurred for any reason other than default by the Dealer, the Issuer and,
unless such Guarantor shall have been released from the Guarantee in accordance
with its terms, each Guarantor agree, jointly and severally, to reimburse the
Dealer on an equitable basis for the Dealer’s loss of the use of such funds for
the period such funds were credited to the Issuer’s account.

 

1.6.       All offers and sales of the Notes by the Issuer shall
be effected pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof, which exempts
transactions by an issuer not involving any public offering.  The Dealer, the Issuer and each Guarantor
hereby establish and agree to observe the following procedures in connection
with offers, sales and subsequent resales or other transfers of the Notes:

 

(a)   Offers and sales of the Notes by or through the
Dealer shall be made only to: (i) investors reasonably believed by the
Dealer to be Qualified Institutional Buyers, Institutional Accredited Investors
or Sophisticated Individual Accredited Investors and (ii) non-bank
fiduciaries or agents that will be purchasing Notes for one or more accounts,
each of which is reasonably 

 

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believed by the Dealer to be an Institutional Accredited Investor or
Sophisticated Individual Accredited Investor.

 

(b)   Resales and other transfers of the Notes by the
holders thereof shall be made only in accordance with the restrictions in the
legend described in clause (e) below.

 

(c)   No general solicitation or general advertising shall
be used in connection with the offering of the Notes.  Without limiting the generality of the
foregoing, without the prior written approval of the Dealer, neither the Issuer
nor any Guarantor shall issue any press release or place or publish any “tombstone”
or other advertisement relating to the Notes.

 

(d)   No sale of Notes to any one purchaser shall be for
less than $250,000 principal or face amount, and no Note shall be issued in a
smaller principal or face amount.  If the
purchaser is a non-bank fiduciary acting on behalf of others, each person for
whom such purchaser is acting must purchase at least $250,000 principal or face
amount of Notes.

 

(e)   Offers and sales of the Notes by the Issuer through
the Dealer acting as agent for the Issuer shall be made in accordance with Rule 506
under the Securities Act, and shall be subject to the restrictions described in
the legend appearing on Exhibit A hereto. 
A legend substantially to the effect of such Exhibit A shall appear
as part of the Private Placement Memorandum used in connection with offers and
sales of Notes hereunder, as well as on each individual certificate
representing a Note and each Master Note representing book-entry Notes offered
and sold pursuant to this Agreement.

 

(f)    The Dealer shall furnish or shall have furnished to
each purchaser of Notes for which it has acted as the Dealer a copy of the
then-current Private Placement Memorandum unless such purchaser has previously
received a copy of the Private Placement Memorandum as then in effect.  The Private Placement Memorandum shall expressly
state that any person to whom Notes are offered shall have an opportunity to
ask questions of, and receive information from the Issuer, each Guarantor,
unless such Guarantor shall have been released from the Guarantee in accordance
with its terms, and the Dealer and shall provide the names, addresses and
telephone numbers of the persons from whom information regarding the Issuer and
the Guarantors may be obtained.

 

(g)   The Issuer and, unless such Guarantor shall have
been released from the Guarantee in accordance with its terms, each Guarantor,
jointly and severally, agree for the benefit of the Dealer and each of the
holders and prospective purchasers from time to time of the Notes that, if at
any time the Issuer shall not be subject to Section 13 or 15(d) of
the Exchange Act, the Issuer and, unless such Guarantor shall have been
released from the Guarantee in accordance with its terms, each Guarantor will
furnish, upon request and at their expense, to the Dealer and to holders and
prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in
compliance with Rule 144A(d).

 

(h)   In the event that any Note offered or to be offered
by the Dealer would be ineligible for resale under Rule 144A, the Issuer
shall immediately notify the 

 

4

 

Dealer (by telephone, confirmed in writing) of such fact and shall
promptly prepare and deliver to the Dealer an amendment or supplement to the
Private Placement Memorandum describing the Notes that are ineligible, the
reason for such ineligibility and any other relevant information relating
thereto.

 

(i)    The Issuer and each Guarantor represent that neither
the Issuer nor any Guarantor is currently issuing commercial paper in the
United States market in reliance upon the exemption provided by Section 3(a)(3) of
the Securities Act.  The Issuer and each
Guarantor agree that, if the Issuer or the Guarantor shall issue commercial
paper after the date hereof in reliance upon such exemption (a) the
proceeds from the sale of the Notes will be segregated from the proceeds of the
sale of any such commercial paper by being placed in a separate account; (b) the
Issuer and such Guarantor will institute appropriate corporate procedures to
ensure that the offers and sales of notes issued by the Issuer or the Guarantor,
as the case may be, pursuant to the Section 3(a)(3) exemption are not
integrated with offerings and sales of Notes hereunder; and (c) the Issuer
and such Guarantor will comply with each of the requirements of Section 3(a)(3) of
the Securities Act in selling commercial paper or other short-term debt
securities other than the Notes in the United States.  The Dealer agrees with the Issuer and the
Guarantors not to offer or sell any Notes in a manner that might call into
question the availability of the private offering exemption contained in Section 4(2) of
the Securities Act and Rule 144A thereunder, it being agreed that the
foregoing procedures do not call into question the availability of such
exemption.

 

1.7.       Each of the Issuer as to itself and each Guarantor as
to itself hereby represents and warrants to the Dealer, in connection with
offers, sales and resales of Notes, as follows:

 

(a)   Except as permitted by Section 1.6(i) or
pursuant to the Original Agreement, within the preceding six months neither the
Issuer nor the Guarantors nor any person other than the Dealer or the other
dealers referred to in Section 1.2 hereof acting on behalf of the Issuer
or the Guarantors has offered or sold any Notes, or any substantially similar
security of the Issuer or the Guarantors (including, without limitation,
medium-term notes issued by the Issuer or the Guarantor), to, or solicited
offers to buy any such security from, any person other than the Dealer or the
other dealers referred to in Section 1.2 hereof.  Except as permitted by Section 1.6(i),
as long as the Notes are being offered for sale by the Dealer and the other
dealers referred to in Section 1.2 hereof as contemplated hereby and until
at least six months after the offer of Notes hereunder has been terminated,
neither the Issuer nor the Guarantor nor any person other than the Dealer or
the other dealers referred to in Section 1.2 hereof (except as
contemplated by Section 1.2 hereof) will offer the Notes or any
substantially similar security of the Issuer for sale to, or solicit offers to
buy any such security from, any person other than the Dealer or the other
dealers referred to in Section 1.2 hereof, it being understood that such
agreement is made with a view to bringing the offer and sale of the Notes within
the exemption provided by Section 4(2) of the Securities Act and Rule 506
thereunder and shall survive any termination of this Agreement.  Neither the Issuer nor the Guarantors has
taken or omitted to take, and will not take or omit to take, any action that
would cause the offering and sale of Notes hereunder to be integrated with any
other offering of securities, whether such offering is made by the Issuer or
the Guarantors or some other party or parties, 

 

5

 

under
circumstances that would cause the offering and sale of the Notes by the Issuer
to fail to be exempt under Section 4(2) of the Securities Act.

 

(b)   The Issuer represents and
agrees that the proceeds of the sale of the Notes are not currently contemplated
to be used for the purpose of buying, carrying or trading securities within the
meaning of Regulation T and the interpretations thereunder by the Board of
Governors of the Federal Reserve System. 
In the event that the Issuer determines to use proceeds from the sale of
the Notes for the purpose of buying, carrying or trading securities, whether in
connection with an acquisition of another company or otherwise, the Issuer
shall give the Dealer at least three business days’ prior written notice to that
effect.  The Issuer shall also give the
Dealer prompt notice of the actual date that it commences to purchase
securities with the proceeds of the Notes. 
Thereafter, in the event that the Dealer purchases Notes as principal
and does not resell such Notes on the day of such purchase, to the extent
necessary to comply with Regulation T and the interpretations thereunder, the
Dealer will sell such Notes either (i) only to offerees it reasonably
believes to be Qualified Institutional Buyers or to Qualified Institutional
Buyers it reasonably believes are acting for other Qualified Institutional
Buyers, in each case in accordance with Rule 144A or (ii) in a manner
which would not cause a violation of Regulation T and the interpretations
thereunder.

 

2.
Representations and Warranties of the Issuer and the Guarantors.

 

Each of
the Issuer and each Guarantor represents and warrants as to itself that:

 

2.1       The Issuer is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all the requisite power
and authority to execute, deliver and perform its obligations under the Notes,
this Agreement and the Issuing and Paying Agency Agreement.

 

2.2       Each Guarantor
is a corporation, limited liability company or limited partnership, as
applicable, duly organized and validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation and has all the
requisite power and authority to execute, deliver and perform its obligations
under the Guarantee, this Agreement and the Issuing and Paying Agency
Agreement.

 

2.3       This Agreement and the Issuing and Paying Agency
Agreement have been duly authorized, executed and delivered by the Issuer and
each Guarantor and constitute legal, valid and binding obligations of the
Issuer and each Guarantor enforceable against the Issuer and each Guarantor in
accordance with their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

2.4       The Notes have been duly authorized, and when issued
as provided in the Issuing and Paying Agency Agreement, will be duly and
validly issued and will constitute legal, valid and binding obligations of the
Issuer enforceable against the Issuer in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity
or at law).

 

6

 

2.5       The Guarantee has been duly authorized, and when the
Notes have been issued as provided in the Issuing and Paying Agency Agreement,
will be duly executed and delivered by each Guarantor and constitute the legal,
valid and binding obligation of each Guarantor enforceable against each
Guarantor in accordance with its terms subject to applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally, and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

2.6       Assuming compliance by the Dealer with the procedures
applicable to it set forth in Section 1 hereof, the offer and sale of the
Notes and the Guarantee in the manner contemplated hereby do not require
registration of the Notes or the Guarantee under the Securities Act, pursuant
to the exemption from registration contained in Section 4(2) thereof,
and no indenture in respect of the Notes or the Guarantee is required to be
qualified under the Trust Indenture Act of 1939, as amended.

 

2.7       The Notes and the Guarantee will rank at least pari
passu with all other unsecured and unsubordinated indebtedness of the Issuer
and the Guarantors, respectively.

 

2.8       Assuming compliance by the Dealer with the procedures
applicable to it set forth in Section 1 hereof, no consent or action of,
or filing or registration with, any governmental or public regulatory body or
authority, including the SEC, is required to authorize, or is otherwise
required in connection with the execution, delivery or performance of, this
Agreement, the Notes, the Guarantee or the Issuing and Paying Agency Agreement,
except as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Notes.

 

2.9       Neither the execution and delivery of this Agreement,
the Guarantee and the Issuing and Paying Agency Agreement, nor the issuance of
the Notes in accordance with the Issuing and Paying Agency Agreement, nor the
fulfillment of or compliance with the terms and provisions hereof or thereof by
the Issuer or any Guarantor, will (i) result in the creation or imposition
of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Issuer or any Guarantor, or (ii) violate
or result in a breach or a default under any of the terms of the charter
documents or by-laws of the Issuer or any Guarantor, any contract or instrument
to which the Issuer or any Guarantor is a party or by which it or its property
is bound, or any law or regulation, or any order, writ, injunction or decree of
any court or government instrumentality, to which the Issuer or any Guarantor
is subject or by which it or its property is bound, which breach or default
might have a material adverse effect on the financial condition or operations
of the Issuer and its subsidiaries taken as a whole or the ability of the
Issuer or any Guarantor to perform its obligations under this Agreement, the
Notes, the Guarantee or the Issuing and Paying Agency Agreement.

 

2.10     Except as disclosed in the Company Information, there
is no litigation or governmental proceeding pending, or to the knowledge of the
Issuer or any Guarantor threatened, against or affecting the Issuer or any
Guarantor or any of its subsidiaries which might reasonably be expected to
result in a material adverse change in the financial condition or operations of
the Issuer and its subsidiaries taken as a whole or the ability of the Issuer
or any Guarantor to perform its obligations under this Agreement, the Notes,
the Guarantee or the Issuing and Paying Agency Agreement.

 

7

 

2.11     Neither the Issuer nor any Guarantor is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

2.12     Neither the Private Placement Memorandum nor the
Company Information contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

2.13     Each (a) issuance of Notes by the Issuer
hereunder and (b) amendment or supplement of the Private Placement
Memorandum shall be deemed a representation and warranty by the Issuer and,
unless such Guarantor shall have been released from the Guarantee in accordance
with its terms, each Guarantor to the Dealer, as of the date thereof, that,
both before and after giving effect to such issuance and after giving effect to
such amendment or supplement, (i) the representations and warranties given
by the Issuer and the Guarantor set forth in this Section 2 remain true
and correct in all material respects on and as of such date as if made on and
as of such date, (ii) in the case of an issuance of Notes, the Notes being
issued on such date have been duly and validly issued and constitute legal,
valid and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and, unless the
Guarantors shall have been released from the Guarantee in accordance with its
terms, are guaranteed pursuant to the Guarantee, (iii) in the case of an
issuance of Notes, since the date of the most recent Private Placement
Memorandum, there has been no material adverse change in the financial
condition or operations of the Issuer and its subsidiaries taken as a whole
which has not been disclosed to the Dealer in writing and (iv) neither the
Issuer nor any Guarantor is in default of any of its obligations hereunder or
under the Notes, the Guarantee or the Issuing and Paying Agency Agreement.

 

3. Covenants and
Agreements of the Issuer and the Guarantors.

 

Each
of the Issuer and each of the Guarantors, until and unless such Guarantor shall
have been released from the Guarantee in accordance with its terms, covenants
and agrees as to itself that:

 

3.1       It will give the Dealer prompt notice (but in any
event prior to any subsequent issuance of Notes hereunder) of any amendment to,
modification of or waiver with respect to, the Notes, the Guarantee or the
Issuing and Paying Agency Agreement, including a complete copy of any such
amendment, modification or waiver.

 

3.2       If any change shall occur in the financial condition
or operations of the Issuer and its subsidiaries taken as a whole or any
development or occurrence in relation to the Issuer or the Guarantors that
would have a material adverse effect on holders of the Notes or potential
holders of the Notes (including any downgrading or receipt of any notice of
intended downgrading in the rating accorded any of the securities of the Issuer
or the Guarantors by any nationally recognized statistical rating organization
which has published a rating of the Notes), promptly, and in any event prior to
any subsequent issuance of Notes hereunder, notify the Dealer (by telephone,
confirmed in writing) of such change, development or occurrence.

 

8

 

3.3       It shall from time to time furnish to the Dealer such
information as the Dealer may reasonably request, including, without
limitation, any press releases or material provided by the Issuer or the
Guarantors to any national securities exchange or rating agency, regarding (i) the
operations and financial condition of the Issuer or the Guarantors, (ii) the
due authorization and execution of the Notes and the Guarantee, (iii) the
Issuer’s ability to pay the Notes as they mature and (iv) any Guarantor’s
ability to fulfill its obligations under the Guarantee.

 

3.4       It will take all such action as the Dealer may
reasonably request to ensure that each offer and each sale of the Notes will
comply with any applicable state Blue Sky laws; provided, however, that neither
the Issuer nor any Guarantor shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.

 

3.5       It will not be in default of any of its obligations
hereunder or under the Notes, the Guarantee or the Issuing and Paying Agency
Agreement, at any time that any of the Notes are outstanding.

 

3.6       The Issuer shall not issue Notes hereunder until the
Dealer shall have received (a) opinions of counsel to the Issuer and the
Guarantors, addressed to the Dealer, satisfactory in form and substance to the
Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as
then in effect, (c) a copy of the executed Guarantee, (d) a copy of
the resolutions adopted by the Boards of Directors of the Issuer and each of
the Guarantors, satisfactory in form and substance to the Dealer and certified
by the Secretary or similar officer of the Issuer or the Guarantor, as the case
may be, authorizing execution and delivery by the Issuer and the Guarantors of
this Agreement, the Issuing and Paying Agency Agreement, the Guarantee and the
Notes and consummation by the Issuer and the Guarantors of the transactions
contemplated hereby and thereby, (e) prior to the issuance of any
book-entry Notes represented by a master note registered in the name of DTC or
its nominee, a copy of the executed Letter of Representations among the Issuer,
the Guarantors, the Issuing and Paying Agent and DTC and of
the executed master note, (f) prior to the issuance of any Notes in physical
form, a copy of such form (unless attached to this Agreement or the Issuing and
Paying Agency Agreement), (g) confirmation of the then current rating
assigned to the Notes by each nationally recognized statistical rating
organization then rating the Notes, and (h) such other certificates,
opinions, letters and documents as the Dealer shall have reasonably requested.

 

3.7       The Issuer and each Guarantor, jointly and severally,
agree to reimburse the Dealer for all of the Dealer’s out-of-pocket expenses related
to this Agreement, including expenses incurred in connection with its
preparation and negotiation, and the transactions contemplated hereby
(including, but not limited to, the printing and distribution of the Private
Placement Memorandum), and, if applicable, for the reasonable fees and
out-of-pocket expenses of the Dealer’s counsel.

 

4. Disclosure.

 

4.1       The Private Placement Memorandum and its
contents (other than the Dealer Information) shall be the sole responsibility
of the Issuer and, unless such Guarantor shall have been released from the
Guarantee in accordance with its terms, the Guarantors.  The Private Placement Memorandum shall
contain a statement expressly offering an opportunity for each prospective
purchaser to ask questions of, and receive answers from, the Issuer and, unless
such Guarantor 

 

9

 

shall
have been released from the Guarantee in accordance with its terms, any
Guarantor concerning the offering of Notes and to obtain relevant additional
information which the Issuer possesses or can acquire without unreasonable
effort or expense.

 

4.2       Each of the Issuer and, unless such Guarantor shall
have been released from the Guarantee in accordance with its terms, each
Guarantor agrees to promptly furnish the Dealer the Company Information as it
becomes available.

 

4.3       (a) Each of the Issuer and, unless such Guarantor
shall have been released from the Guarantee in accordance with its terms, each
Guarantor further agrees to notify the Dealer promptly upon (x) the
occurrence of any event relating to or affecting the Issuer or such Guarantor
that would cause the Company Information then in existence to include an untrue
statement of a material fact or to omit to state a material fact necessary in order
to make the statements contained therein, in light of the circumstances under
which they are made, not misleading or (y) the release of any Guarantor
from the Guarantee in accordance with its terms.  Notwithstanding the foregoing, neither the
Issuer nor any Guarantor shall have any obligation to so notify the Dealer if (i) the
Issuer has temporarily suspended offers and sales of the Notes and has given
the Dealer written notice of such suspension, or (ii) there are no Notes
outstanding.  In the event that the Issuer
wishes to resume
offers and sales of the Notes, it shall (i) give the Dealer notice thereof, and (ii) either
(x) confirm that the then current Private Placement Memorandum and Company
Information do not violate the representation contained in Section 2.13 of
this Agreement, or (y) if the representation contained in Section 2.13
cannot be made, provide to the Dealer an updated Private Placement Memorandum
that will permit the representation to be made. 
The Dealer agrees that, upon such notification, all solicitations and
sales of Notes shall be suspended.

 

(b)       In the event that the Issuer gives the Dealer notice
pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it
then has Notes it is holding in inventory, the Issuer agrees promptly to
supplement or amend the Private Placement Memorandum so that the Private
Placement Memorandum, as amended or supplemented, shall not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and the Issuer shall make such supplement or
amendment available to the Dealer or (ii) if the Issuer chooses not to promptly
amend or supplement the Private Placement Memorandum, the Issuer shall, if
required by the Dealer, purchase from the Dealer any such Notes held in
inventory at a price equal to the face amount thereof discounted on a ratable
basis based on the Issuer’s market rate reflecting the remaining period until
maturity in relation to the original term, provided that no commissions or fees
will be paid to such Dealer in connection with any such repurchase pursuant to
this Section 4.3(b)(ii).

 

(c)       In the event that (i) the Issuer or any
Guarantor gives the Dealer notice pursuant to Section 4.3(a), (ii) the
Dealer does not notify the Issuer or the Guarantors that it is then holding
Notes in inventory and (iii) the Issuer chooses not to promptly amend or
supplement the Private Placement Memorandum in the manner described in clause (b) above,
then all solicitations and sales of Notes shall be suspended until such time as
the Issuer has so amended or supplemented the Private Placement Memorandum, and
made such amendment or supplement available to the Dealer.

 

10

 

(d)       Without
limiting the generality of Section 4.3(a), the Issuer shall review, amend
and supplement the Private Placement Memorandum on a periodic basis, but no
less than at least once annually, to incorporate current
financial information regarding the Issuer  and the
Guarantors to the extent necessary to ensure that the information provided in
the Private Placement Memorandum is accurate and complete, it being
acknowledged that the condensed consolidating financial information regarding
the Guarantors contained in the Notes to the Issuer’s consolidated financial
statements shall be deemed current financial information regarding the
Guarantors.

 

5. Indemnification and
Contribution.

 

5.1       The Issuer and, unless such Guarantor shall have been
released from the Guarantee in accordance with its terms, each Guarantor,
jointly and severally, will indemnify and hold harmless the Dealer, each
individual, corporation, partnership, trust, association or other entity controlling
the Dealer, any affiliate of the Dealer or any such controlling entity and
their respective directors, officers, employees, partners, incorporators,
shareholders, servants, trustees and agents (hereinafter the “Indemnitees”)
against any and all liabilities, penalties, suits, causes of action, losses,
damages, claims, costs and expenses (including, without limitation, fees and
disbursements of counsel) or judgments of whatever kind or nature (each a “Claim”),
imposed upon, incurred by or asserted against the Indemnitees arising out of or
based upon (i) any allegation that the Private Placement Memorandum, the
Company Information or any information provided by the Issuer or the Guarantors
to the Dealer included (as of any relevant time) or includes an untrue
statement of a material fact or omitted (as of any relevant time) or omits to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or (ii) arising
out of or based upon the breach by the Issuer or the Guarantors of any
agreement, covenant or representation made in or pursuant to this
Agreement.  This indemnification shall
not apply to the extent that the Claim arises out of or is based upon Dealer
Information or that the Claim is determined by a court of
competent jurisdiction to have resulted from an Indemnitee’s gross negligence
or willful misconduct.

 

5.2       Provisions relating to claims made for
indemnification under this Section 5 are set forth on Exhibit B to this
Agreement.

 

5.3       In order
to provide for just and equitable contribution in circumstances in which the
indemnification provided for in this Section 5 is held to be unavailable
or insufficient to hold harmless the Indemnitees, although applicable in accordance with
the terms of this Section 5, the Issuer and, unless such Guarantor shall
have been released from the Guarantee in accordance with its terms, each
Guarantor, jointly and severally, shall contribute to the aggregate costs
incurred by the Dealer in connection with any Claim in the proportion of the
respective economic interests of the Issuer, the Guarantors and the Dealer;
provided, however, that such contribution by the Issuer and the Guarantors
shall be in an amount such that the aggregate costs incurred by the Dealer do
not exceed the aggregate of the commissions and fees earned by the Dealer
hereunder with respect to the issue or issues of Notes to which such Claim
relates.  The respective economic
interests shall be calculated by reference to the aggregate proceeds to the
Issuer of the Notes issued hereunder and the aggregate commissions and fees
earned by the Dealer hereunder.

 

11

 

6. Definitions.

 

6.1       “Claim” shall have the meaning set forth
in Section 5.1.

 

6.2       “Company Information” at any given time
shall mean the Private Placement Memorandum (other than the Dealer Information)
together with, to the extent applicable, (i) the Issuer’s most recent
report on Form 10-K filed with the SEC and each report on Form 10-Q
or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the
Issuer’s most recent annual audited financial statements and each interim
financial statement or report prepared subsequent thereto, if not included in
item (i) above, (iii) the Issuer’s other publicly available recent
reports, including, but not limited to, any publicly available filings or
reports provided to their respective shareholders, (iv) any other
information or disclosure prepared pursuant to Section 4.3 hereof and (v) any
information prepared or approved by the Issuer or the Guarantors for
dissemination to investors or potential investors in the Notes.

 

6.3       “Dealer Information” shall mean material
concerning the Dealer provided by the Dealer in writing expressly for inclusion
in the Private Placement Memorandum.

 

6.4       “Exchange Act” shall mean the U.S.
Securities Exchange Act of 1934, as amended.

 

6.5       “Indemnitee” shall have the meaning set
forth in Section 5.1.

 

6.6       “Institutional Accredited Investor” shall
mean an institutional investor that is an accredited investor within the
meaning of Rule 501 under the Securities Act and that has such knowledge
and experience in financial and business matters that it is capable of
evaluating and bearing the economic risk of an investment in the Notes,
including, but not limited to, a bank, as defined in Section 3(a)(2) of
the Securities Act, or a savings and loan association or other institution, as
defined in Section 3(a)(5)(A) of the Securities Act, whether acting
in its individual or fiduciary capacity.

 

6.7       “Issuing and Paying Agency Agreement”
shall mean the issuing and paying agency agreement described on the cover page of
this Agreement, as such agreement may be amended or supplemented from time to
time.

 

6.8       “Issuing and Paying Agent” shall mean the
party designated as such on the cover page of this Agreement, as issuing
and paying agent under the Issuing and Paying Agency Agreement, or any
successor thereto in accordance with the Issuing and Paying Agency Agreement.

 

6.9       “Non-bank fiduciary or agent” shall mean
a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of
the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of
the Securities Act.

 

6.10     “Private Placement Memorandum” shall mean
offering materials prepared in accordance with Section 4 (including
materials referred to therein or incorporated by reference therein, if any)
provided to purchasers and prospective purchasers of the Notes, and shall
include amendments and supplements thereto which may be prepared from time to
time in accordance with this Agreement (other than any amendment or supplement
that has been completely superseded by a later amendment or supplement).

 

6.11     “Qualified Institutional Buyer” shall
have the meaning assigned to that term in Rule 144A under the Securities
Act.

 

12

 

6.12     “Rule 144A” shall mean Rule 144A
under the Securities Act.

 

6.13     “SEC” shall mean the U.S. Securities and
Exchange Commission.

 

6.14     “Securities Act” shall mean the U.S.
Securities Act of 1933, as amended.

 

6.15     “Sophisticated Individual Accredited
Investor” shall mean an individual who (a) is an accredited investor
within the meaning of Regulation D under the Securities Act and (b) based
on his or her pre-existing relationship with the Dealer, is reasonably believed
by the Dealer to be a sophisticated investor (i) possessing such knowledge
and experience (or represented by a fiduciary or agent possessing such
knowledge and experience) in financial and business matters that he or she is
capable of evaluating and bearing the economic risk of an investment in the
Notes and (ii) having not less than $5 million in investments (as defined,
for purposes of this section, in Rule 2a51-1 under the Investment Company
Act of 1940, as amended).

 

7. General

 

7.1       Unless otherwise expressly provided
herein, all notices under this Agreement to parties hereto shall be in writing
and shall be effective when received at the address of the respective party set
forth in the Addendum to this Agreement.

 

7.2       This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflict of laws provisions.

 

7.3       (a) Each of the Issuer and each
Guarantor agrees that any suit, action or proceeding brought by the Issuer or
any Guarantor against the Dealer in connection with or arising out of this
Agreement or the Notes or the offer and sale of the Notes shall be brought
solely in the United States federal courts located in the Borough of Manhattan
or the courts of the State of New York located in the Borough of
Manhattan.  THE DEALER, THE ISSUER AND
EACH GUARANTOR WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

(b) Each of the Issuer and each Guarantor hereby irrevocably
accepts and submits to the non-exclusive jurisdiction of each of the aforesaid
courts in personam, generally and unconditionally, for itself and in respect of
its properties, assets and revenues, with respect to any suit, action or
proceeding in connection with or arising out of this Agreement, the Guarantee
or the Notes or the offer and sale of the Notes.

 

7.4       This Agreement may be terminated, at any
time, by the Issuer, upon one business day’s prior notice to such effect to the
Dealer, or by the Dealer upon one business day’s prior notice to such effect to
the Issuer.  Any such termination,
however, shall not affect the obligations of the Issuer and, subject to terms
of the Guarantee, the Guarantors under Sections 3.7, 4.3(a) and (b), 5 and
7.3 hereof or the respective representations, warranties, agreements,
covenants, rights or responsibilities of the parties made or arising prior to
the termination of this Agreement.

 

7.5       This Agreement is not assignable by any
party hereto without the written consent of the other parties; provided,
however, that the Dealer may assign its rights and obligations under this
Agreement to any affiliate of the Dealer.

 

13

 

7.6       This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

 

7.7       This Agreement is for the exclusive
benefit of the parties hereto, and their respective permitted successors and
assigns hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.

 

7.8       The
Issuer and each Guarantor acknowledges and agrees that in connection with this
purchase and sale of the Notes or any other services the Dealer may be deemed
to be providing hereunder, notwithstanding any preexisting relationship,
advisory or otherwise, between the parties or any oral representations or
assurances previously or subsequently made by the Dealer: (i) no fiduciary
or agency relationship between the Issuer, the Guarantors and any other person,
on the one hand, and the Dealer, on the other, exists; (ii) the Dealer is
not acting as advisor, expert or otherwise, to either the Issuer or any
Guarantor, including, without limitation, with respect to the determination of
the offering price of the Notes, and such relationship between the Issuer and
the Guarantors, on the one hand, and the Dealer, on the other, is entirely and
solely commercial, based on arms-length negotiations; (iii) any duties and
obligations that the Dealer may have to the Issuer or the Guarantors shall be
limited to those duties and obligations specifically stated herein; and (iv) the
Dealer and their respective affiliates may have interests that differ from
those of the Issuer or the Guarantors. 
Each of the Issuer and each Guarantor hereby waives any claims that the
Issuer or such Guarantor may have against the Dealer with respect to any breach
of fiduciary duty in connection with the purchase and sale of the Notes.

 

14

 

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

 

	
  Staples, Inc.,
  as Issuer

  	
   

  	
  Lehman
  Brothers Inc., as Dealer

  
	
   

  	
   

  	
   

  
	
  By:

  	
      /s/
  Ronald L. Sargent

  	
   

  	
  By:

  	
      /s/ Joann Petrossian

  
	
   

  	
   

  	
   

  
	
  Name:
  Ronald L. Sargent

  	
   

  	
  Name:
  Joann Petrossian

  
	
   

  	
   

  	
   

  
	
  Title:
  Chairman and Chief Executive Officer

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
  Staples,
  Inc., as Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
        /s/
  John J. Mahoney

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  John J. Mahoney

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:
  Vice Chairman and Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Staples
  the Office Superstore, LLC, as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
     /s/
  Nicholas Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Nicholas
  Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Senior
  Vice President, Finance and Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Staples
  the Office Superstore East, Inc., as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
     /s/
  Nicholas Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Nicholas
  Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Senior
  Vice President, Finance and Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Staples
  Contract & Commercial, Inc., as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
     /s/
  Nicholas Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Nicholas
  Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Senior
  Vice President, Finance and Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Staples
  the Office Superstore, Limited Partnership, as Guarantor

  	
   

  	
   

  
	
  By its General Partner, Staples, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
     /s/
  Nicholas Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Nicholas
  Hotchkin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Senior
  Vice President, Finance and Treasurer

  	
   

  	
   

  
							

 

15

 

Addendum

 

The following additional clauses shall apply to the Agreement and be
deemed a part thereof.

 

The addresses of the respective parties for purposes
of notices under Section 7.1 are as follows:

 

	
  For the Issuer:

  	
   

  
	
   

  	
   

  
	
  Address:
  500 Staples Drive, Framingham, MA 01702

  	
   

  
	
  Attention:
  MarciJo Lerner

  	
   

  
	
  Telephone number: 508-253-7775

  	
   

  
	
  Fax number: 508-253-5440

  	
   

  
	
   

  	
   

  
	
  For the Guarantor: Staples the Office Superstore, LLC

  	
   

  
	
   

  	
   

  
	
  Address:
  500 Staples Drive, Framingham, MA 01702

  	
   

  
	
  Attention:
  MarciJo Lerner

  	
   

  
	
  Telephone number: 508-253-7775

  	
   

  
	
  Fax number: 508-253-5440

  	
   

  
	
   

  	
   

  
	
  For the Guarantor: Staples the Office Superstore
  East, Inc.

  
	
   

  	
   

  
	
  Address:
  500 Staples Drive, Framingham, MA 01702

  	
   

  
	
  Attention:
  MarciJo Lerner

  	
   

  
	
  Telephone number: 508-253-7775

  	
   

  
	
  Fax number: 508-253-5440

  	
   

  
	
   

  	
   

  
	
  For the Guarantor: Staples Contract &
  Commercial, Inc.

  
	
   

  	
   

  
	
  Address:
  500 Staples Drive, Framingham, MA 01702

  	
   

  
	
  Attention:
  MarciJo Lerner

  	
   

  
	
  Telephone number: 508-253-7775

  	
   

  
	
  Fax number: 508-253-5440

  	
   

  
	
   

  	
   

  
	
  For the Guarantor: Staples the Office Superstore, Limited
  Partnership

  
	
   

  	
   

  
	
  Address:
  500 Staples Drive, Framingham, MA 01702

  	
   

  
	
  Attention:
  MarciJo Lerner

  	
   

  
	
  Telephone number: 508-253-7775

  	
   

  
	
  Fax number: 508-253-5440

  	
   

  
	
   

  	
   

  
	
  For the Dealer:

  
	
   

  
	
  Address: 745 Seventh Avenue, 4th floor, New York,
  New York 10019-6801

  
	
  Attention: Product Management-Commercial Paper

  
	
  Telephone number: 212-526-0731

  
	
  Fax number: 646-758-4641

  

 

16

 

Exhibit A

 

Form of Legend for Private
Placement Memorandum and Notes

 

THE
NOTES AND THE GUARANTEE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY OTHER APPLICABLE SECURITIES LAW,
AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.  BY ITS
ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT
HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER,
THE GUARANTORS, THE NOTES AND THE GUARANTEE, (II) IT IS NOT ACQUIRING SUCH
NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF, (III) IT IS EITHER (A)(1) AN
INSTITUTIONAL INVESTOR OR SOPHISTICATED INDIVIDUAL INVESTOR THAT IS AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT AND WHICH, IN
THE CASE OF AN INDIVIDUAL (i) POSSESSES SUCH KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS THAT HE OR SHE IS CAPABLE OF EVALUATING AND BEARING
THE ECONOMIC RISK OF AN INVESTMENT IN THE NOTES AND (ii) HAS NOT LESS THAN
$5 MILLION IN INVESTMENTS (AN “INSTITUTIONAL ACCREDITED INVESTOR” OR “SOPHISTICATED
INDIVIDUAL ACCREDITED INVESTOR”, RESPECTIVELY) AND (2)(i) PURCHASING NOTES
FOR ITS OWN ACCOUNT, (ii) A BANK (AS DEFINED IN SECTION 3(a)(2) OF
THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF
THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A
FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION)
PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH ACCOUNTS IS SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR OR SOPHISTICATED INDIVIDUAL ACCREDITED
INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE
MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING NOTES FOR ITS OWN ACCOUNT
OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER
ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION
FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE
144A.  BY ITS ACCEPTANCE OF A NOTE, THE
PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER
TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO A PLACEMENT
AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE NOTES
(COLLECTIVELY, THE “PLACEMENT AGENTS”), NONE OF WHICH SHALL HAVE ANY OBLIGATION
TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL
ACCREDITED INVESTOR, SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR OR A QIB, OR (3) TO
A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN
MINIMUM AMOUNTS OF $250,000.

 

17

 

Exhibit B

 

Further Provisions Relating to
Indemnification

 

(a)          The
Issuer and, unless such Guarantor shall have been released from the
Guarantee in accordance with its terms, each Guarantor, jointly and severally, agrees to reimburse each Indemnitee
for all expenses (including reasonable fees and disbursements of internal and
external counsel) as they are incurred by it in connection with investigating
or defending any loss, claim, damage, liability or action in respect of which
indemnification may be sought under Section 5 of the Agreement (whether or
not it is a party to any such proceedings).

 

(b)         Promptly
after receipt by an Indemnitee of notice of the existence of a Claim, such
Indemnitee will, if a claim in respect thereof is to be made against the Issuer
or any Guarantor, notify the Issuer and the Guarantor in writing of the
existence thereof; provided that (i) the omission to so notify the Issuer
or any Guarantor will not relieve it from any liability which it may have
hereunder unless and except to the extent it did not otherwise learn of such
Claim and such failure results in the forfeiture by it of substantial rights
and defenses, and (ii) the omission to so notify the Issuer or the
Guarantors will not relieve it from liability which it may have to an
Indemnitee otherwise than on account of this indemnity agreement.  In case any such Claim is made against any
Indemnitee and it notifies the Issuer or any Guarantor of the existence
thereof, the Issuer and the Guarantors will be entitled to participate therein,
and to the extent that it may elect by written notice delivered to the
Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory
to such Indemnitee; provided that if the defendants in any such Claim include
both the Indemnitee and either the Issuer or the Guarantors or both, and the
Indemnitee shall have concluded that there may be legal defenses available to
it which are different from or additional to those available to the Issuer or
the Guarantors, the Issuer shall not have the right to direct the defense of
such Claim on behalf of such Indemnitee, and the Indemnitee shall have the
right to select separate counsel to assert such legal defenses on behalf of
such Indemnitee.  Upon receipt of notice
from the Issuer to such Indemnitee of the election of the Issuer and the
Guarantors to assume the defense of such Claim and approval by the Indemnitee
of counsel, the Issuer and the Guarantors will not be liable to such Indemnitee
for expenses incurred thereafter by the Indemnitee in connection with the
defense thereof (other than reasonable costs of investigation) unless (i) the
Indemnitee shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that neither the Issuer nor
any Guarantor shall be liable for the expenses of more than one separate
counsel (in addition to any local counsel in the jurisdiction in which any
Claim is brought), approved by the Dealer, representing the Indemnitee who is
party to such Claim), (ii) the Issuer and the Guarantors shall not have
employed counsel reasonably satisfactory to the Indemnitee to represent the
Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the
Issuer or the Guarantors has authorized in writing the employment of counsel
for the Indemnitee.  The indemnity,
reimbursement and contribution obligations of the Issuer and the Guarantors
hereunder shall be in addition to any other liability the Issuer or the
Guarantors may otherwise have to an Indemnitee and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Issuer, the Guarantors and any Indemnitee.  Each of the Issuer and each Guarantor agrees
that without the Dealer’s prior written consent, it will not settle, compromise
or consent to the entry of any judgment in any Claim in respect of which
indemnification may be sought under the indemnification provision of the
Agreement (whether or not the Dealer or any other Indemnitee is an actual or
potential party to such Claim), unless such settlement, 

 

18

 

compromise or consent (i) includes an unconditional release of
each Indemnitee from all liability arising out of such Claim and (ii) does
not include a statement as to or an admission of fault, culpability or failure
to act, by or on behalf of any Indemnitee.

 

19

 

Exhibit C

 

Statement of Terms for Interest –
Bearing Commercial Paper Notes of Staples, Inc.

 

THE PROVISIONS SET FORTH BELOW
ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC PRIVATE
PLACEMENT MEMORANDUM SUPPLEMENT (THE “SUPPLEMENT”) (IF ANY) SENT TO EACH PURCHASER
AT THE TIME OF THE TRANSACTION.

 

1.  General.  (a)  The obligations of the Issuer to
which these terms apply (each a “Note”) are represented by one or more Master
Notes (each, a “Master Note”) issued in the name of (or of a nominee for) The
Depository Trust Company (“DTC”), which Master Note includes the terms and provisions for the
Issuer’s Interest-Bearing Commercial Paper Notes that are set forth in this
Statement of Terms, since this Statement of Terms constitutes an integral part
of the Underlying Records as defined and referred to in the Master Note.

 

(b)  “Business Day” means any day other than a Saturday or
Sunday that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, executive order or regulation to be closed
in New York City and, with respect to
LIBOR Notes (as defined below) is also a London Business Day.  “London Business Day” means a day, other than
a Saturday or Sunday, on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.

 

2.  Interest.  (a)  Each Note will bear interest at a
fixed rate (a “Fixed Rate Note”) or at a floating rate (a “Floating Rate Note”).

 

(b)  The Supplement sent to each holder of such Note will describe
the following terms: (i) whether such Note is a Fixed Rate Note or a
Floating Rate Note and whether such Note is an Original Issue Discount Note (as
defined below); (ii) the date on which such Note will be issued (the “Issue
Date”); (iii) the Stated Maturity Date (as defined below); (iv) if
such Note is a Fixed Rate Note, the
rate per annum at which such Note will bear interest, if any, and the Interest
Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate,
the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and
the Spread and/or Spread Multiplier, if any (all as defined below), and any
other terms relating to the particular method of calculating the interest rate
for such Note; and (vi) any other terms applicable specifically to such
Note.  “Original Issue Discount Note”
means a Note which has a stated redemption price at the Stated Maturity Date
that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates
will be an “Original Issue Discount Note”.

 

(c)  Each Fixed Rate Note will bear interest from its Issue Date
at the rate per annum specified in the Supplement until the principal amount
thereof is paid or made available for payment. 
Interest on each Fixed Rate Note will be payable on the dates specified
in the Supplement (each an “Interest Payment
Date” for a Fixed Rate
Note) and on the Maturity Date (as defined below).  Interest on Fixed Rate Notes will be computed
on the basis of a 360-day year of twelve 30-day months.

 

If any Interest Payment Date or the Maturity Date of a Fixed Rate Note
falls on a day that is not a Business Day, the required payment of principal,
premium, if any, and/or interest will be payable on the next succeeding
Business Day, and no additional interest will accrue in respect of the payment
made on that next succeeding Business
Day.

 

20

 

(d)  The interest rate on each Floating Rate Note for each
Interest Reset Period (as defined below) will be determined by reference to an
interest rate basis (a “Base Rate”) plus or minus a number of basis points (one
basis point equals one-hundredth of a
percentage point) (the “Spread”), if any, and/or multiplied by a certain
percentage (the “Spread Multiplier”), if any, until the principal thereof is
paid or made available for payment.  The
Supplement will designate which of the following Base Rates is applicable to
the related Floating Rate Note: (a) the CD Rate (a “CD Rate Note”), (b) the
Commercial Paper Rate (a “Commercial Paper Rate Note”), (c) the Federal
Funds Rate (a “Federal Funds Rate Note”), (d) LIBOR (a “LIBOR Note”), (e) the
Prime Rate (a “Prime Rate Note”), (f) the Treasury Rate (a “Treasury Rate
Note”) or (g) such other Base Rate as may be specified in such Supplement.

 

The rate of interest
on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or
semi-annually (the “Interest Reset Period”). 
The date or dates on which interest will be reset (each an “Interest
Reset Date”) will be, unless otherwise specified in the Supplement, in the case
of Floating Rate Notes which reset daily, each Business Day, in the case of
Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the
Tuesday of each week; in the case of Floating Rate Notes that reset monthly,
the third Wednesday of each month; in the case of Floating Rate Notes that
reset quarterly, the third Wednesday of March, June, September and
December; and in the case of Floating Rate Notes that reset semiannually, the
third Wednesday of the two months specified in the Supplement.  If any Interest Reset Date for any Floating
Rate Note is not a Business Day, such Interest Reset Date will be postponed to
the next day that is a Business Day, except that in the case of a LIBOR Note,
if such Business Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding Business Day. Interest on each
Floating Rate Note will be payable monthly, quarterly or semiannually (the “Interest
Payment Period”) and on the Maturity Date. 
Unless otherwise specified in the Supplement, and except as provided
below, the date or dates on which interest will be payable (each an “Interest
Payment Date” for a Floating Rate Note) will be, in the case of Floating Rate
Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with
a quarterly Interest Payment Period, on the third Wednesday of March, June, September and
December; and in the case of Floating Rate Notes with a semiannual Interest
Payment Period, on the third Wednesday of the two months specified in the
Supplement.  In addition, the Maturity
Date will also be an Interest Payment Date.

 

If any Interest Payment Date for any Floating Rate Note (other than an
Interest Payment Date occurring on the Maturity Date) would otherwise be a day
that is not a Business Day, such Interest Payment Date shall be postponed to
the next day that is a Business Day, except that in the case of a LIBOR Note,
if such Business Day is in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding Business Day.  If the Maturity Date of a Floating Rate Note
falls on a day that is not a Business Day, the payment of principal and
interest will be made on the next succeeding Business Day, and no interest on
such payment shall accrue for the period from and after such maturity.

 

Interest payments on each Interest Payment Date for Floating
Rate Notes will include accrued interest from and including the Issue Date or
from and including the last date in respect of which interest has been paid, as
the case may be, to, but excluding, such Interest Payment Date.  On the Maturity Date, the interest payable on
a Floating Rate Note will include interest accrued to, but excluding, the
Maturity Date.  Accrued interest will be
calculated by multiplying the principal amount of a Floating 

 

21

 

Rate Note by an
accrued interest factor.  This accrued
interest factor will be computed by adding the interest factors calculated for
each day in the period for which accrued interest is being calculated.  The interest factor (expressed as a decimal)
for each such day will be computed by dividing the interest rate applicable to
such day by 360, in the cases where the Base Rate is the CD Rate, Commercial
Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of
days in the year, in the case where the Base Rate is the Treasury Rate.  The interest rate in effect on each day will
be (i) if such day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date (as defined below) pertaining to
such Interest Reset Date, or (ii) if such day is not an Interest Reset
Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date, subject in either case to
any adjustment by a Spread and/or a Spread Multiplier.

 

The “Interest
Determination Date” where the Base Rate is the CD Rate or the Commercial Paper
Rate will be the second Business Day next preceding an Interest Reset
Date.  The Interest Determination Date
where the Base Rate is the Federal Funds Rate or the Prime Rate will be the
Business Day next preceding an Interest Reset Date.  The Interest Determination Date where the
Base Rate is LIBOR will be the second London Business Day next preceding an
Interest Reset Date.  The Interest
Determination Date where the Base Rate is the Treasury Rate will be the day of
the week in which such Interest Reset Date falls when Treasury Bills are
normally auctioned.  Treasury Bills are
normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is held on the following Tuesday or the
preceding Friday.  If an auction is so
held on the preceding Friday, such Friday will be the Interest Determination
Date pertaining to the Interest Reset Date occurring in the next succeeding
week.

 

The “Index Maturity”
is the period to maturity of the instrument or obligation from which the
applicable Base Rate is calculated.

 

The “Calculation
Date,” where applicable, shall be the earlier of (i) the tenth calendar
day following the applicable Interest Determination Date or (ii) the
Business Day preceding the applicable Interest Payment Date or Maturity Date.

 

All times referred
to herein reflect New York City time, unless otherwise specified.

 

The Issuer shall
specify in writing to the Issuing and Paying Agent which party will be the
calculation agent (the “Calculation Agent”) with respect to the Floating Rate
Notes.  The Calculation Agent will
provide the interest rate then in effect and, if determined, the interest rate
which will become effective on the next Interest Reset Date with respect to
such Floating Rate Note to the Issuing and Paying Agent as soon as the interest
rate with respect to such Floating Rate Note has been determined and as soon as
practicable after any change in such interest rate.

 

All percentages
resulting from any calculation on Floating Rate Notes will be rounded to the
nearest one hundred-thousandth of a percentage point, with five-one millionths
of a percentage point rounded upwards. 
For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or
..0987655).  All dollar amounts used in or
resulting from any calculation on Floating Rate Notes will be rounded, in the
case of U.S. dollars, to the nearest cent or, in the case of a foreign
currency, to the nearest unit (with one-half cent or unit being rounded
upwards).

 

22

 

CD Rate Notes

 

“CD Rate” means
the rate on any Interest Determination Date for negotiable certificates of
deposit having the Index Maturity as published by the Board of Governors of the
Federal Reserve System (the “FRB”) in “Statistical Release H.15(519), Selected
Interest Rates” or any successor publication of the FRB (“H.15(519)”) under the
heading “CDs (Secondary Market)”.

 

If the above rate
is not published in H.15(519) by 3:00 p.m. on the Calculation Date, the CD
Rate will be the rate on such Interest Determination Date set forth in the
daily update of H.15(519), available through the world wide website of the FRB
at http://www.federalreserve.gov/releases/h15/Update, or any successor site or
publication or other recognized electronic source used for the purpose of
displaying the applicable rate (“H.15 Daily Update”) under the caption “CDs
(Secondary Market)”.

 

If such rate is
not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the
Calculation Date, the Calculation Agent will determine the CD Rate to be the
arithmetic mean of the secondary market offered rates as of 10:00 a.m. on
such Interest Determination Date of three leading nonbank dealers(1) in
negotiable U.S. dollar certificates of deposit in New York City selected by the
Calculation Agent for negotiable U.S. dollar certificates of deposit of major
United States money center banks of the highest credit standing in the market
for negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity in the denomination of $5,000,000.

 

If the dealers
selected by the Calculation Agent are not quoting as set forth above, the CD
Rate will remain the CD Rate then in effect on such Interest Determination
Date.

 

Commercial Paper Rate Notes

 

“Commercial Paper
Rate” means the Money Market Yield (calculated as described below) of the rate
on any Interest Determination Date for commercial paper having the Index
Maturity, as published in H.15(519) under the heading “Commercial
Paper-Nonfinancial”.

 

If the above rate
is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then
the Commercial Paper Rate will be the Money Market Yield of the rate on such
Interest Determination Date for commercial paper of the Index Maturity as
published in H.15 Daily Update under the heading “Commercial Paper-Nonfinancial”.

 

If by 3:00 p.m.
on such Calculation Date such rate is not published in either H.15(519) or H.15
Daily Update, then the Calculation Agent will determine the Commercial Paper
Rate to be the Money Market Yield of the arithmetic mean of the offered rates
as of 11:00 a.m. on such Interest Determination Date of three leading
dealers of U.S. dollar commercial paper in New York City selected by the
Calculation Agent for commercial paper of the Index Maturity placed for an
industrial issuer whose bond rating is “AA,” or the equivalent, from a
nationally recognized statistical rating organization.

 

If the dealers
selected by the Calculation Agent are not quoting as mentioned above, the
Commercial Paper Rate with respect to such Interest Determination Date will
remain the Commercial Paper Rate then in effect on such Interest Determination
Date.

 

“Money Market
Yield” will be a yield calculated in accordance with the following formula:

 

(1)          Such
nonbank dealers referred to in this Statement of Terms may include affiliates
of the Dealer.

 

23

 

	
   

  	
   

  	
  D x 360

  	
   

  	
   

  
	
  Money Market Yield =

  	
   

  	
   

  	
  x 100

  
	
   

  	
   

  	
  360 - (D x M)

  	
   

  	
   

  

 

where “D” refers
to the applicable per annum rate for commercial paper quoted on a bank discount
basis and expressed as a decimal and “M” refers to the actual number of days in
the interest period for which interest is being calculated.

 

Federal Funds Rate Notes

 

“Federal
Funds Rate” means the rate on any Interest Determination Date for Federal Funds
as published in Reuters (or any successor service) on page FEDFUNDS1 under
the heading “EFFECT” (or any other page as may replace the specified page on
that service) (“Reuters Page FEDFUNDS1”).

 

If the above rate does not
appear on Reuters Page FEDFUNDS1 or is not so published by 3:00 p.m.
on the Calculation Date, the Federal Funds Rate will be the rate on such
Interest Determination Date as published in H.15 Daily Update under the heading
“Federal Funds/(Effective)”.

 

If such rate is
not published as described above by 3:00 p.m. on the Calculation Date, the
Calculation Agent will determine the Federal Funds Rate to be the arithmetic
mean of the rates for the last transaction in overnight U.S. dollar federal
funds arranged by each of three leading brokers of Federal Funds transactions
in New York City selected by the Calculation Agent prior to 9:00 a.m. on
such Interest Determination Date.

 

If the brokers
selected by the Calculation Agent are not quoting as mentioned above, the
Federal Funds Rate will remain the Federal Funds Rate then in effect on such
Interest Determination Date.

 

LIBOR Notes

 

The London
Interbank offered rate (“LIBOR”) means, with respect to any Interest
Determination Date, the rate for deposits in U.S. dollars having the Index
Maturity that appears on the Designated LIBOR Page as of 11:00 a.m.
London time, on such Interest Determination Date.

 

If no rate
appears, LIBOR will be determined on the basis of the rates at approximately
11:00 a.m., London time, on such Interest Determination Date at which
deposits in U.S. dollars are offered to prime banks in the London interbank
market by four major banks in such market selected by the Calculation Agent for
a term equal to the Index Maturity and in principal amount equal to an amount
that in the Calculation Agent’s judgment is representative for a single
transaction in U.S. dollars in such market at such time (a “Representative
Amount”).  The Calculation Agent will
request the principal London office of each of such banks to provide a
quotation of its rate.  If at least two
such quotations are provided, LIBOR will be the arithmetic mean of such
quotations.  If fewer than two quotations
are provided, LIBOR for such interest period will be the arithmetic mean of the
rates quoted at approximately 11:00 a.m., in New York City, on such
Interest Determination Date by three major banks in New York City, selected by
the Calculation Agent, for loans in U.S. dollars to leading European banks, for
a term equal to the Index Maturity and in a Representative Amount; provided,
however, that if fewer than three banks so selected by the Calculation Agent
are providing such quotations, the then existing LIBOR rate will remain in
effect for such Interest Payment Period.

 

“Designated
LIBOR Page” means Reuters Screen LIBOR01 Page or any replacement page or
pages on which London interbank rates of major banks for the Index
Currency are displayed.

 

24

 

Prime Rate Notes

 

“Prime Rate” means
the rate on any Interest Determination Date as published in H.15(519) under the
heading “Bank Prime Loan”.

 

If the above rate
is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date,
then the Prime Rate will be the rate on such Interest Determination Date as
published in H.15 Daily Update opposite the caption “Bank Prime Loan”.

 

If the rate is not
published prior to 3:00 p.m. on the Calculation Date in either H.15(519)
or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate
to be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen US PRIME1 Page (as defined below)
as such bank’s prime rate or base lending rate as of 11:00 a.m. on that
Interest Determination Date.

 

If fewer than four
such rates referred to above are so published by 3:00 p.m. on the
Calculation Date, the Calculation Agent will determine the Prime Rate to be the
arithmetic mean of the prime rates or base lending rates quoted on the basis of
the actual number of days in the year divided by 360 as of the close of
business on such Interest Determination Date by three major banks in New York
City selected by the Calculation Agent.

 

If the banks
selected are not quoting as mentioned above, the Prime Rate will remain the
Prime Rate in effect on such Interest Determination Date.

 

“Reuters Screen US Prime1
Page” means the display designated as page “USPrime1” of the Reuters
Service, or any successor service, or any replacement page or pages on
that service, for the purpose of displaying prime rates or base lending rates
of major U.S. banks.

 

Treasury Rate Notes

 

“Treasury Rate” means:

 

(1) the
rate from the auction held on the Interest Determination Date (the “Auction”)
of direct obligations of the United States (“Treasury Bills”) having the Index
Maturity specified in the applicable pricing supplement above under the caption
“INVESTMENT RATE”, as that rate appears on Reuters Screen USAUCTION10 or USAUCTION11
Page under the heading “Investment Rate” (or any other page as may
replace the specified page on that service or a successor service).

 

(2) if the
rate referred to in clause (1) is not so published by 3:00 p.m. on
the related Calculation Date, the Bond Equivalent Yield (as defined below) of
the rate for the applicable Treasury Bills as published in H.15 Daily Update,
under the caption “U.S. Government Securities/Treasury Bills/Auction High”, or

 

(3) if the rate referred to in clause (2) is
not so published by 3:00 p.m. on the related Calculation Date, the Bond
Equivalent Yield of the auction rate of the applicable Treasury Bills as
announced by the United States Department  of the Treasury, or

 

(4) if the
rate referred to in clause (3) is not so announced by the United States
Department of the Treasury, or if the Auction is not held, the Bond Equivalent
Yield of the rate on the particular Interest Determination Date of the
applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government
Securities/Treasury Bills/Secondary Market”, or

 

25

 

(5) if the
rate referred to in clause (4) not so published by 3:00 p.m. on the
related Calculation Date, the rate on the particular Interest Determination
Date of the applicable Treasury Bills as published in H.15 Daily Update, under
the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

 

(6) if the
rate referred to in clause (5) is not so published by 3:00 p.m. on
the related Calculation Date, the rate on the particular Interest Determination
Date calculated by the Calculation Agent as the Bond Equivalent Yield of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m.
on that Interest Determination Date, of three primary United States government
securities dealers selected by the Calculation Agent for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity specified in the
Supplement, or

 

(7) if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
clause (6), the Treasury Rate in effect on the particular Interest
Determination Date.

 

“Bond Equivalent Yield” means a yield (expressed as a percentage)
calculated in accordance with the following formula:

 

	
   

  	
   

  	
  D x N

  	
   

  	
   

  
	
  Bond Equivalent Yield =

  	
   

  	
   

  	
  x 100

  
	
   

  	
   

  	
  360 - (D x M)

  	
   

  	
   

  

 

where “D” refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis and expressed as a decimal, “N” refers to 365
or 366, as the case may be, and “M” refers to the actual number of days in the
applicable Interest Reset Period.

 

3.               Final
Maturity.  The Stated Maturity Date for any Note will be
the date so specified in the Supplement, which shall be no later than 397 days
from the date of issuance.  On its Stated
Maturity Date, or any date prior to the Stated Maturity Date on which the
particular Note becomes due and payable by the declaration of acceleration,
each such date being referred to as a Maturity Date, the principal amount of
each Note, together with accrued and unpaid interest thereon, will be
immediately due and payable.

 

4.               Events
of Default.  The occurrence of any of
the following shall constitute an “Event of Default” with respect to a
Note:  (i) default in any payment of
principal of or interest on such Note (including on a redemption thereof); (ii) the
Issuer or any Guarantor makes any compromise arrangement with its creditors
generally including the entering into any form of moratorium with its creditors
generally; (iii) a court having jurisdiction shall enter a decree or order
for relief in respect of the Issuer or any Guarantor in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or there shall be appointed a receiver, administrator,
liquidator, custodian, trustee or sequestrator (or similar officer) with
respect to the whole or substantially the whole of the assets of the Issuer or
such Guarantor and any such decree, order or appointment is not removed,
discharged or withdrawn within 60 days thereafter; or (iv) the Issuer or
any Guarantor shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law, or
consent to the appointment of or taking possession by a receiver,
administrator, liquidator, assignee, custodian, trustee or sequestrator (or
similar official), with respect to the whole or substantially the whole of the
assets 

 

26

 

of the Issuer or any Guarantor or make any general assignment for the
benefit of creditors.  Upon the
occurrence of an Event of Default, the principal of each obligation evidenced
by such Note (together with interest accrued and unpaid thereon) shall become,
without any notice or demand, immediately due and payable.(2)

 

5.               Obligation
Absolute.  No provision of the
Issuing and Paying Agency Agreement under which the Notes are issued shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on each Note at the times,
place and rate, and in the coin or currency, herein prescribed.

 

6.               Supplement.  Any term contained in the Supplement shall
supercede any conflicting term contained herein.

 

(2)          Unlike
single payment notes, where a default arises only at the stated maturity,
interest-bearing notes with multiple payment dates should contain a default
provision permitting acceleration of the maturity if the Issuer defaults on an
interest payment.

 

27

 

Exhibit D

 

Form of Guarantee

 

GUARANTEE

 

GUARANTEE, dated as of August 6, 2008, of STAPLES
THE OFFICE SUPERSTORE, LLC, a Delaware limited liability company, STAPLES THE
OFFICE SUPERSTORE EAST, INC., a Delaware corporation, STAPLES CONTRACT AND
COMMERCIAL, INC., a Delaware corporation, and STAPLES THE OFFICE SUPERSTORE,
LIMITED PARTNERSHIP, a Massachusetts limited partnership (each a “Guarantor”
and collectively, the “Guarantors”).

 

The Guarantors, for value received, hereby jointly and
severally agree as follows for the benefit of the holders from time to time of
the Notes hereinafter described:

 

1.                                       Each
Guarantor irrevocably guarantees payment in full, as and when the same becomes
due and payable, of the principal of and interest, if any, on the promissory
notes (the “Notes”) issued by Staples, Inc., a Delaware corporation (the “Issuer”),
from time to time pursuant to the Issuing and Paying Agent Agreement, dated as
of June 9, 2008, as the same may be amended, supplemented or modified from
time to time, between the Issuer and LaSalle Bank (the “Agreement”).

 

2.                                       Each
Guarantor’s obligations under this Guarantee shall be unconditional,
irrespective of the validity or enforceability of any provision of the
Agreement or the Notes.

 

3.                                       This
Guarantee is a guaranty of the due and punctual payment (and not merely of
collection) of the principal of and interest, if any, on the Notes by the
Issuer and shall remain in full force and effect until all amounts have been
validly, finally and irrevocably paid in full, and shall not be affected in any
way by any circumstance or condition whatsoever, including without limitation (a) the
absence of any action to obtain such amounts from the Issuer, (b) any
variation, extension, waiver, compromise or release of any or all of the
obligations of the Issuer under the Agreement of the Notes or of any collateral
security therefore or (c) any change in the existence or structure of, or
the bankruptcy or insolvency of, the Issuer or by any other circumstance (other
than by complete, irrevocable payment) that might otherwise constitute a legal
or equitable discharge or defense of a guarantor or surety.  Each Guarantor waives all requirements as to
diligence, presentment, demand for payment, protest and notice of any kind with
respect to the Agreement and the Notes.

 

4.                                       In
the event of a default in payment of principal of or interest on any Notes, the
holders of such Notes, may institute legal proceedings directly against each
Guarantor to enforce this Guarantee without first proceeding against the
Issuer.

 

5.                                       This
Guarantee shall remain in full force and effect or shall be reinstated (as the
case may be) if at any time any payment by the Issuer of the principal of or
interest, if any, on the Notes, in whole or in part, is rescinded or must
otherwise 

 

 

be returned by the holder upon the insolvency,
bankruptcy or reorganization of the Issuer or otherwise, all as though such
payment had not been made.

 

6.                                       This
Guarantee shall be permanently released as to any Guarantor party hereto if (a) such
Guarantor is not a guarantor of the Issuer’s publicly issued notes or bonds
outstanding from time to time or any such guarantee of the Issuer’s publicly
issued notes or bonds is subject to release concurrently with the release of
this Guarantee, and (b)  if there are no amounts that are both unpaid and
overdue under the Notes or Guarantee and there is no continuing Event of
Default (as defined in the Amended and Restated Commercial Paper Dealer
Agreement, dated as of August 6, 2008, between the Issuer and Lehman
Brothers Inc.) on the date of such release. 
Such release shall be immediate and automatic without any requirement of
any notice to or acknowledgment by any holder of the Notes.

 

7.                                       This
Guarantee shall be governed by and construed in accordance with the laws of the
State of New York.

 

[Remainder of Page Intentionally
Blank]

 

 

IN WITNESS WHEREOF, each Guarantor has caused this
Guarantee to be duly executed as of the day and year first above written.

 

	
   

  	
   

  	
  STAPLES
  THE OFFICE SUPERSTORE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Nicholas
  Hotchkin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Finance and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  STAPLES
  THE OFFICE SUPERSTORE EAST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Nicholas
  Hotchkin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Finance and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  STAPLES
  CONTRACT AND COMMERCIAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Nicholas
  Hotchkin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Finance and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  STAPLES
  THE OFFICE SUPERSTORE, LIMITED

  
	
   

  	
   

  	
  PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By
  its General Partner: Staples, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Nicholas
  Hotchkin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Finance and TreasurerExhibit 10.8

 

	
  Notice of Award
  of Restricted Stock and Restricted Stock Award Agreement

  	
   

  	
  Staples, Inc.

  Employer ID: 04-2896127

  500 Staples Drive

  Framingham, MA 01702

  

 

	
  «FirstName» «LastName»

  	
  ACCOUNT ID:

  	
  «AccountID»

  
	
  «Address1»

  	
   

  	
   

  
	
  «Address2»

  	
   

  	
   

  
	
  «City», «State» 
  «Zip»

  	
   

  	
   

  
	
  «Country»

  	
   

  	
   

  

 

In consideration of services rendered to Staples, Inc.,
you have been awarded shares of Staples, Inc. Common Stock under Staples, Inc.’s
Restricted Stock program as follows:

 

	
  Restricted Stock Award No.:

  	
  «GrantNumber»

  	
   

  
	
  Stock Plan:

  	
  2004RS

  	
   

  
	
  Date of Award:

  	
   

  	
   

  
	
  Total Number of Shares:

  	
  «SharesGranted»

  	
   

  
	
  Fair Market Value per Share:

  	
  «FairValue»

  	
   

  
	
  Total Value of Shares Granted:

  	
   

  	
   

  
	
  Vesting Date:

  	
   

  	
   

  

 

By your acceptance of this Restricted Stock Award, you
acknowledge that this award is granted under and governed by the terms and
conditions of Staples, Inc.’s Amended and Restated 2004 Stock Incentive
Plan (as further amended or restated from time to time) and by the terms and
conditions of Staples, Inc.’s Restricted Stock Award Agreement which is
attached hereto.

 

 

	
   

  	
  Staples, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Ronald L. Sargent

  Chairman and Chief Executive Officer

  

 

 

STAPLES,
INC.

RESTRICTED
STOCK AWARD AGREEMENT

(DIRECTORS – INITIAL GRANT)

 

1.  Award. 
In consideration of services rendered, Staples, Inc., a Delaware
corporation (“Staples”), hereby awards to the Director named in the Notice of
Award (the “Notice”), pursuant to Staples’ Amended and Restated 2004 Stock
Incentive Plan (the “Plan”), the Total Number of Shares of Common Stock of
Staples stated in the Notice of Award (the “Shares”) subject to the terms and
conditions of this Restricted Stock Award Agreement and the Plan. Except where
the context otherwise requires, the term “Staples” shall include any parent and
all present and future subsidiaries of Staples as defined in Sections 424(e) and
424(f) of the Internal Revenue Code of 1986, as amended or replaced from
time to time (the “Code”).

 

2. Transferability of Shares.  Until the Vesting Date described below, the
Shares may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of (whether by operation of law or otherwise) nor shall
Shares be subject to execution, attachment or similar process, except that the
Shares may be transferred by will or the laws of descent and distribution or,
upon notice to Staples, for estate planning purposes to entities that are
beneficially owned entirely by family members. 
All transferees of the Shares must agree to be governed by all of the
terms and conditions of this Agreement. 
Upon any sale, transfer, assignment, pledge, hypothecation or other
disposition, or any attempt to sell, assign, transfer, pledge, hypothecate or
otherwise dispose, of the Shares contrary to the provisions hereof, or upon the
levy of any execution, attachment or similar process upon the Shares or such
rights, the Shares shall, at the election of Staples, be deemed repurchased by
Staples at a repurchase price of zero and all rights with respect to the Shares
shall be forfeited to Staples.  In
addition, Staples may seek any other legal or equitable remedies available to
it, including rights of specific performance. 
Staples may refuse to recognize as a shareholder of Staples any
purported transferee of or holder of any rights with respect to the Shares and
may retain and/or recover all dividends, dividend equivalents and other
distributions payable or paid with respect to such Shares.

 

3.  Vesting of Shares.  Except as otherwise provided in this
Agreement, the transfer restrictions on the Shares shall lapse, and the Shares
shall be considered to “vest”, on the Vesting Date set forth in the Notice.

 

4.  Vesting Date.

 

(a)  Continuous Relationship with Staples Required.  For purposes of this Agreement, an “Eligible
Director” is an individual that is, and has been at all times since the Date of
Award, a director of Staples.

 

(b)  Vesting; Termination of Relationship with Staples.  If the Director ceases to be an Eligible
Director for any reason before the Vesting Date, then, except as provided in
paragraph (c) below, the Shares shall be deemed repurchased by Staples at
a repurchase price of zero and ownership of all right, title and interest in
and to the Shares shall be forfeited and revert to Staples on the date such
Director ceases to be an Eligible Director. 
If the Director is an Eligible Director on the Vesting Date, the Shares
shall no longer be subject to repurchase/forfeiture as provided in this Section 4.  If the Director is on an approved leave of
absence, then the Shares shall not be forfeited, unless and until the Director’s
position as a director is ultimately terminated.

 

(c)  Vesting Upon Death or Disability or Retirement.  If the Director (i) dies; (ii) becomes
disabled (within the meaning of Section 22(e)(3) of the Code); or (iii) terminates
his or her position as a director of Staples upon or after reaching age 72, in
each case prior to the Vesting Date, while he or she is an Eligible Director,
then the Shares shall no longer be subject to repurchase/forfeiture as provided
in this Section 4.  In addition and
subject to Section 11 of this Agreement, if the Director reaches age 72
before the Vesting Date while he or she is an Eligible Director, a number of
Shares that is sufficient to satisfy the Eligible Director’s federal, state or
local income and tax obligations with respect to the Shares that are triggered
by such event shall no longer be subject to repurchase/forfeiture as provided
in this Section 4.

 

(d)  Repurchase/Forfeiture.  Upon repurchase/forfeiture of the Shares for
any reason hereunder, the Director shall cease to have any rights or privileges
as a stockholder of Staples with respect to the Shares repurchased/forfeited
and such Shares shall again be available for subsequent option grants or awards
under the Plan.

 

 

STAPLES,
INC.

RESTRICTED STOCK AWARD AGREEMENT

(DIRECTORS – INITIAL GRANT)

 

5.  Delivery of Shares.  Staples shall, upon the Date of Award, effect
issuance of the Shares by registering the Shares in book entry form with
Staples’ transfer agent in the name of the Director.  No certificate(s) representing all or a
part of the Shares that have not been repurchased/forfeited shall be issued
until vesting.

 

6.  No Rights to Continue as a Director.  Nothing contained in the Plan or this
Agreement shall be construed or deemed by any person under any circumstances to
bind Staples to continue the relationship of the Director with Staples for the
period before or after the Vesting Date.

 

7.  Rights as a Shareholder.  Except as otherwise provided herein, the
Director shall have all rights as a shareholder with respect to the Shares
including, without limitation, any rights to receive dividends or other
distributions with respect to the Shares and to vote the Shares and act in
respect of the Shares at any meeting of shareholders.

 

8.  Adjustment Provisions.

 

(a)  General. 
In the event of any recapitalization, reclassification of shares,
combination of shares, stock dividend, stock split, reverse stock split,
spin-off or other similar change in capitalization or event or any distribution
to holders of Common Stock other than an ordinary cash dividend, the Director
shall, with respect to the Shares, be entitled to the rights and benefits, and
be subject to the limitations, set forth in Section 9 of the Plan.

 

(b)  Board  Authority to Make Adjustments.  Any adjustments under this Section 8
will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive.  No fractional shares
will be issued with respect to Shares on account of any such adjustments.

 

9.  Mergers, Consolidations,
Distributions, Liquidations, Etc.  In the event of a merger or consolidation or
any share exchange transaction in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or in the event of a liquidation of Staples, the Director
shall, with respect to this Agreement, be entitled to the rights and benefits,
and be subject to the limitations, set forth in Section 9 of the Plan.

 

10.  Vesting Following a Change in
Control.

 

(a)  Definitions. 
For purposes of this Agreement, the following terms shall have the
following meanings:

 

(i)  A “Change in Control” shall be deemed to
have occurred if (A) any “person”, as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other
than Staples, any trustee or other fiduciary holding securities under an
employee benefit plan of Staples, or any corporation owned directly or indirectly
by the stockholders of Staples in substantially the same proportion as their
ownership of stock of Staples), is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Staples representing 30% or more of the combined voting power of
Staples’ then outstanding securities (other than pursuant to a merger or
consolidation described in clause (1) or (2) of subsection (C) below);
(B) individuals who, as of the date hereof, constitute the Board of
Directors of Staples (as of the date hereof, the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board of Directors,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by Staples’ stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of Staples, as such
terms are used in Regulation 14A under the Exchange Act) shall be, for purposes
of this Agreement, considered as though such person were a member of the Incumbent
Board; (C) the stockholders of Staples approve a merger or consolidation
of Staples with any other corporation, and such merger or consolidation is
consummated, other than (1) a merger or consolidation which would result
in the voting securities of Staples outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 75% of the combined
voting power of the voting securities of Staples or such surviving entity
outstanding immediately after such merger or consolidation, or (2) a
merger or consolidation effected to

 

 

STAPLES,
INC.

RESTRICTED
STOCK AWARD AGREEMENT

(DIRECTORS – INITIAL GRANT)

 

implement a recapitalization of Staples (or similar
transaction) in which no “person” (as defined above) acquires more than 30% of
the combined voting power of Staples’ then outstanding securities; or (D) the
stockholders of Staples approve an agreement for the sale or disposition by
Staples of all or substantially all of Staples’ assets, and such sale or
disposition is consummated.

 

(ii) “Surviving Corporation” shall mean (x) in
the case of a Change in Control pursuant to clause (A) or clause (B) of
Section 10(a)(i), Staples; (y) in the case of a Change in Control
pursuant to clause (C) of Section 10(a)(i), the surviving or
resulting corporation in such merger or consolidation; and (z) in the case
of a Change in Control pursuant to Clause (D) of Section 10(a)(i),
the entity acquiring the majority of the assets being sold or disposed of by
Staples.

 

(b)  Effect of Change of Control. Notwithstanding
the provisions of Sections 3 and 4, if a Change in Control of Staples occurs,
the Shares shall no longer be subject to repurchase/forfeiture as provided in Section 4.

 

11.  Withholding Taxes.  Notwithstanding anything to the contrary in
this Agreement, any provisions providing that the Shares shall no longer be
subject to repurchase/forfeiture shall be subject to the Director’s
satisfaction of all applicable federal, state and local income tax withholding
requirements.

 

12.  Miscellaneous.

 

(a)  Except as provided herein, this Agreement
may not be amended or otherwise modified unless evidenced in writing and signed
by Staples and the Director unless the Board of Directors determines that the
amendment or modification, taking into account any related action, would not materially
and adversely affect the Director.

 

(b)  All notices under this Agreement shall be
mailed or delivered by hand to Staples at its main office, Attn: Secretary, and
to the Director to his/her last known address on the records of Staples or at
such other address as may be designated in writing by either of the parties to
one another.

 

(c)  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

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